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Home My WebLink AboutStaff Report 2508-5117CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, March 16, 2026 Council Chambers & Hybrid 4:30 PM Agenda Item 5.Adoption of a Resolution Approving Edison Electric Institute Master Power Purchase and Sale Agreements with NRG Business Marketing LLC, DRW Energy Trading LLC, and Dynasty Power Inc., (collectively the “Master Agreements”), Delegating Authority to the City Manager to Transact Under the Master Agreements for Electricity-Related Commodities and Services, and Updating the City’s Standard Form Edison Electric Institute Master Power Purchase and Sale Agreement; CEQA status: not a project under CEQA Guidelines sections 15378(a) 8 0 6 4 City Council Staff Report From: City Manager Report Type: CONSENT CALENDAR Lead Department: Utilities Meeting Date: March 16, 2026 Report #:2508-5117 TITLE Adoption of a Resolution Approving Edison Electric Institute Master Power Purchase and Sale Agreements with NRG Business Marketing LLC, DRW Energy Trading LLC, and Dynasty Power Inc., (collectively the “Master Agreements”), Delegating Authority to the City Manager to Transact Under the Master Agreements for Electricity-Related Commodities and Services, and Updating the City’s Standard Form Edison Electric Institute Master Power Purchase and Sale Agreement; CEQA status: not a project under CEQA Guidelines sections 15378(a) RECOMMENDATION Staff recommends that Council adopt a Resolution (Attachment A): (a) Approving the Edison Electric Institute (EEI) Master Power Purchase and Sale Agreements with NRG Business Marketing LLC (NRG), DRW Energy Trading LLC (DRW), and Dynasty Power Inc. (Dynasty) (Exhibits A, B, and C to Attachment A); (b) Delegating authority to the City Manager or their designee, the Director of Utilities, to transact under the Master Agreements for electricity-related commodities and services subject to the following limitations: 1. The date for delivery of the electricity products for each transaction shall not exceed 36 months from the date the transaction is executed; 2. The delivery date for any transaction shall not extend beyond December 2027; 3. The maximum aggregate transaction limit under each Master Agreement shall be $25 million; 4. All transactions shall be subject to the Palo Alto Municipal Code; 5. All transactions shall be subject to the City’s Energy Risk Management Policies, Guidelines, and Procedures; (c) Waiving the investment-grade credit rating requirement for NRG, DRW, and Dynasty; and (d) Approving an updated standard form version EEI Master Power Purchase and Sale Agreement (Exhibit D to Attachment A). 8 0 6 4 EXECUTIVE SUMMARY BACKGROUND 1). 1 Resolution 9324: RESO 9324 - https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=53606&dbid=0&repo=PaloAlto 8 0 6 4 In August 2016, the Council streamlined this process, approving Ordinance No 53873, which modified the Municipal Code to explicitly allow for the use of Council-approved standard form master agreements. The ordinance modified PAMC Section 2.30.140, clarifying the process to enable new suppliers by specifically allowing the use of a standard form agreement that contains the City’s minimum contract terms and conditions. Negotiations could then be carried out with qualified suppliers on an ongoing basis without the need to issue successive formal requests for proposals, which also streamlined the contract negotiations by addressing the City’s requirements in the supplied master agreement forms. Under this process, any proposed amendments or deviations to the standard form master agreements with specific suppliers remain subject to Council approval before the master agreement may be executed or any transactions may be completed under it. 4), based on the year 2000 version of the EEI Master Power Purchase and Sale Agreement. This standard form agreement has been made available on the City’s website to any wholesale utility supplier since that time, and in 2024 the City utilized this process to execute a new EEI master agreement with Silicon Valley Clean Energy (Resolution 101535). As a result, the City now has executed electric master agreements with the following suppliers: ANALYSIS 3 Ordinance 5387: 2016-08-29 Ordinance 5387 - https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=47269&dbid=0&repo=PaloAlto 4 Resolution 9652: RESO 9652 - https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=54485&dbid=0&repo=PaloAlto 5 Resolution 10153: RESO 10153 - https://recordsportal.paloalto.gov/WebLink/DocView.aspx?id=62011&dbid=0&repo=PaloAlto 8 0 6 4 company that operates in electricity, natural gas, and clean energy products. Its parent company, NRG Energy, Inc., has a portfolio of over 24,000 MW of generation capacity and annual revenues of over $28 billion. Staff are also familiar with DRW’s and Dynasty’s key personnel from when they worked for one of the City’s other electricity suppliers. DRW is a privately-held trading firm based in Chicago, while Dynasty is a privately-held trading firm based in Calgary and Houston. All three companies are highly active in California’s electricity markets, and are currently enabled with 40+ counterparties in the state. 9, have been approved as to form by the City Attorney’s Office, and have also been approved by the City’s Utilities and ASD risk management. 9 PAMC Section 2.30.340(c) requires that utilities contracts incorporate the following contract terms and conditions: (1) governing law shall be the laws of the State of California; (2) choice of venue shall be the County of Santa Clara; and (3) a counterparty shall obtain and maintain during the term of the contract the minimum credit rating established as of the date of award of contract of not less than a BBB- credit rating established by Standard & Poor’s and a Baa3 credit rating established by Moody’s Investors Services. 8 0 6 4 And while DRW and Dynasty are smaller, privately-held trading firms, they have both shared demonstrated their financial strength by providing financial data for staff’s analysis. Staff utilized a tool from Moody’s Analytics to assess these reports, which indicated that their balance sheets equate to implied ratings of Aa3 for Dynasty and Ba1 for DRW. (The Moody’s Analytics report for NRG also assigned it an implied rating of Aa3.) In addition, all proposed counterparties will be required to post collateral in the form of cash or a letter of credit from an A+ rated bank, within five (5) business days of the award of a transaction. Upon completion of each transaction, the collateral amount may be adjusted to reflect the value of outstanding transactions. The collateral posting shall serve as the primary mechanism to mitigate the City’s credit exposure. The provision of such collateral justifies the waiver of the City’s investment-grade credit rating requirement for the proposed counterparties. Finally, ASD risk management will continuously monitor the financial strength of all of these counterparties, and may impose trading limitations (such as total transaction volume or contract term) on them based on this assessment. is permitted to receive a termination payment – is now the industry standard, and that many banks are no longer willing to finance transactions that involve one-way termination language. undelivered energy products that the two parties have contracted for, the City will still pay for any energy products that have already been delivered at the time of the default (assuming no other dispute). 8 0 6 4 FISCAL/RESOURCE IMPACT STAKEHOLDER ENGAGEMENT ENVIRONMENTAL REVIEW ATTACHMENTS APPROVED BY: Attachment A * NOT YET APPROVED * 6059729 1 9 2 3 1 Resolution No. _________ Resolution of the Council of the City of Palo Alto Approving Edison Electric Institute Master Power Purchase and Sale Agreements with NRG Business Marketing LLC, DRW Energy Trading LLC, and Dynasty Power Inc., Delegating Authority to the City Manager to Transact Under the Master Agreements for Electricity-Related Commodities and Services, and Updating the City’s Standard Form Edison Electric Institute Master Power Purchase and Sale Agreement R E C I T A L S A. An active set of creditworthy counterparties is essential for the City of Palo Alto (City) to meet its electric supply portfolio planning objectives, internal risk management controls, and external operational and regulatory requirements. B. The City desires to enter into Edison Electric Institute (EEI) Master Power Purchase and Sale Agreements (Master Agreements) with NRG Business Marketing LLC (NRG), DRW Energy Trading LLC (DRW), and Dynasty Power Inc. (Dynasty) to provide additional electricity suppliers with which to transact in a timely and competitive manner. C. The proposed Master Agreements with NRG, DRW, and Dynasty have been negotiated under terms and conditions acceptable to the City, reviewed and approved by the City Attorney’s Office, and deemed suitable by the City’s Energy Risk Manager. D. Staff has identified that NRG does not fully satisfy the City's investment-grade credit rating requirement, but recommends a waiver of this requirement given the company's strong balance sheet, positive ratings outlook, and the limited number of active counterparties currently available to the City. E. DRW and Dynasty are privately-held and therefore lack a credit rating, but staff recommends a waiver of the City's investment-grade credit rating requirement for them based on the strength of their financial data. F.All three proposed counterparties will be required to post collateral in the form of cash or a letter of credit from an A+ rated bank, within five business days of the award of a transaction. G. Palo Alto Municipal Code (PAMC) Section 2.30.340 permits the use of Master Agreements to buy and/or sell electricity, gas, and related services through preapproved suppliers, subject to the City’s Energy Risk Management Policy, Guidelines, and Procedures. Attachment A * NOT YET APPROVED * 6059729 2 9 2 3 1 H. Executing these Master Agreements does not commit the City to any transactions with these counterparties but allows for future transactions to be executed efficiently. I. Staff has also identified minor updates to the City’s standard form version of the EEI Master Power Purchase and Sale Agreement that are needed to clarify the City's 'one-way termination' provisions and better align them with current industry standards, thereby making the City's contract language more acceptable to suppliers. J. The City Council’s approval of the Master Agreements with NRG, DRW, and Dynasty, and updates to the City’s standard form version EEI Master Agreement does not constitute a project under the California Environmental Quality Act (CEQA) as it will not result in any reasonably foreseeable direct or indirect change in the environment. The Council of the City of Palo Alto does hereby RESOLVE as follows: SECTION 1. The Council hereby approves the execution of the Edison Electric Institute Master Power Purchase and Sale Agreement with NRG Business Marketing LLC, DRW Energy Trading LLC and Dynasty Power Inc. (Exhibits A, B and C to this Resolution). SECTION 2. The Council hereby delegates authority to the City Manager or their designee, the Director of Utilities, to transact under the Master Agreements for electricity- related commodities and services subject to the following limitations: (a) The date for delivery of the electricity products for each transaction shall not exceed 36 months from the date the transaction is executed; (b) The delivery date for any transaction shall not extend beyond December 2027; (c) The maximum aggregate transaction limit under the Master Agreement shall be $25 million; (d) All transactions shall be subject to the Palo Alto Municipal Code; and (e) All transactions shall be subject to the City’s Energy Risk Management Policies, Guidelines, and Procedures. SECTION 3. The Council hereby waives the investment-grade credit rating requirement for NRG, DRW, and Dynasty. SECTION 4. The Council hereby approves an updated standard form version EEI Master Power Purchase and Sale Agreement (Exhibit D). SECTION 5. The Council hereby authorizes the City Manager or their designee, the Director of Utilities, to take any administrative actions necessary to implement this Resolution. Attachment A * NOT YET APPROVED * 6059729 2 9 2 3 1 Attachment A * NOT YET APPROVED * 6059729 3 9 2 3 1 INTRODUCED AND PASSED: Version 2.1 (modified 4/25/00) ©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association ALL RIGHTS RESERVED UNDER U.S. AND FOREIGN LAW, TREATIES AND CONVENTIONS AUTOMATIC LICENSE – PERMISSION OF THE COPYRIGHT OWNERS IS GRANTED FOR REPRODUCTION BY DOWNLOADING FROM A COMPUTER AND PRINTING ELECTRONIC COPIES OF THE WORK. NO AUTHORIZED COPY MAY BE SOLD. THE INDUSTRY IS ENCOURAGED TO USE THIS MASTER POWER PURCHASE AND SALE AGREEMENT IN ITS TRANSACTIONS. ATTRIBUTION TO THE COPYRIGHT OWNERS IS REQUESTED. Master Power Purchase & Sale Agreement i Version 2.1 (modified 4/25/00) ©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association MASTER POWER PURCHASE AND SALES AGREEMENT TABLE OF CONTENTS GENERAL TERMS AND CONDITIONS ...................................................................................21 ARTICLE ONE: GENERAL DEFINITIONS .......................................................................21 ARTICLE TWO: TRANSACTION TERMS AND CONDITIONS ......................................26 2.1 Transactions ...........................................................................................................26 2.2 Governing Terms ...................................................................................................26 2.3 Confirmation ..........................................................................................................26 2.4 Additional Confirmation Terms .............................................................................26 2.5 Recording ...............................................................................................................26 ARTICLE THREE: OBLIGATIONS AND DELIVERIES .......................................................27 3.1 Seller’s and Buyer’s Obligations ...........................................................................27 3.2 Transmission and Scheduling ................................................................................27 3.3 Force Majeure ........................................................................................................27 ARTICLE FOUR: REMEDIES FOR FAILURE TO DELIVER/RECEIVE ..........................27 4.1 Seller Failure ..........................................................................................................27 4.2 Buyer Failure .........................................................................................................27 ARTICLE FIVE: EVENTS OF DEFAULT; REMEDIES .....................................................28 5.1 Events of Default ...................................................................................................28 5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts .................................................................................................................29 5.3 Net Out of Settlement Amounts .............................................................................29 5.4 Notice of Payment of Termination Payment .........................................................29 5.5 Disputes With Respect to Termination Payment ...................................................30 5.6 Closeout Setoffs .....................................................................................................30 5.7 Suspension of Performance....................................................................................30 ARTICLE SIX: PAYMENT AND NETTING ....................................................................30 6.1 Billing Period .........................................................................................................30 6.2 Timeliness of Payment ...........................................................................................31 6.3 Disputes and Adjustments of Invoices ...................................................................31 6.4 Netting of Payments ...............................................................................................31 6.5 Payment Obligation Absent Netting ......................................................................31 6.6 Security ..................................................................................................................31 6.7 Payment for Options ..............................................................................................31 6.8 Transaction Netting ................................................................................................32 ARTICLE SEVEN: LIMITATIONS ..........................................................................................32 7.1 Limitation of Remedies, Liability and Damages ...................................................32 ii Version 2.1 (modified 4/25/00) ©COPYRIGHT 2000 by the Edison Electric Institute and National Energy Marketers Association ARTICLE EIGHT: CREDIT AND COLLATERAL REQUIREMENTS ................................32 8.1 Party A Credit Protection .......................................................................................32 8.2 Party B Credit Protection .......................................................................................34 8.3 Grant of Security Interest/Remedies ......................................................................35 ARTICLE NINE: GOVERNMENTAL CHARGES...............................................................36 9.1 Cooperation ............................................................................................................36 9.2 Governmental Charges...........................................................................................36 ARTICLE TEN: MISCELLANEOUS ..................................................................................36 10.1 Term of Master Agreement ....................................................................................36 10.2 Representations and Warranties .............................................................................36 10.3 Title and Risk of Loss ............................................................................................38 10.4 Indemnity ...............................................................................................................38 10.5 Assignment ............................................................................................................38 10.6 Governing Law ......................................................................................................38 10.7 Notices ...................................................................................................................38 10.8 General ...................................................................................................................38 10.9 Audit ......................................................................................................................39 10.10 Forward Contract ...................................................................................................39 10.11 Confidentiality .......................................................................................................39 SCHEDULE M: GOVERNMENTAL ENTITY OR PUBLIC POWER SYSTEMS ..................40 SCHEDULE P: PRODUCTS AND RELATED DEFINITIONS .................................................43 EXHIBIT A: CONFIRMATION LETTER ..................................................................................49 1 MASTER POWER PURCHASE AND SALE AGREEMENT COVER SHEET This Master Power Purchase and Sale Agreement (“Master Agreement”) is made as of the following date: September 11, 2025 (“Effective Date”). This Master Agreement, together with the exhibits, schedules and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement.” This Master Agreement will be formed in the style of the pre-printed Master Power Purchase and Sale Agreement, Version 2.1, as published by the Edison Electric Institute, dated April 25, 2000 as modified by the Errata, Version 1.1, published by the Edison Electric Institute, dated July 18, 2007, and such pre-printed form as so modified (other than the form cover sheet) will control to the extent of any inconsistencies with this Master Agreement executed by the Parties. If any of the terms of this cover sheet conflict with such pre-printed form as so modified, the terms of this cover sheet will govern. The Parties to this Master Agreement are the following: Name (“NRG Business Marketing LLC” or “Party A”) Name (“City of Palo Alto” or “Party B”) All Notices: All Notices: Street: 804 Carnegie Center Street: 250 Hamilton Ave. City: Princeton, NJ Zip: 08540 City: Palo Alto, CA Zip: 94301 Attn: Contract Administration Phone: 609.524.4543 Facsimile: 609.524.4540 Email: ContractAdmin@nrg.com Duns: 07-879-0103 Federal Tax ID Number: 80-0909818 Attn: Assistant Director, Utilities Resource Management Division Phone: 650-329-2119 Facsimile: 650-617-3140 Duns: 17-892-8479 Federal Tax ID Number: 94-6000389 Invoices: Attn: Accounting – Physical Power Phone: 609.524.4980 Email: PhysicalSettlements@nrg.com Invoices: Attn: Power Settlements, Northern California Power Agency Phone: 916-781-4224 Email: settlements@ncpa.com Scheduling: PJM, ISONE, NYISO: Attn: Scheduling Desk Phone: 609.524.5484 or 4554 Facsimile: 609.524.4540 Email: NE_Hourly_Desk@nrg.com ERCOT, CAISO and MISO: Attn: Day Ahead Scheduling Phone: 713.537.3710 or 3711 Facsimile: 609.524.4540 Email: nrgdayahead@nrg.com Scheduling: Attn: Pre-Scheduler Desk, Northern California Power Agency Phone: 916-781-4240 Email: preschedulers@ncpa.com 2 Payments: Attn: Accounting – Physical Power Phone: 609.524.4980 Email: PhysicalSettlements@nrg.com Payments: Attn: Accounts Payable, Northern California Power Agency Phone: 916-781-4237 Facsimile: 916-781-4226 Wire Transfer: Bank Name: J.P. Morgan/Chase Manhattan Bank ABA: 021-000021 Account Name: NRG Business Marketing LLC Account Number: 323-271979 Wire Transfer: BNK: U.S. Bank - Deposit to Northern California Power Agency, to the benefit of City of Palo Alto ABA: 121122676 ACCT: 1-534-0216-2744 Credit and Collections: Attn: Sr. Director of Credit Phone: 732-781-0506 Facsimile: 609.524.4779 _WholesaleCredit@nrg.com Credit and Collections: Attn: Power Settlements, Northern California Power Agency Phone: 916-781-4221 Email: settlements@ncpa.com With additional Notices of an Event of Default or Potential Event of Default to: Attn: Assistant General Counsel – Commercial Operations Phone: 609.524.4500 Facsimile: 609.524.4501 With additional Notices of an Event of Default or Potential Event of Default to: Attn: Assistant City Attorney - Utilities Phone: 650-329-2171 Facsimile: 650-329-2646 Confirmations: Attn: Confirmation Specialist - Power Phone: 609.524.4870 Facsimile: 609.524.4779 Confirmations@nrg.com Confirmations: Attn: CPAU Electric Front Office Phone: 650-329-2314 Email: utilitycommoditysettlements@paloalto.gov The Parties hereby agree that the General Terms and Conditions are incorporated herein, and to the following provisions as provided for in the General Terms and Conditions: Party A Tariff: FERC Electric Tariff Dated: May 13, 2013 Docket Number ER13-1192-000; as such may be amended, modified, superseded or replaced from time to time. Party B Tariff:____________________Dated Docket Number ______ Article Two Transaction Terms and Conditions  Optional provision in Section 2.4. If not checked, inapplicable. Article Four Remedies for Failure to Deliver or Receive  Accelerated Payment of Damages. If not checked, inapplicable. 3 Article Five  Cross Default for Party A: Events of Default; Remedies  Party A: Cross Default Amount: USD 150,000,000  Other Entity: NRG Energy, Inc. Cross Default Amount: USD 150,000,000  Cross Default for Party B:  Party B: Cross Default Amount: USD 150,000,000  Other Entity: [A single event or multiple events equal to or greater than the Cross Default Amount by any of [ - ]] Cross Default Amount: USD [ - ] 5.6 Closeout Setoff  Option A (Applicable if no other selection is made.)  Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows: (See modified provision for Section 5.6 below.)  Option C Article 8 8.1 Party A Credit Protection: Credit and Collateral Requirements (a) Financial Information:  Option A  Option B Specify: Audited financial statements for City of Palo Alto and for City of Palo Alto Enterprise Fund  Option C Specify: (b) Credit Assurances:  Not Applicable  Applicable (c) Collateral Threshold:  Not Applicable  Applicable 4 (d) Downgrade Event:  Not Applicable  Applicable If applicable, complete the following:  It shall be a Downgrade Event for Party B only if (a) Party B’s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt") by S&P or Moody's is respectively below BBB- or Baa3, (b) (ii) both S&P and Moody's refuse to rate Party B's Debt, or and (c) Party B’s City Council no longer has the legal authority under the Act, as defined by Schedule M, to adjust electric rates as necessary to recover Party B’s costs of providing retail electric service to its customers.  Other: Specify: (e) Guarantor for Party B: [ - ] Guarantee Amount: USD [ - ] 8.2 Party B Credit Protection: (a) Financial Information:  Option A  Option B Specify: NRG Energy, Inc. Audited financial statements to be provided by Party A as described in Section 8.2(a) shall be for Party A or parent entity, if any, providing credit support.  Option C Specify: (b) Credit Assurances:  Not Applicable  Applicable If Party B has reasonable grounds to believe that Party A’s creditworthiness or performance under this Agreement has become unsatisfactory, Party B will provide Party A with written notice requesting Performance Assurance in an amount determined by Party B in a commercially reasonable manner. Upon receipt of such notice Party A shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party B. In the event that Party A fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default under 5 Article Five will be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. For purpose of this Master Agreement, creditworthiness shall mean a credit rating for Party A rating established as of the Effective Date of the Master Agreement of not less than a BB credit rating established by Standard & Poor’s and a Ba2 credit rating established by Moody’s Investors Service, continuing throughout the term of this agreement. (c) Collateral Threshold:  Not Applicable  Applicable (d) Downgrade Event:  Not Applicable  Applicable If applicable, complete the following:  It shall be a Downgrade Event for Party A if Party A’s Credit Rating falls below _______ from S&P and ________from Moody’s or if Party A is not rated by either S&P or Moody’s.  Other: Specify: (e) Guarantor for Party A: NRG Energy, Inc. Guarantee Amount: As set forth in the Guaranty. Article 10 Confidentiality  Confidentiality Applicable If not checked, inapplicable. Schedule M  Party A is a Governmental Entity or Public Power System  Party B is a Governmental Entity or Public Power System  Add Section 3.6. If not checked, inapplicable  Add Section 8.4. If not checked, inapplicable 6 Other Changes: This Agreement incorporates the Errata published by the Edison Electric Institute Version 1.1 published July 18, 2007. Article One General Definitions add the following provisions: “1.62 ‘Trading Affiliate’ means, to the extent that it is an Affiliate of Party A, Direct Energy Marketing Limited, or any successor thereto.” Section 1.4 is amended by deleting the first sentence and replacing it to read as follows: “Business Day” means any day except a Saturday, Sunday, the Friday immediately following the Thanksgiving holiday or a Federal Reserve Bank Holiday. Section 1.10 is amended by adding after “the price” in line 1 the words “, including any and all AB 32 fees” and substituting “U.S. $” for “$U.S.” in line 1 Section 1.27 Letters of Credit (1) delete the phrase “or a foreign bank with a U.S. branch” and replacing it with the phrase “or a U.S. branch of a foreign bank” and (2) replace “transferable” with “non-transferable”, and (3) inserting the phrase “and in an amount” in the third line after the word “form” and before the word “acceptable”. Section 1.45 is deleted and replaced with the following definition, ““Performance Assurance” means sufficient security in the form, amount, for a term, and from an issuer, all as reasonably acceptable to the Requesting Party. The following forms of Performance Assurance may be requested by the Requesting Party: (i) collateral in the form of either cash or Letter(s) of Credit, (ii) revised or earlier payment terms for Product that has been delivered during the prior Month, (iii) any other security acceptable to the Requesting Party, or (iv) information demonstrating that Party B’s retail rates are set at levels sufficiently high to recover all costs of providing electric service to Party B’s retail electric customers, including the costs incurred by Party B under all Transactions executed under this Agreement.” Section 1.46 is amended by adding before the period at the end thereof the following: “; provided that the failure to comply with any requirement of this Master Agreement or a Transaction, including the requirements of Article 8, before the expiration of the time period expressly specified for such compliance in this Master Agreement or the Transaction, if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance.” Section 1.51 Replacement Price (1) add the phrase “for delivery” immediately before the phrase “at the Delivery Point” in the second line and (2) delete the phrase “at Buyer's option” from the fifth line and replace with the phrase “absent a purchase”, and (3) inserting in the seventh line after the words, “any penalties” and before “, ratcheted demand”, the following: “(other than penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery)”. Section 1.52 S&P delete in its entirety and replace with the following: “1.52 “S&P” means S&P Global Ratings or its successor.” Section 1.53 Sales Price (1) delete the phrase “at the Delivery Point” from the second line, and (2) delete the phrase “at Seller’s option” from the fifth line and replace with the phrase “=assuming a sale could not have been made in a commercially reasonable manner” Section 2.1 shall be amended by deleting the second sentence thereof. For purposes of Section 2.3, Party B requires that all Transactions be confirmed in writing. Accordingly, the provision is amended by striking the word “may” from the first line thereof and replacing it with the word “shall.” 7 Section 2.3 Confirmation (1) add after “deemed to have accepted the terms as sent” in each place it appears the words “, absent manifest error,” and (2) delete the phrase “two (2) Business Days of Buyer’s receipt thereof” and replace with the phrase “seven (7) Business Days of Buyer’s receipt thereof”, and (3) all references to Seller shall be instead to Party A. Section 2.4 Additional Confirmation Terms, delete the words “either orally or” in the seventh line. A new Section 2.6 is added to Article Two, worded as follows: “2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction between the Parties shall become binding unless and until a Confirmation for such Transaction is signed by both Parties, and this Master Agreement and any and all Transactions may not be orally amended or modified, including by Recording pursuant to Section 2.5.” Section 3.2 Transmission and Scheduling add the following text to the end of the Section: “Product deliveries shall be scheduled in accordance with the then-current applicable tariffs, protocols, operating procedures and scheduling practices for the relevant region. A new Section 4.3 is added to Article Four, worded as follows: “4.3 Suspension of Performance. In addition to the remedies provided pursuant to Sections 4.1, 4.2 and 5.7, if Seller or Buyer fails to schedule, deliver or receive all or part of the Product pursuant to a Transaction for a period of three (3) or more consecutive days, and such failure is not excused under the terms of the Product, by Force Majeure, by the other Party’s failure to perform or by agreement of the Parties, then upon one (1) Business Day’s prior written notice, and for so long as the non- performing Party fails to perform, the performing Party shall have the right to suspend its performance under such Transaction; provided however, suspension of performance will not include the payment for any Products already delivered. In the event the performing Party suspends performance pursuant to this Section 4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Party at least one (1) Business Day prior to the date upon which the non-performing Party intends to resume its performance; provided that, if the performing Party has entered into a replacement contract with a term of 31 days or less, the performing Party may resume performance at the end of the term of such replacement contract. Remedies available under this provision to the performing Party are in addition to, not in replacement of, other remedies specified in this Agreement.” Section 5.1 Events of Default, subsection (g), (1) add “, excluding any such indebtedness owing by such Party or any other party specified in the Cover Sheet for such Party to any of their Affiliates” after “borrowed money” in the sixth line, (2) delete the phrase “, or becoming capable at such time of being declared,” beginning in the eighth line of the Section, and (3) add the phrase “under such agreements or instruments” immediately following the phrase “due date therefor” in the eleventh line. Section 5.1 Events of Default, subjection (h)(v), add “made in connection with this Agreement” after “any guaranty”. Section 5.1 Events of Default add the following as a new Section 5.1(i) through (m): “(i) a Party, its Guarantor or any Specified Entity (as defined below) of such Party: (i) defaults under a Specified Transaction (as defined below) and, after giving effect to any applicable notice requirement or grace period, which results in a liquidation of, an acceleration of obligations under, or an early termination of, that Specified 8 Transaction, (ii) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment date or delivery date of a Specified Transaction; or (iii) disaffirms, disclaims or repudiates any Specified Transaction. (j) a representation or warranty with respect to the Defaulting Party's financial statement or position that is false or materially misleading; or (m) revocation by the Federal Energy Regulatory Commission of Party A’s authorization to make sales and market-based rates.” ‘Specified Transaction’ means any transaction (other than a Transaction) now existing or hereafter entered into between one Party to this Agreement (or any Guarantor or any applicable Specified Entity of such Party) and the other Party to this Agreement (or any Guarantor or any applicable Specified Entity of such Party) that is a transaction for the purchase, sale, exchange or transfer of any commodity or any other commodity transaction or a spot, forward, option or swap transaction in or with respect to one or more currencies, commodities, securities, rates, indices or other measures of financial or economic risk or any other similar transaction (or any combination thereof). For this purpose, “commodity” means any tangible or intangible commodity of any type or description (including, without limitation, electric power, capacity, natural gas, natural gas liquids, coal, petroleum (and the products or by-products thereof), renewable energy obligations, emission allowances, ambient temperature indexes, and indexes of other weather characteristics. ‘Specified Entity’ shall mean with respect to Party A: Trading Affiliate. ‘Specified Entity’ shall mean with respect to Party B: Affiliate;” Section 5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts delete the following phrase from the last two lines: “under applicable law on the Early Termination Date, as soon thereafter as is reasonably practicable” and replace it with the following: “under applicable law on the Early Termination Date, then each such Transaction shall be terminated as soon thereafter as reasonably practicable, and upon termination shall be deemed to be a Terminated Transaction and the Termination Payment payable in connection with all such Transactions shall be calculated in accordance with Section 5.3 below). The Non- Defaulting Party (or its agent) may determine its Gains and Losses by reference to information either available to it internally or supplied by one or more third parties including, without limitation, quotations (either firm or indicative) of relevant rates, prices, yields, yield curves, volatilities, spreads or other relevant market data in the relevant markets. Third parties supplying such information may include, without limitation, dealers in the relevant markets, end-users of the relevant product, information vendors and other sources of market information.” Add the following to the end of this Section- “If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the Settlement Amount shall be zero, notwithstanding any provision of this Agreement to the contrary. Any Party who is in default at the time of the Early Termination Date, or whose default is the cause of the Early Termination Date, 9 shall not be entitled to receive any Termination Payment