|
CONFIDENTIAL INFORMATION
CONTAINED IN THIS EXHIBIT HAS BEEN OMITTED FROM PUBLIC FILING
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT SUBMITTED TO THE
U.S. SECURITIES AND EXCHANGE COMMISSION. THE OMITTED INFORMATION,
WHICH APPEARS ON 1 PAGE OF THIS EXHIBIT AND
HAS BEEN IDENTIFIED WITH THE SYMBOL "***," HAS BEEN FILED
SEPARATELY WITH THE U.S. SECURITIES AND EXCHANGE
COMMISSION.
RENEWABLE POWER PURCHASE
AND SALE AGREEMENT
SALT RIVER PROJECT
AGRICULTURAL
IMPROVEMENT AND POWER
DISTRICT
|
LIGHTNING DOCK GEOTHERMAL
HI-01, LLC, a special purpose entity subsidiary of Los Lobos
Renewable Power, LLC
THIS RENEWABLE POWER PURCHASE AND SALE AGREEMENT (this
“Agreement”) is executed this 11th day of June, 2008
(the “Effective Date”), between Salt River Project
Agricultural Improvement and Power District, a political
subdivision of the State of Arizona (“Buyer”) and
Lightning Dock Geothermal HI-01, LLC, a Delaware limited liability
company (“Seller”). Buyer and Seller are sometimes
referred to herein individually as a “Party” and
jointly as “Parties.” Capitalized terms not otherwise
defined in this Agreement have the meanings set forth in Exhibit
A.
Seller is willing to construct, own, operate and maintain a
geothermal binary electric energy Generating Facility to be known
as Lightning Dock Geothermal and located in Animas Valley, Hidalgo
County, New Mexico, as further described in Exhibit B, and to sell
all electric energy produced by the Generating Facility as
specified herein together with all Environmental Attributes and
Ancillary Services to Buyer; and
Buyer is willing to purchase all electric energy delivered
by Seller to Buyer generated by the Generating Facility together
with all Environmental Attributes and Ancillary Services pursuant
to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements herein contained, and for other good and valuable
consideration, the sufficiency and adequacy of which are hereby
acknowledged, the Parties agree to the following:
STARTUP DEADLINE, TERM AND
PRICE
|
| 1.01
|
Startup
Deadline . The startup deadline for
delivering energy to the Delivery Point shall be September 30, 2009
(the “Startup Deadline”), plus any additional days for
Force Majeure as provided in Section 5.03, or such other date as
provided in this Agreement or as may be agreed to in a writing
signed by both Parties; provided that Seller shall use reasonable
commercial efforts to achieve an earlier startup of December 15,
2008. |
| |
| 1.02
|
Term
. The term of this Agreement
(“Term”) shall commence upon the date hereof and shall
terminate as of 11:59:59 p.m. of the day prior to the 20
th anniversary of the Initial Operation Date, unless
terminated pursuant to an express provision of this
Agreement. |
| |
| |
(a)
|
Contract Price
. If the Generating Facility is Placed in
Service on or before December 31, 2008, the price per megawatt hour
for the Metered Output, Environmental Attributes and Ancillary
Services shall be $***/MWh (the “Contract Price”). If
the Generating Facility is Placed in Service after December 31,
2008, the Contract Price shall be determined as follows
*** |
| |
The Contract Price shall
escalate annually by ***% effective on each anniversary of the
Initial Operation Date.
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 1
| 1.03
|
Generating
Facility Capacity . The Generating
Facility shall be a 10 megawatt net nameplate facility. The
“Contract Capacity” shall be 10 MW. |
| |
| 1.04
|
Test
Energy . |
| |
| |
(a)
|
Seller shall notify Buyer no
less than 30 days before the Initial Synchronization of the
Generating Facility at which point Seller will give Buyer the
option to purchase any and all Test Energy produced by the
Generating Facility at a price equal to 75% of the Contract Price.