of Settlement Amount For purposes of clarity, the Defaulting Party is entitled for any payment due for any amounts delivered prior to the Early Termination Date.” Section 5.3 Net Out of Settlement Amounts. Section 5.3 is amended by adding the phrase “plus, at the option of the Non-Defaulting Party, any cash or Letter of Credit(s) then in the possession of the Defaulting Party or its agent pursuant to Article Eight,” after the first use of the phrase “due to the Non-Defaulting Party” in the sixth line. Section 5.6 Closeout Setoffs, Option B delete in its entirety and replace with the following: “Option B: Subject to Section 5.2, any Termination Payment payable to the Defaulting Party will, at the option of the Non-Defaulting Party (“X”) (and without prior notice to the Defaulting Party), be set-off against any other amounts (“Other Amounts”) payable by or due to the other Party (“Y”) to or from X or any Affiliate of X (whether or not arising under this Agreement, matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent that any Other Amounts are so set off, those Other Amounts will be discharged promptly and in all respects. X will give notice to Y of any set-off effected under this Section 5.6. For purposes of this Section 5.6 the Affiliates of Party A will be limited to the Trading Affiliates. The remedy provided for in this Section 5.6 will be without prejudice and in addition to any right or setoff, combination of accounts, lien, or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract, or otherwise).” Section 5.7 Suspension of Performance delete all of the text starting with the proviso in subclause (i) and replace it with the following: “provided, however, and without waiving any Event of Default or any rights or remedies in this Agreement (other than the suspension rights in this Section 5.7 solely in respect of such Event of Default), in no event shall any such suspension related to an Event of Default continue for longer than ten (10) NERC Business Days with respect to any single Transaction unless an early Termination Date shall have been declared and notice thereof pursuant to Section 5.2 given (during which time amounts under Section 4.1 or 4.2, as applicable, may continue to accrue with respect to the Defaulting Party as if it breached its obligation), and (ii) to the extent an Event of Default shall have occurred and be continuing, to exercise any remedy available at law or in equity. Notwithstanding the proviso in subclause (i), (x) the Non-Defaulting Party retains all of its other rights and remedies arising with respect to such Event of Default or Potential Event of Default, including (without limitation) the right to declare an Early Termination Date, and (y) such proviso will not affect the right of the Non-Defaulting Party in respect of any new or subsequent Event of Default or Potential Event of Default.” Section 8.1(a) Financial Information, Option A (1) replace “120” with “90”, and (2) add after the phrase “quarterly report containing unaudited consolidated financial statements for such fiscal quarter” the text, “, provided however, for the purposes of this (i) and (ii), if such financial statements are publicly available electronically, then Party B shall be deemed to have met this requirement”. Section 8.1(b) Credit Assurances (1) add in the fourth line after the words “in a commercially reasonable manner” the text, “which amount shall not exceed 100% of the Termination Payment that would be due Party A as if Party B was the Defaulting Party and an Early Termination Date had been designated”, and (2) add in the seventh line after the words “acceptable to Party A” the text, 10 “acting reasonably”. Section 8.1(d) Downgrade Event (1) add in the third line after the words “in a commercially reasonable manner” the text, “which amount shall not exceed 100% of the Termination Payment that would be due Party A as if Party B was the Defaulting Party and an Early Termination Date had been designated” and (2) add after the phrase “or other credit assurance acceptable to Party A within three (3) Business Days of receipt of notice” the following text, “and/or fails to maintain such Performance Assurance or guaranty or other credit assurance for so long as the Downgrade Event is continuing.” Section 8.2(a) Financial Information, Option B (1) replace “120” with “90”, and (2) add after the phrase “quarterly report containing unaudited consolidated financial statements for such fiscal quarter for the party(s) specified on the Cover Sheet” the text, “, provided however, for the purposes of this (i) and (ii), if such financial statements are publicly available electronically, then Party A shall be deemed to have met this requirement”. Section 8.2(b) Credit Assurances (1) add in the fourth line after the words “in a commercially reasonable manner” the text, “which amount shall not exceed 100% of the Termination Payment that would be due Party B as if Party A was the Defaulting Party and an Early Termination Date had been designated” and (2) add in the seventh line after the words “acceptable to Party B” the text, “acting reasonably”. Section 8.2(d) Downgrade Event (1) add in the third line after the words “in a commercially reasonable manner” the text, “which amount shall not exceed 100% of the Termination Payment that would be due Party B as if Party A was the Defaulting Party and an Early Termination Date had been designated” and (2) add after the phrase “or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice” the text, “and/or fails to maintain such Performance Assurance or guaranty or other credit assurance for so long as the Downgrade Event is continuing.” Section 10.2 Representations and Warranties, subsection (viii) (1) delete “and” before the phrase “is capable of assessing the merits of” and (2) add at the end the words “, and the other Party is not acting as a fiduciary or an advisor to it in respect of a Transaction”. Section 10.2 Representations and Warranties, subsection (ix) amend to read in its entirety as follows: “(ix) (a) it is a “forward contract merchant” within the meaning of the United States Bankruptcy Code, (b) it is a “master netting agreement participant” for purposes of the United States Bankruptcy Code, and (c) it is an “eligible contract participant” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a)(18).” Section 10.2 Representations and Warranties, subsection (xi) delete in its entirety and replace with the following: “(ix) with respect to each Transaction proposed or entered into that constitutes a “commodity option transaction” as such term is used in Part 32 of Title 17 of the U.S. Code of Federal Regulations, (A) it is a producer, processor, or commercial user of, or a merchant handling the commodity that is the subject of such Transaction, of the products or byproducts thereof; (B) it is entering into the Transaction solely for purposes related to its business as such; and (C) it intends to physically settle such Transaction such that if the option associated with such Transaction is exercised, the option would result in the sale of an “exempt commodity” (as such term is defined in Section 1a(20) of the U.S. Commodity Exchange Act, as amended), for 11 immediate or deferred delivery;” Section 10.4 Indemnity (1) add in the last sentence after “hold harmless the other Party” the text “from any liability” and (2) add after the last sentence the text, “Neither Party shall be liable with respect to any Claim to the extent that such Claim resulted from the negligence, willful misconduct or bad faith of the indemnified Party.”. Section 10.5 Assignment (1) Delete from the first sentence the text “may be withheld in the exercise of its sole discretion” and replace it with “shall not be unreasonably delayed or withheld”; (2) In clause (ii) thereof replace the words “affiliate” and “affiliate's” with, respectively, “Affiliate” and “Affiliate's”, and insert before “, or” the words “taking in account any credit support document”; (3) Replace subsection (ii) - (iii) with the following text: “(ii) transfer or assign this Agreement to an Affiliate of such Party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such Party or the Guarantor as of the Effective Date and the date of entering into each Transaction under this Agreement, if any, for such Party, or (y) the obligations of such Affiliate are guaranteed by such Party or its Guarantor, if any, in accordance with a guaranty agreement in form and substance satisfactory to the other Party, and (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party whose creditworthiness is equal to or higher than that of such Party or its Guarantor, if any, as of the Effective Date and the effective date of any such transfer or assignment.” (4) An additional sentence shall be added as the last sentences of Section 10.5 stating “Any purported transfer or assignment in contravention of this Section shall be void.” Section 10.6 Governing Law is amended as follows : “THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY DISPUTE ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. The Parties hereby consent to conduct all dispute resolution, judicial actions or proceedings arising directly, indirectly or otherwise in conjunction with, out of, related to, or arising from this Agreement in Santa Clara County, California.” Section 10.7 Notices (1) add the phrase “or the exercise of an option” immediately after the phrase “(other than scheduling requests” and (2) delete the third and fourth sentences and replace them with the following: “Unless otherwise specified herein, notice by facsimile shall be considered received upon the sending Party’s receipt of its facsimile machines’ confirmation of successful transmission, notice by hand delivery shall be considered received at the close of business on the day actually received, if received during business hours on a Business Day, and notice by overnight United States mail or courier shall be considered received on the next Business Day after it was sent.” Section 10.8 General change the words “parties” and “party” to “Parties” and “Party” in the third sentence and delete the second to last sentence and replace it with “The indemnity provisions of this Agreement shall survive the termination of this Agreement for the period of the applicable statute of limitations and the audit provisions of this Agreement shall survive the termination of this 12 Agreement for a period of twelve (12) months.” Section 10.10 Forward Contract delete in its entirety and replace with the following: “10.10 Bankruptcy Provisions. The Parties acknowledge and agree that (a) this Agreement and all Transactions constitute a “forward contract” within the meaning of the United States Bankruptcy Code (the “Code”); (b) this Agreement constitutes a “master netting agreement” within the meaning of the Code; (c) all payments made or to be made on its behalf pursuant to this Agreement, including the application by a Party of Performance Assurance to any amounts due and owing to such Party, constitute “settlement payments” within the meaning of the Code; (d) all transfers of Performance Assurance by it or on its behalf under this Agreement constitute “margin payments” within the meaning of the Code; (e) its rights under Article Five, “Events of Default; Remedies”, of this Agreement constitute a “contractual right to liquidate, terminate or accelerate” or “contractual right to liquidate, terminate, accelerate, or offset under a master netting agreement and across contracts” the Transactions within the meaning of the Code; (f) (i) the other Party is not a “utility” as such term is used in Section 366 of the Code, and (ii) it waives and agrees not to assert (x) the applicability of the provisions of Section 366 of the Code in any bankruptcy proceeding wherein it is a debtor and (y) that the other Party is a provider of last resort in any such proceeding.” Section 10.11 Confidentiality is amended to (1) add the phrase “or the completed Cover Sheet to this Master Agreement” immediately before the phrase “to a third party”, (2) add the following phrase after the word “lenders”: “and their counsel and advisors”, (3) add immediately after the phrase “other than the Party's” the text “or the Party's Affiliates'“, and (4) add the following text to the end of the paragraph: “The Parties hereby acknowledge that the disclosure of price data only without counterparty name does not contravene this Section 10.11 so long as the data is disclosed to an index publisher that publishes the data in aggregated form and does not identify the Parties. The Parties acknowledge and agree that the Transaction may be subject to the requirements of the California Public Records Act (Government Code Section 7920.000 et seq.). Each Party (a “Receiving Party”) acknowledges that the other Party (a “Disclosing Party”) may submit information to the Receiving Party that the Disclosing Party considers confidential, proprietary, or trade secret information pursuant to the Uniform Trade Secrets Act (Cal. Civ. Code section 3426 et seq.), or otherwise protected from disclosure pursuant to an exemption to the California Public Records Act (Government Code Sections 7929 and 7922). In order to designate information as confidential, the Disclosing Party must clearly stamp and identify the specific portion of the material designated with the word “Confidential”. The Parties agree not to over-designate material as confidential. Over-designation would include stamping whole agreements, entire pages or series of pages as confidential that clearly contain information that is not confidential. Upon request or demand of any third person or entity not a party to this Transaction (“Requestor”) for production, inspection and/or copying of information designated by a Party as confidential information (such designated information, the “Confidential Information”), the Receiving Party shall notify the Disclosing Party as soon as practical that such request has been made. The Disclosing Party shall be solely responsible for taking whatever legal steps are necessary to protect information deemed by it to be Confidential Information and to prevent release of information to the Requestor by the Receiving Party. If the Disclosing Party takes no such action within ten (10) business days after receiving the foregoing notice from the Receiving Party, the Receiving Party shall be permitted to comply with the Requestor’s demand and is not required to defend against it. If required by any law, statute, ordinance, a court, Governmental Authority or agency having jurisdiction over a Party, including the California Public Records Act, that Party may release 13 Confidential Information, or a portion thereof, as required by the Applicable Law, statute, ordinance, decision, order or regulation. A Party may disclose Confidential Information to accountants in connection with audits. In the event a Party is required to release Confidential Information, such Party shall notify the other Party of the required disclosure, such that the other Party may attempt (if such Party so chooses), at its sole cost, to cause the recipient of the Confidential Information to treat such information in a confidential manner, and to prevent such information from being disclosed or otherwise becoming part of the public domain. Parties acknowledge that Purchaser may be obligated to provide Confidential Information to the CPUC and CEC for regulatory compliance purposes. Except as provided in this Confidentiality section and the California Public Records Act neither Party shall publish, disclose, or otherwise divulge Confidential Information to any person at any time during or after the term of this Agreement, without the other Party’s prior express written consent. Each Party shall permit knowledge of and access to Confidential Information only to those of its affiliates and to their respective attorneys, accountants, representatives, agents and employees who have a need to know such Confidential Information related to this Agreement.” Article Ten, Miscellaneous add the following new Sections 10.12 to 10.18: “10.12 FERC Standard of Review; Mobile Sierra Waiver. (a) Absent the agreement of all Parties to the proposed change, the standard of review for changes to any rate, charge, classification, term or condition of this Agreement proposed by a Party (to the extent that any waiver in subsection (b) below is unenforceable or ineffective as to such Party), by FERC acting sua sponte or by non-parties will be the “public interest” application of the “just and reasonable” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group, Inc. v. Public Util. Dist. No. 1 of Snohomish, 554 U.S. 527 (2008), and further clarified by NRG Power Marketing LLC v. Maine Pub. Util. Comm’n, 558 U.S. 165 (2010) (commonly known as the “Mobile-Sierra doctrine). (b) In addition, and notwithstanding the foregoing subsection (a), to the fullest extent permitted by applicable law, each Party, for itself and its successors and assigns, hereby expressly and irrevocably waives any rights it can or may have, now or in the future, whether under §§ 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC by any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC changing any section of this Agreement specifying the rate, charge, classification, or other term or condition agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted by applicable law, neither Party shall unilaterally seek to obtain from FERC any relief changing the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any subsequent changes in applicable law or market conditions that may occur. In the event it were to be determined that applicable law precludes the Parties from waiving their rights to seek changes from FERC to their market-based power sales contracts (including entering into covenants not to do so) then this subsection (b) shall not apply, provided that, consistent with the foregoing subsection (a), neither Party shall seek any such changes except solely under the “public interest” application of the “just and reasonable” standard of review and otherwise as set forth in the foregoing section (a).” 14 10.13. Imaged Documents. Any document generated by the Parties with respect to this Agreement, including this Agreement, may be imaged and stored electronically (“Imaged Documents”). Imaged Documents may be introduced as evidence in any proceeding as if such were original business records and neither Party shall contest the admissibility of Imaged Documents as evidence in any proceeding on the basis that such were not originated or maintained in documentary form. However, nothing herein shall be construed as a waiver of any other objection to the admissibility of such evidence. 10.14 Prior Agreements. Party A and Party B confirm that there are no prior master power purchase and sale agreements between the Parties with respect to the subject matter hereof. . 10.15 Counterparts. This Master Agreement and any Confirmation may be executed in counterparts, each of which will be considered an original, but all of which together will constitute the same instrument. Without limiting the foregoing, a facsimile copy of this Master Agreement or a Confirmation or copy of this Master Agreement or a Confirmation sent via electronic mail in a portable document format (“PDF”) will be considered an original. 10.16. Compliance with Law. Each Party will comply in all material respects with all applicable laws, regulations, and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Master Agreement or any Confirmation. 10.17 “Nondiscrimination. As set forth in Palo Alto Municipal Code section 2.30.510, Party A agrees that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. Party A acknowledges that it has read and understands the provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in employment, including completing the form furnished by Party B and set forth in Exhibit D, as applicable. 10.18 Index Transactions. If the Contract Price for a Transaction is determined by reference to a Price Source, then: (a) .Market Disruption Event. If a Market Disruption Event occurs on any one or more days during a Determination Period (each day, a “Disrupted Day”), then: i) The fallback Floating Price, if any, specified by the Parties in the relevant Confirmation shall be the Floating Price for each Disrupted Day. ii) If the Parties have not specified a fallback Floating Price, then the Parties will endeavor, in good faith and using commercially reasonable efforts, to agree on a substitute Floating Price, taking into consideration, without limitation, guidance, protocols or other recommendations or conventions issued or employed by trade organizations or industry groups in response to the Market Disruption Event and other prices published by the Price Source or alternative price sources with respect to the Delivery Point or comparable Delivery Points that may permit the Parties to derive the Floating Price based on historical differentials. 15 iii) If the Price Source retrospectively issues a Floating Price in respect of a Disrupted Day (a “Delayed Floating Price”) before the parties agree on a substitute Floating Price for such day, then the Delayed Floating Price shall be the Floating Price for such Disrupted Day. If a Delayed Price is issued by the Price Source in respect of a Disrupted Day after the Parties agree on a substitute Floating Price for such day, the substitute Floating Price agreed upon by the Parties will remain the Floating Price without adjustment unless the Parties expressly agree otherwise. iv) If the Parties cannot agree on a substitute Floating Price and the Price Source does not retrospectively publish or announce a Floating Price, in each case, on or before the fifth Business Day following the first Trading Day on which the Market Disruption Event first occurred or existed, then the Floating Price for each Disrupted Day shall be determined by taking the arithmetic mean of quotations requested from four leading dealers in the relevant market that are unaffiliated with either Party and mutually agreed upon by the Parties (“Specified Dealers”), without regard to the quotations with the highest and lowest values, subject to the following qualifications: 1. If exactly three quotations are obtained, the Floating Price for each such Disrupted Day will be the quotation that remains after disregarding the quotations having the highest and lowest values. 2. If fewer than three quotations are obtained, the Floating Price for each such Disrupted Day will be the average of the quotations obtained. 3. If the Parties cannot agree upon four Specified Dealers, then each of the Parties will, acting in good faith and in a commercially reasonable manner, select up to two Specified Dealers separately, and those selected dealers shall be the Specified Dealers. v) Unless otherwise agreed, if at any time the Parties agree on a substitute Floating Price for any Disrupted Day, then such substitute Floating Price shall be the Floating Price for such Disrupted Day, notwithstanding the subsequent publication or announcement of a Delayed Floating Price by the relevant Price Source or any quotations obtained from Specified Dealers. "Determination Period" means each calendar month a part or all of which is within the Delivery Period of a Transaction. "Exchange" means, in respect of a Transaction, the exchange or principal trading market specified as applicable to the relevant Transaction. "Floating Price" means a Contract Price specified in a Transaction that is based upon a Price Source. "Market Disruption Event" means, with respect to any Price Source, any of the following events: (a) the failure of the Price Source to announce, publish or make available the specified Floating Price or information necessary for determining the Floating Price for a particular day; (b) the failure of trading to commence on a particular day or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange, 16 RTO or in the market specified for determining a Floating Price; (c) the temporary or permanent discontinuance or unavailability of the Price Source; (d) the temporary or permanent closing of any Exchange or RTO specified for determining a Floating Price; or (e) a material change in the formula for or the method of determining the Floating Price by the Price Source or a material change in the composition of the Product. "Price Source" means, in respect of a Transaction, a publication or such other origin of reference, including an Exchange or RTO, containing or reporting or making generally available to market participants (including by electronic means) a price, or prices or information from which a price is determined, as specified in the relevant Transaction. “RTO” means any regional transmission operator or independent system operator. "Trading Day" means a day in respect of which the relevant Price Source ordinarily would announce, publish or make available the Floating Price. (b) Corrections to Published Prices. If the Floating Price published, announced or made available on a given day and used or to be used to determine a relevant price is subsequently corrected by the relevant Price Source (i) within 30 days of the original publication, announcement or availability, or (ii) in the case of RTO Transactions only, within such longer time period as is consistent with the RTO’s procedures and guidelines, then either Party may notify the other Party of that correction and the amount (if any) that is payable as a result of that correction. If, not later than sixty (60) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Party that originally either received or retained such amount will, not later than three (3) Business Days after such notice is effective, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction. Notwithstanding the foregoing, corrections shall not be made to any Floating Prices agreed upon by the Parties or determined based on quotations from Specified Dealers pursuant to paragraph (a) above unless the Parties expressly agree otherwise. (c) Rounding. When calculating a Floating Price, all numbers shall be rounded to four (4) decimal places. If the fifth (5th) decimal number is five (5) or greater, then the fourth (4th) decimal number shall be increased by one (1), and if the fifth (5th) decimal number is less than five (5), then the fourth (4th) decimal number shall remain unchanged. Schedule M is amended as follows: Part A is amended by including the following definition for the term “Act”: “Act” means the Constitution of the State of California, the California statute(s), charter and municipal ordinances under which Party B was created, organized and authorized to enter into this Master Agreement and each Transaction thereunder. Schedule M, Clause E delete the model text for new Section 3.6 and add the following: “Section 3.6 Governmental Entity or Public Power System Security. (a) With 17 respect to each Transaction, Party B shall (1) either (i) have created and set aside a Special Fund or (ii) upon execution of this Master Agreement and prior to the commencement of each subsequent fiscal year of Governmental Entity or Public Power System during any Delivery Period, have obtained all necessary budgetary approvals and certifications for payment of all of its obligations under this Master Agreement for such fiscal year; and (2) upon the reasonable request of Party A, provide to Party A evidence reasonably satisfactory to Party A, that Party B has complied with the preceding clause (1). Party B shall have allocated to the Special Fund or its general funds a revenue base that is adequate to cover Party B’s payment obligations hereunder throughout the entire Delivery Period. For the avoidance of doubt, any breach of this Section 3.6(a) by Party B shall be deemed to be material and to have arisen during a fiscal period of Party B for which budgetary approval or certification of its obligations under this Master Agreement is in effect. (b) If any Transaction is determined to be a “swap” (as defined in Section 1a(47) of the U.S. Commodity Exchange Act, as amended, 7 USC Section 1, et seq. and any Commodity Futures Trading Commission rules, regulations, orders, supplementary information, guidance, questions and answers, staff letters and interpretations published or issued thereunder, in each applicable case as amended), Party B shall be deemed to have represented to Party A immediately prior to the Parties entry into such Transaction that (1) Party B is a “utility special entity” at such time and (2) that such Transaction is a “utility operations-related swap” (as each such term is defined in the CFTC’s rule Exclusion of Utility Operations-Related Swaps With Utility Special Entities From De Minimis Threshold for Swaps With Special Entities, 79 Fed. Reg. 57,767 (Sept. 26, 2014)).” Part G does not apply. Schedule P The following shall be added at the end of Schedule P: “If the Parties agree to use a service level/product defined by reference to a different agreement, tariff, set of rules or protocols (herein, “agreement”) (e.g., the PJM Operating Agreement, the ERCOT Protocols, WSPP Agreement) for a particular Transaction, then, unless the Parties expressly state and agree that all the terms and conditions of such other agreement will apply, the Transaction shall be subject to all the terms of this Agreement except (1) all service level/product definitions, (2) the regional reliability requirements and guidelines, and (3) the specific definitions for excuses for performance, Force Majeure and Uncontrollable Forces shall have the meaning ascribed to them in such other agreement in effect on the date the Transaction was entered into; provided, however, that with respect to Transactions subject to the WSPP Agreement, the methodology for calculating the payments for failure to deliver or receive, under Section 4 hereof, shall be in accordance with Section 21.3 of the WSPP Agreement; provided, further that the “Accelerated Payment of Damages” addressed in Section 4 hereof shall continue to apply to such payments if such election is made on the Cover Sheet.” The following definitions are hereby added to Schedule P: “CAISO” means the California Independent System Operator Corporation, or its successor. “CAISO Tariff” means the Federal Energy Regulatory Commission approved tariff of CAISO, 18 including all CAISO protocols, as the same may be amended from time to time. "West Firm", or “WSPP Schedule C” or “Schedule C” or “WSPPC-Firm” or any similar description means with respect to a Transaction, a Product that is or will be scheduled as firm energy consistent with the most recent rules adopted by the WECC. "WECC" means the Western Electricity Coordinating Council. "WSPP Agreement" means the Western Systems Power Pool Agreement as amended from time to time. “CAISO Energy” means with respect to a Transaction, a Product under which the Seller shall sell and the Buyer shall purchase a quantity of energy equal to the hourly quantity without Ancillary Services (as defined in the Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the applicable tariff and protocol provisions of the California Independent System Operator (“CAISO”) (as amended from time to time, the “Tariff”) for which the only excuse for failure to deliver or receive is an “Uncontrollable Force” (as defined in the Tariff). “Hourly Transactions”. The sale of energy on an hourly basis shall be deemed a “Non-Firm” product. “WSPP Agreement” means the WSPP Agreement as amended from time to time. 19 IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed in one or more counterparts (each of which shall be deemed an original, and all of which, taken together, shall constitute one and the same agreement) as of the date first above written. The Parties expressly acknowledge the validity of facsimile counterparts of the executed Master Agreement, if any, which may be transmitted in advance of, or in lieu of, executed original documents. Party A: Party B: City of Palo Alto NRG Business Marketing LLC Approval as to Form: By: …………………………….. By: …………………………….. Name: …………………………….. Name: Amy Bartell Title: …………………………….. Title: Assistant City Attorney Date: ____, 2025 Date: _________ _, 2025 Party B: City of Palo Alto By: …………………………….. Name: Ed Shikada Title: City Manager Date: _______________, 2025 Party B: City of Palo Alto Approval by Administrative Services Department: By: …………………………… .. Name: Lauren Lai Title: Administrative Services Director Date: ______ ___, 2025 Party B: City of Palo Alto Approval by Utilities Department: By: …………………………… .. Name: Alan Kurotori Title: Utilities Director Date: _______ ___, 2025 20 DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected. 21 GENERAL TERMS AND CONDITIONS ARTICLE ONE: GENERAL DEFINITIONS 1.1 “Affiliate” means, with respect to any person, any other person (other than an individual) that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such person. For this purpose, “control” means the direct or indirect ownership of fifty percent (50%) or more of the outstanding capital stock or other equity interests having ordinary voting power. 1.2 “Agreement” has the meaning set forth in the Cover Sheet. 1.3 “Bankrupt” means with respect to any entity, such entity (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they fall due. 1.4 “Business Day” means any day except a Saturday, Sunday, or a Federal Reserve Bank holiday. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received. 1.5 “Buyer” means the Party to a Transaction that is obligated to purchase and receive, or cause to be received, the Product, as specified in the Transaction. 1.6 “Call Option” means an Option entitling, but not obligating, the Option Buyer to purchase and receive the Product from the Option Seller at a price equal to the Strike Price for the Delivery Period for which the Option may be exercised, all as specified in the Transaction. Upon proper exercise of the Option by the Option Buyer, the Option Seller will be obligated to sell and deliver the Product for the Delivery Period for which the Option has been exercised. 1.7 “Claiming Party” has the meaning set forth in Section 3.3. 1.8 “Claims” means all third party claims or actions, threatened or filed and, whether groundless, false, fraudulent or otherwise, that directly or indirectly relate to the subject matter of an indemnity, and the resulting losses, damages, expenses, attorneys’ fees and court costs, whether incurred by settlement or otherwise, and whether such claims or actions are threatened or filed prior to or after the termination of this Agreement. 1.9 “Confirmation” has the meaning set forth in Section 2.3. 1.10 “Contract Price” means the price in $U.S. (unless otherwise provided for) to be paid by Buyer to Seller for the purchase of the Product, as specified in the Transaction. 22 1.11 “Costs” means, with respect to the Non-Defaulting Party, brokerage fees, commissions and other similar third party transaction costs and expenses reasonably incurred by such Party either in terminating any arrangement pursuant to which it has hedged its obligations or entering into new arrangements which replace a Terminated Transaction; and all reasonable attorneys’ fees and expenses incurred by the Non-Defaulting Party in connection with the termination of a Transaction. 1.12 “Credit Rating” means, with respect to any entity, the rating then assigned to such entity’s unsecured, senior long-term debt obligations (not supported by third party credit enhancements) or if such entity does not have a rating for its senior unsecured long-term debt, then the rating then assigned to such entity as an issues rating by S&P, Moody’s or any other rating agency agreed by the Parties as set forth in the Cover Sheet. 1.13 “Cross Default Amount” means the cross default amount, if any, set forth in the Cover Sheet for a Party. 1.14 “Defaulting Party” has the meaning set forth in Section 5.1. 1.15 “Delivery Period” means the period of delivery for a Transaction, as specified in the Transaction. 1.16 “Delivery Point” means the point at which the Product will be delivered and received, as specified in the Transaction. 1.17 “Downgrade Event” has the meaning set forth on the Cover Sheet. 1.18 “Early Termination Date” has the meaning set forth in Section 5.2. 1.19 “Effective Date” has the meaning set forth on the Cover Sheet. 1.20 “Equitable Defenses” means any bankruptcy, insolvency, reorganization and other laws affecting creditors’ rights generally, and with regard to equitable remedies, the discretion of the court before which proceedings to obtain same may be pending. 1.21 “Event of Default” has the meaning set forth in Section 5.1. 1.22 “FERC” means the Federal Energy Regulatory Commission or any successor government agency. 1.23 “Force Majeure” means an event or circumstance which prevents one Party from performing its obligations under one or more Transactions, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Claiming Party, and which, by the exercise of due diligence, the Claiming Party is unable to overcome or avoid or cause to be avoided. Force Majeure shall not be based on (i) the loss of Buyer’s markets; (ii) Buyer’s inability economically to use or resell the Product purchased hereunder; (iii) the loss or failure of Seller’s supply; or (iv) Seller’s ability to sell the Product at a price greater than the Contract Price. Neither Party may raise a claim of Force Majeure based in whole or in part on curtailment by a Transmission Provider unless (i) such Party has contracted for firm transmission with a Transmission Provider for the Product to be delivered to or received at the Delivery Point and (ii) such curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the Transmission Provider’s tariff; provided, however, that existence of the foregoing 23 factors shall not be sufficient to conclusively or presumptively prove the existence of a Force Majeure absent a showing of other facts and circumstances which in the aggregate with such factors establish that a Force Majeure as defined in the first sentence hereof has occurred. The applicability of Force Majeure to the Transaction is governed by the terms of the Products and Related Definitions contained in Schedule P. 1.24 “Gains” means, with respect to any Party, an amount equal to the present value of the economic benefit to it, if any (exclusive of Costs), resulting from the termination of a Terminated Transaction, determined in a commercially reasonable manner. 1.25 “Guarantor” means, with respect to a Party, the guarantor, if any, specified for such Party on the Cover Sheet. 1.26 “Interest Rate” means, for any date, the lesser of (a) the per annum rate of interest equal to the prime lending rate as may from time to time be published in The Wall Street Journal under “Money Rates” on such day (or if not published on such day on the most recent preceding day on which published), plus two percent (2%) and (b) the maximum rate permitted by applicable law. 1.27 “Letter(s) of Credit” means one or more irrevocable, transferable standby letters of credit issued by a U.S. commercial bank or a foreign bank with a U.S. branch with such bank having a credit rating of at least A- from S&P or A3 from Moody’s, in a form acceptable to the Party in whose favor the letter of credit is issued. Costs of a Letter of Credit shall be borne by the applicant for such Letter of Credit. 1.28 “Losses” means, with respect to any Party, an amount equal to the present value of the economic loss to it, if any (exclusive of Costs), resulting from termination of a Terminated Transaction, determined in a commercially reasonable manner. 1.29 “Master Agreement” has the meaning set forth on the Cover Sheet. 1.30 “Moody’s” means Moody’s Investor Services, Inc. or its successor. 1.31 “NERC Business Day” means any day except a Saturday, Sunday or a holiday as defined by the North American Electric Reliability Council or any successor organization thereto. A NERC Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant Party’s principal place of business. The relevant Party, in each instance unless otherwise specified, shall be the Party from whom the notice, payment or delivery is being sent and by whom the notice or payment or delivery is to be received. 1.32 “Non-Defaulting Party” has the meaning set forth in Section 5.2. 1.33 “Offsetting Transactions” mean any two or more outstanding Transactions, having the same or overlapping Delivery Period(s), Delivery Point and payment date, where under one or more of such Transactions, one Party is the Seller, and under the other such Transaction(s), the same Party is the Buyer. 1.34 “Option” means the right but not the obligation to purchase or sell a Product as specified in a Transaction. 24 1.35 “Option Buyer” means the Party specified in a Transaction as the purchaser of an option, as defined in Schedule P. 1.36 “Option Seller” means the Party specified in a Transaction as the seller of an option , as defined in Schedule P. 1.37 “Party A Collateral Threshold” means the collateral threshold, if any, set forth in the Cover Sheet for Party A. 1.38 “Party B Collateral Threshold” means the collateral threshold, if any, set forth in the Cover Sheet for Party B. 1.39 “Party A Independent Amount” means the amount , if any, set forth in the Cover Sheet for Party A. 1.40 “Party B Independent Amount” means the amount , if any, set forth in the Cover Sheet for Party B. 1.41 “Party A Rounding Amount” means the amount, if any, set forth in the Cover Sheet for Party A. 1.42 “Party B Rounding Amount” means the amount, if any, set forth in the Cover Sheet for Party B. 1.43 “Party A Tariff” means the tariff, if any, specified in the Cover Sheet for Party A. 1.44 “Party B Tariff” means the tariff, if any, specified in the Cover Sheet for Party B. 1.45 “Performance Assurance” means collateral in the form of either cash, Letter(s) of Credit, or other security acceptable to the Requesting Party. 1.46 “Potential Event of Default” means an event which, with notice or passage of time or both, would constitute an Event of Default. 1.47 “Product” means electric capacity, energy or other product(s) related thereto as specified in a Transaction by reference to a Product listed in Schedule P hereto or as otherwise specified by the Parties in the Transaction. 1.48 “Put Option” means an Option entitling, but not obligating, the Option Buyer to sell and deliver the Product to the Option Seller at a price equal to the Strike Price for the Delivery Period for which the option may be exercised, all as specified in a Transaction. Upon proper exercise of the Option by the Option Buyer, the Option Seller will be obligated to purchase and receive the Product. 1.49 “Quantity” means that quantity of the Product that Seller agrees to make available or sell and deliver, or cause to be delivered, to Buyer, and that Buyer agrees to purchase and receive, or cause to be received, from Seller as specified in the Transaction. 1.50 “Recording” has the meaning set forth in Section 2.4. 25 1.51 “Replacement Price” means the price at which Buyer, acting in a commercially reasonable manner, purchases at the Delivery Point a replacement for any Product specified in a Transaction but not delivered by Seller, plus (i) costs reasonably incurred by Buyer in purchasing such substitute Product and (ii) additional transmission charges, if any, reasonably incurred by Buyer to the Delivery Point, or at Buyer’s option, the market price at the Delivery Point for such Product not delivered as determined by Buyer in a commercially reasonable manner; provided, however, in no event shall such price include any penalties, ratcheted demand or similar charges, nor shall Buyer be required to utilize or change its utilization of its owned or controlled assets or market positions to minimize Seller’s liability. For the purposes of this definition, Buyer shall be considered to have purchased replacement Product to the extent Buyer shall have entered into one or more arrangements in a commercially reasonable manner whereby Buyer repurchases its obligation to sell and deliver the Product to another party at the Delivery Point. 1.52 “S&P” means the Standard & Poor’s Rating Group (a division of McGraw-Hill, Inc.) or its successor. 1.53 “Sales Price” means the price at which Seller, acting in a commercially reasonable manner, resells at the Delivery Point any Product not received by Buyer, deducting from such proceeds any (i) costs reasonably incurred by Seller in reselling such Product and (ii) additional transmission charges, if any, reasonably incurred by Seller in delivering such Product to the third party purchasers, or at Seller’s option, the market price at the Delivery Point for such Product not received as determined by Seller in a commercially reasonable manner; provided, however, in no event shall such price include any penalties, ratcheted demand or similar charges, nor shall Seller be required to utilize or change its utilization of its owned or controlled assets, including contractual assets, or market positions to minimize Buyer’s liability. For purposes of this definition, Seller shall be considered to have resold such Product to the extent Seller shall have entered into one or more arrangements in a commercially reasonable manner whereby Seller repurchases its obligation to purchase and receive the Product from another party at the Delivery Point. 1.54 “Schedule” or “Scheduling” means the actions of Seller, Buyer and/or their designated representatives, including each Party’s Transmission Providers, if applicable, of notifying, requesting and confirming to each other the quantity and type of Product to be delivered on any given day or days during the Delivery Period at a specified Delivery Point. 1.55 “Seller” means the Party to a Transaction that is obligated to sell and deliver, or cause to be delivered, the Product, as specified in the Transaction. 1.56 “Settlement Amount” means, with respect to a Transaction and the Non-Defaulting Party, the Losses or Gains, and Costs, expressed in U.S. Dollars, which such party incurs as a result of the liquidation of a Terminated Transaction pursuant to Section 5.2. 1.57 “Strike Price” means the price to be paid for the purchase of the Product pursuant to an Option. 1.58 “Terminated Transaction” has the meaning set forth in Section 5.2. 1.59 “Termination Payment” has the meaning set forth in Section 5.3. 1.60 “Transaction” means a particular transaction agreed to by the Parties relating to the sale and purchase of a Product pursuant to this Master Agreement. 26 1.61 “Transmission Provider” means any entity or entities transmitting or transporting the Product on behalf of Seller or Buyer to or from the Delivery Point in a particular Transaction. ARTICLE TWO: TRANSACTION TERMS AND CONDITIONS 2.1 Transactions. A Transaction shall be entered into upon agreement of the Parties orally or, if expressly required by either Party with respect to a particular Transaction, in writing, including an electronic means of communication. Each Party agrees not to contest, or assert any defense to, the validity or enforceability of the Transaction entered into in accordance with this Master Agreement (i) based on any law requiring agreements to be in writing or to be signed by the parties, or (ii) based on any lack of authority of the Party or any lack of authority of any employee of the Party to enter into a Transaction. 2.2 Governing Terms. Unless otherwise specifically agreed, each Transaction between the Parties shall be governed by this Master Agreement. This Master Agreement (including all exhibits, schedules and any written supplements hereto), , the Party A Tariff, if any, and the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any Confirmations accepted in accordance with Section 2.3) shall form a single integrated agreement between the Parties. Any inconsistency between any terms of this Master Agreement and any terms of the Transaction shall be resolved in favor of the terms of such Transaction. 2.3 Confirmation. Seller may confirm a Transaction by forwarding to Buyer by facsimile within three (3) Business Days after the Transaction is entered into a confirmation (“Confirmation”) substantially in the form of Exhibit A. If Buyer objects to any term(s) of such Confirmation, Buyer shall notify Seller in writing of such objections within two (2) Business Days of Buyer’s receipt thereof, failing which Buyer shall be deemed to have accepted the terms as sent. If Seller fails to send a Confirmation within three (3) Business Days after the Transaction is entered into, a Confirmation substantially in the form of Exhibit A, may be forwarded by Buyer to Seller. If Seller objects to any term(s) of such Confirmation, Seller shall notify Buyer of such objections within two (2) Business Days of Seller’s receipt thereof, failing which Seller shall be deemed to have accepted the terms as sent. If Seller and Buyer each send a Confirmation and neither Party objects to the other Party’s Confirmation within two (2) Business Days of receipt, Seller’s Confirmation shall be deemed to be accepted and shall be the controlling Confirmation, unless (i) Seller’s Confirmation was sent more than three (3) Business Days after the Transaction was entered into and (ii) Buyer’s Confirmation was sent prior to Seller’s Confirmation, in which case Buyer’s Confirmation shall be deemed to be accepted and shall be the controlling Confirmation. Failure by either Party to send or either Party to return an executed Confirmation or any objection by either Party shall not invalidate the Transaction agreed to by the Parties. 2.4 Additional Confirmation Terms. If the Parties have elected on the Cover Sheet to make this Section 2.4 applicable to this Master Agreement, when a Confirmation contains provisions, other than those provisions relating to the commercial terms of the Transaction (e.g., price or special transmission conditions), which modify or supplement the general terms and conditions of this Master Agreement (e.g., arbitration provisions or additional representations and warranties), such provisions shall not be deemed to be accepted pursuant to Section 2.3 unless agreed to either orally or in writing by the Parties; provided that the foregoing shall not invalidate any Transaction agreed to by the Parties. 2.5 Recording. Unless a Party expressly objects to a Recording (defined below) at the beginning of a telephone conversation, each Party consents to the creation of a tape or electronic recording (“Recording”) of all telephone conversations between the Parties to this Master Agreement, and that any such Recordings will be retained in confidence, secured from improper access, and may be submitted in evidence in any proceeding or action relating to this Agreement. Each Party waives any 27 further notice of such monitoring or recording, and agrees to notify its officers and employees of such monitoring or recording and to obtain any necessary consent of such officers and employees. The Recording, and the terms and conditions described therein, if admissible, shall be the controlling evidence for the Parties’ agreement with respect to a particular Transaction in the event a Confirmation is not fully executed (or deemed accepted) by both Parties. Upon full execution (or deemed acceptance) of a Confirmation, such Confirmation shall control in the event of any conflict with the terms of a Recording, or in the event of any conflict with the terms of this Master Agreement. ARTICLE THREE: OBLIGATIONS AND DELIVERIES 3.1 Seller’s and Buyer’s Obligations. With respect to each Transaction, Seller shall sell and deliver, or cause to be delivered, and Buyer shall purchase and receive, or cause to be received, the Quantity of the Product at the Delivery Point, and Buyer shall pay Seller the Contract Price; provided, however, with respect to Options, the obligations set forth in the preceding sentence shall only arise if the Option Buyer exercises its Option in accordance with its terms. Seller shall be responsible for any costs or charges imposed on or associated with the Product or its delivery of the Product up to the Delivery Point. Buyer shall be responsible for any costs or charges imposed on or associated with the Product or its receipt at and from the Delivery Point. 3.2 Transmission and Scheduling. Seller shall arrange and be responsible for transmission service to the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers, as specified by the Parties in the Transaction, or in the absence thereof, in accordance with the practice of the Transmission Providers, to deliver the Product to the Delivery Point. Buyer shall arrange and be responsible for transmission service at and from the Delivery Point and shall Schedule or arrange for Scheduling services with its Transmission Providers to receive the Product at the Delivery Point. 3.3 Force Majeure. To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under the Transaction and such Party (the “Claiming Party”) gives notice and details of the Force Majeure to the other Party as soon as practicable, then, unless the terms of the Product specify otherwise, the Claiming Party shall be excused from the performance of its obligations with respect to such Transaction (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure). The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. The non-Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure. ARTICLE FOUR: REMEDIES FOR FAILURE TO DELIVER/RECEIVE 4.1 Seller Failure. If Seller fails to schedule and/or deliver all or part of the Product pursuant to a Transaction, and such failure is not excused under the terms of the Product or by Buyer’s failure to perform, then Seller shall pay Buyer, on the date payment would otherwise be due in respect of the month in which the failure occurred or, if “Accelerated Payment of Damages” is specified on the Cover Sheet, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Contract Price from the Replacement Price. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount. 4.2 Buyer Failure. If Buyer fails to schedule and/or receive all or part of the Product pursuant to a Transaction and such failure is not excused under the terms of the Product or by Seller’s failure to perform, then Buyer shall pay Seller, on the date payment would otherwise be due in respect of the month in which the failure occurred or, if “Accelerated Payment of Damages” is specified on the 28 Cover Sheet, within five (5) Business Days of invoice receipt, an amount for such deficiency equal to the positive difference, if any, obtained by subtracting the Sales Price from the Contract Price. The invoice for such amount shall include a written statement explaining in reasonable detail the calculation of such amount. ARTICLE FIVE: EVENTS OF DEFAULT; REMEDIES 5.1 Events of Default. An “Event of Default” shall mean, with respect to a Party (a “Defaulting Party”), the occurrence of any of the following: (a) the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within three (3) Business Days after written notice; (b) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated; (c) the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default, and except for such Party’s obligations to deliver or receive the Product, the exclusive remedy for which is provided in Article Four) if such failure is not remedied within three (3) Business Days after written notice; (d) such Party becomes Bankrupt; (e) the failure of such Party to satisfy the creditworthiness/collateral requirements agreed to pursuant to Article Eight hereof; (f) such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting, surviving or transferee entity fails to assume all the obligations of such Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; (g) if the applicable cross default section in the Cover Sheet is indicated for such Party, the occurrence and continuation of (i) a default, event of default or other similar condition or event in respect of such Party or any other party specified in the Cover Sheet for such Party under one or more agreements or instruments, individually or collectively, relating to indebtedness for borrowed money in an aggregate amount of not less than the applicable Cross Default Amount (as specified in the Cover Sheet), which results in such indebtedness becoming, or becoming capable at such time of being declared, immediately due and payable or (ii) a default by such Party or any other party specified in the Cover Sheet for such Party in making on the due date therefor one or more payments, individually or collectively, in an aggregate amount of not less than the applicable Cross Default Amount (as specified in the Cover Sheet); (h) with respect to such Party’s Guarantor, if any: 29 (i) if any representation or warranty made by a Guarantor in connection with this Agreement is false or misleading in any material respect when made or when deemed made or repeated; (ii) the failure of a Guarantor to make any payment required or to perform any other material covenant or obligation in any guaranty made in connection with this Agreement and such failure shall not be remedied within three (3) Business Days after written notice; (iii) a Guarantor becomes Bankrupt; (iv) the failure of a Guarantor’s guaranty to be in full force and effect for purposes of this Agreement (other than in accordance with its terms) prior to the satisfaction of all obligations of such Party under each Transaction to which such guaranty shall relate without the written consent of the other Party; or (v) a Guarantor shall repudiate, disaffirm, disclaim, or reject, in whole or in part, or challenge the validity of any guaranty. 5.2 Declaration of an Early Termination Date and Calculation of Settlement Amounts. If an Event of Default with respect to a Defaulting Party shall have occurred and be continuing, the other Party (the “Non-Defaulting Party”) shall have the right (i) to designate a day, no earlier than the day such notice is effective and no later than 20 days after such notice is effective, as an early termination date (“Early Termination Date”) to accelerate all amounts owing between the Parties and to liquidate and terminate all, but not less than all, Transactions (each referred to as a “Terminated Transaction”) between the Parties, (ii) withhold any payments due to the Defaulting Party under this Agreement and (iii) suspend performance. The Non-Defaulting Party shall calculate, in a commercially reasonable manner, a Settlement Amount for each such Terminated Transaction as of the Early Termination Date (or, to the extent that in the reasonable opinion of the Non-Defaulting Party certain of such Terminated Transactions are commercially impracticable to liquidate and terminate or may not be liquidated and terminated under applicable law on the Early Termination Date, as soon thereafter as is reasonably practicable). 5.3 Net Out of Settlement Amounts. The Non-Defaulting Party shall aggregate all Settlement Amounts into a single amount by: netting out (a) all Settlement Amounts that are due to the Defaulting Party, plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Non-Defaulting Party pursuant to Article Eight, plus any or all other amounts due to the Defaulting Party under this Agreement against (b) all Settlement Amounts that are due to the Non- Defaulting Party, plus any or all other amounts due to the Non-Defaulting Party under this Agreement, so that all such amounts shall be netted out to a single liquidated amount (the “Termination Payment”) payable by one Party to the other. The Termination Payment shall be due to or due from the Non- Defaulting Party as appropriate. 5.4 Notice of Payment of Termination Payment. As soon as practicable after a liquidation, notice shall be given by the Non-Defaulting Party to the Defaulting Party of the amount of the Termination Payment and whether the Termination Payment is due to or due from the Non-Defaulting Party. The notice shall include a written statement explaining in reasonable detail the calculation of such amount. The Termination Payment shall be made by the Party that owes it within two (2) Business Days after such notice is effective. 30 5.5 Disputes With Respect to Termination Payment. If the Defaulting Party disputes the Non-Defaulting Party’s calculation of the Termination Payment, in whole or in part, the Defaulting Party shall, within two (2) Business Days of receipt of Non-Defaulting Party’s calculation of the Termination Payment, provide to the Non-Defaulting Party a detailed written explanation of the basis for such dispute; provided, however, that if the Termination Payment is due from the Defaulting Party, the Defaulting Party shall first transfer Performance Assurance to the Non-Defaulting Party in an amount equal to the Termination Payment. 5.6 Closeout Setoffs. Option A: After calculation of a Termination Payment in accordance with Section 5.3, if the Defaulting Party would be owed the Termination Payment, the Non-Defaulting Party shall be entitled, at its option and in its discretion, to (i) set off against such Termination Payment any amounts due and owing by the Defaulting Party to the Non-Defaulting Party under any other agreements, instruments or undertakings between the Defaulting Party and the Non-Defaulting Party and/or (ii) to the extent the Transactions are not yet liquidated in accordance with Section 5.2, withhold payment of the Termination Payment to the Defaulting Party. The remedy provided for in this Section shall be without prejudice and in addition to any right of setoff, combination of accounts, lien or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract or otherwise). Option B: After calculation of a Termination Payment in accordance with Section 5.3, if the Defaulting Party would be owed the Termination Payment, the Non-Defaulting Party shall be entitled, at its option and in its discretion, to (i) set off against such Termination Payment any amounts due and owing by the Defaulting Party or any of its Affiliates to the Non-Defaulting Party or any of its Affiliates under any other agreements, instruments or undertakings between the Defaulting Party or any of its Affiliates and the Non-Defaulting Party or any of its Affiliates and/or (ii) to the extent the Transactions are not yet liquidated in accordance with Section 5.2, withhold payment of the Termination Payment to the Defaulting Party. The remedy provided for in this Section shall be without prejudice and in addition to any right of setoff, combination of accounts, lien or other right to which any Party is at any time otherwise entitled (whether by operation of law, contract or otherwise). Option C: Neither Option A nor B shall apply. 5.7 Suspension of Performance. Notwithstanding any other provision of this Master Agreement, if (a) an Event of Default or (b) a Potential Event of Default shall have occurred and be continuing, the Non-Defaulting Party, upon written notice to the Defaulting Party, shall have the right (i) to suspend performance under any or all Transactions; provided, however, in no event shall any such suspension continue for longer than ten (10) NERC Business Days with respect to any single Transaction unless an early Termination Date shall have been declared and notice thereof pursuant to Section 5.2 given, and (ii) to the extent an Event of Default shall have occurred and be continuing to exercise any remedy available at law or in equity. ARTICLE SIX: PAYMENT AND NETTING 6.1 Billing Period. Unless otherwise specifically agreed upon by the Parties in a Transaction, the calendar month shall be the standard period for all payments under this Agreement (other than Termination Payments and, if “Accelerated Payment of Damages” is specified by the Parties in the Cover Sheet, payments pursuant to Section 4.1 or 4.2 and Option premium payments pursuant to Section 6.7). As soon as practicable after the end of each month, each Party will render to the other Party an invoice for the payment obligations, if any, incurred hereunder during the preceding month. 31 6.2 Timeliness of Payment. Unless otherwise agreed by the Parties in a Transaction, all invoices under this Master Agreement shall be due and payable in accordance with each Party’s invoice instructions on or before the later of the twentieth (20th) day of each month, or tenth (10th) day after receipt of the invoice or, if such day is not a Business Day, then on the next Business Day. Each Party will make payments by electronic funds transfer, or by other mutually agreeable method(s), to the account designated by the other Party. Any amounts not paid by the due date will be deemed delinquent and will accrue interest at the Interest Rate, such interest to be calculated from and including the due date to but excluding the date the delinquent amount is paid in full. 6.3 Disputes and Adjustments of Invoices. A Party may, in good faith, dispute the correctness of any invoice or any adjustment to an invoice, rendered under this Agreement or adjust any invoice for any arithmetic or computational error within twelve (12) months of the date the invoice, or adjustment to an invoice, was rendered. In the event an invoice or portion thereof, or any other claim or adjustment arising hereunder, is disputed, payment of the undisputed portion of the invoice shall be required to be made when due, with notice of the objection given to the other Party. Any invoice dispute or invoice adjustment shall be in writing and shall state the basis for the dispute or adjustment. Payment of the disputed amount shall not be required until the dispute is resolved. Upon resolution of the dispute, any required payment shall be made within two (2) Business Days of such resolution along with interest accrued at the Interest Rate from and including the due date to but excluding the date paid. Inadvertent overpayments shall be returned upon request or deducted by the Party receiving such overpayment from subsequent payments, with interest accrued at the Interest Rate from and including the date of such overpayment to but excluding the date repaid or deducted by the Party receiving such overpayment. Any dispute with respect to an invoice is waived unless the other Party is notified in accordance with this Section 6.3 within twelve (12) months after the invoice is rendered or any specific adjustment to the invoice is made. If an invoice is not rendered within twelve (12) months after the close of the month during which performance of a Transaction occurred, the right to payment for such performance is waived. 6.4 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each other on the same date pursuant to all Transactions through netting, in which case all amounts owed by each Party to the other Party for the purchase and sale of Products during the monthly billing period under this Master Agreement, including any related damages calculated pursuant to Article Four (unless one of the Parties elects to accelerate payment of such amounts as permitted by Article Four), interest, and payments or credits, shall be netted so that only the excess amount remaining due shall be paid by the Party who owes it. 6.5 Payment Obligation Absent Netting. If no mutual debts or payment obligations exist and only one Party owes a debt or obligation to the other during the monthly billing period, including, but not limited to, any related damage amounts calculated pursuant to Article Four, interest, and payments or credits, that Party shall pay such sum in full when due. 6.6 Security. Unless the Party benefiting from Performance Assurance or a guaranty notifies the other Party in writing, and except in connection with a liquidation and termination in accordance with Article Five, all amounts netted pursuant to this Article Six shall not take into account or include any Performance Assurance or guaranty which may be in effect to secure a Party’s performance under this Agreement. 6.7 Payment for Options. The premium amount for the purchase of an Option shall be paid within two (2) Business Days of receipt of an invoice from the Option Seller. Upon exercise of an Option, payment for the Product underlying such Option shall be due in accordance with Section 6.1. 32 6.8 Transaction Netting. If the Parties enter into one or more Transactions, which in conjunction with one or more other outstanding Transactions, constitute Offsetting Transactions, then all such Offsetting Transactions may by agreement of the Parties, be netted into a single Transaction under which: (a) the Party obligated to deliver the greater amount of Energy will deliver the difference between the total amount it is obligated to deliver and the total amount to be delivered to it under the Offsetting Transactions, and (b) the Party owing the greater aggregate payment will pay the net difference owed between the Parties. Each single Transaction resulting under this Section shall be deemed part of the single, indivisible contractual arrangement between the parties, and once such resulting Transaction occurs, outstanding obligations under the Offsetting Transactions which are satisfied by such offset shall terminate. ARTICLE SEVEN: LIMITATIONS 7.1 Limitation of Remedies, Liability and Damages. EXCEPT AS SET FORTH HEREIN, THERE IS NO WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR’S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN OR IN A TRANSACTION, THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. UNLESS EXPRESSLY HEREIN PROVIDED, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. ARTICLE EIGHT: CREDIT AND COLLATERAL REQUIREMENTS 8.1 Party A Credit Protection. The applicable credit and collateral requirements shall be as specified on the Cover Sheet. If no option in Section 8.1(a) is specified on the Cover Sheet, Section 8.l(a) Option C shall apply exclusively. If none of Sections 8.1(b), 8.1(c) or 8.1(d) are specified on the Cover Sheet, Section 8.1(b) shall apply exclusively. 33 (a) Financial Information. Option A: If requested by Party A, Party B shall deliver (i) within 120 days following the end of each fiscal year, a copy of Party B’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of Party B’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as Party B diligently pursues the preparation, certification and delivery of the statements. Option B: If requested by Party A, Party B shall deliver (i) within 120 days following the end of each fiscal year, a copy of the annual report containing audited consolidated financial statements for such fiscal year for the party(s) specified on the Cover Sheet and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of quarterly report containing unaudited consolidated financial statements for such fiscal quarter for the party(s) specified on the Cover Sheet. In all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as the relevant entity diligently pursues the preparation, certification and delivery of the statements. Option C: Party A may request from Party B the information specified in the Cover Sheet. (b) Credit Assurances. If Party A has reasonable grounds to believe that Party B’s creditworthiness or performance under this Agreement has become unsatisfactory, Party A will provide Party B with written notice requesting Performance Assurance in an amount determined by Party A in a commercially reasonable manner. Upon receipt of such notice Party B shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party A. In the event that Party B fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party A within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement. (c) Collateral Threshold. If at any time and from time to time during the term of this Agreement (and notwithstanding whether an Event of Default has occurred), the Termination Payment that would be owed to Party A plus Party B’s Independent Amount, if any, exceeds the Party B Collateral Threshold, then Party A, on any Business Day, may request that Party B provide Performance Assurance in an amount equal to the amount by which the Termination Payment plus Party B’s Independent Amount, if any, exceeds the Party B Collateral Threshold (rounding upwards for any fractional amount to the next Party B Rounding Amount) (“Party B Performance Assurance”), less any Party B Performance Assurance already posted with Party A. Such Party B Performance Assurance shall be delivered to Party A within three (3) Business Days of the date of such request. On any Business Day (but no more frequently than weekly with respect to Letters of Credit and daily with respect to cash), Party B, at its sole cost, may request that such Party B Performance Assurance be reduced correspondingly to the amount of such excess Termination Payment plus Party B’s Independent Amount, if any, (rounding upwards for any fractional amount to the next Party B Rounding Amount). In the event that Party B fails to provide Party B Performance Assurance pursuant to the terms of this Article Eight within three (3) Business Days, then an Event of Default under Article Five shall be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement. 