Buyer shall have 15 days to accept or reject Seller’s
proposal for the sale of Test Energy. |
| |
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(b)
|
If Buyer agrees to the
Seller’s sale of Test Energy to Buyer, Buyer shall purchase
all Test Energy produced by the Generating Facility between the
Initial Synchronization and the Initial Operation Date. If Buyer
rejects or does not respond to the Seller’s proposal for the
sale of Test Energy, Seller has the right to sell any and all of
the Test Energy from the Generating Facility to another party under
a third party sale. |
| |
| |
(c)
|
Throughout the sale of Test
Energy, Seller shall have the right to interrupt or amend the
delivery of Test Energy to Buyer at any time and for any reason in
conjunction with work on the Generating Facility. Seller may not,
however, interrupt or otherwise change the delivery of Test Energy
for economic purposes or to sell to another party. |
| |
| 1.05
|
Buyer Right of
First Refusal on Additional Generation Capacity
. |
| |
| |
(a)
|
If Seller expands the
generating capacity of the Generation Facility by incorporating
additional generation units beyond the original plant design (the
“Additional Generating Capacity”), Seller shall not
enter into a binding obligation to sell or otherwise transfer any
Additional Generating Capacity to a party other than Buyer, unless
Seller first offers, in writing, to sell such Additional Generating
Capacity to Buyer (an “Offer”). |
| |
| |
(b)
|
If Buyer elects to negotiate or
accept the Offer made by Seller, Buyer shall give Notice to Seller
within 20 Business Days of receipt of the Offer (“Buyer's
Notice”) and the Parties shall have not more than 60 days
from the date of Buyer’s Notice to enter into a new power
purchase agreement, in substantially the same form as this
Agreement, or amend this Agreement, unless agreed to otherwise by
both Parties. |
| |
| |
(c)
|
If Buyer does not provide
Buyer’s Notice or if Buyer and Seller are unable to enter
into a power purchase agreement or amend this Agreement in
accordance with subpart (b) above, Seller may enter into an
agreement to sell the Additional Generating Capacity from the
Project to a third party on terms and conditions no more favorable
to the third party than those offered to Buyer. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 2
| 1.06
|
Progress Reporting Toward
Meeting Milestone Schedule . Seller
shall use commercially reasonable efforts to meet the milestone
schedule and avoid or minimize any delays in meeting such schedule.
Seller shall provide a monthly written report of its progress
toward meeting the milestone schedule contained in Exhibit E using
the procedures set forth in Exhibit F. Seller shall include in such
report a list of all letters, notices, applications, approvals,
authorizations, filings, permits and licenses relating to any
Transmission Provider or Governmental Authority and shall provide
any such documents as may be reasonably requested on Notice from
Buyer. In addition, Seller shall advise Buyer as soon as reasonably
practicable of any problems or issues of which it is aware which
may materially impact its ability to meet the milestone
schedule. |
| |
ARTICLE TWO. TERM AND
CONDITIONS PRECEDENT; TERMINATION; SECURITY INTEREST
| 2.01
|
Construction of
the Generation Facility . Seller
shall develop, design and construct the Generating Facility prior
to the Startup Deadline. |
| |
| 2.02
|
Interconnection
Agreement and Costs . Seller shall
exercise commercially reasonable efforts to enter into
interconnection agreements required to transmit electric energy
from the Generating Facility to the Delivery Point. Seller shall
pay all costs and any other charges directly caused by, associated
with, or allocated to interconnection of the Generating Facility to
the Transmission Provider’s system and metering of delivered
energy. Seller shall use commercially reasonable efforts to cause
the applicable balancing authority to arrange for the use of
dynamic scheduling of the delivered energy. |
| |
| 2.03
|
Transmission to
Delivery Point . Seller shall obtain
and maintain any transmission, distribution or other service
agreements necessary to deliver electric energy from the Generating
Facility to the Delivery Point. |
| |
| 2.04
|
Permits . Prior to Initial
Synchronization, Seller shall obtain and maintain any and all
interconnection rights and Permits required to effect delivery of
the electric energy from the Generating Facility to the Delivery