34 For purposes of this Section 8.1(c), the calculation of the Termination Payment shall be calculated pursuant to Section 5.3 by Party A as if all outstanding Transactions had been liquidated, and in addition thereto, shall include all amounts owed but not yet paid by Party B to Party A, whether or not such amounts are due, for performance already provided pursuant to any and all Transactions. (d) Downgrade Event. If at any time there shall occur a Downgrade Event in respect of Party B, then Party A may require Party B to provide Performance Assurance in an amount determined by Party A in a commercially reasonable manner. In the event Party B shall fail to provide such Performance Assurance or a guaranty or other credit assurance acceptable to Party A within three (3) Business Days of receipt of notice, then an Event of Default shall be deemed to have occurred and Party A will be entitled to the remedies set forth in Article Five of this Master Agreement. (e) If specified on the Cover Sheet, Party B shall deliver to Party A, prior to or concurrently with the execution and delivery of this Master Agreement a guarantee in an amount not less than the Guarantee Amount specified on the Cover Sheet and in a form reasonably acceptable to Party A. 8.2 Party B Credit Protection. The applicable credit and collateral requirements shall be as specified on the Cover Sheet. If no option in Section 8.2(a) is specified on the Cover Sheet, Section 8.2(a) Option C shall apply exclusively. If none of Sections 8.2(b), 8.2(c) or 8.2(d) are specified on the Cover Sheet, Section 8.2(b) shall apply exclusively. (a) Financial Information. Option A: If requested by Party B, Party A shall deliver (i) within 120 days following the end of each fiscal year, a copy of Party A’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of such Party’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as such Party diligently pursues the preparation, certification and delivery of the statements. Option B: If requested by Party B, Party A shall deliver (i) within 120 days following the end of each fiscal year, a copy of the annual report containing audited consolidated financial statements for such fiscal year for the party(s) specified on the Cover Sheet and (ii) within 60 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of quarterly report containing unaudited consolidated financial statements for such fiscal quarter for the party(s) specified on the Cover Sheet. In all cases the statements shall be for the most recent accounting period and shall be prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as the relevant entity diligently pursues the preparation, certification and delivery of the statements. Option C: Party B may request from Party A the information specified in the Cover Sheet. (b) Credit Assurances. If Party B has reasonable grounds to believe that Party A’s creditworthiness or performance under this Agreement has become unsatisfactory, Party B will provide Party A with written notice requesting Performance Assurance in an amount determined by Party B in a commercially reasonable manner. Upon receipt of such notice Party A shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party B. In the event that Party A fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be 35 deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. (c) Collateral Threshold. If at any time and from time to time during the term of this Agreement (and notwithstanding whether an Event of Default has occurred), the Termination Payment that would be owed to Party B plus Party A’s Independent Amount, if any, exceeds the Party A Collateral Threshold, then Party B, on any Business Day, may request that Party A provide Performance Assurance in an amount equal to the amount by which the Termination Payment plus Party A’s Independent Amount, if any, exceeds the Party A Collateral Threshold (rounding upwards for any fractional amount to the next Party A Rounding Amount) (“Party A Performance Assurance”), less any Party A Performance Assurance already posted with Party B. Such Party A Performance Assurance shall be delivered to Party B within three (3) Business Days of the date of such request. On any Business Day (but no more frequently than weekly with respect to Letters of Credit and daily with respect to cash), Party A, at its sole cost, may request that such Party A Performance Assurance be reduced correspondingly to the amount of such excess Termination Payment plus Party A’s Independent Amount, if any, (rounding upwards for any fractional amount to the next Party A Rounding Amount). In the event that Party A fails to provide Party A Performance Assurance pursuant to the terms of this Article Eight within three (3) Business Days, then an Event of Default under Article Five shall be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. For purposes of this Section 8.2(c), the calculation of the Termination Payment shall be calculated pursuant to Section 5.3 by Party B as if all outstanding Transactions had been liquidated, and in addition thereto, shall include all amounts owed but not yet paid by Party A to Party B, whether or not such amounts are due, for performance already provided pursuant to any and all Transactions. (d) Downgrade Event. If at any time there shall occur a Downgrade Event in respect of Party A, then Party B may require Party A to provide Performance Assurance in an amount determined by Party B in a commercially reasonable manner. In the event Party A shall fail to provide such Performance Assurance or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default shall be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. (e) If specified on the Cover Sheet, Party A shall deliver to Party B, prior to or concurrently with the execution and delivery of this Master Agreement a guarantee in an amount not less than the Guarantee Amount specified on the Cover Sheet and in a form reasonably acceptable to Party B. 8.3 Grant of Security Interest/Remedies. To secure its obligations under this Agreement and to the extent either or both Parties deliver Performance Assurance hereunder, each Party (a “Pledgor”) hereby grants to the other Party (the “Secured Party”) a present and continuing security interest in, and lien on (and right of setoff against), and assignment of, all cash collateral and cash equivalent collateral and any and all proceeds resulting therefrom or the liquidation thereof, whether now or hereafter held by, on behalf of, or for the benefit of, such Secured Party, and each Party agrees to take such action as the other Party reasonably requires in order to perfect the Secured Party’s first-priority security interest in, and lien on (and right of setoff against), such collateral and any and all proceeds resulting therefrom or from the liquidation thereof. Upon or any time after the occurrence or deemed occurrence and during the continuation of an Event of Default or an Early Termination Date, the Non-Defaulting Party may do any one or more of the following: (i) exercise any of the rights and remedies of a Secured Party with respect to all Performance Assurance, including any such rights and remedies under law then in effect; (ii) exercise its rights of setoff against any and all property of the Defaulting Party in the possession of the Non-Defaulting Party or its agent; (iii) draw on any outstanding Letter of Credit issued for its benefit; and (iv) liquidate all Performance Assurance then held by or for the benefit of the Secured Party free from any 36 claim or right of any nature whatsoever of the Defaulting Party, including any equity or right of purchase or redemption by the Defaulting Party. The Secured Party shall apply the proceeds of the collateral realized upon the exercise of any such rights or remedies to reduce the Pledgor’s obligations under the Agreement (the Pledgor remaining liable for any amounts owing to the Secured Party after such application), subject to the Secured Party’s obligation to return any surplus proceeds remaining after such obligations are satisfied in full. ARTICLE NINE: GOVERNMENTAL CHARGES 9.1 Cooperation. Each Party shall use reasonable efforts to implement the provisions of and to administer this Master Agreement in accordance with the intent of the parties to minimize all taxes , so long as neither Party is materially adversely affected by such efforts. 9.2 Governmental Charges. Seller shall pay or cause to be paid all taxes imposed by any government authority(“Governmental Charges”) on or with respect to the Product or a Transaction arising prior to the Delivery Point. Buyer shall pay or cause to be paid all Governmental Charges on or with respect to the Product or a Transaction at and from the Delivery Point (other than ad valorem, franchise or income taxes which are related to the sale of the Product and are, therefore, the responsibility of the Seller). In the event Seller is required by law or regulation to remit or pay Governmental Charges which are Buyer’s responsibility hereunder, Buyer shall promptly reimburse Seller for such Governmental Charges. If Buyer is required by law or regulation to remit or pay Governmental Charges which are Seller’s responsibility hereunder, Buyer may deduct the amount of any such Governmental Charges from the sums due to Seller under Article 6 of this Agreement. Nothing shall obligate or cause a Party to pay or be liable to pay any Governmental Charges for which it is exempt under the law. ARTICLE TEN: MISCELLANEOUS 10.1 Term of Master Agreement. The term of this Master Agreement shall commence on the Effective Date and shall remain in effect until terminated by either Party upon (thirty) 30 days’ prior written notice; provided, however, that such termination shall not affect or excuse the performance of either Party under any provision of this Master Agreement that by its terms survives any such termination and, provided further, that this Master Agreement and any other documents executed and delivered hereunder shall remain in effect with respect to the Transaction(s) entered into prior to the effective date of such termination until both Parties have fulfilled all of their obligations with respect to such Transaction(s), or such Transaction(s) that have been terminated under Section 5.2 of this Agreement. 10.2 Representations and Warranties. On the Effective Date and the date of entering into each Transaction, each Party represents and warrants to the other Party that: (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; (ii) it has all regulatory authorizations necessary for it to legally perform its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3); (iii) the execution, delivery and performance of this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any 37 contracts to which it is a party or any law, rule, regulation, order or the like applicable to it; (iv) this Master Agreement, each Transaction (including any Confirmation accepted in accordance with Section 2.3), and each other document executed and delivered in accordance with this Master Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; subject to any Equitable Defenses. (v) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; (vi) there is not pending or, to its knowledge, threatened against it or any of its Affiliates any legal proceedings that could materially adversely affect its ability to perform its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3); (vii) no Event of Default or Potential Event of Default with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3); (viii) it is acting for its own account, has made its own independent decision to enter into this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) and as to whether this Master Agreement and each such Transaction (including any Confirmation accepted in accordance with Section 2.3) is appropriate or proper for it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of and understanding, and understands and accepts, the terms, conditions and risks of this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3); (ix) it is a “forward contract merchant” within the meaning of the United States Bankruptcy Code; (x) it has entered into this Master Agreement and each Transaction (including any Confirmation accepted in accordance with Section 2.3) in connection with the conduct of its business and it has the capacity or ability to make or take delivery of all Products referred to in the Transaction to which it is a Party; (xi) with respect to each Transaction (including any Confirmation accepted in accordance with Section 2.3) involving the purchase or sale of a Product or an Option, it is a producer, processor, commercial user or merchant handling the Product, and it is entering into such Transaction for purposes related to its business as such; and (xii) the material economic terms of each Transaction are subject to individual negotiation by the Parties. 38 10.3 Title and Risk of Loss. Title to and risk of loss related to the Product shall transfer from Seller to Buyer at the Delivery Point. Seller warrants that it will deliver to Buyer the Quantity of the Product free and clear of all liens, security interests, claims and encumbrances or any interest therein or thereto by any person arising prior to the Delivery Point. 10.4 Indemnity. Each Party shall indemnify, defend and hold harmless the other Party from and against any Claims arising from or out of any event, circumstance, act or incident first occurring or existing during the period when control and title to Product is vested in such Party as provided in Section 10.3. Each Party shall indemnify, defend and hold harmless the other Party against any Governmental Charges for which such Party is responsible under Article Nine. 10.5 Assignment. Neither Party shall assign this Agreement or its rights hereunder without the prior written consent of the other Party, which consent may be withheld in the exercise of its sole discretion; provided, however, either Party may, without the consent of the other Party (and without relieving itself from liability hereunder), (i) transfer, sell, pledge, encumber or assign this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements, (ii) transfer or assign this Agreement to an affiliate of such Party which affiliate’s creditworthiness is equal to or higher than that of such Party, or (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets whose creditworthiness is equal to or higher than that of such Party; provided, however, that in each such case, any such assignee shall agree in writing to be bound by the terms and conditions hereof and so long as the transferring Party delivers such tax and enforceability assurance as the non-transferring Party may reasonably request. 10.6 Governing Law. THIS AGREEMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, ENFORCED AND PERFORMED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LITIGATION ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT. 10.7 Notices. All notices, requests, statements or payments shall be made as specified in the Cover Sheet. Notices (other than scheduling requests) shall, unless otherwise specified herein, be in writing and may be delivered by hand delivery, United States mail, overnight courier service or facsimile. Notice by facsimile or hand delivery shall be effective at the close of business on the day actually received, if received during business hours on a Business Day, and otherwise shall be effective at the close of business on the next Business Day. Notice by overnight United States mail or courier shall be effective on the next Business Day after it was sent. A Party may change its addresses by providing notice of same in accordance herewith. 10.8 General. This Master Agreement (including the exhibits, schedules and any written supplements hereto), the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any Confirmation accepted in accordance with Section 2.3) constitute the entire agreement between the Parties relating to the subject matter. Notwithstanding the foregoing, any collateral, credit support or margin agreement or similar arrangement between the Parties shall, upon designation by the Parties, be deemed part of this Agreement and shall be incorporated herein by reference. This Agreement shall be considered for all purposes as prepared through the joint efforts of the parties and shall not be construed against one party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof. Except to the extent herein provided for, no amendment or modification to this Master Agreement shall be enforceable unless reduced to writing and executed by both Parties. Each Party agrees if it seeks to amend any applicable wholesale power sales tariff during the 39 term of this Agreement, such amendment will not in any way affect outstanding Transactions under this Agreement without the prior written consent of the other Party. Each Party further agrees that it will not assert, or defend itself, on the basis that any applicable tariff is inconsistent with this Agreement. This Agreement shall not impart any rights enforceable by any third party (other than a permitted successor or assignee bound to this Agreement). Waiver by a Party of any default by the other Party shall not be construed as a waiver of any other default. Any provision declared or rendered unlawful by any applicable court of law or regulatory agency or deemed unlawful because of a statutory change (individually or collectively, such events referred to as “Regulatory Event”) will not otherwise affect the remaining lawful obligations that arise under this Agreement; and provided, further, that if a Regulatory Event occurs, the Parties shall use their best efforts to reform this Agreement in order to give effect to the original intention of the Parties. The term “including” when used in this Agreement shall be by way of example only and shall not be considered in any way to be in limitation. The headings used herein are for convenience and reference purposes only. All indemnity and audit rights shall survive the termination of this Agreement for twelve (12) months. This Agreement shall be binding on each Party’s successors and permitted assigns. 10.9 Audit. Each Party has the right, at its sole expense and during normal working hours, to examine the records of the other Party to the extent reasonably necessary to verify the accuracy of any statement, charge or computation made pursuant to this Master Agreement. If requested, a Party shall provide to the other Party statements evidencing the Quantity delivered at the Delivery Point. If any such examination reveals any inaccuracy in any statement, the necessary adjustments in such statement and the payments thereof will be made promptly and shall bear interest calculated at the Interest Rate from the date the overpayment or underpayment was made until paid; provided, however, that no adjustment for any statement or payment will be made unless objection to the accuracy thereof was made prior to the lapse of twelve (12) months from the rendition thereof, and thereafter any objection shall be deemed waived. 10.10 Forward Contract. The Parties acknowledge and agree that all Transactions constitute “forward contracts” within the meaning of the United States Bankruptcy Code. 10.11 Confidentiality. If the Parties have elected on the Cover Sheet to make this Section 10.11 applicable to this Master Agreement, neither Party shall disclose the terms or conditions of a Transaction under this Master Agreement to a third party (other than the Party’s employees, lenders, counsel, accountants or advisors who have a need to know such information and have agreed to keep such terms confidential) except in order to comply with any applicable law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding; provided, however, each Party shall, to the extent practicable, use reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. 40 SCHEDULE M (THIS SCHEDULE IS INCLUDED IF THE APPROPRIATE BOX ON THE COVER SHEET IS MARKED INDICATING A PARTY IS A GOVERNMENTAL ENTITY OR PUBLIC POWER SYSTEM) A. The Parties agree to add the following definitions in Article One. “Act” means ______________________________.1 “Governmental Entity or Public Power System” means a municipality, county, governmental board, public power authority, public utility district, joint action agency, or other similar political subdivision or public entity of the United States, one or more States or territories or any combination thereof. “Special Fund” means a fund or account of the Governmental Entity or Public Power System set aside and or pledged to satisfy the Public Power System’s obligations hereunder out of which amounts shall be paid to satisfy all of the Public Power System’s obligations under this Master Agreement for the entire Delivery Period. B. The following sentence shall be added to the end of the definition of “Force Majeure” in Article One. If the Claiming Party is a Governmental Entity or Public Power System, Force Majeure does not include any action taken by the Governmental Entity or Public Power System in its governmental capacity. C. The Parties agree to add the following representations and warranties to Section 10.2: Further and with respect to a Party that is a Governmental Entity or Public Power System, such Governmental Entity or Public Power System represents and warrants to the other Party continuing throughout the term of this Master Agreement, with respect to this Master Agreement and each Transaction, as follows: (i) all acts necessary to the valid execution, delivery and performance of this Master Agreement, including without limitation, competitive bidding, public notice, election, referendum, prior appropriation or other required procedures has or will be taken and performed as required under the Act and the Public Power System’s ordinances, bylaws or other regulations, (ii) all persons making up the governing body of Governmental Entity or Public Power System are the duly elected or appointed incumbents in their positions and hold such positions in good standing in accordance with the Act and other applicable law, (iii) entry into and performance of this Master Agreement by Governmental Entity or Public Power System are for a proper public purpose within the meaning of the Act and all other relevant constitutional, organic or other governing documents and applicable law, (iv) the term of this Master Agreement does not extend beyond any applicable limitation imposed by the Act or other 1 Cite the state enabling and other relevant statutes applicable to Governmental Entity or Public Power System. 41 relevant constitutional, organic or other governing documents and applicable law, (v) the Public Power System’s obligations to make payments hereunder are unsubordinated obligations and such payments are (a) operating and maintenance costs (or similar designation) which enjoy first priority of payment at all times under any and all bond ordinances or indentures to which it is a party, the Act and all other relevant constitutional, organic or other governing documents and applicable law or (b) otherwise not subject to any prior claim under any and all bond ordinances or indentures to which it is a party, the Act and all other relevant constitutional, organic or other governing documents and applicable law and are available without limitation or deduction to satisfy all Governmental Entity or Public Power System’ obligations hereunder and under each Transaction or (c) are to be made solely from a Special Fund, (vi) entry into and performance of this Master Agreement and each Transaction by the Governmental Entity or Public Power System will not adversely affect the exclusion from gross income for federal income tax purposes of interest on any obligation of Governmental Entity or Public Power System otherwise entitled to such exclusion, and (vii) obligations to make payments hereunder do not constitute any kind of indebtedness of Governmental Entity or Public Power System or create any kind of lien on, or security interest in, any property or revenues of Governmental Entity or Public Power System which, in either case, is proscribed by any provision of the Act or any other relevant constitutional, organic or other governing documents and applicable law, any order or judgment of any court or other agency of government applicable to it or its assets, or any contractual restriction binding on or affecting it or any of its assets. D. The Parties agree to add the following sections to Article Three: Section 3.4 Public Power System’s Deliveries. On the Effective Date and as a condition to the obligations of the other Party under this Agreement, Governmental Entity or Public Power System shall provide the other Party hereto (i) certified copies of all ordinances, resolutions, public notices and other documents evidencing the necessary authorizations with respect to the execution, delivery and performance by Governmental Entity or Public Power System of this Master Agreement and (ii) an opinion of counsel for Governmental Entity or Public Power System, in form and substance reasonably satisfactory to the Other Party, regarding the validity, binding effect and enforceability of this Master Agreement against Governmental Entity or Public Power System in respect of the Act and all other relevant constitutional organic or other governing documents and applicable law. Section 3.5 No Immunity Claim. Governmental Entity or Public Power System warrants and covenants that with respect to its contractual obligations hereunder and performance thereof, it will not claim immunity on the grounds of sovereignty or similar grounds with respect to itself or its revenues or assets from (a) suit, (b) jurisdiction of court (including a court located outside the jurisdiction of its organization), (c) relief by way of injunction, order for specific performance or recovery of property, (d) attachment of assets, or (e) execution or enforcement of any judgment. 42 E. If the appropriate box is checked on the Cover Sheet, as an alternative to selecting one of the options under Section 8.3, the Parties agree to add the following section to Article Three: Section 3.6 Governmental Entity or Public Power System Security. With respect to each Transaction, Governmental Entity or Public Power System shall either (i) have created and set aside a Special Fund or (ii) upon execution of this Master Agreement and prior to the commencement of each subsequent fiscal year of Governmental Entity or Public Power System during any Delivery Period, have obtained all necessary budgetary approvals and certifications for payment of all of its obligations under this Master Agreement for such fiscal year; any breach of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which budgetary approval or certification of its obligations under this Master Agreement is in effect and, notwithstanding anything to the contrary in Article Four, an Early Termination Date shall automatically and without further notice occur hereunder as of such date wherein Governmental Entity or Public Power System shall be treated as the Defaulting Party. Governmental Entity or Public Power System shall have allocated to the Special Fund or its general funds a revenue base that is adequate to cover Public Power System’s payment obligations hereunder throughout the entire Delivery Period. F. If the appropriate box is checked on the Cover Sheet, the Parties agree to add the following section to Article Eight: Section 8.4 Governmental Security. As security for payment and performance of Public Power System’s obligations hereunder, Public Power System hereby pledges, sets over, assigns and grants to the other Party a security interest in all of Public Power System’s right, title and interest in and to [specify collateral]. G. The Parties agree to add the following sentence at the end of Section 10.6 - Governing Law: NOTWITHSTANDING THE FOREGOING, IN RESPECT OF THE APPLICABILITY OF THE ACT AS HEREIN PROVIDED, THE LAWS OF THE STATE OF _____________2 SHALL APPLY. 2 Insert relevant state for Governmental Entity or Public Power System. 43 SCHEDULE P: PRODUCTS AND RELATED DEFINITIONS “Ancillary Services” means any of the services identified by a Transmission Provider in its transmission tariff as “ancillary services” including, but not limited to, regulation and frequency response, energy imbalance, operating reserve-spinning and operating reserve-supplemental, as may be specified in the Transaction. “Capacity” has the meaning specified in the Transaction. “Energy” means three-phase, 60-cycle alternating current electric energy, expressed in megawatt hours. “Firm (LD)” means, with respect to a Transaction, that either Party shall be relieved of its obligations to sell and deliver or purchase and receive without liability only to the extent that, and for the period during which, such performance is prevented by Force Majeure. In the absence of Force Majeure, the Party to which performance is owed shall be entitled to receive from the Party which failed to deliver/receive an amount determined pursuant to Article Four. “Firm Transmission Contingent - Contract Path” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission for such Transaction is interrupted or curtailed and (i) such Party has provided for firm transmission with the transmission provider(s) for the Product in the case of the Seller from the generation source to the Delivery Point or in the case of the Buyer from the Delivery Point to the ultimate sink, and (ii) such interruption or curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the applicable transmission provider’s tariff. This contingency shall excuse performance for the duration of the interruption or curtailment notwithstanding the provisions of the definition of “Force Majeure” in Section 1.23 to the contrary. “Firm Transmission Contingent - Delivery Point” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission to the Delivery Point (in the case of Seller) or from the Delivery Point (in the case of Buyer) for such Transaction is interrupted or curtailed and (i) such Party has provided for firm transmission with the transmission provider(s) for the Product, in the case of the Seller, to be delivered to the Delivery Point or, in the case of Buyer, to be received at the Delivery Point and (ii) such interruption or curtailment is due to “force majeure” or “uncontrollable force” or a similar term as defined under the applicable transmission provider’s tariff. This transmission contingency excuses performance for the duration of the interruption or curtailment, notwithstanding the provisions of the definition of “Force Majeure” in Section 1.23 to the contrary. Interruptions or curtailments of transmission other than the transmission either immediately to or from the Delivery Point shall not excuse performance “Firm (No Force Majeure)” means, with respect to a Transaction, that if either Party fails to perform its obligation to sell and deliver or purchase and receive the Product, the Party to which performance is owed shall be entitled to receive from the Party which failed to perform an amount determined pursuant to Article Four. Force Majeure shall not excuse performance of a Firm (No Force Majeure) Transaction. “Into ______________ (the “Receiving Transmission Provider”), Seller’s Daily Choice” means that, in accordance with the provisions set forth below, (1) the Product shall be scheduled and delivered to an interconnection or interface (“Interface”) either (a) on the Receiving Transmission Provider’s 44 transmission system border or (b) within the control area of the Receiving Transmission Provider if the Product is from a source of generation in that control area, which Interface, in either case, the Receiving Transmission Provider identifies as available for delivery of the Product in or into its control area; and (2) Seller has the right on a daily prescheduled basis to designate the Interface where the Product shall be delivered. An “Into” Product shall be subject to the following provisions: 1. Prescheduling and Notification. Subject to the provisions of Section 6, not later than the prescheduling deadline of 11:00 a.m. CPT on the Business Day before the next delivery day or as otherwise agreed to by Buyer and Seller, Seller shall notify Buyer (“Seller’s Notification”) of Seller’s immediate upstream counterparty and the Interface (the “Designated Interface”) where Seller shall deliver the Product for the next delivery day, and Buyer shall notify Seller of Buyer’s immediate downstream counterparty. 2. Availability of “Firm Transmission” to Buyer at Designated Interface; “Timely Request for Transmission,” “ADI” and “Available Transmission.” In determining availability to Buyer of next- day firm transmission (“Firm Transmission”) from the Designated Interface, a “Timely Request for Transmission” shall mean a properly completed request for Firm Transmission made by Buyer in accordance with the controlling tariff procedures, which request shall be submitted to the Receiving Transmission Provider no later than 30 minutes after delivery of Seller’s Notification, provided, however, if the Receiving Transmission Provider is not accepting requests for Firm Transmission at the time of Seller’s Notification, then such request by Buyer shall be made within 30 minutes of the time when the Receiving Transmission Provider first opens thereafter for purposes of accepting requests for Firm Transmission. Pursuant to the terms hereof, delivery of the Product may under certain circumstances be redesignated to occur at an Interface other than the Designated Interface (any such alternate designated interface, an “ADI”) either (a) on the Receiving Transmission Provider’s transmission system border or (b) within the control area of the Receiving Transmission Provider if the Product is from a source of generation in that control area, which ADI, in either case, the Receiving Transmission Provider identifies as available for delivery of the Product in or into its control area using either firm or non-firm transmission, as available on a day-ahead or hourly basis (individually or collectively referred to as “Available Transmission”) within the Receiving Transmission Provider’s transmission system. 3. Rights of Buyer and Seller Depending Upon Availability of/Timely Request for Firm Transmission. A. Timely Request for Firm Transmission made by Buyer, Accepted by the Receiving Transmission Provider and Purchased by Buyer. If a Timely Request for Firm Transmission is made by Buyer and is accepted by the Receiving Transmission Provider and Buyer purchases such Firm Transmission, then Seller shall deliver and Buyer shall receive the Product at the Designated Interface. i. If the Firm Transmission purchased by Buyer within the Receiving Transmission Provider’s transmission system from the Designated Interface ceases to be available to Buyer for any reason, or if Seller is unable to deliver the Product at the Designated Interface for any reason except Buyer’s non-performance, then at Seller’s choice from among the following, Seller shall: (a) to the extent Firm Transmission is available to Buyer from an ADI on a day-ahead basis, require Buyer to purchase such Firm Transmission from such ADI, and schedule and deliver the affected portion of the Product to such ADI on the basis of Buyer’s purchase of Firm Transmission, or (b) require Buyer to purchase non-firm transmission, and schedule and deliver the affected 45 portion of the Product on the basis of Buyer’s purchase of non-firm transmission from the Designated Interface or an ADI designated by Seller, or (c) to the extent firm transmission is available on an hourly basis, require Buyer to purchase firm transmission, and schedule and deliver the affected portion of the Product on the basis of Buyer’s purchase of such hourly firm transmission from the Designated Interface or an ADI designated by Seller. ii. If the Available Transmission utilized by Buyer as required by Seller pursuant to Section 3A(i) ceases to be available to Buyer for any reason, then Seller shall again have those alternatives stated in Section 3A(i) in order to satisfy its obligations. iii. Seller’s obligation to schedule and deliver the Product at an ADI is subject to Buyer’s obligation referenced in Section 4B to cooperate reasonably therewith. If Buyer and Seller cannot complete the scheduling and/or delivery at an ADI, then Buyer shall be deemed to have satisfied its receipt obligations to Seller and Seller shall be deemed to have failed its delivery obligations to Buyer, and Seller shall be liable to Buyer for amounts determined pursuant to Article Four. iv. In each instance in which Buyer and Seller must make alternative scheduling arrangements for delivery at the Designated Interface or an ADI pursuant to Sections 3A(i) or (ii), and Firm Transmission had been purchased by both Seller and Buyer into and within the Receiving Transmission Provider’s transmission system as to the scheduled delivery which could not be completed as a result of the interruption or curtailment of such Firm Transmission, Buyer and Seller shall bear their respective transmission expenses and/or associated congestion charges incurred in connection with efforts to complete delivery by such alternative scheduling and delivery arrangements. In any instance except as set forth in the immediately preceding sentence, Buyer and Seller must make alternative scheduling arrangements for delivery at the Designated Interface or an ADI under Sections 3A(i) or (ii), Seller shall be responsible for any additional transmission purchases and/or associated congestion charges incurred by Buyer in connection with such alternative scheduling arrangements. B. Timely Request for Firm Transmission Made by Buyer but Rejected by the Receiving Transmission Provider. If Buyer’s Timely Request for Firm Transmission is rejected by the Receiving Transmission Provider because of unavailability of Firm Transmission from the Designated Interface, then Buyer shall notify Seller within 15 minutes after receipt of the Receiving Transmission Provider’s notice of rejection (“Buyer’s Rejection Notice”). If Buyer timely notifies Seller of such unavailability of Firm Transmission from the Designated Interface, then Seller shall be obligated either (1) to the extent Firm Transmission is available to Buyer from an ADI on a day-ahead basis, to require Buyer to purchase (at Buyer’s own expense) such Firm Transmission from such ADI and schedule and deliver the Product to such ADI on the basis of Buyer’s purchase of Firm Transmission, and thereafter the provisions in Section 3A shall apply, or (2) to require Buyer to purchase (at Buyer’s own expense) non-firm transmission, and schedule and deliver the Product on the basis of Buyer’s purchase of non-firm transmission from the Designated Interface or an ADI designated by the Seller, in which case Seller shall bear the risk of interruption or curtailment of the non-firm transmission; provided, however, that if the non-firm transmission is interrupted or curtailed or if Seller is unable to deliver the Product for any reason, Seller shall have the 46 right to schedule and deliver the Product to another ADI in order to satisfy its delivery obligations, in which case Seller shall be responsible for any additional transmission purchases and/or associated congestion charges incurred by Buyer in connection with Seller’s inability to deliver the Product as originally prescheduled. If Buyer fails to timely notify Seller of the unavailability of Firm Transmission, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface, and the provisions of Section 3D shall apply. C. Timely Request for Firm Transmission Made by Buyer, Accepted by the Receiving Transmission Provider and not Purchased by Buyer. If Buyer’s Timely Request for Firm Transmission is accepted by the Receiving Transmission Provider but Buyer elects to purchase non-firm transmission rather than Firm Transmission to take delivery of the Product, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface. In such circumstances, if Seller’s delivery is interrupted as a result of transmission relied upon by Buyer from the Designated Interface, then Seller shall be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for amounts determined pursuant to Article Four. D. No Timely Request for Firm Transmission Made by Buyer, or Buyer Fails to Timely Send Buyer’s Rejection Notice. If Buyer fails to make a Timely Request for Firm Transmission or Buyer fails to timely deliver Buyer’s Rejection Notice, then Buyer shall bear the risk of interruption or curtailment of transmission from the Designated Interface. In such circumstances, if Seller’s delivery is interrupted as a result of transmission relied upon by Buyer from the Designated Interface, then Seller shall be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for amounts determined pursuant to Article Four. 4. Transmission. A. Seller’s Responsibilities. Seller shall be responsible for transmission required to deliver the Product to the Designated Interface or ADI, as the case may be. It is expressly agreed that Seller is not required to utilize Firm Transmission for its delivery obligations hereunder, and Seller shall bear the risk of utilizing non-firm transmission. If Seller’s scheduled delivery to Buyer is interrupted as a result of Buyer’s attempted transmission of the Product beyond the Receiving Transmission Provider’s system border, then Seller will be deemed to have satisfied its delivery obligations to Buyer, Buyer shall be deemed to have failed to receive the Product and Buyer shall be liable to Seller for damages pursuant to Article Four. B. Buyer’s Responsibilities. Buyer shall be responsible for transmission required to receive and transmit the Product at and from the Designated Interface or ADI, as the case may be, and except as specifically provided in Section 3A and 3B, shall be responsible for any costs associated with transmission therefrom. If Seller is attempting to complete the designation of an ADI as a result of Seller’s rights and obligations 47 hereunder, Buyer shall co-operate reasonably with Seller in order to effect such alternate designation. 5. Force Majeure. An “Into” Product shall be subject to the “Force Majeure” provisions in Section 1.23. 6. Multiple Parties in Delivery Chain Involving a Designated Interface. Seller and Buyer recognize that there may be multiple parties involved in the delivery and receipt of the Product at the Designated Interface or ADI to the extent that (1) Seller may be purchasing the Product from a succession of other sellers (“Other Sellers”), the first of which Other Sellers shall be causing the Product to be generated from a source (“Source Seller”) and/or (2) Buyer may be selling the Product to a succession of other buyers (“Other Buyers”), the last of which Other Buyers shall be using the Product to serve its energy needs (“Sink Buyer”). Seller and Buyer further recognize that in certain Transactions neither Seller nor Buyer may originate the decision as to either (a) the original identification of the Designated Interface or ADI (which designation may be made by the Source Seller) or (b) the Timely Request for Firm Transmission or the purchase of other Available Transmission (which request may be made by the Sink Buyer). Accordingly, Seller and Buyer agree as follows: A. If Seller is not the Source Seller, then Seller shall notify Buyer of the Designated Interface promptly after Seller is notified thereof by the Other Seller with whom Seller has a contractual relationship, but in no event may such designation of the Designated Interface be later than the prescheduling deadline pertaining to the Transaction between Buyer and Seller pursuant to Section 1. B. If Buyer is not the Sink Buyer, then Buyer shall notify the Other Buyer with whom Buyer has a contractual relationship of the Designated Interface promptly after Seller notifies Buyer thereof, with the intent being that the party bearing actual responsibility to secure transmission shall have up to 30 minutes after receipt of the Designated Interface to submit its Timely Request for Firm Transmission. C. Seller and Buyer each agree that any other communications or actions required to be given or made in connection with this “Into Product” (including without limitation, information relating to an ADI) shall be made or taken promptly after receipt of the relevant information from the Other Sellers and Other Buyers, as the case may be. D. Seller and Buyer each agree that in certain Transactions time is of the essence and it may be desirable to provide necessary information to Other Sellers and Other Buyers in order to complete the scheduling and delivery of the Product. Accordingly, Seller and Buyer agree that each has the right, but not the obligation, to provide information at its own risk to Other Sellers and Other Buyers, as the case may be, in order to effect the prescheduling, scheduling and delivery of the Product “Native Load” means the demand imposed on an electric utility or an entity by the requirements of retail customers located within a franchised service territory that the electric utility or entity has statutory obligation to serve. “Non-Firm” means, with respect to a Transaction, that delivery or receipt of the Product may be interrupted for any reason or for no reason, without liability on the part of either Party. 48 “System Firm” means that the Product will be supplied from the owned or controlled generation or pre-existing purchased power assets of the system specified in the Transaction (the “System”) with non-firm transmission to and from the Delivery Point, unless a different Transmission Contingency is specified in a Transaction. Seller’s failure to deliver shall be excused: (i) by an event or circumstance which prevents Seller from performing its obligations, which event or circumstance was not anticipated as of the date the Transaction was agreed to, which is not within the reasonable control of, or the result of the negligence of, the Seller; (ii) by Buyer’s failure to perform; (iii) to the extent necessary to preserve the integrity of, or prevent or limit any instability on, the System; (iv) to the extent the System or the control area or reliability council within which the System operates declares an emergency condition, as determined in the system’s, or the control area’s, or reliability council’s reasonable judgment; or (v) by the interruption or curtailment of transmission to the Delivery Point or by the occurrence of any Transmission Contingency specified in a Transaction as excusing Seller’s performance. Buyer’s failure to receive shall be excused (i) by Force Majeure; (ii) by Seller’s failure to perform, or (iii) by the interruption or curtailment of transmission from the Delivery Point or by the occurrence of any Transmission Contingency specified in a Transaction as excusing Buyer’s performance. In any of such events, neither party shall be liable to the other for any damages, including any amounts determined pursuant to Article Four. “Transmission Contingent” means, with respect to a Transaction, that the performance of either Seller or Buyer (as specified in the Transaction) shall be excused, and no damages shall be payable including any amounts determined pursuant to Article Four, if the transmission for such Transaction is unavailable or interrupted or curtailed for any reason, at any time, anywhere from the Seller’s proposed generating source to the Buyer’s proposed ultimate sink, regardless of whether transmission, if any, that such Party is attempting to secure and/or has purchased for the Product is firm or non-firm. If the transmission (whether firm or non-firm) that Seller or Buyer is attempting to secure is from source to sink is unavailable, this contingency excuses performance for the entire Transaction. If the transmission (whether firm or non-firm) that Seller or Buyer has secured from source to sink is interrupted or curtailed for any reason, this contingency excuses performance for the duration of the interruption or curtailment notwithstanding the provisions of the definition of “Force Majeure” in Article 1.23 to the contrary. “Unit Firm” means, with respect to a Transaction, that the Product subject to the Transaction is intended to be supplied from a generation asset or assets specified in the Transaction. Seller’s failure to deliver under a “Unit Firm” Transaction shall be excused: (i) if the specified generation asset(s) are unavailable as a result of a Forced Outage (as defined in the NERC Generating Unit Availability Data System (GADS) Forced Outage reporting guidelines) or (ii) by an event or circumstance that affects the specified generation asset(s) so as to prevent Seller from performing its obligations, which event or circumstance was not anticipated as of the date the Transaction was agreed to, and which is not within the reasonable control of, or the result of the negligence of, the Seller or (iii) by Buyer’s failure to perform. In any of such events, Seller shall not be liable to Buyer for any damages, including any amounts determined pursuant to Article Four. 49 EXHIBIT A MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER This confirmation letter shall confirm the Transaction agreed to on ___________, ___ between __________________________ (“Party A”) and _____________________ (“Party B”) regarding the sale/purchase of the Product under the terms and conditions as follows: Seller: Buyer: Product: [] Into _________________, Seller’s Daily Choice [] Firm (LD) [] Firm (No Force Majeure) [] System Firm (Specify System: ) [] Unit Firm (Specify Unit(s): ) [] Other [] Transmission Contingency (If not marked, no transmission contingency) [] FT-Contract Path Contingency [] Seller [] Buyer [] FT-Delivery Point Contingency [] Seller [] Buyer [] Transmission Contingent [] Seller [] Buyer [] Other transmission contingency (Specify: ) Contract Quantity: Delivery Point: Contract Price: Energy Price: Other Charges: 50 Confirmation Letter Page 2 Delivery Period: Special Conditions: Scheduling: Option Buyer: Option Seller: Type of Option: Strike Price: Premium: Exercise Period: This confirmation letter is being provided pursuant to and in accordance with the Master Power Purchase and Sale Agreement dated ______________ (the “Master Agreement”) between Party A and Party B, and constitutes part of and is subject to the terms and provisions of such Master Agreement. Terms used but not defined herein shall have the meanings ascribed to them in the Master Agreement. [Party A] [Party B] Name: Name: Title: Title: Phone No: Phone No: Fax: Fax: 1 CITY OF PALO ALTO V.2016 MASTER POWER PURCHASE AND SALE AGREEMENT (EEI Version 2.1, modified 4/25/00) COVER SHEET This Master Power Purchase and Sale Agreement (“Master Agreement”) is made as of the following date: September 23, 2025 (“Effective Date”). The Master Agreement, together with the exhibits, schedules, annexes and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement.” The Parties to this Master Agreement are the following: Name: DRW Energy Trading LLC (“Party A”)Name: City of Palo Alto (“Party B”) All Notices: Attn: Legal Phone: (713) 814-3027 Facsimile: (713) 814-3029 E-mail: DRWHoustonLegal@drwholdings.com Duns 080120548 Federal Tax ID Number: 93-4589565 All Notices: Attn: Assistant Director, Resource Management Department of Utilities City of Palo Alto 250 Hamilton Avenue, 3rd Floor Palo Alto, CA 94301 Phone: 650-329-2119 Facsimile: 650-617-3140 Duns: 17-892-8479 Federal Tax ID Number: 94-6000389 With additional Notices of an Event of Default or Potential Event of Default to: Attn: General Counsel Phone: (312) 542-1000 Email: GeneralCounsel@drwholdings.com With additional Notices of an Event of Default or Potential Event of Default to: Attn: Assistant City, Attorney/Utilities City of Palo Alto Phone: 650-329-2171 Facsimile: 650-329-2646 Invoices: Attn: Kristi Flournoy Phone: (713) 447-3413 Facsimile: E-mail: DRWSettlements@drwholdings.com Duns 080120548 Federal Tax ID Number: 93-4589565 Invoices: Attn: Power Accounts Administrator Northern California Power Agency 651 Commerce Drive Roseville, CA 95678-6420 Phone: (916) 781-4224/3636 Facsimile: (916) 781-4225 Day Ahead Pre-Scheduling: Attn: Karl Garvy Phone: (346) 679-5454 Facsimile: E-mail: DRW-Power- Scheduling@drwholdings.com Day Ahead Pre-Scheduling: Confirmations: Attn: Pre-Scheduler Desk Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4240/4227/4228 Facsimile: 916-781-4239 2 CITY OF PALO ALTO V.2016 The Parties hereby agree that the General Terms and Conditions are incorporated herein, as selected, modified and amended by the following specific provisions, as provided for in such General Terms and Conditions: Party A Tariff: FERC Market-Based Rate Tariff, dated August 24, 2023, Docket Number: ER23 -2272 -000_ Party B Tariff: N/A Article One General Definitions Section 1.4 is amended by deleting the first sentence and replacing it to read as follows: “Business Day” means any day except a Saturday, Sunday or a Federal Reserve Bank Holiday. Section 1.10 is amended by adding after “the price” in line 1 the words “, including any and all AB 32 fees” and substituting “U.S. $” for “$U.S.” in line 1. Section 1.11 is amended by adding the following after “Party” in the third line: “after using commercially reasonable efforts to mitigate costs”. Real Time Scheduling: Attn: Karl Garvy Phone: (346) 679-5454 Facsimile: E-mail: DRW-Power- Scheduling@drwholdings.com Real Time Scheduling: Attn: Chief Dispatcher/Scheduler Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Payments: Attn: Kristi Flournoy Phone: (713) 447-3413 Facsimile: E-mail: DRWSettlements@drwholdings.com Payments: Attn: Accounts Payable Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Wire Transfer: BNK JP Morgan Chase ABA: 021000021 ACCT: 603148185 Credit DRW Energy Trading LLC Wire Transfer: Deposit to Northern California Power Agency, “to the benefit of City of Palo Alto” BNK U.S. Bank ABA: 121122676 ACCT: 1-534-0216-2744 Attn: Cyndy Husebye U.S. Bank 555 SW Oak Street, Suite 400 Portland, OR. 97204 Phone: 877-295-2509 Facsimile: 877-324-1680 Credit and Collections: Attn: Ryan Childers Phone: (713) 814-3043 Facsimile: (713) 814-3029 Email: DRWCredit@drwholdings.com Credit and Collections: Attn: Power Accounts Analyst Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4221/4224 Facsimile: 916-781-4255 Confirmations: Attn: Kenia Quinonez Phone: (872) 280-0530 Facsimile: (713) 814-3029 Email: DRWCredit@drwholdings.com 2 CITY OF PALO ALTO V.2016 3 CITY OF PALO ALTO V.2016 Section 1.12 is amended by deleting in the fourth line the word “issues” and replacing it with the word “issuer”. Section 1.24 is amended by adding before the period at the end thereof the following: “in accordance with Section 5.2”. Section 1.27 is amended by inserting the phrase “and in an amount” in the third line after the word “form” and before the word “acceptable”. Section 1.28 is amended by adding before the period at end thereof the following: “in accordance with Section 5.2”. Section 1.45 is amended by adding the following sentence at the end of that provision: “Party B shall be deemed to have complied with any request from Party A for the provision of Performance Assurance by furnishing a copy of a resolution adopted by Party B’s City Council within a reasonable period of time after receipt of such request, determining that Party B’s retail rates are set at levels sufficiently high to recover all costs of providing electric service to Party B’s retail electric customers, including the costs incurred by Party B under all Transactions executed under this Agreement.” Section 1.46 is amended by adding before the period at the end thereof the following: “; provided that the failure to comply with any requirement of this Master Agreement or a Transaction, including the requirements of Article 8, before the expiration of the time period expressly specified for such compliance in this Master Agreement or the Transaction, if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance”. Section 1.50 is amended by deleting the reference to “Section 2.4” and replacing it with “Section 2.5”. Section 1.51 is amended by (a) inserting the phrase “for delivery” in the second line after the word “purchases” and before the phrase “at the Delivery Point”, and (b) deleting the phrase “at Buyer’s option” in the fifth line and inserting in their place the following: “absent a purchase” and (c) inserting in the seventh line after the words, “any penalties” and before “, ratched demand”, the following: “(other than penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery)”. Section 1.53 is amended by (a) deleting the phrase “at the Delivery Point” in the second line, and (b) deleting the phrase “at Seller’s option” in the fifth line and inserting in their place the following: “absent a sale, assuming a sale could not have been made in a commercially reasonable manner.” Section 1.56 is amended by deleting the words “pursuant to Section 5.2” and by adding before the period at the end thereof the following: “, as determined in accordance with Section 5.2.” Section 1.60 is amended by inserting the words “in writing” immediately following the words “agreed to”. Article Two Transaction Terms and Conditions Section 2.1 shall be amended by deleting the second sentence thereof. 3 CITY OF PALO ALTO V.2016 4 CITY OF PALO ALTO V.2016 For purposes of Section 2.3, Party B requires that all Transactions be confirmed in writing. Accordingly, the provision is amended by striking the word “may” from the first line thereof and replacing it with the word “shall.” X Optional provision in Section 2.4. If not checked, inapplicable. A new Section 2.6 is added to Article Two, worded as follows: “2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction between the Parties shall become binding unless and until a Confirmation for such Transaction is signed by both Parties, and this Master Agreement and any and all Transactions may not be orally amended or modified, including by Recording pursuant to Section 2.5.” Article Four Remedies for Failure to Deliver or Receive X Accelerated Payment of Damages. If not checked, inapplicable. A new Section 4.3 is added to Article Four, worded as follows: “4.3 Suspension of Performance. In addition to the remedies provided pursuant to Sections 4.1, 4.2 and 5.7, if Seller or Buyer fails to schedule, deliver or receive 96% or more of the Product pursuant to a Transaction for a period of three (3) or more consecutive days, and such failure is not excused under the terms of the Product, by Force Majeure, by the other Party’s failure to perform or by agreement of the Parties, then upon one (1) Business Day’s prior written notice, and for so long as the non-performing Party fails to perform, the performing Party shall have the right to suspend its performance under such Transaction. In the event the performing Party suspends performance pursuant to this Section 4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Party at least one (1) Business Day prior to the date upon which the non-performing Party intends to resume its performance; provided that, if the performing Party has entered into a replacement contract with a term of 31 days or less, the performing Party may resume performance at the end of the term of such replacement contract. Remedies available under this provision to the performing Party are in addition to, not in replacement of, other remedies specified in this Agreement.” Article Five Events of Default; Remedies X Cross Default provision of Section 5.1(g) shall apply for both Party A and Party B. Cross Default amount for each shall be $20,000,000. 4 CITY OF PALO ALTO V.2016 5 CITY OF PALO ALTO V.2016 Section 5.1 is further amended by replacing the period at the end of subsection (h) with a semi- colon, and adding new subsections “(i),” “(j)" , “(k)” and “(l)”, which read as follows: “(i) during any consecutive ninety (90) day period, there have occurred five (5) or more “Seller Failures” as that term is used in Section 4.1, under any or all Transactions, regarding which the Seller shall be deemed to be the Defaulting Party, and Buyer shall also be entitled to its remedies under Section 4.1; (j)during any consecutive ninety (90) day period, there have occurred five (5) or more “Buyer Failures” as that term is used in Section 4.2 under any or all Transactions, regarding which the Buyer shall be deemed to be the Defaulting Party, and Seller shall also be entitled to its remedies under Section 4.2; (k)a representation or warranty with respect to the Defaulting Party's financial statement or position that is false or materially misleading; or (l)revocation by the Federal Energy Regulatory Commission of Party A’s authorization to make sales and market-based rates.” Section 5.2 is amended in line 3 by changing “right (i) to” to “right to (i)” and by adding the following sentence to the end of that provision: “If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the Settlement Amount shall be zero, notwithstanding any provision of this Agreement to the contrary.” Section 5.3 is amended by inserting the phrase “plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Defaulting Party pursuant to Article Eight”, between the words “that are due to the Non-Defaulting Party,”, and “plus any and all other amounts” in the sixth line thereof Section 5.6 Closeout Setoff Option A (Applicable if no other selection is made.) X Option B - Affiliates shall have the meaning set forth in the Master Agreement unless otherwise specified as follows: Option B is amended as set forth in Article 10 below. Option C (No Setoff) Section 5.6 is further amended by inserting before the last sentence in Option B: “At the election of the Non-Defaulting Party, all obligations owing by or to an Affiliate of a Party shall be treated as if they were owing by or to the Party itself for purposes of set- off.” Article Six Section 6.4 is amended by deleting “and owing to each other on the same date”. Section 6.8 is amended by deleting the words, “may by agreement of the Parties,” in line 3 and inserting in their place the word “shall”. 5 CITY OF PALO ALTO V.2016 6 CITY OF PALO ALTO V.2016 Article Seven Section 7.1 is amended by (i) deleting in the fifteenth line the words, “UNLESS EXPRESSLY HEREIN PROVIDED,”, (ii) adding in the nineteenth line the words, “; PROVIDED, HOWEVER, NOTHING IN THIS SECTION SHALL AFFECT THE ENFORCEABILITY OF THE PROVISIONS OF SECTIONS 4.1 AND 4.2 OF THIS AGREEMENT RELATING TO REMEDIES FOR FAILURE TO DELIVER/RECEIVE AND OF SECTIONS 5.2 AND 5.3 OF THIS AGREEMENT RELATING TO THE CALCULATION AND PAYMENT OF THE TERMINATION PAYMENT” immediately after the words “ANY INDEMNITY PROVISION OR OTHERWISE”, and (iii) adding at the end of the last sentence the words, “AND ARE NOT PENALTIES”. Article Eight 8.1 Party A Credit Protection Credit and Collateral Requirements Financial Information from Party B, Section 8.1(a) Option A X Option B Specify: Audited financial statements for City of Palo Alto and for City of Palo Alto Enterprise Fund Option C Credit Assurances from Party B, Section 8.1(b) X Not Applicable Applicable Collateral Threshold for Party B, Section 8.1(c) X Not Applicable Applicable Party B Independent Amount: N/A Party B Rounding Amount: N/A Party B Minimum Transfer Amount: N/A Downgrade Event, Section 8.1(d): Not Applicable X Applicable If applicable, complete the following: X It shall be a Downgrade Event for Party B only if (a) Party B’s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt") by S&P or Moody's is respectively below BBB- or Baa3, or (b) both S&P and Moody's refuse to rate Party B's Debt, or (c) Party B’s City Council no longer has the legal authority under the Act, as defined by Schedule M, to adjust electric rates as necessary to recover Party B’s costs of providing retail electric service to its customers. Guarantor for Party B, Section 8.1(e): N/A Guarantee Amount: N/A 8.2 Party B Credit Protection: 6 CITY OF PALO ALTO V.2016 7 CITY OF PALO ALTO V.2016 Financial Information from Party A, Section 8.2(a): Option A X Option B Specify: Audited financial statements to be provided by Party A as described in Section 8.2(a) shall be for Party A or parent entity, if any, providing credit support. Option C Credit Assurances from Party A, Section 8.2(b): Not Applicable X Applicable Collateral Threshold for Party A, Section 8.2(c): Not Applicable X Applicable If applicable, complete the following: Party A Collateral Threshold: means with respect to Party A, at any time the amount specified in the table below under the relevant heading opposite the lower of the ratings at that time assigned by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) or Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation (“Moody’s”) to the long term, senior, unenhanced, unsecured debt securities or obligations of Party A’s Guarantor; provided, that (a) if the long term, senior, unenhanced, unsecured debt securities of Party A’s Guarantor is no longer rated by one of S&P or Moody’s, the Threshold with respect to Party A will be zero dollars and (b) if an Event of Default or Potential Event of Default with respect to Party A has occurred and is continuing, the Threshold with respect to such party shall be zero dollars. S&P Rating Moody’s Rating Threshold A- or above A3 or above $25,000,000 BBB+ Baa1 $15,000,000 BBB Baa2 $10,000,000 BBB- Baa3 $ 5,000,000 Below BBB- (or rating Below Baa3 (or rating $ 0 (zero) suspended or withdrawn suspended or withdrawn by both S&P and by both S&P and Moody’s) Moody’s) Party A Independent Amount: $0 Party A Rounding Amount: $100,000 Party A Minimum Transfer Amount: $250,000 7 CITY OF PALO ALTO V.2016 8 CITY OF PALO ALTO V.2016 Downgrade Event, Section 8.2(d): Not Applicable X Applicable If applicable, complete the following: X It shall be a Downgrade Event for Party A only if the Credit Rating of Party A or Party A’s Guarantor falls below BBB- from S&P or Baa3 from Moody's or if the unenhanced, unsecured senior long-term debt securities or obligations of Party A or Party A’s Guarantor ceases to be rated by either S&P or Moody's. Guarantor for Party A, Section 8.2(e): Guarantor for Party A: Guarantee Amount: Article Ten Section 10.1 is amended by replacing “upon (thirty) 30 days’ prior written notice” in lines 2 and 3, with “, which termination shall be effective immediately upon receipt of written notice thereof”. Section 10.2 (ix) is amended to read in its entirety as follows: “(ix) (1) it is an “eligible contract participant” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (12); and (2) it is an “eligible commercial entity” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (11). Section 10.4 shall be amended by inserting the phrase "To the extent permitted by law," at the beginning of each of the first two sentences, and substituting the word, “each” for “Each” after the insertion of each such phrase. 8 CITY OF PALO ALTO V.2016 9 CITY OF PALO ALTO V.2016 Section 10.5 shall be amended by deleting clause (ii) and the portion of clause (iii) prior to the words “provided, however”, and replacing them with the following: “(ii) transfer or assign this Agreement to an Affiliate of such Party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such Party or the Guarantor as of the Effective Date and the date of entering into each Transaction under this Agreement, if any, for such Party, or (y) the obligations of such Affiliate are guaranteed by such Party or its Guarantor, if any, in accordance with a guaranty agreement in form and substance satisfactory to the other Party, and (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party whose creditworthiness is equal to or higher than that of such Party or its Guarantor, if any, as of the Effective Date and the effective date of any such transfer or assignment. Section 10.6 is amended by deleting the words “New York” from the fourth line thereof and replacing it with the word “California.” Further, Section 10.6 is amended by deleting the last sentence thereof and replacing it with the following sentence: “With respect to any proceeding in connection with any claim, counterclaim, demand, cause of action, dispute and controversy arising out of or relating to this Agreement, the parties hereby consent to the exclusive jurisdiction of the federal and state courts sitting in the Northern District of the State of California; provided, however, that if the federal courts sitting in the Northern District of the State of California refuse jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts sitting in the County of Santa Clara, State of California.” Section 10.8 is modified by adding before the word “constitute” in line four of Section 10.8, “, and all financial and other information, explanations, statements, reports provided by one party to the other in connection therewith”. Section 10.8 shall be amended by deleting its penultimate sentence in its entirety and replacing it with the following sentences: “The indemnity provisions of this Agreement shall survive the termination of this Agreement for the period of the applicable statute of limitations. The audit provisions of this Agreement shall survive the termination of this Agreement for a period of twelve (12) months.” Section 10.10 is deleted in its entirety and replaced with the following new section: “Bankruptcy. The Parties acknowledge and agree that (i) any Transaction with a maturity date more than two days after the date the Transaction is entered into constitutes a "forward contract" within the meaning of the United States Bankruptcy Code“, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and from time to time (the “Bankruptcy Code”); (ii) each believes that it is or intends that it shall be deemed for all purposes to be a “forward contract merchant” within the meaning of the Bankruptcy Code; (iii) all payments made or to be made by one Party to the other Party pursuant to this Agreement are "settlement payments" within the meaning of the Bankruptcy Code; and (iv) all transfers of Performance Assurance by one Party to the other Party under this Agreement are "margin payments" within the meaning of the Bankruptcy Code. Each Party further agrees that, for purposes of this Agreement, the other Party is not a "utility" as such term is used in 11 U.S.C. Section 366, and each Party agrees to waive and not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further agrees to waive the right to assert that the other Party is a provider of last resort." Confidentiality X Confidentiality Applicable, subject to Section 10.11 as amended. If not checked, inapplicable. 9 CITY OF PALO ALTO V.2016 10 CITY OF PALO ALTO V.2016 Section 10.11 shall be amended by adding the following to the end of the Section: “Party A acknowledges that Party B is subject to California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“Public Records Act”) in regard to the documents comprising this Master Agreement and the Transactions, which items may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Party B shall, consistent with those laws, use reasonable efforts to provide Party A with notice of any third party request to inspect and copy any of the documents that comprise this Master Agreement and the Transactions, which Party A might deem confidential and exempt from disclosure, in order that Party A may timely seek to protect those documents from disclosure to the third party. Party A acknowledges and agrees that Party B shall not be liable to Party A if Party B makes disclosure in accordance with the California Constitution and/or the Public Records Act before Party A has timely obtained an order to prevent Party B from making the requested disclosure to the third party.” A new Section 10.12 shall be added to Article 10 as follows: "10.12. No Agency. In performing their respective obligations hereunder, neither Party is acting, or is authorized to act, as the agent of the other Party.” A new Section 10.13 shall be added to Article 10 as follows: 10.13 Dispute Resolution. In the event of any controversy or claim, whether based in contract, tort, or otherwise, arising out of or based upon, or relating to this Agreement or the scope, breach, termination or validity of each of them (a “Dispute”), the Parties will resolve such Dispute in the following manner: 10.13.1 Negotiation. The Parties will attempt in good faith to resolve the Dispute promptly by negotiations between duly authorized representatives of the Parties who have authority to settle the Dispute. When a Party believes there is a Dispute, that Party will give the other Party written notice describing the Dispute with reasonable particularity. Within thirty (30) days after receipt of such notice, the receiving Party will submit a written response to the other Party. 10.13.2 Mediation. If the Dispute is not resolved within forty-five (45) days of the date of the response given pursuant to Section 10.13.1, or such additional time, if any, that the Parties mutually agree to in writing, the Parties shall try in good faith to settle the Dispute by mediation. The form of mediation and the mediator(s) selected to resolve the Dispute shall be acceptable to both Parties. 10.13.3 Additional Rights. If the Dispute is not resolved through mediation within ninety (90) days after the first meeting of the Parties and mediator(s), or such additional time, if any, that the Parties mutually agree to in writing, either Party shall be free to pursue any and all legal actions and remedies as it may deem necessary. 10 CITY OF PALO ALTO V.2016 11 CITY OF PALO ALTO V.2016 A new Section 10.14 shall be added to Article 10 as follows: 10.14: “The Parties acknowledge and agree that any purchase of power made under this Agreement and any Transaction shall be executed and delivered in compliance with applicable laws and regulations in effect at the time this Agreement is signed by the Parties and at the time of entering into any particular Transaction, including, but not limited to, Senate Bill 1368 (California Public Utilities Code section 8340 et seq.) and related regulations (Title 20, Sections 2900 – 2930 of the California Code of Regulations), as amended, to the extent such laws and regulations, including SB 1368 and related regulations, apply or are deemed to apply to this Agreement and any Transaction. To the extent SB 1368 and related regulations require Party B as a local publicly owned electric utility to submit a compliance filing in accordance with such laws, Party A, upon the request of Party B, shall in good faith provide promptly to Party B (to the extent Party B lacks such information) the information to the extent Party A has knowledge of or access to such information, and shall work cooperatively with and provide commercially reasonable assistance to Party B in Party B’s compliance with such laws. A failure by Party A to provide such information which is within its possession or knowledge shall constitute a default under this Agreement.” A new Section 10.15 shall be added to Article 10 as follows: 10.15: “The Parties intend that the standard of review for changes to any rate, charge, classification, term or condition of this Agreement at FERC shall be the most stringent standard permissible under applicable law. As to the Parties, it is understood and agreed that the standard shall solely be the “public interest” application of the “just and reasonable” standard of review, as stated by the United States Supreme Court in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, Nos. 06-1457, 128 S.Ct. 2733 (2008), and consistent with the order of the Supreme Court in NRG Power Marketing, LLC, et al., v. Maine Public Utilities Commission et al., 558 U.S. 165 (2010) (“NRG Order”). As to all other persons, the Parties intend and agree that the same standard, to the maximum degree as may be made applicable to other than the Parties, apply, to the maximum degree permitted under the NRG Order.” A new Section 10.16 shall be added to Article 10 as follows: 10.16 ““AB 32 fees” means the regulatory assessments, charges, fees imposts and/or taxes imposed upon and required to be paid by suppliers of energy in accordance with the Global Warming Solutions Act of 2006, Chapter 488, Statutes 2006, including, without limitation, the Compliance Offset Protocols, which shall be included (or be deemed included to the extent they are not expressly included) in the Contract Price, defined in Section 1.10 of the General Terms and Conditions, and that are in effect as of the Effective Date of this Agreement and/or the date the Parties enter into each Transaction hereunder.” A new Section 10.17 shall be added to Article 10 as follows: 10.17 “The Parties understand and agree that the Transactions under this Agreement are physical transactions for deferred delivery, and that the Parties contemplate making or taking physical delivery of electric energy. Party B is a commercial entity engaged in the business of delivering electric energy to its retail load and routinely makes or takes delivery of electric energy in order to provide service to its retail electric customers.” 