Point. |
| |
| 2.05
|
Conditions
Precedent . |
| |
| |
(a)
|
On or before the Startup
Deadline, Seller shall have complied with the requirements of
Section 2.01 through 2.04. |
| |
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(b)
|
Seller shall notify Buyer
within five Business Days after Seller executes a Financing
Commitment with Lender (“Notice of Financing
Commitment”). The Notice of Financing Commitment shall
specify a date that the Generating Facility will commence
production and delivery of the Contract Capacity to the Delivery
Point (the “Expected Initial Operation Date”). Promptly
after Buyer’s receipt of the Notice of Financing Commitment,
Buyer shall use commercially reasonable efforts to reach agreement
with the transmission providers on terms for Buyer’s purchase
of transmission service. Buyer shall provide notice to Seller
(which |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 3
| |
notice may be provided by
telephone call or email) of Buyer’s receipt of final
execution copies of the agreements (the “Notice of Final
Transmission Documents”) for the purchase of transmission
service, no later than the first Business Day following
Buyer’s receipt of such agreements. |
| |
| (c)
|
Within three Business Days of
receipt of the Notice of Final Transmission Documents, Seller shall
deliver a validly issued, irrevocable, unconditional, standby
letter of credit in the amount of $3,600,000, issued by a United
States bank with a rating of “A” or better from S&P
or a rating of “A2” from Moody’s with Buyer shown
as the beneficiary in the form of Exhibit H. Buyer shall execute
the agreement(s) with the transmission provider(s) promptly after
receiving the standby letter of credit. The initial term of the
letter of credit shall be for one year. If this Agreement is
terminated by either Party pursuant to Section 2.06(a) or by Buyer
pursuant to Section 2.06(b)(iii), Buyer shall have the right to
draw the entire amount of the letter of credit. If Buyer exercises
its right to draw on the letter of credit pursuant to this Section
and receives the proceeds thereof, Buyer shall, subject to the
consent of the transmission provider, assign the transmission
purchased by Buyer pursuant to this Section to Seller or such other
party as requested by Seller. |
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| (d)
|
If the Initial Operation Date
occurs after the Expected Initial Operation Date, Seller shall
reimburse Buyer for any amounts paid by Buyer for transmission
service purchased by Buyer pursuant to Section 2.05(c) between the
Expected Initial Operation Date and the Initial Operation Date.
Buyer may set-off amounts due from Seller pursuant to this Section
against amounts due to Seller from Buyer under this Agreement or,
if this Agreement is terminated by either Party pursuant to 2.06(a)
or by Buyer pursuant to Section 2.06(b)(iii), Buyer shall be
reimbursed by drawing on the letter of credit provided by Seller in
accordance with Section 2.05(c). |
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| (e)
|
In the event that the Letter of
Credit is drawn due to a failure of Seller to renew or replace the
Letter of Credit not less than 30 days prior to its expiration,
Buyer shall maintain the proceeds of any such draw in a custodial
account at a national bank reasonably acceptable to Seller. Buyer
may withdraw funds from such account to collect any amount due and
owing from Seller under this Section 2.05. |
| |
| (f)
|
Within 10 Business Days
following the Initial Operation Date, Buyer shall return the
original letter of credit to Seller. Following the return of the
letter of credit, Buyer shall execute such documents as Seller or
the issuer of the letter of credit reasonably requests to evidence
the cancellation of the letter of credit. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 4
| 2.06
|
Termination
Rights . |
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| |
(a)
|
Termination
Rights of Both Parties . |
| |
| |
|
(i)
|
Either Party shall have the
right to terminate this Agreement if documentation for the project
financing has not been executed by September 30, 2008. |
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| |
|
(ii)
|
Either Party shall have the
right to terminate this Agreement if the Initial Operation Date
does not occur on or before September 30, 2009. |
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|
(iii)
|
Either Party shall have the