11 CITY OF PALO ALTO V.2016 12 CITY OF PALO ALTO V.2016 A new Section 10.18 shall be added to Article 10 as follows: 10.18 “Nondiscrimination. As set forth in Palo Alto Municipal Code section 2.30.510, Party A agrees that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. Party A acknowledges that it has read and understands the provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in employment, including completing the form furnished by Party B and set forth in Exhibit D.” A new Section 10.19 shall be added to Article 10 as follows: 10.19 “Imaged Agreement. Any original executed Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation or the Imaged Agreement) on the basis that such were not originated or maintained in documentary form under either the hearsay rule, the best evidence rule or other rule of evidence.” 12 CITY OF PALO ALTO V.2016 13 CITY OF PALO ALTO V.2016 A new Section 10.20 shall be added to Article 10 as follows: Index Transactions. If the Contract Price for a Transaction is determined by reference to a Price Source, then: a)Market Disruption Event. If a Market Disruption Event occurs on any one or more days during a Determination Period (each day, a “Disrupted Day”), then: i)The fallback Floating Price, if any, specified by the Parties in the relevant Confirmation shall be the Floating Price for each Disrupted Day. ii)If the Parties have not specified a fallback Floating Price, then the Parties will endeavor, in good faith and using commercially reasonable efforts, to agree on a substitute Floating Price, taking into consideration, without limitation, guidance, protocols or other recommendations or conventions issued or employed by trade organizations or industry groups in response to the Market Disruption Event and other prices published by the Price Source or alternative price sources with respect to the Delivery Point or comparable Delivery Points that may permit the Parties to derive the Floating Price based on historical differentials. iii)If the Price Source retrospectively issues a Floating Price in respect of a Disrupted Day (a “Delayed Floating Price”) before the parties agree on a substitute Floating Price for such day, then the Delayed Floating Price shall be the Floating Price for such Disrupted Day. If a Delayed Price is issued by the Price Source in respect of a Disrupted Day after the Parties agree on a substitute Floating Price for such day, the substitute Floating Price agreed upon by the Parties will remain the Floating Price without adjustment unless the Parties expressly agree otherwise. iv)If the Parties cannot agree on a substitute Floating Price and the Price Source does not retrospectively publish or announce a Floating Price, in each case, on or before the fifth Business Day following the first Trading Day on which the Market Disruption Event first occurred or existed, then the Floating Price for each Disrupted Day shall be determined by taking the arithmetic mean of quotations requested from four leading dealers in the relevant market that are unaffiliated with either Party and mutually agreed upon by the Parties (“Specified Dealers”), without regard to the quotations with the highest and lowest values, subject to the following qualifications: 1.If exactly three quotations are obtained, the Floating Price for each such Disrupted Day will be the quotation that remains after disregarding the quotations having the highest and lowest values. 2.If fewer than three quotations are obtained, the Floating Price for each such Disrupted Day will be the average of the quotations obtained. 3.If the Parties cannot agree upon four Specified Dealers, then each of the Parties will, acting in good faith and in a commercially reasonable manner, select up to two Specified Dealers separately, and those selected dealers shall be the Specified Dealers. 13 CITY OF PALO ALTO V.2016 14 CITY OF PALO ALTO V.2016 v)Unless otherwise agreed, if at any time the Parties agree on a substitute Floating Price for any Disrupted Day, then such substitute Floating Price shall be the Floating Price for such Disrupted Day, notwithstanding the subsequent publication or announcement of a Delayed Floating Price by the relevant Price Source or any quotations obtained from Specified Dealers. "Determination Period" means each calendar month a part or all of which is within the Delivery Period of a Transaction. "Exchange" means, in respect of a Transaction, the exchange or principal trading market specified as applicable to the relevant Transaction. "Floating Price" means a Contract Price specified in a Transaction that is based upon a Price Source. "Market Disruption Event" means, with respect to any Price Source, any of the following events: (a)the failure of the Price Source to announce, publish or make available the specified Floating Price or information necessary for determining the Floating Price for a particular day; (b)the failure of trading to commence on a particular day or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange, RTO or in the market specified for determining a Floating Price; (c)the temporary or permanent discontinuance or unavailability of the Price Source; (d)the temporary or permanent closing of any Exchange or RTO specified for determining a Floating Price; or (e)a material change in the formula for or the method of determining the Floating Price by the Price Source or a material change in the composition of the Product. "Price Source" means, in respect of a Transaction, a publication or such other origin of reference, including an Exchange or RTO, containing or reporting or making generally available to market participants (including by electronic means) a price, or prices or information from which a price is determined, as specified in the relevant Transaction. “RTO” means any regional transmission operator or independent system operator. 14 CITY OF PALO ALTO V.2016 15 CITY OF PALO ALTO V.2016 "Trading Day" means a day in respect of which the relevant Price Source ordinarily would announce, publish or make available the Floating Price. (b)Corrections to Published Prices. If the Floating Price published, announced or made available on a given day and used or to be used to determine a relevant price is subsequently corrected by the relevant Price Source (i) within 30 days of the original publication, announcement or availability, or (ii) in the case of RTO Transactions only, within such longer time period as is consistent with the RTO’s procedures and guidelines, then either Party may notify the other Party of that correction and the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Party that originally either received or retained such amount will, not later than three (3) Business Days after such notice is effective, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction. Notwithstanding the foregoing, corrections shall not be made to any Floating Prices agreed upon by the Parties or determined based on quotations from Specified Dealers pursuant to paragraph (a) above unless the Parties expressly agree otherwise. (c)Rounding. When calculating a Floating Price, all numbers shall be rounded to four (4) decimal places. If the fifth (5th) decimal number is five (5) or greater, then the fourth (4th) decimal number shall be increased by one (1), and if the fifth (5th) decimal number is less than five (5), then the fourth (4th) decimal number shall remain unchanged. Schedule M Party A is a Governmental Entity or Public Power System X Party B is a Governmental Entity, Schedule M Applicable Part A Part A of Schedule M is amended by including the following definition for the term “Act”: “Act” means the Constitution of the State of California, the California statute(s), charter and municipal ordinances under which Party B was created, organized and authorized to enter into this Master Agreement and each Transaction thereunder. Part A is further amended by adding the following sentence at the end of the definition of the term “Special Fund”: “Party A has conducted such investigation as it deems necessary of the City of Palo Alto Enterprise Fund and the Act under which such Fund was established to determine, for its purposes under this Agreement, that such Fund meets this definition of Special Fund.” Part C Part C of Schedule M is amended by adding the phrase in line 7 “and to the extent applicable,” immediately following the word “limitation” in clause (i). Part D Section 3.4 is amended by deleting it in its entirety and replacing with the following: 15 CITY OF PALO ALTO V.2016 16 CITY OF PALO ALTO V.2016 “3.4: Public Power System’s Deliveries. On the Effective Date and as a condition to the obligations of the other Party under this Agreement, Governmental Entity or Public Power System shall provide the other Party hereto electronic copies of all ordinances, resolutions, public notices and other documents evidencing the necessary authorizations with respect to the execution, delivery and performance by Governmental Entity or Public Power System of this Master Agreement.” Part E X Section 3.6 under Part E of Schedule M applies; however, the portion of that provision following the semicolon on the eighth line thereof is replaced in its entirety with the following: “any breach of clause (ii) of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which such budgetary approval or certification of its obligations under this Master Agreement is required to be in effect and an Event of Default shall be deemed to have occurred for purposes of Section 5.1 under which Governmental Entity or Public Power System shall be treated as the Defaulting Party.” Part F Add Section 8.4. If not checked, inapplicable. Part G Part G does not apply. 16 CITY OF PALO ALTO V.2016 17 CITY OF PALO ALTO V.2016 Schedule P The following defined terms are added to Schedule P: “CAISO” means the California Independent System Operator Corporation, or its successor. “CAISO Tariff” means the Federal Energy Regulatory Commission approved tariff of CAISO, including all CAISO protocols, as the same may be amended from time to time. “CAISO Energy” means a Transaction in which the Seller shall sell and the Buyer shall purchase a quantity of Energy equal to the hourly quantity without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the CAISO Tariff as amended from time to time for which the only excuse for failure to deliver or receive is an “Uncontrollable Force” (as defined in the CAISO Tariff) called by the CAISO in accordance with the CAISO Tariff. “HLH (Heavy Load Hour)” is defined as energy delivered from hours ending (HE) 0700- 2200 Monday-Saturday, excluding NERC holidays, PPT. “IST” means Inter-Scheduling Coordinator Trade shall mean a trade between Scheduling Coordinators of Energy or Ancillary Services in accordance with the CAISO Tariff. “LLH (Light Load Hour)” is defined as energy delivered from hours ending (HE) 0100- 0600 and 2300-2400 Monday-Saturday, all day Sunday and NERC holidays, PPT. “NP15 Zone Delivery Point” means the NP15 Zone; provided, however, if CAISO implements trading hubs under a locational marginal pricing design during the Delivery Period, the Delivery Point shall be the Existing Zone Generation NP15 Trading Hub (“NP15 EZ Gen Hub”), as such trading hub is contemplated by the CAISO in its filing made to the FERC dated March 15, 2005 (“Comprehensive Design Proposal for Inter- Scheduling Coordinator Trades Under the California Independent System Operator Corporation’s Market Redesign and Technology Upgrade, Docket No. ER02-1656-025”); provided further, if the NP15 EZ Gen Hub (under any name) is not established as part of a market redesign that is implemented during the Delivery Period, the parties agree to promptly work together in good faith to designate an alternate Delivery Point to reasonably approximate the characteristics of the NP-15 Zone. "West Firm", or “WSPP Schedule C” or “Schedule C” or “WSPPC-Firm” or any similar description means with respect to a Transaction, a Product that is or will be scheduled as firm energy consistent with the most recent rules adopted by the WECC for which the only excuses for failure to deliver or receive are if an interruption is (i) due to an Uncontrollable Force as provided in Section 10 of the WSPP Agreement; or (ii) where applicable, to meet Seller's public utility or statutory obligations to its customers. Notwithstanding any other provision in this Agreement, if Seller exercises its right to interrupt to meet its public utility or statutory obligations, Seller shall be responsible for payment of damages for failure to deliver firm energy as provided in Article 4 of this Agreement. "WECC" means the Western Electricity Coordinating Council. "WSPP Agreement" means the Western Systems Power Pool Agreement as amended from time to time. 17 CITY OF PALO ALTO V.2016 18 CITY OF PALO ALTO V.2016 EXHIBIT A MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER EXHIBIT B RESOURCE ADEQUACY (“RA”) CAPACITY The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning Resource Adequacy, which products, terms, conditions and definitions shall be documented in a Resource Adequacy Confirmation (“RA Confirm”), the terms and conditions of which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT C RENEWABLE ENERGY CREDIT (“REC”) The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning RECs, which terms and conditions shall be documented in a REC Confirmation and which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT D CERTIFICATION OF NONDISCRIMINATION 18 CITY OF PALO ALTO V.2016 19 CITY OF PALO ALTO V.2016 IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written. Party B: City of Palo Alto Party A: DRW Energy Trading LLC Approval as to Form: By: ……………………………..By: …………………………….. Name: Amy Bartell Name: …………………………….. Title: Asst. City Attorney Title: …………………………….. Date: _________Date: ____ Party B: City of Palo Alto Approval by City Manager’s Office: By: Name: Ed Shikada Title: City Manager Date: _____ Party B: City of Palo Alto Approval by Administrative Services Department: By: Name: Lauren Lai Title: Administrative Services Director Date: ___ Party B: City of Palo Alto Approval by Utilities Department: By: Name: Alan Kurotori Title: Utilities Director Date: ______ DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected. 19 CITY OF PALO ALTO V.2016 20 CITY OF PALO ALTO V.2016 Exhibit D Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do not and will not during the course of this contract discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person and that they are in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. DRW ENERGY TRADING LLC Authorized Signature: Date: 1 CITY OF PALO ALTO V.2016 MASTER POWER PURCHASE AND SALE AGREEMENT (EEI Version 2.1, modified 4/25/00 including any erratas published by EEI, including the EEI Errata, Version 1.1, dated July 18, 2007.) COVER SHEET This Master Power Purchase and Sale Agreement (“Master Agreement”) is made as of the following date: , 2025 (“Effective Date”). The Master Agreement, together with the exhibits, schedules, annexes and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement.” The Parties to this Master Agreement are the following: Name: Dynasty Power Inc. (“Counterparty ” or “Party A”) Name: City of Palo Alto (“Counterparty” or “Party B”) All Notices: Street: 411-8th Ave SW City: Calgary, AB T2P 1E3 Attn: Yan Petchatnikov Email: ypetchatnikov@dynastypower.com Phone: 587- 917-1267 Facsimile: 587- 317-7443 Duns: 245230821 Federal Tax ID Number: 98-0674614 Phone: 587- 917-1267 Facsimile: 587- 317-7443 Facsimile: 587- 317-7443 Facsimile: 587- 317- 7443 Duns: 245230821 Federal Tax ID Number: 98-0674614 Facsimile: 587- 317-7443 Duns: 245230821 Federal Tax ID Number: 98-0674614 All Notices: Attn: Assistant Director, Resource Management Department of Utilities City of Palo Alto 250 Hamilton Avenue, 3rd Floor Palo Alto, CA 94301 Phone: 650-329-2119 Facsimile: 650-617-3140 Duns: 17-892-8479 Federal Tax ID Number: 94-6000389 With additional Notices of an Event of Default or Potential Event of Default to: Attn: Yan Petchatnikov Phone: 587- 917-1267 Email: contracts@dynastypower.com CC:credit@dynasytpower.com With additional Notices of an Event of Default or Potential Event of Default to: Attn: Senior Assistant City, Attorney/Utilities City of Palo Alto Phone: 650-329-2171 Facsimile: 650-329-2646 Invoices and Payments: Attn: DYNP Accounting Email: accounting@dynastypower.com Phone: 403-305-4252 Invoices: Attn: Power Accounts Administrator Northern California Power Agency 651 Commerce Drive Roseville, CA 95678-6420 Phone: (916) 781-4224/3636 Facsimile: (916) 781-4225 Day Ahead Pre-Scheduling: Attn: Real Time Desk Email: west_rt@dynastypower.com Phone: 587-602-6262Phone: 587-602-6262 Day Ahead Pre-Scheduling: Confirmations: Attn: Pre-Scheduler Desk Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4240/4227/4228 Facsimile: 916-781-4239 2 CITY OF PALO ALTO V.2016 Real Time Scheduling: Attn: Real Time Desk Email: west_rt@dynastypower.com Phone: 587-602-6262 Real Time Scheduling: Attn: Chief Dispatcher/Scheduler Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Confirmations: Attn: Confirms Manager Email: confirms@dynastypower.com Phone: 587-330-0686 Payments: Attn: Accounts Payable Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Wire Transfer: BNK: JPMorgan Chase New York, NY 10017 ABA: 021000021 ACCT: 721652250 Wire Transfer: Deposit to Northern California Power Agency, “to the benefit of City of Palo Alto” BNK U.S. Bank ABA: 121122676 ACCT: 1-534-0216-2744 Attn: Cyndy Husebye U.S. Bank 555 SW Oak Street, Suite 400 Portland, OR. 97204 Phone: 877-295-2509 Facsimile: 877-324-1680 Credit and Collections: Attn: Shereen Lewis Email: credit@dynastypower.com With a copy to: slewis@dynastypower.com Phone: 403-479-3667 Credit and Collections: Attn: Power Accounts Analyst Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4221/4224 Facsimile: 916-781-4255 The Parties hereby agree that the General Terms and Conditions are incorporated herein, as selected, modified and amended by the following specific provisions, as provided for in such General Terms and Conditions: Party A Tariff: FERC MBR Tariff, dated 6/1/2011, Docket Number: ER11 -3342–000 -_ Party B Tariff: N/A Article Two Transaction Terms and Conditions [x] Optional provision in Section 2.4. If not checked, inapplicable. Article Four Remedies for Failure to Deliver or Receive [x] Accelerated Payment of Damages. If not checked, inapplicable. Article Five [x] Cross Default for Party A: Events of Default; Remedies [x] Party A:Cross Default Amount $20,000,000 [] Other Entity:Cross Default Amount $ [x] Cross Default for Party B: [x] Party B:Cross Default Amount $20,000,000 3 CITY OF PALO ALTO V.2016 [] Other Entity:Cross Default Amount $ 5.6 Closeout Setoff [] Option A (Applicable if no other selection is made.) [x] Option B - Affiliates shall have the meaning set forth in the Agreement unless otherwise specified as follows: [] Option C (No Setoff) Article 8 8.1 Party A Credit Protection: Credit and Collateral Requirements (a) Financial Information: [] Option A [x] Option B Specify: Audited financial statements for City of Palo Alto and for City of Palo Alto Enterprise Fund [] Option C (b) Credit Assurances: [x] Not Applicable [] Applicable (c) Collateral Threshold: [x] Not Applicable [] Applicable 3 CITY OF PALO ALTO V.2016 4 CITY OF PALO ALTO V.2016 If applicable, complete the following: Party B Collateral Threshold: $25,000,000; provided, however, that Party B’s Collateral Threshold shall be zero if an Event of Default or Potential Event of Default with respect to Party B has occurred and is continuing. Party B Independent Amount: $0 Party B Rounding Amount: $10,000 (d) Downgrade Event: [] Not Applicable [x] Applicable If applicable, complete the following: [x] Other: It shall be a Downgrade Event for Party B only if (a) Party B’s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt") by S&P or Moody's is respectively below BBB or Baa2, or (b) both S&P and Moody's refuse to rate Party B's Debt, or (c) Party B’s City Council no longer has the legal authority under the Act, as defined by Schedule M, to adjust electric rates as necessary to recover Party B’s costs of providing retail electric service to its customers Specify: (e) Guarantor for Party B: N/A Guarantee Amount: 8.2 Party B Credit Protection: (a) Financial Information: [] Option A [] Option B Specify: [x] Option C Specify: If requested by Party B, Party A shall deliver (i) within 150 days following the end of each fiscal year, a copy of Party A’s annual report containing audited consolidated financial statements for such fiscal year and (ii) within 90 days after the end of each of its first three fiscal quarters of each fiscal year, a copy of such Party’s quarterly report containing unaudited consolidated financial statements for such fiscal quarter. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles; provided, however, that should any such statements not be available on a timely basis due to a delay in preparation or certification, such delay shall not be an Event of Default so long as such Party diligently pursues the preparation, certification and delivery of the statements. (b) Credit Assurances: [x] Not Applicable [] Applicable 5 CITY OF PALO ALTO V.2016 (c) Collateral Threshold: [] Not Applicable [x] Applicable If applicable, complete the following: Party A Collateral Threshold: $5,000,000; provided, however, that Party A’s Collateral Threshold shall be zero if Party A’s Tangible Net Worth (as defined herein) falling to CAD$170,000,000 or below, or an Event of Default with respect to Party A has occurred and is continuing. “Party A’s Tangible Net Worth” means, as of the most recent calculation date, (a) total assets of Party A, minus (b) total liabilities of Party A, minus (c) intangible assets of Party A, minus (d) restricted assets and affiliate assets (net of any matching liabilities, assuming the result is positive value) of Party A minus (e) derivative assets (net of any matching liabilities, assuming the result is positive value) of Party A. Party A Independent Amount: $0 Party A Rounding Amount: $100,000 (d) Downgrade Event: [x] Not Applicable [] Applicable If applicable, complete the following: [] It shall be a Downgrade Event for Party A if Party A’s Credit Rating falls below BBB- from S&P or Baa3 from Moody’s or if Party A is not rated by either S&P or Moody’s [] Other: Specify: (e) Guarantor for Party A: N/A Guarantee Amount: Article 10 Confidentiality [x] Confidentiality Applicable If not checked, inapplicable. Schedule M [] Party A is a Governmental Entity or Public Power System [x] Party B is a Governmental Entity or Public Power System [] Add Section 3.6. If not checked, inapplicable [] Add Section 8.6. If not checked, inapplicable Other Changes Specify, if any: This Master Power Purchase and Sale Agreement incorporates, by reference, the changes published in the EEI Errata, Version 1.1, dated July 18, 2007. Article One 6 CITY OF PALO ALTO V.2016 General Definitions Section 1.4 is amended by deleting the first sentence and replacing it to read as follows: “Business Day” means any day except a Saturday, Sunday, the Friday immediately following the Thanksgiving holiday or a Federal Reserve Bank Holiday. Section 1.10 is amended by adding after “the price” in line 1 the words “, including any and all AB 32 fees” and substituting “U.S. $” for “$U.S.” in line 1. Section 1.11 is amended by adding the following after “Party” in the third line: “after using commercially reasonable efforts to mitigate costs”. Section 1.23 is amended by adding the phrase “or reasonably foreseeable by the Claiming Party” immediately before the phrase “as of the date the Transaction was agreed to,” in the third line. Section 1.24 is amended by adding before the period at the end thereof the following: “in accordance with Section 5.2”. Section 1.27 is amended by (i) deleting the phrase “or a foreign bank with a U.S. branch” and replacing it with the phrase “or a U.S. branch of a foreign bank domiciled in Canada or Europe.” ; and (ii)inserting the phrase “and in an amount” in the third line after the word “form” and before the word “acceptable”. Section 1.28 is amended by adding before the period at end thereof the following: “in accordance with Section 5.2”. Section 1.45 is amended by adding the following sentence at the end of that provision: “Party B shall be deemed to have complied with any request from Party A for the provision of Performance Assurance by furnishing a copy of a resolution adopted by Party B’s City Council within a reasonable period of time after receipt of such request, determining that Party B’s retail rates are set at levels sufficiently high to recover all costs of providing electric service to Party B’s retail electric customers, including the costs incurred by Party B under all Transactions executed under this Agreement.” Section 1.46 is amended by (i) deleting the words “or passage of time or both”; and (ii) adding before the period at the end thereof the following: “; provided that the failure to comply with any requirement of this Master Agreement or a Transaction, including the requirements of Article 8, before the expiration of the time period expressly specified for such compliance in this Master Agreement or the Transaction, if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance”. Section 1.51 is amended by (a) inserting the phrase “for delivery” in the second line after the word “purchases” and before the phrase “at the Delivery Point”, and (b) deleting the phrase “at Buyer’s option” in the fifth line and inserting in their place the following: “absent a purchase”. Section 1.53 is amended by (a) deleting the phrase “at the Delivery Point” in the second line, and (b) deleting the phrase “at Seller’s option” in the fifth line and inserting in their place the following: “absent a sale, assuming a sale could not have been made in a commercially reasonable manner.” Section 1.56 is amended by deleting the words “pursuant to Section 5.2” and by adding before the period at the end thereof the following: “, as determined in accordance with Section 5.2.” 7 CITY OF PALO ALTO V.2016 Section 1.60 is amended by inserting the words “in writing” immediately following the words “agreed to”. Article Two Transaction Terms and Conditions Section 2.1 is deleted in its entirety and replaced with the following: “A Transaction, or an amendment, modification or supplement thereto, shall be entered into only upon a writing signed by both Parties. Each Party agrees not to contest, or assert any defense to, the validity or enforceability of the Transaction entered into in accordance with this Master Agreement based on any lack of authority of the Party or any lack of authority of any employee of the Party to enter into a Transaction.” 8 CITY OF PALO ALTO V.2016 “2.3 Confirmation. A Transaction shall be entered into only by a written confirmation in a form mutually agreeable to both Parties and signed by both Parties (“Confirmation”). Notwithstanding anything to the contrary in this Master Agreement, the Master Agreement and any and all Confirmations may not be amended or modified except by an instrument in writing signed by both of the Parties. Seller shall initiate confirmation of a Transaction by forwarding to Buyer by email a partially-executed proposed form of Confirmation within three (3) Business Days after the Parties have agreed upon the material terms. If Seller fails to send a partially- executed proposed form of Confirmation within three (3) Business Days after the terms of the Transaction are agreed to, a partially-executed proposed form of Confirmation may be forwarded by Buyer to Seller by email for counter-signature. If the Party receiving a partially- executed Confirmation fails to sign and return the Confirmation within three (3) Business Days, the Transaction shall be null and void, provided however, should the Confirmation initiating Party elect to accept the signed confirmation after three (3) Business Days (the “Delayed Confirmation”), the Delayed Confirmation will be valid upon re-execution by the initiating Party within three (3) Business Days. Notwithstanding anything to the contrary in this Master Agreement, the Master Agreement and any and all Transactions may not be orally amended or modified. For purposes of clarity, a “docusign” or similar format of electronically-captured signature shall meet the requirements of this section.” Section 2.4 is amended by deleting the words “either orally or” in the sixth and seventh lines and adding “a” before the word “writing”. A new Section 2.6 is added to Article Two, worded as follows: “2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction between the Parties shall become binding unless and until a Confirmation for such Transaction is signed by both Parties, and this Master Agreement and any and all Transactions may not be orally amended or modified, including by Recording pursuant to Section 2.5.” Article Three Tariffs Section 3.2 is amended by adding the following text to the end of the Section: “Product deliveries shall be scheduled in accordance with the then-current applicable tariffs, protocols, operating procedures and scheduling practices for the relevant region.” Market Redesign Article Three is amended by adding the following new Section 3.4 at the end: “3.4 Market Redesign. In the event the current definition of the Delivery Point set forth in a Transaction is modified, redefined, replaced or eliminated in the transmission provider’s or other applicable tariff, the parties agree to promptly negotiate in good faith to designate an alternate Delivery Point that reasonably approximates the characteristics of the originally designated Delivery Point so that the parties shall be in the same economic position after such designation as they were at the time the parties entered into such Transaction, or as mutually agreed to by the parties. Failure of the parties to so agree shall constitute a Market Disruption Event.” Article Four Section 4.1 is amended by: (i) adding in the fourth line following “failure occurred” the following : “plus any penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery”; and (ii) adding in the seventh line following “Contract Price”, the following: “plus any penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery”. 8 CITY OF PALO ALTO V.2016 9 CITY OF PALO ALTO V.2016 Section 4.2 is amended by: (i) adding in the fourth line following “failure occurred” the following : “plus any penalties imposed on Seller under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery”; and (ii) adding in the seventh line following “Contract Price”, the following: “plus any penalties imposed on Seller under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery”. Suspension of Performance A new Section 4.3 is added to Article Four, worded as follows: “4.3 Temporary Suspension of Performance. In addition to the remedies provided pursuant to Sections 4.1, 4.2 and 5.7, if Seller or Buyer fails to schedule, deliver or receive all or part of the Product pursuant to a Transaction for a period of three (3) or more consecutive days, and such failure is not excused under the terms of the Product, by Force Majeure, by the other Party’s failure to perform or by agreement of the Parties, then upon one (1) Business Day’s prior written notice, and for so long as the non-performing Party fails to perform, the performing Party shall have the right to suspend its performance under such Transaction. In the event the performing Party suspends performance pursuant to this Section 4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Party at least one (1) Business Day prior to the date upon which the non-performing Party intends to resume its performance; provided that, if the performing Party has entered into a replacement contract with a term of 31 days or less, the performing Party may elect to resume performance at the end of the term of such replacement contract. Remedies available under this provision to the performing Party are in addition to, not in replacement of, other remedies specified in this Agreement.” Article Five Events of Default; Remedies Section 5.1(g) is amended by inserting, “or any Affiliate of such Party” after the first appearance of the word “Party” in subsections (i) and (ii). 9 CITY OF PALO ALTO V.2016 10 CITY OF PALO ALTO V.2016 Section 5.1 is further amended by replacing the period at the end of subsection (h) with a semi- colon, and adding new subsections “(i),” “(j)" , “(k)” and “(l)”, which read as follows: “(i) during any consecutive ninety (90) day period, there have occurred five (5) or more “Seller Failures” as that term is used in Section 4.1, under any or all Transactions, regarding which the Seller shall be deemed to be the Defaulting Party, and Buyer shall also be entitled to its remedies under Section 4.1; (j)during any consecutive ninety (90) day period, there have occurred five (5) or more “Buyer Failures” as that term is used in Section 4.2 under any or all Transactions, regarding which the Buyer shall be deemed to be the Defaulting Party, and Seller shall also be entitled to its remedies under Section 4.2; or (k)revocation by the Federal Energy Regulatory Commission of Party A’s authorization to make sales and market-based rates.” Section 5.2 is amended in line 3 by changing “right (i) to” to “right to (i)” and by adding the following sentence to the end of that provision: “If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the Settlement Amount shall be zero, notwithstanding any provision of this Agreement to the contrary.” Section 5.3 is amended by inserting the phrase “plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Defaulting Party pursuant to Article Eight”, between the words “that are due to the Non-Defaulting Party,”, and “plus any and all other amounts” in the sixth line thereof Section 5.6 is further amended by inserting before the last sentence in Option B: “At the election of the Non-Defaulting Party, all obligations owing by or to an Affiliate of a Party shall be treated as if they were owing by or to the Party itself for purposes of set- off.” Article Six Section 6.8 is amended by deleting the words, “may by agreement of the Parties,” in line 3 and inserting in their place the word “shall”. 10 CITY OF PALO ALTO V.2016 11 CITY OF PALO ALTO V.2016 Article Seven Section 7.1 is amended by (i) deleting in the fifteenth line the words, “UNLESS EXPRESSLY HEREIN PROVIDED,”, (ii) adding in the nineteenth line the words, “; PROVIDED, HOWEVER, NOTHING IN THIS SECTION SHALL AFFECT THE ENFORCEABILITY OF THE PROVISIONS OF SECTIONS 4.1 AND 4.2 OF THIS AGREEMENT RELATING TO REMEDIES FOR FAILURE TO DELIVER/RECEIVE AND OF SECTIONS 5.2 AND 5.3 OF THIS AGREEMENT RELATING TO THE CALCULATION AND PAYMENT OF THE TERMINATION PAYMENT” immediately after the words “ANY INDEMNITY PROVISION OR OTHERWISE”, and (iii) adding at the end of the last sentence the words, “AND ARE NOT PENALTIES”. 11 CITY OF PALO ALTO V.2016 12 CITY OF PALO ALTO V.2016 Article Ten Section 10.1 is amended by replacing “upon (thirty) 30 days’ prior written notice” in lines 2 and 3, with “,upon (two) 2 Business Days’ prior written notice”. Section 10.2(viii) is amended by adding to the end: “; information and explanations of the terms and conditions of each such Transaction shall not be considered investment or trading advice or a recommendation to enter into that Transaction; no communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction; and the other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction;”. Section 10.2 (ix) is amended to read in its entirety as follows: “(ix) (1) it is an “eligible contract participant” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (12); and (2) it is an “eligible commercial entity” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (11). Section 10.2 shall be amended by deleting the “and” at the end of sub-section 10.2(xi), replacing the period at the end of subsection 10.2(xii) with a semi-colon, and adding the following new sub- sections at the end thereof: “(xiii) each Transaction that is not executed or traded on a trading facility, as defined in the Commodity Exchange Act, is subject to individual negotiation by the Parties; (xiv) all payments made or to be made by one Party to the other Party pursuant to this Agreement constitute “settlement payments”; (xv) all transfers of Performance Assurance by one Party to the other Party under this Agreement constitute “margin payments”; (xvi) each Party’s rights under Section 5.2, Declaration of an Early Termination Date and Calculation of Settlement Amounts, and Section 5.3, Net Out of Settlement Amounts constitute a “contractual right to liquidate” Transactions; and (xvii) “Notwithstanding any provision in this Agreement to the contrary, all information, statements, reports and similar materials, conveyed by Party A orally or in writing to Party B to demonstrate Party A’s financial condition, are true and accurate in all material respects. Any representation made by Party A regarding its financial performance or condition or that of its corporate parent (“Financial Representation”) as an inducement to Party B during the solicitation, bidding or negotiation of any Transaction entered into under this Master Agreement shall be deemed to be repeated and reaffirmed as of the date of the applicable Transaction and incorporated as a representation of Party A or a related party, if any, who makes the Financial Representation in that Transaction, without the need for any further action by either Party; and” Section 10.4 shall be amended by inserting the phrase "To the extent permitted by law," at the beginning of each of the first two sentences, and substituting the word, “each” for “Each” after the insertion of each such phrase. 13 CITY OF PALO ALTO V.2016 Section 10.5 shall be amended by deleting clause (ii) and the portion of clause (iii) prior to the words “provided, however”, and replacing them with the following: “(ii) transfer or assign this Agreement to an Affiliate of such Party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such Party or the Guarantor as of the Effective Date and the date of entering into each Transaction under this Agreement, if any, for such Party, or (y) the obligations of such Affiliate are guaranteed by such Party or its Guarantor, if any, in accordance with a guaranty agreement in form and substance satisfactory to the other Party, and (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party whose creditworthiness is equal to or higher than that of such Party or its Guarantor, if any, as of the Effective Date and the effective date of any such transfer or assignment. Section 10.6 is amended by deleting the last sentence thereof and replacing it with the following sentence: and adding the following after the last line: “(a) EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HEREBY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION AND THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN SECTION 5.8, INCLUDING THE AGREEMENT THAT ALL DISPUTES BE SUBJECT TO BINDING ARBITRATION RATHER THAN LITIGATION THROUGH STATE OR FEDERAL COURT. (b) IN THE EVENT A PARTY SEEKS TO ENFORCE ANY RIGHTS HEREUNDER PURSUANT TO LITIGATION (WHERE SUCH RIGHT IS NOT BARRED BY Section 5.8). (b) EACH PARTY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA, FOR ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY TRANSACTION, AND EXPRESSLY WAIVES ANY OBJECTION IT MAY HAVE TO SUCH JURISDICTION OR THE CONVENIENCE OF SUCH FORUM. The Parties intend for the waiver in clause (a) and (b) above to be enforced to the fullest extent permitted under applicable law as in effect from time to time 13 CITY OF PALO ALTO V.2016 14 CITY OF PALO ALTO V.2016 Section 10.7 is amended by (1) deleting the word “facsimile” at the end of the second sentence and replacing “facsimile” with “email”; (2) deleting the words “facsimile or” from the third sentence; (3) amending the fourth sentence by adding “, email” after “by overnight United States mail”. Section 10.8 is modified by adding before the word “constitute” in line four of Section 10.8, “, and all financial and other information, explanations, statements, reports provided by one party to the other in connection therewith”. Section 10.8 shall be amended by deleting its penultimate sentence in its entirety and replacing it with the following sentences: “The indemnity provisions of this Agreement shall survive the termination of this Agreement for the period of the applicable statute of limitations. The audit provisions of this Agreement shall survive the termination of this Agreement for a period of twelve (12) months.” Confidentiality X Confidentiality Applicable, subject to Section 10.11 as amended. If not checked, inapplicable. 14 CITY OF PALO ALTO V.2016 15 CITY OF PALO ALTO V.2016 Section 10.11 shall be replaced in its entirety with the following: “Party A acknowledges that Party B is subject to California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“Public Records Act”) in regard to the documents comprising this Master Agreement and the Transactions, which items may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Party B shall, consistent with those laws, use reasonable efforts to provide Party A with notice of any third party request to inspect and copy any of the documents that comprise this Master Agreement and the Transactions, which Party A might deem confidential and exempt from disclosure, in order that Party A may timely seek to protect those documents from disclosure to the third party. Party A acknowledges and agrees that Party B shall not be liable to Party A if Party B makes disclosure in accordance with the California Constitution and/or the Public Records Act before Party A has timely obtained an order to prevent Party B from making the requested disclosure to the third party.” A new Section 10.12 shall be added to Article 10 as follows: "10.12. No Agency. In performing their respective obligations hereunder, neither Party is acting, or is authorized to act, as the agent of the other Party.” A new Section 10.13 shall be added to Article 10 as follows: 10.13 Dispute Resolution. In the event of any controversy or claim, whether based in contract, tort, or otherwise, arising out of or based upon, or relating to this Agreement or the scope, breach, termination or validity of each of them (a “Dispute”), the Parties will resolve such Dispute in the following manner: 10.13.1 Negotiation. The Parties will attempt in good faith to resolve the Dispute promptly by negotiations between duly authorized representatives of the Parties who have authority to settle the Dispute. When a Party believes there is a Dispute, that Party will give the other Party written notice describing the Dispute with reasonable particularity. Within thirty (30) days after receipt of such notice, the receiving Party will submit a written response to the other Party. 10.13.2 Mediation. If the Dispute is not resolved within forty-five (45) days of the date of the response given pursuant to Section 10.13.1, or such additional time, if any, that the Parties mutually agree to in writing, the Parties shall try in good faith to settle the Dispute by mediation. The form of mediation and the mediator(s) selected to resolve the Dispute shall be acceptable to both Parties. 10.13.3 Additional Rights. If the Dispute is not resolved through mediation within ninety (90) days after the first meeting of the Parties and mediator(s), or such additional time, if any, that the Parties mutually agree to in writing, either Party shall be free to pursue any and all legal actions and remedies as it may deem necessary. 10.13.4 Injunctive Relief. Either Party may seek a preliminary injunction or other provisional judicial remedy if such action is necessary to prevent irreparable harm or preserve the status quo, in which case both Parties nonetheless will continue to pursue resolution of the dispute by means of the dispute resolution procedure set forth in this Section 10.13. 16 CITY OF PALO ALTO V.2016 A new Section 10.14 shall be added to Article 10 as follows: 10.14: “The Parties acknowledge and agree that any purchase of power made under this Agreement and any Transaction shall be executed and delivered in compliance with applicable laws and regulations in effect at the time this Agreement is signed by the Parties and at the time of entering into any particular Transaction, including, but not limited to, Senate Bill 1368 (California Public Utilities Code section 8340 et seq.) and related regulations (Title 20, Sections 2900 – 2930 of the California Code of Regulations), as amended, to the extent such laws and regulations, including SB 1368 and related regulations, apply or are deemed to apply to this Agreement and any Transaction. To the extent SB 1368 and related regulations require Party B as a local publicly owned electric utility to submit a compliance filing in accordance with such laws, Party A, upon the request of Party B, shall in good faith provide promptly to Party B (to the extent Party B lacks such information) the information to the extent Party A has knowledge of or access to such information, and shall work cooperatively with and provide commercially reasonable assistance to Party B in Party B’s compliance with such laws. A failure by Party A to provide such information which is within its possession or knowledge shall constitute a default under this Agreement.” A new Section 10.15 shall be added to Article 10 as follows: 10.15: Federal Power Act Waiver; FERC Standard of Review. (a) The Parties intend that the standard of review for changes to any rate, charge, classification, term or condition of this Agreement at FERC shall be the most stringent standard permissible under applicable law. As to the Parties, it is understood and agreed that the standard shall solely be the “public interest” application of the “just and reasonable” standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S. 332 (1956) and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956) and clarified by Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, Nos. 06-1457, 128 S.Ct. 2733 (2008), and consistent with the order of the Supreme Court in NRG Power Marketing, LLC, et al., v. Maine Public Utilities Commission et al., No. 08-674, 130 S.Ct. 693 (2010) (“NRG Order”). As to all other persons, the Parties intend and agree that the same standard, to the maximum degree as may be made applicable to other than the Parties, apply, to the maximum degree permitted under the NRG Order.” (b) In addition, and notwithstanding the foregoing subsection (a), to the fullest extent permitted by applicable law, each Party, for itself and its successors and assigns, hereby expressly and irrevocably waives any rights it can or may have, now or in the future, whether under §§ 205 and/or 206 of the Federal Power Act or otherwise, to seek to obtain from FERC or PUC by any means, directly or indirectly (through complaint, investigation or otherwise), and each hereby covenants and agrees not at any time to seek to so obtain, an order from FERC or PUC changing any section of this Agreement specifying the rate, charge, classification, or other term or condition agreed to by the Parties, it being the express intent of the Parties that, to the fullest extent permitted by applicable law, neither Party shall unilaterally seek to obtain from FERC or PUC any relief changing the rate, charge, classification, or other term or condition of this Agreement, notwithstanding any subsequent changes in applicable law or market conditions that may occur. In the event it were to be determined that applicable law precludes the Parties from waiving their rights to seek changes from FERC to their market-based power sales contracts (including entering into covenants not to do so) then this subsection (b) shall not apply, provided that, consistent with the foregoing subsection (a), neither Party shall seek any such changes except solely under the "public interest" application of the "just and reasonable" standard of review and otherwise as set forth in the foregoing section (a). 16 CITY OF PALO ALTO V.2016 17 CITY OF PALO ALTO V.2016 (c) No subsection of this Section limits the generality of any other subsection of this Section. In determining legal enforceability, each subsection of this Section is severable from every other subsection of this Section.” A new Section 10.16 shall be added to Article 10 as follows: 10.16 ““AB 32 fees” means the regulatory assessments, charges, fees imposts and/or taxes imposed upon and required to be paid by suppliers of energy in accordance with the Global Warming Solutions Act of 2006, Chapter 488, Statutes 2006, including, without limitation, the Compliance Offset Protocols, which shall be included (or be deemed included to the extent they are not expressly included) in the Contract Price, defined in Section 1.10 of the General Terms and Conditions, and that are in effect as of the Effective Date of this Agreement and/or the date the Parties enter into each Transaction hereunder.” A new Section 10.17 shall be added to Article 10 as follows: 10.17 “The Parties understand and agree that the Transactions under this Agreement are physical transactions for deferred delivery, and that the Parties contemplate making or taking physical delivery of electric energy. Party B is a commercial entity engaged in the business of delivering electric energy to its retail load and routinely makes or takes delivery of electric energy in order to provide service to its retail electric customers.” 17 CITY OF PALO ALTO V.2016 18 CITY OF PALO ALTO V.2016 A new Section 10.18 shall be added to Article 10 as follows: 10.18 “Nondiscrimination. As set forth in Palo Alto Municipal Code section 2.30.510, Party A agrees that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. Party A acknowledges that it has read and understands the provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in employment, including completing the form furnished by Party B and set forth in Exhibit D.” A new Section 10.19 shall be added to Article 10 as follows: 10.19 “Imaged Agreement. Any original executed Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation or the Imaged Agreement) on the basis that such were not originated or maintained in documentary form under either the hearsay rule, the best evidence rule or other rule of evidence.” A new Section 10.21 shall be added to Article 10 as follows: 10.21 “Cyber Attack. In addition to the provisions of Section 3.3, the Parties hereby agree that a Cyber Attack (as defined below) that causes (i) the failure to perform a material obligation or (ii) a breach of a Party’s confidentiality obligations arising under Section 10.11 will constitute an event of Force Majeure. In addition, notwithstanding the provisions of Section 5.1, the Parties agree that a failure to pay that is solely the result of a Cyber Attack will not constitute an Event of Default; provided that (a) sufficient funds were available for such Party to fulfill its obligations hereunder on the relevant date, and (b) the payment is made as soon as practicable but in no event later than fifteen (15) days after the occurrence of the Cyber Attack. “Cyber Attack” means a third-party attack that compromises the integrity or availability of information from an information system or systems required to perform the obligations under this Master Agreement that is outside the Party’s control.” 18 CITY OF PALO ALTO V.2016 19 CITY OF PALO ALTO V.2016 A new Section 10.22 shall be added to Article 10 as follows: Index Transactions. If the Contract Price for a Transaction is determined by reference to a Price Source, then: a)Market Disruption Event. If a Market Disruption Event occurs on any one or more days during a Determination Period (each day, a “Disrupted Day”), then: i)The fallback Floating Price, if any, specified by the Parties in the relevant Confirmation shall be the Floating Price for each Disrupted Day. ii)If the Parties have not specified a fallback Floating Price, then the Parties will endeavor, in good faith and using commercially reasonable efforts, to agree on a substitute Floating Price, taking into consideration, without limitation, guidance, protocols or other recommendations or conventions issued or employed by trade organizations or industry groups in response to the Market Disruption Event and other prices published by the Price Source or alternative price sources with respect to the Delivery Point or comparable Delivery Points that may permit the Parties to derive the Floating Price based on historical differentials. iii)If the Price Source retrospectively issues a Floating Price in respect of a Disrupted Day (a “Delayed Floating Price”) before the parties agree on a substitute Floating Price for such day, then the Delayed Floating Price shall be the Floating Price for such Disrupted Day. If a Delayed Price is issued by the Price Source in respect of a Disrupted Day after the Parties agree on a substitute Floating Price for such day, the substitute Floating Price agreed upon by the Parties will remain the Floating Price without adjustment unless the Parties expressly agree otherwise. iv)If the Parties cannot agree on a substitute Floating Price and the Price Source does not retrospectively publish or announce a Floating Price, in each case, on or before the fifth Business Day following the first Trading Day on which the Market Disruption Event first occurred or existed, then the Floating Price for each Disrupted Day shall be determined by taking the arithmetic mean of quotations requested from four leading dealers in the relevant market that are unaffiliated with either Party and mutually agreed upon by the Parties (“Specified Dealers”), without regard to the quotations with the highest and lowest values, subject to the following qualifications: 1.If exactly three quotations are obtained, the Floating Price for each such Disrupted Day will be the quotation that remains after disregarding the quotations having the highest and lowest values. 2.If fewer than three quotations are obtained, the Floating Price for each such Disrupted Day will be the average of the quotations obtained. 3.If the Parties cannot agree upon four Specified Dealers, then each of the Parties will, acting in good faith and in a commercially reasonable manner, select up to two Specified Dealers separately, and those selected dealers shall be the Specified Dealers. 19 CITY OF PALO ALTO V.2016 20 CITY OF PALO ALTO V.2016 v)Unless otherwise agreed, if at any time the Parties agree on a substitute Floating Price for any Disrupted Day, then such substitute Floating Price shall be the Floating Price for such Disrupted Day, notwithstanding the subsequent publication or announcement of a Delayed Floating Price by the relevant Price Source or any quotations obtained from Specified Dealers. "Determination Period" means each calendar month a part or all of which is within the Delivery Period of a Transaction. "Exchange" means, in respect of a Transaction, the exchange or principal trading market specified as applicable to the relevant Transaction. "Floating Price" means a Contract Price specified in a Transaction that is based upon a Price Source. "Market Disruption Event" means, with respect to any Price Source, any of the following events: (a)the failure of the Price Source to announce, publish or make available the specified Floating Price or information necessary for determining the Floating Price for a particular day; (b)the failure of trading to commence on a particular day or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange, RTO or in the market specified for determining a Floating Price; (c)the temporary or permanent discontinuance or unavailability of the Price Source; (d)the temporary or permanent closing of any Exchange or RTO specified for determining a Floating Price; or (e)a material change in the formula for or the method of determining the Floating Price by the Price Source or a material change in the composition of the Product. "Price Source" means, in respect of a Transaction, a publication or such other origin of reference, including an Exchange or RTO, containing or reporting or making generally available to market participants (including by electronic means) a price, or prices or information from which a price is determined, as specified in the relevant Transaction. “RTO” means any regional transmission operator or independent system operator. 20 CITY OF PALO ALTO V.2016 21 CITY OF PALO ALTO V.2016 y "Trading Day" means a day in respect of which the relevant Price Source ordinarily woul announce, publish or make available the Floating Price. (b)Corrections to Published Prices. If the Floating Price published, announced or made available on a given day and used or to be used to determine a relevant price is subsequently corrected by the relevant Price Source (i) within 30 days of the original publication, announcement or availability, or (ii) in the case of RTO Transactions only, within such longer time period as is consistent with the RTO’s procedures and guidelines, then either Party may notify the other Party of that correction and the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Part that originally either received or retained such amount will, not later than three (3) Business Days after such notice is effective, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction. Notwithstanding the foregoing, corrections shall not be made to any Floating Prices agreed upon by the Parties or determined based on quotations from Specified Dealers pursuant to paragraph (a) above unless the Parties expressly agree otherwise. (c)Rounding. When calculating a Floating Price, all numbers shall be rounded to four (4 decimal places. If the fifth (5th) decimal number is five (5) or greater, then the fourth (4th decimal number shall be increased by one (1), and if the fifth (5th) decimal number is les than five (5), then the fourth (4th) decimal number shall remain unchanged. Schedule M Party A is a Governmental Entity or Public Power System X Party B is a Governmental Entity, Schedule M Applicable Part A Part A of Schedule M is amended by including the following definition for the term “Act”: “Act” means the Constitution of the State of California, the California statute(s), charter and municipal ordinances under which Party B was created, organized and authorized to enter into this Master Agreement and each Transaction thereunder Part A is further amended by adding the following sentence at the end of the definition of the term “Special Fund”: “Party A has conducted such investigation as it deems necessary of the City of Palo Alto Enterprise Fund and the Act under which such Fund was established to determine, for its purposes under this Agreement, that such Fund meets this definition of Special Fund.” Part C Part C of Schedule M is amended by adding the phrase in line 7 “and to the extent applicable,” immediately following the word “limitation” in clause (i). Part D Section 3.4 is amended by deleting it in its entirety and replacing with the following: 21 CITY OF PALO ALTO V.2016 22 CITY OF PALO ALTO V.2016 “3.4: Public Power System’s Deliveries. On the Effective Date and as a condition to the obligations of the other Party under this Agreement, Governmental Entity or Public Power System shall provide the other Party hereto electronic copies of all ordinances, resolutions, public notices and other documents evidencing the necessary authorizations with respect to the execution, delivery and performance by Governmental Entity or Public Power System of this Master Agreement.” Part E X Section 3.6 under Part E of Schedule M applies; however, the portion of that provision following the semicolon on the eighth line thereof is replaced in its entirety with the following: “any breach of clause (ii) of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which such budgetary approval or certification of its obligations under this Master Agreement is required to be in effect and an Event of Default shall be deemed to have occurred for purposes of Section 5.1 under which Governmental Entity or Public Power System shall be treated as the Defaulting Party.” Part F Add Section 8.4. If not checked, inapplicable. Part G Part G does not apply. 22 CITY OF PALO ALTO V.2016 23 CITY OF PALO ALTO V.2016 Schedule P The following defined terms are added to Schedule P: “CAISO” means the California Independent System Operator Corporation, or its successor. “CAISO Tariff” means the Federal Energy Regulatory Commission approved tariff of CAISO, including all CAISO protocols, as the same may be amended from time to time. “CAISO Energy” means a Transaction in which the Seller shall sell and the Buyer shall purchase a quantity of Energy equal to the hourly quantity without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the CAISO Tariff as amended from time to time for which the only excuse for failure to deliver or receive is an “Uncontrollable Force” (as defined in the CAISO Tariff) called by the CAISO in accordance with the CAISO Tariff. “HLH (Heavy Load Hour)” is defined as energy delivered from hours ending (HE) 0700- 2200 Monday-Saturday, excluding NERC holidays, PPT. “IST” means Inter-Scheduling Coordinator Trade shall mean a trade between Scheduling Coordinators of Energy or Ancillary Services in accordance with the CAISO Tariff. “LLH (Light Load Hour)” is defined as energy delivered from hours ending (HE) 0100- 0600 and 2300-2400 Monday-Saturday, all day Sunday and NERC holidays, PPT. “NP15 Zone Delivery Point” means the NP15 Zone; provided, however, if CAISO implements trading hubs under a locational marginal pricing design during the Delivery Period, the Delivery Point shall be the Existing Zone Generation NP15 Trading Hub (“NP15 EZ Gen Hub”), as such trading hub is contemplated by the CAISO in its filing made to the FERC dated March 15, 2005 (“Comprehensive Design Proposal for Inter- Scheduling Coordinator Trades Under the California Independent System Operator Corporation’s Market Redesign and Technology Upgrade, Docket No. ER02-1656-025”); provided further, if the NP15 EZ Gen Hub (under any name) is not established as part of a market redesign that is implemented during the Delivery Period, the parties agree to promptly work together in good faith to designate an alternate Delivery Point to reasonably approximate the characteristics of the NP-15 Zone. "West Firm", or “WSPP Schedule C” or “Schedule C” or “WSPPC-Firm” or any similar description means with respect to a Transaction, a Product that is or will be scheduled as firm energy consistent with the most recent rules adopted by the WECC for which the only excuses for failure to deliver or receive are if an interruption is (i) due to an Uncontrollable Force as provided in Section 10 of the WSPP Agreement; or (ii) where applicable, to meet Seller's public utility or statutory obligations to its customers. Notwithstanding any other provision in this Agreement, if Seller exercises its right to interrupt to meet its public utility or statutory obligations, Seller shall be responsible for payment of damages for failure to deliver firm energy as provided in Article 4 of this Agreement. "WECC" means the Western Electricity Coordinating Council. "WSPP Agreement" means the Western Systems Power Pool Agreement as amended from time to time. 23 CITY OF PALO ALTO V.2016 24 CITY OF PALO ALTO V.2016 EXHIBIT A MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER EXHIBIT B RESOURCE ADEQUACY (“RA”) CAPACITY The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning Resource Adequacy, which products, terms, conditions and definitions shall be documented in an Resource Adequacy Confirmation (“RA Confirm”), the terms and conditions of which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT C RENEWABLE ENERGY CREDIT (“REC”) The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning RECs, which terms and conditions shall be documented in a REC Confirmation and which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT D CERTIFICATION OF NONDISCRIMINATION 24 CITY OF PALO ALTO V.2016 25 CITY OF PALO ALTO V.2016 IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written. Party B: City of Palo Alto Party A: Approval as to Form: By: ……………………………..By: …………………………….. Name: Amy Bartell Name: …………………………….. Title: Asst. City Attorney Title: …………………………….. Date: _________Date: ____, 20 Party B: City of Palo Alto Approval by City Manager’s Office: By: Name: Ed Shikada Title: City Manager Date: _____ Party B: City of Palo Alto Approval by Administrative Services Department: By: Name: Lauren Lai Title: Administrative Services Director Date: ___ Party B: City of Palo Alto Approval by Utilities Department: By: Name: Alan Kurotori Title: Utilities Director Date: ______ DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected. 25 CITY OF PALO ALTO V.2016 26 CITY OF PALO ALTO V.2016 Exhibit D Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do not and will not during the course of this contract discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person and that they are in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Authorized Signature: Date: 1 CITY OF PALO ALTO V.2016 9 2 3 3 MASTER POWER PURCHASE AND SALE AGREEMENT (EEI Version 2.1, modified 4/25/00) COVER SHEET This Master Power Purchase and Sale Agreement (“Master Agreement”) is made as of the following date: , 2016 (“Effective Date”). The Master Agreement, together with the exhibits, schedules, annexes and any written supplements hereto, the Party A Tariff, if any, the Party B Tariff, if any, any designated collateral, credit support or margin agreement or similar arrangement between the Parties and all Transactions (including any confirmations accepted in accordance with Section 2.3 hereto) shall be referred to as the “Agreement.” The Parties to this Master Agreement are the following: Name: (“Counterparty ” or “Party A”)Name: City of Palo Alto (“Counterparty” or “Party B”) All Notices: Attn: Phone: Facsimile: E-mail: Duns Federal Tax ID Number: All Notices: Attn: Assistant Director, Resource Management Department of Utilities City of Palo Alto 250 Hamilton Avenue, 3rd Floor Palo Alto, CA 94301 Phone: 650-329-2523119 Facsimile: 650-617-3140 Duns: 17-892-8479 Federal Tax ID Number: 94-6000389 With additional Notices of an Event of Default or Potential Event of Default to: Attn: Phone: Facsimile: With additional Notices of an Event of Default or Potential Event of Default to: Attn: Senior Assistant City, Attorney, /Utilities, City of Palo Alto Phone: 650-329-2171 Facsimile: 650-329-2646 Invoices: Attn: Phone: Facsimile: E-mail: Duns Federal Tax ID Number: Invoices: Attn: Power Accounts Administrator Northern California Power Agency 651 Commerce Drive Roseville, CA 95678-6420 Phone: (916) 781-421124/36364262 Facsimile: (916) 781-42525 Day Ahead Pre-Scheduling: Attn: Phone: Facsimile: E-mail: Day Ahead Pre-Scheduling: Confirmations: utilitycommoditysettlements@paloalto.gov Attn: Pre-Scheduler Desk Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4240/4227/4228 Facsimile: 916-781-4239 2 CITY OF PALO ALTO V.2016 9 2 3 3 Real Time Scheduling: Attn: Phone: Facsimile: E-mail: Real Time Scheduling: Attn: Chief Dispatcher/Scheduler Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781-4237/3636 Facsimile: 916-781-4226 Payments: Attn: Phone: Facsimile: E-mail: Payments: Attn: Accounts Payable Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781- 4211/426237/3636 Facsimile: 916-781-425526Wire Transfer: BNK ABA: ACCT: Confirmation Wire Transfer: Deposit to Northern California Power Agency, “to the benefit of City of Palo Alto” BNK U.S. Bank ABA: 12112267602105 2053 ACCT: 1-534-0216-274455797786 Attn: Cyndy Husebye U.S. Bank 555 SW Oak Street, Suite 400 Portland, OR. 97204 Phone: 877-295-2509 Facsimile: 877-324-1680Credit and Collections: Attn: Phone: Facsimile: Credit and Collections: Attn: Power Accounts Analyst Northern California Power Agency 651 Commerce Drive Roseville, CA 95678 Phone: 916-781- 42121/426224 Facsimile: 916-781-4255 The Parties hereby agree that the General Terms and Conditions are incorporated herein, as selected, modified and amended by the following specific provisions, as provided for in such General Terms and Conditions: Party A Tariff: FERC Electric Rate Schedule , dated , Docket Number: ER - -_ Party B Tariff: N/A Article One General Definitions Section 1.4 is amended by deleting the first sentence and replacing it to read as follows: “Business Day” means any day except a Saturday, Sunday, the Friday immediately following the Thanksgiving holiday or a Federal Reserve Bank Holiday. Section 1.10 is amended by adding after “the price” in line 1 the words “, including any and all AB 32 fees” and substituting “U.S. $” for “$U.S.” in line 1. Section 1.11 is amended by adding the following after “Party” in the third line: “after using commercially reasonable efforts to mitigate costs”. 2 CITY OF PALO ALTO V.2016 9 2 3 3 3 CITY OF PALO ALTO V.2016 9 2 3 3 Section 1.12 is amended by deleting in the fourth line the word “issues” and replacing it with the word “issuer”. Section 1.24 is amended by adding before the period at the end thereof the following: “in accordance with Section 5.2”. Section 1.27 is amended by inserting the phrase “and in an amount” in the third line after the word “form” and before the word “acceptable”. Section 1.28 is amended by adding before the period at end thereof the following: “in accordance with Section 5.2”. Section 1.45 is amended by adding the following sentence at the end of that provision: “Party B shall be deemed to have complied with any request from Party A for the provision of Performance Assurance by furnishing a copy of a resolution adopted by Party B’s City Council within a reasonable period of time after receipt of such request, determining that Party B’s retail rates are set at levels sufficiently high to recover all costs of providing electric service to Party B’s retail electric customers, including the costs incurred by Party B under all Transactions executed under this Agreement.” Section 1.46 is amended by adding before the period at the end thereof the following: “; provided that the failure to comply with any requirement of this Master Agreement or a Transaction, including the requirements of Article 8, before the expiration of the time period expressly specified for such compliance in this Master Agreement or the Transaction, if any, shall not be considered a Potential Event of Default unless and until the applicable time period has expired without compliance”. Section 1.50 is amended by deleting the reference to “Section 2.4” and replacing it with “Section 2.5”. Section 1.51 is amended by (a) inserting the phrase “for delivery” in the second line after the word “purchases” and before the phrase “at the Delivery Point”, and (b) deleting the phrase “at Buyer’s option” in the fifth line and inserting in their place the following: “absent a purchase” and (c) inserting in the seventh line after the words, “any penalties” and before “, ratched demand”, the following: “(other than penalties imposed on Buyer under the CAISO Tariff, the NCPA Metered Subsystem Agreement, or an open access transmission tariff as a result of the non-delivery)”. Section 1.53 is amended by (a) deleting the phrase “at the Delivery Point” in the second line, and (b) deleting the phrase “at Seller’s option” in the fifth line and inserting in their place the following: “absent a sale, assuming a sale could not have been made in a commercially reasonable manner.” Section 1.56 is amended by deleting the words “pursuant to Section 5.2” and by adding before the period at the end thereof the following: “, as determined in accordance with Section 5.2.” Section 1.60 is amended by inserting the words “in writing” immediately following the words “agreed to”. Article Two Transaction Terms and Conditions Section 2.1 shall be amended by deleting the second sentence thereof. 3 CITY OF PALO ALTO V.2016 9 2 3 3 4 CITY OF PALO ALTO V.2016 9 2 3 3 For purposes of Section 2.3, Party B requires that all Transactions be confirmed in writing. Accordingly, the provision is amended by striking the word “may” from the first line thereof and replacing it with the word “shall.” For purposes of Section 2.3, all references to Seller shall be instead to Party A. X Optional provision in Section 2.4. If not checked, inapplicable. A new Section 2.6 is added to Article Two, worded as follows: “2.6 No Oral Agreements or Modifications. Notwithstanding anything to the contrary in this Master Agreement, including in this Article Two, no Transaction between the Parties shall become binding unless and until a Confirmation for such Transaction is signed by both Parties, and this Master Agreement and any and all Transactions may not be orally amended or modified, including by Recording pursuant to Section 2.5.” Article Four Remedies for Failure to Deliver or Receive X Accelerated Payment of Damages. If not checked, inapplicable. A new Section 4.3 is added to Article Four, worded as follows: “4.3 Suspension of Performance. In addition to the remedies provided pursuant to Sections 4.1, 4.2 and 5.7, if Seller or Buyer fails to schedule, deliver or receive all or part of the Product pursuant to a Transaction for a period of three (3) or more consecutive days, and such failure is not excused under the terms of the Product, by Force Majeure, by the other Party’s failure to perform or by agreement of the Parties, then upon one (1) Business Day’s prior written notice, and for so long as the non-performing Party fails to perform, the performing Party shall have the right to suspend its performance under such Transaction. In the event the performing Party suspends performance pursuant to this Section 4.3, it shall not be obligated to resume performance until it has received notice from the non-performing Party at least one (1) Business Day prior to the date upon which the non-performing Party intends to resume its performance; provided that, if the performing Party has entered into a replacement contract with a term of 31 days or less, the performing Party may resume performance at the end of the term of such replacement contract. Remedies available under this provision to the performing Party are in addition to, not in replacement of, other remedies specified in this Agreement.” Article Five Events of Default; Remedies X Cross Default provision of Section 5.1(g) shall apply for both Party A and Party B. Cross Default amount for each shall be $20,000,000. Section 5.1(g) is amended by inserting, “or any Affiliate of such Party” after the first appearance of the word “Party” in subsections (i) and (ii). 4 CITY OF PALO ALTO V.2016 9 2 3 3 5 CITY OF PALO ALTO V.2016 9 2 3 3 Section 5.1 is further amended by replacing the period at the end of subsection (h) with a semi- colon, and adding new subsections “(i),” “(j)" , “(k)” and “(l)”, which read as follows: “(i) during any consecutive ninety (90) day period, there have occurred five (5) or more “Seller Failures” as that term is used in Section 4.1, under any or all Transactions, regarding which the Seller shall be deemed to be the Defaulting Party, and Buyer shall also be entitled to its remedies under Section 4.1; (j)during any consecutive ninety (90) day period, there have occurred five (5) or more “Buyer Failures” as that term is used in Section 4.2 under any or all Transactions, regarding which the Buyer shall be deemed to be the Defaulting Party, and Seller shall also be entitled to its remedies under Section 4.2; (k)a representation or warranty with respect to the Defaulting Party's financial statement or position that is false or materially misleading; or (l)revocation by the Federal Energy Regulatory Commission of Party A’s authorization to make sales and market-based rates.” Section 5.2 is amended in line 3 by changing “right (i) to” to “right to (i)” and by adding the following sentence to the end of that provision: “If the Non-Defaulting Party’s aggregate Gains exceed its aggregate Losses and Costs, if any, resulting from the termination of this Agreement, the Settlement Amount shall be zero, notwithstanding any provision of this Agreement to the contrary. Any Party who is in default at the time of the Early Termination Date, or whose default is the cause of the Early Termination Date, shall not be entitled to receive any Termination Payment or Settlement Amount.” Section 5.3 is amended by inserting the phrase “plus, at the option of the Non-Defaulting Party, any cash or other form of security then available to the Defaulting Party pursuant to Article Eight”, between the words “that are due to the Non-Defaulting Party,”, and “plus any and all other amounts” in the sixth line thereof Section 5.6 Closeout Setoff Option A (Applicable if no other selection is made.) X Option B - Affiliates shall have the meaning set forth in the Master Agreement unless otherwise specified as follows: Option B is amended as set forth in Article 10 below. Option C (No Setoff) Section 5.6 is further amended by inserting before the last sentence in Option B: “At the election of the Non-Defaulting Party, all obligations owing by or to an Affiliate of a Party shall be treated as if they were owing by or to the Party itself for purposes of set- off.” Article Six Section 6.4 is amended by deleting “and owing to each other on the same date”. Section 6.8 is amended by deleting the words, “may by agreement of the Parties,” in line 3 and inserting in their place the word “shall”. 5 CITY OF PALO ALTO V.2016 9 2 3 3 6 CITY OF PALO ALTO V.2016 9 2 3 3 Article Seven Section 7.1 is amended by (i) deleting in the fifteenth line the words, “UNLESS EXPRESSLY HEREIN PROVIDED,”, (ii) adding in the nineteenth line the words, “; PROVIDED, HOWEVER, NOTHING IN THIS SECTION SHALL AFFECT THE ENFORCEABILITY OF THE PROVISIONS OF SECTIONS 4.1 AND 4.2 OF THIS AGREEMENT RELATING TO REMEDIES FOR FAILURE TO DELIVER/RECEIVE AND OF SECTIONS 5.2 AND 5.3 OF THIS AGREEMENT RELATING TO THE CALCULATION AND PAYMENT OF THE TERMINATION PAYMENT” immediately after the words “ANY INDEMNITY PROVISION OR OTHERWISE”, and (iii) adding at the end of the last sentence the words, “AND ARE NOT PENALTIES”. Article Eight 8.1 Party A Credit Protection Credit and Collateral Requirements Financial Information from Party B, Section 8.1(a) Option A X Option B Specify: Audited financial statements for City of Palo Alto and for City of Palo Alto Enterprise Fund Option C Credit Assurances from Party B, Section 8.1(b) X Not Applicable Applicable Collateral Threshold for Party B, Section 8.1(c) X Not Applicable Applicable Party B Independent Amount: N/A Party B Rounding Amount: N/A Party B Minimum Transfer Amount: N/A Downgrade Event, Section 8.1(d): Not Applicable X Applicable If applicable, complete the following: X It shall be a Downgrade Event for Party B only if (a) Party B’s underlying rating, determined without reference to third party credit enhancement, on its utility revenue bond ("Debt") by S&P or Moody's is respectively below BBB- or Baa3, (b) (ii) both S&P and Moody's refuse to rate Party B's Debt, or and (c) Party B’s City Council no longer has the legal authority under the Act, as defined by Schedule M, to adjust electric rates as necessary to recover Party B’s costs of providing retail electric service to its customers. Guarantor for Party B, Section 8.1(e): N/A Guarantee Amount: N/A 8.2 Party B Credit Protection: 7 CITY OF PALO ALTO V.2016 9 2 3 3 Financial Information from Party A, Section 8.2(a): Option A X Option B Specify: Audited financial statements to be provided by Party A as described in Section 8.2(a) shall be for Party A or parent entity, if any, providing credit support. Option C Credit Assurances from Party A, Section 8.2(b): Not Applicable X Applicable If Party B has reasonable grounds to believe that Party A’s creditworthiness or performance under this Agreement has become unsatisfactory, Party B will provide Party A with written notice requesting Performance Assurance in an amount determined by Party B in a commercially reasonable manner. Upon receipt of such notice Party A shall have three (3) Business Days to remedy the situation by providing such Performance Assurance to Party B. In the event that Party A fails to provide such Performance Assurance, or a guaranty or other credit assurance acceptable to Party B within three (3) Business Days of receipt of notice, then an Event of Default under Article Five will be deemed to have occurred and Party B will be entitled to the remedies set forth in Article Five of this Master Agreement. For purpose of this Master Agreement, creditworthiness shall mean a credit rating for Party A rating established as of the Effective Date of the Master Agreement of not less than a BBB- credit rating established by Standard & Poor’s and a Baa3 credit rating established by Moody’s Investors Service, continuing throughout the term of this Agreement. Collateral Threshold for Party A, Section 8.2(c ): Not Applicable X Applicable If applicable, complete the following: Party A Collateral Threshold: means with respect to Party A, at any time the amount specified in the table below under the relevant heading opposite the lower of the ratings at that time assigned by Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) or Moody’s Investors Service, Inc., a subsidiary of Moody’s Corporation (“Moody’s”) to the long term, senior, unenhanced, unsecured debt securities or obligations of Party A’s Guarantor; provided, that (a) if the long term, senior, unenhanced, unsecured debt securities of Party A’s Guarantor is no longer rated by one of S&P or Moody’s, the Threshold with respect to Party A will be zero dollars and (b) if an Event of Default or Potential Event of Default with respect to Party A has occurred and is continuing, the Threshold with respect to such party shall be zero dollars. S&P Rating Moody’s Rating Threshold A- or above A3 or above $25,000,000 BBB+ Baa1 $15,000,000 BBB Baa2 $10,000,000 BBB- Baa3 $ 5,000,000 Below BBB- (or rating Below Baa3 (or rating $ 0 (zero) suspended or withdrawn suspended or withdrawn by both S&P and by both S&P and Moody’s) Moody’s) 7 CITY OF PALO ALTO V.2016 9 2 3 3 8 CITY OF PALO ALTO V.2016 9 2 3 3 Party A Independent Amount: $0 Party A Rounding Amount: $100,000 Party A Minimum Transfer Amount: $250,000 8 CITY OF PALO ALTO V.2016 9 2 3 3 9 CITY OF PALO ALTO V.2016 9 2 3 3 Downgrade Event, Section 8.2(d): Not Applicable X Applicable If applicable, complete the following: X It shall be a Downgrade Event for Party A only if the Credit Rating of Party A or Party A’s Guarantor falls below BBB- from S&P or Baa3 from Moody's or if the unenhanced, unsecured senior long-term debt securities or obligations of Party A or Party A’s Guarantor ceases to be rated by either S&P or Moody's. Guarantor for Party A, Section 8.2(e): X Guarantor for Party A: [Name of investment grade parent guarantor] Guarantee Amount: [Unlimited Guarantee amount preferred] Article Ten Section 10.1 is amended by replacing “upon (thirty) 30 days’ prior written notice” in lines 2 and 3, with “, which termination shall be effective immediately upon receipt of written notice thereof”. Section 10.2 (ix) is amended to read in its entirety as follows: “(ix) (1) it is an “eligible contract participant” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (12); and (2) it is an “eligible commercial entity” as such term is defined in the Commodity Exchange Act, as amended 7 U.S.C. § 1 (a) (11). Section 10.2 shall be amended by deleting the “and” at the end of sub-section 10.2(xi), replacing the period at the end of subsection 10.2(xii) with a semi-colon, and adding a new sub-section (xiii) as follows: “Notwithstanding any provision in this Agreement to the contrary, all information, statements, reports and similar materials, conveyed by Party A orally or in writing to Party B to demonstrate Party A’s financial condition, are true and accurate in all material respects. Any representation made by Party A regarding its financial performance or condition or that of its corporate parent (“Financial Representation”) as an inducement to Party B during the solicitation, bidding or negotiation of any Transaction entered into under this Master Agreement shall be deemed to be repeated and reaffirmed as of the date of the applicable Transaction and incorporated as a representation of Party A or a related party, if any, who makes the Financial Representation in that Transaction, without the need for any further action by either Party; and” Section 10.4 shall be amended by inserting the phrase "To the extent permitted by law," at the beginning of each of the first two sentences, and substituting the word, “each” for “Each” after the insertion of each such phrase. 9 CITY OF PALO ALTO V.2016 9 2 3 3 10 CITY OF PALO ALTO V.2016 9 2 3 3 Section 10.5 shall be amended by deleting clause (ii) and the portion of clause (iii) prior to the words “provided, however”, and replacing them with the following: “(ii) transfer or assign this Agreement to an Affiliate of such Party so long as (x) such Affiliate’s creditworthiness is equal to or higher than that of such Party or the Guarantor as of the Effective Date and the date of entering into each Transaction under this Agreement, if any, for such Party, or (y) the obligations of such Affiliate are guaranteed by such Party or its Guarantor, if any, in accordance with a guaranty agreement in form and substance satisfactory to the other Party, and (iii) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of such Party whose creditworthiness is equal to or higher than that of such Party or its Guarantor, if any, as of the Effective Date and the effective date of any such transfer or assignment. Section 10.6 is amended by deleting the words “New York” from the fourth line thereof and replacing it with the word “California.” Further, Section 10.6 is amended by deleting the last sentence thereof and replacing it with the following sentence: “With respect to any proceeding in connection with any claim, counterclaim, demand, cause of action, dispute and controversy arising out of or relating to this Agreement, the parties hereby consent to the exclusive jurisdiction of the federal courts sitting in the Northern District of the State of California; provided, however, that if the federal courts sitting in the Northern District of the State of California refuse jurisdiction, the Parties agree to the exclusive jurisdiction of the state courts sitting in the County of Santa Clara, State of California.” Section 10.8 is modified by adding before the word “constitute” in line four of Section 10.8, “, and all financial and other information, explanations, statements, reports provided by one party to the other in connection therewith”. Section 10.8 shall be amended by deleting its penultimate sentence in its entirety and replacing it with the following sentences: “The indemnity provisions of this Agreement shall survive the termination of this Agreement for the period of the applicable statute of limitations. The audit provisions of this Agreement shall survive the termination of this Agreement for a period of twelve (12) months.” Section 10.10 is deleted in its entirety and replaced with the following new section: “Bankruptcy. The Parties acknowledge and agree that (i) any Transaction with a maturity date more than two days after the date the Transaction is entered into constitutes a "forward contract" within the meaning of the United States Bankruptcy Code“, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 and from time to time (the “Bankruptcy Code”); (ii) each believes that it is or intends that it shall be deemed for all purposes to be a “forward contract merchant” within the meaning of the Bankruptcy Code; (iii) all payments made or to be made by one Party to the other Party pursuant to this Agreement are "settlement payments" within the meaning of the Bankruptcy Code; and (iv) all transfers of Performance Assurance by one Party to the other Party under this Agreement are "margin payments" within the meaning of the Bankruptcy Code. Each Party further agrees that, for purposes of this Agreement, the other Party is not a "utility" as such term is used in 11 U.S.C. Section 366, and each Party agrees to waive and not to assert the applicability of the provisions of 11 U.S.C. Section 366 in any bankruptcy proceeding wherein such Party is a debtor. In any such proceeding, each Party further agrees to waive the right to assert that the other Party is a provider of last resort." Confidentiality X Confidentiality Applicable, subject to Section 10.11 as amended. If not checked, inapplicable. 10 CITY OF PALO ALTO V.2016 9 2 3 3 11 CITY OF PALO ALTO V.2016 9 2 3 3 Section 10.11 shall be replaced in its entirety with the following: “Party A acknowledges that Party B is subject to California Constitution Article 1, Section 3, and the California Public Records Act, Cal. Gov. Code § 6250 et seq. (“Public Records Act”) in regard to the documents comprising this Master Agreement and the Transactions, which items may constitute public records subject to inspection and copying by the public under the authority of the California Constitution and the Public Records Act. Party B shall, consistent with those laws, use reasonable efforts to provide Party A with notice of any third party request to inspect and copy any of the documents that comprise this Master Agreement and the Transactions, which Party A might deem confidential and exempt from disclosure, in order that Party A may timely seek to protect those documents from disclosure to the third party. Party A acknowledges and agrees that Party B shall not be liable to Party A if Party B makes disclosure in accordance with the California Constitution and/or the Public Records Act before Party A has timely obtained an order to prevent Party B from making the requested disclosure to the third party.” A new Section 10.12 shall be added to Article 10 as follows: "10.12. No Agency. In performing their respective obligations hereunder, neither Party is acting, or is authorized to act, as the agent of the other Party.” A new Section 10.13 shall be added to Article 10 as follows: 10.13 Dispute Resolution. In the event of any controversy or claim, whether based in contract, tort, or otherwise, arising out of or based upon, or relating to this Agreement or the scope, breach, termination or validity of each of them (a “Dispute”), the Parties will resolve such Dispute in the following manner: 10.13.1 Negotiation. The Parties will attempt in good faith to resolve the Dispute promptly by negotiations between duly authorized representatives of the Parties who have authority to settle the Dispute. When a Party believes there is a Dispute, that Party will give the other Party written notice describing the Dispute with reasonable particularity. Within thirty (30) days after receipt of such notice, the receiving Party will submit a written response to the other Party. 10.13.2 Mediation. If the Dispute is not resolved within forty-five (45) days of the date of the response given pursuant to Section 10.13.1, or such additional time, if any, that the Parties mutually agree to in writing, the Parties shall try in good faith to settle the Dispute by mediation. The form of mediation and the mediator(s) selected to resolve the Dispute shall be acceptable to both Parties. 10.13.3 Additional Rights. If the Dispute is not resolved through mediation within ninety (90) days after the first meeting of the Parties and mediator(s), or such additional time, if any, that the Parties mutually agree to in writing, either Party shall be free to pursue any and all legal actions and remedies as it may deem necessary. 11 CITY OF PALO ALTO V.2016 9 2 3 3 12 CITY OF PALO ALTO V.2016 9 2 3 3 A new Section 10.14 shall be added to Article 10 as follows: 10.14: “The Parties acknowledge and agree that any purchase of power made under this Agreement and any Transaction shall be executed and delivered in compliance with applicable laws and regulations in effect at the time this Agreement is signed by the Parties and at the time of entering into any particular Transaction, including, but not limited to, Senate Bill 1368 (California Public Utilities Code section 8340 et seq.) and related regulations (Title 20, Sections 2900 – 2930 of the California Code of Regulations), as amended, to the extent such laws and regulations, including SB 1368 and related regulations, apply or are deemed to apply to this Agreement and any Transaction. To the extent SB 1368 and related regulations require Party B as a local publicly owned electric utility to submit a compliance filing in accordance with such laws, Party A, upon the request of Party B, shall in good faith provide promptly to Party B (to the extent Party B lacks such information) the information to the extent Party A has knowledge of or access to such information, and shall work cooperatively with and provide commercially reasonable assistance to Party B in Party B’s compliance with such laws. A failure by Party A to provide such information which is within its possession or knowledge shall constitute a default under this Agreement.” A new Section 10.15 shall be added to Article 10 as follows: 10.15: “The Parties intend that the standard of review for changes to any rate, charge, classification, term or condition of this Agreement at FERC shall be the most stringent standard permissible under applicable law. As to the Parties, it is understood and agreed that the standard shall solely be the “public interest” application of the “just and reasonable” standard of review, as stated by the United States Supreme Court in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1 of Snohomish County, Nos. 06-1457, 128 S.Ct. 2733 (2008), and consistent with the order of the Supreme Court in NRG Power Marketing, LLC, et al., v. Maine Public Utilities Commission et al., No. 08-674, 130 S.Ct. 693 (2010) (“NRG Order”). As to all other persons, the Parties intend and agree that the same standard, to the maximum degree as may be made applicable to other than the Parties, apply, to the maximum degree permitted under the NRG Order.” A new Section 10.16 shall be added to Article 10 as follows: 10.16 ““AB 32 fees” means the regulatory assessments, charges, fees imposts and/or taxes imposed upon and required to be paid by suppliers of energy in accordance with the Global Warming Solutions Act of 2006, Chapter 488, Statutes 2006, including, without limitation, the Compliance Offset Protocols, which shall be included (or be deemed included to the extent they are not expressly included) in the Contract Price, defined in Section 1.10 of the General Terms and Conditions, and that are in effect as of the Effective Date of this Agreement and/or the date the Parties enter into each Transaction hereunder.” A new Section 10.17 shall be added to Article 10 as follows: 10.17 “The Parties understand and agree that the Transactions under this Agreement are physical transactions for deferred delivery, and that the Parties contemplate making or taking physical delivery of electric energy. Party B is a commercial entity engaged in the business of delivering electric energy to its retail load and routinely makes or takes delivery of electric energy in order to provide service to its retail electric customers.” 12 CITY OF PALO ALTO V.2016 9 2 3 3 13 CITY OF PALO ALTO V.2016 9 2 3 3 A new Section 10.18 shall be added to Article 10 as follows: 10.18 “Nondiscrimination. As set forth in Palo Alto Municipal Code section 2.30.510, Party A agrees that in the performance of this Agreement, it shall not discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person. Party A acknowledges that it has read and understands the provisions of Chapter 2.30 of the Palo Alto Municipal Code relating to Nondiscrimination Requirements and the penalties for violation thereof, and agrees to meet all requirements of Chapter 2.30 pertaining to nondiscrimination in employment, including completing the form furnished by Party B and set forth in Exhibit D.” A new Section 10.19 shall be added to Article 10 as follows: 10.19 “Imaged Agreement. Any original executed Agreement, Confirmation or other related document may be photocopied and stored on computer tapes and disks (the “Imaged Agreement”). The Imaged Agreement, if introduced as evidence on paper, the Confirmation, if introduced as evidence in automated facsimile form, the Recording, if introduced as evidence in its original form and as transcribed onto paper, and all computer records of the foregoing, if introduced as evidence in printed format, in any judicial, arbitration, mediation or administrative proceedings, will be admissible as between the Parties to the same extent and under the same conditions as other business records originated and maintained in documentary form. Neither Party shall object to the admissibility of the Recording, the Confirmation or the Imaged Agreement (or photocopies of the transcription of the Recording, the Confirmation or the Imaged Agreement) on the basis that such were not originated or maintained in documentary form under either the hearsay rule, the best evidence rule or other rule of evidence.” 13 CITY OF PALO ALTO V.2016 9 2 3 3 14 CITY OF PALO ALTO V.2016 9 2 3 3 A new Section 10.19 shall be added to Article 10 as follows: Index Transactions. If the Contract Price for a Transaction is determined by reference to a Price Source, then: a)Market Disruption Event. If a Market Disruption Event occurs on any one or more days during a Determination Period (each day, a “Disrupted Day”), then: i)The fallback Floating Price, if any, specified by the Parties in the relevant Confirmation shall be the Floating Price for each Disrupted Day. ii)If the Parties have not specified a fallback Floating Price, then the Parties will endeavor, in good faith and using commercially reasonable efforts, to agree on a substitute Floating Price, taking into consideration, without limitation, guidance, protocols or other recommendations or conventions issued or employed by trade organizations or industry groups in response to the Market Disruption Event and other prices published by the Price Source or alternative price sources with respect to the Delivery Point or comparable Delivery Points that may permit the Parties to derive the Floating Price based on historical differentials. iii)If the Price Source retrospectively issues a Floating Price in respect of a Disrupted Day (a “Delayed Floating Price”) before the parties agree on a substitute Floating Price for such day, then the Delayed Floating Price shall be the Floating Price for such Disrupted Day. If a Delayed Price is issued by the Price Source in respect of a Disrupted Day after the Parties agree on a substitute Floating Price for such day, the substitute Floating Price agreed upon by the Parties will remain the Floating Price without adjustment unless the Parties expressly agree otherwise. iv)If the Parties cannot agree on a substitute Floating Price and the Price Source does not retrospectively publish or announce a Floating Price, in each case, on or before the fifth Business Day following the first Trading Day on which the Market Disruption Event first occurred or existed, then the Floating Price for each Disrupted Day shall be determined by taking the arithmetic mean of quotations requested from four leading dealers in the relevant market that are unaffiliated with either Party and mutually agreed upon by the Parties (“Specified Dealers”), without regard to the quotations with the highest and lowest values, subject to the following qualifications: 1.If exactly three quotations are obtained, the Floating Price for each such Disrupted Day will be the quotation that remains after disregarding the quotations having the highest and lowest values. 2.If fewer than three quotations are obtained, the Floating Price for each such Disrupted Day will be the average of the quotations obtained. 3.If the Parties cannot agree upon four Specified Dealers, then each of the Parties will, acting in good faith and in a commercially reasonable manner, select up to two Specified Dealers separately, and those selected dealers shall be the Specified Dealers. 14 CITY OF PALO ALTO V.2016 9 2 3 3 15 CITY OF PALO ALTO V.2016 9 2 3 3 v)Unless otherwise agreed, if at any time the Parties agree on a substitute Floating Price for any Disrupted Day, then such substitute Floating Price shall be the Floating Price for such Disrupted Day, notwithstanding the subsequent publication or announcement of a Delayed Floating Price by the relevant Price Source or any quotations obtained from Specified Dealers. "Determination Period" means each calendar month a part or all of which is within the Delivery Period of a Transaction. "Exchange" means, in respect of a Transaction, the exchange or principal trading market specified as applicable to the relevant Transaction. "Floating Price" means a Contract Price specified in a Transaction that is based upon a Price Source. "Market Disruption Event" means, with respect to any Price Source, any of the following events: (a)the failure of the Price Source to announce, publish or make available the specified Floating Price or information necessary for determining the Floating Price for a particular day; (b)the failure of trading to commence on a particular day or the permanent discontinuation or material suspension of trading in the relevant options contract or commodity on the Exchange, RTO or in the market specified for determining a Floating Price; (c)the temporary or permanent discontinuance or unavailability of the Price Source; (d)the temporary or permanent closing of any Exchange or RTO specified for determining a Floating Price; or (e)a material change in the formula for or the method of determining the Floating Price by the Price Source or a material change in the composition of the Product. "Price Source" means, in respect of a Transaction, a publication or such other origin of reference, including an Exchange or RTO, containing or reporting or making generally available to market participants (including by electronic means) a price, or prices or information from which a price is determined, as specified in the relevant Transaction. “RTO” means any regional transmission operator or independent system operator. 15 CITY OF PALO ALTO V.2016 9 2 3 3 16 CITY OF PALO ALTO V.2016 9 2 3 3 y "Trading Day" means a day in respect of which the relevant Price Source ordinarily woulwould announce, publish or make available the Floating Price. (b)Corrections to Published Prices. If the Floating Price published, announced or made available on a given day and used or to be used to determine a relevant price is subsequently corrected by the relevant Price Source (i) within 30 days of the original publication, announcement or availability, or (ii) in the case of RTO Transactions only, within such longer time period as is consistent with the RTO’s procedures and guidelines, then either Party may notify the other Party of that correction and the amount (if any) that is payable as a result of that correction. If, not later than thirty (30) days after publication or announcement of that correction, a Party gives notice that an amount is so payable, the Part that originally either received or retained such amount will, not later than three (3) Business Days after such notice is effective, pay, subject to any applicable conditions precedent, to the other Party that amount, together with interest at the Interest Rate for the period from and including the day on which payment originally was (or was not) made to but excluding the day of payment of the refund or payment resulting from that correction. Notwithstanding the foregoing, corrections shall not be made to any Floating Prices agreed upon by the Parties or determined based on quotations from Specified Dealers pursuant to paragraph (a) above unless the Parties expressly agree otherwise. (c)Rounding. When calculating a Floating Price, all numbers shall be rounded to four (4) decimal places. If the fifth (5th) decimal number is five (5) or greater, then the fourth (4th) decimal number shall be increased by one (1), and if the fifth (5th) decimal number is lesless than five (5), then the fourth (4th) decimal number shall remain unchanged. Schedule M Party A is a Governmental Entity or Public Power System X Party B is a Governmental Entity, Schedule M Applicable Part A Part A of Schedule M is amended by including the following definition for the term “Act”: “Act” means the Constitution of the State of California, the California statute(s), charter and municipal ordinances under which Party B was created, organized and authorized to enter into this Master Agreement and each Transaction thereunder. Part A is further amended by adding the following sentence at the end of the definition of the term “Special Fund”: “Party A has conducted such investigation as it deems necessary of the City of Palo Alto Enterprise Fund and the Act under which such Fund was established to determine, for its purposes under this Agreement, that such Fund meets this definition of Special Fund.” Part C Part C of Schedule M is amended by adding the phrase in line 7 “and to the extent applicable,” immediately following the word “limitation” in clause (i). Part D Section 3.4 is modified by inserting a period after “Master Agreement” in line 7 and deleting the rest of the sentence. 16 CITY OF PALO ALTO V.2016 9 2 3 3 17 CITY OF PALO ALTO V.2016 9 2 3 3 Part E X Section 3.6 under Part E of Schedule M applies; however, the portion of that provision following the semicolon on the eighth line thereof is replaced in its entirety with the following: “any breach of clause (ii) of this provision shall be deemed to have arisen during a fiscal period of Governmental Entity or Public Power System for which such budgetary approval or certification of its obligations under this Master Agreement is required to be in effect and an Event of Default shall be deemed to have occurred for purposes of Section 5.1 under which Governmental Entity or Public Power System shall be treated as the Defaulting Party.” Part F Add Section 8.4. If not checked, inapplicable. Part G Part G does not apply. 17 CITY OF PALO ALTO V.2016 9 2 3 3 18 CITY OF PALO ALTO V.2016 9 2 3 3 Schedule P The following defined terms are added to Schedule P: “CAISO” means the California Independent System Operator Corporation, or its successor. “CAISO Tariff” means the Federal Energy Regulatory Commission approved tariff of CAISO, including all CAISO protocols, as the same may be amended from time to time. “CAISO Energy” means a Transaction in which the Seller shall sell and the Buyer shall purchase a quantity of Energy equal to the hourly quantity without Ancillary Services (as defined in the CAISO Tariff) that is or will be scheduled as a schedule coordinator to schedule coordinator transaction pursuant to the CAISO Tariff as amended from time to time for which the only excuse for failure to deliver or receive is an “Uncontrollable Force” (as defined in the CAISO Tariff) called by the CAISO in accordance with the CAISO Tariff. “HLH (Heavy Load Hour)” is defined as energy delivered from hours ending (HE) 0700- 2200 Monday-Saturday, excluding NERC holidays, PPT. “IST” means Inter-Scheduling Coordinator Trade shall mean a trade between Scheduling Coordinators of Energy or Ancillary Services in accordance with the CAISO Tariff. “LLH (Light Load Hour)” is defined as energy delivered from hours ending (HE) 0100- 0600 and 2300-2400 Monday-Saturday, all day Sunday and NERC holidays, PPT. “NP15 Zone Delivery Point” means the NP15 Zone; provided, however, if CAISO implements trading hubs under a locational marginal pricing design during the Delivery Period, the Delivery Point shall be the Existing Zone Generation NP15 Trading Hub (“NP15 EZ Gen Hub”), as such trading hub is contemplated by the CAISO in its filing made to the FERC dated March 15, 2005 (“Comprehensive Design Proposal for Inter- Scheduling Coordinator Trades Under the California Independent System Operator Corporation’s Market Redesign and Technology Upgrade, Docket No. ER02-1656-025”); provided further, if the NP15 EZ Gen Hub (under any name) is not established as part of a market redesign that is implemented during the Delivery Period, the parties agree to promptly work together in good faith to designate an alternate Delivery Point to reasonably approximate the characteristics of the NP-15 Zone. "West Firm", or “WSPP Schedule C” or “Schedule C” or “WSPPC-Firm” or any similar description means with respect to a Transaction, a Product that is or will be scheduled as firm energy consistent with the most recent rules adopted by the WECC for which the only excuses for failure to deliver or receive are if an interruption is (i) due to an Uncontrollable Force as provided in Section 10 of the WSPP Agreement; or (ii) where applicable, to meet Seller's public utility or statutory obligations to its customers. Notwithstanding any other provision in this Agreement, if Seller exercises its right to interrupt to meet its public utility or statutory obligations, Seller shall be responsible for payment of damages for failure to deliver firm energy as provided in Article 4 of this Agreement. "WECC" means the Western Electricity Coordinating Council. "WSPP Agreement" means the Western Systems Power Pool Agreement as amended from time to time. 18 CITY OF PALO ALTO V.2016 9 2 3 3 19 CITY OF PALO ALTO V.2016 9 2 3 3 EXHIBIT A MASTER POWER PURCHASE AND SALE AGREEMENT CONFIRMATION LETTER EXHIBIT B RESOURCE ADEQUACY (“RA”) CAPACITY The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning Resource Adequacy, which products, terms, conditions and definitions shall be documented in an Resource Adequacy Confirmation (“RA Confirm”), the terms and conditions of which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT C RENEWABLE ENERGY CREDIT (“REC”) The Parties acknowledge and agree that after the execution of this Master Agreement, they may enter into one or more contracts or confirmations concerning RECs, which terms and conditions shall be documented in a REC Confirmation and which the Parties agree to negotiate in good faith at the time such Transactions are contemplated. EXHIBIT D CERTIFICATION OF NONDISCRIMINATION 19 CITY OF PALO ALTO V.2016 9 2 3 3 20 CITY OF PALO ALTO V.2016 9 2 3 3 IN WITNESS WHEREOF, the Parties have caused this Master Agreement to be duly executed as of the date first above written. Party B: City of Palo Alto Party A: Approval as to Form: By: ……………………………..By: …………………………….. Name: Name: …………………………….. Title: Sr. Asst. City Attorney Title: …………………………….. Date: _________ , 20 Date: ____, 20 Party B: City of Palo Alto Approval by City Manager’s Office: By: Name: __ Title: City Manager Date: _____, 20 Party B: City of Palo Alto Approval by Administrative Services Department: By: Name: Title: Administrative Services Director Date: ___, 20 Party B: City of Palo Alto Approval by Utilities Department: By: Name: ___ Title: _ Date: ______, 20 DISCLAIMER: This Master Power Purchase and Sale Agreement was prepared by a committee of representatives of Edison Electric Institute (“EEI”) and National Energy Marketers Association (“NEM”) member companies to facilitate orderly trading in and development of wholesale power markets. Neither EEI nor NEM nor any member company nor any of their agents, representatives or attorneys shall be responsible for its use, or any damages resulting therefrom. By providing this Agreement EEI and NEM do not offer legal advice and all users are urged to consult their own legal counsel to ensure that their commercial objectives will be achieved and their legal interests are adequately protected. 20 CITY OF PALO ALTO V.2016 9 2 3 3 21 CITY OF PALO ALTO V.2016 9 2 3 3 Exhibit D Certification of Nondiscrimination As suppliers of goods or services to the City of Palo Alto, the firm and individuals listed below certify that they do not and will not during the course of this contract discriminate in the employment of any person because of the race, skin color, gender, gender identity, age, religion, disability, national origin, ancestry, sexual orientation, pregnancy, genetic information or condition, housing status, marital status, familial status, weight or height of such person and that they are in compliance with all Federal, State and local directives and executive orders regarding nondiscrimination in employment. THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. Authorized Signature: Date: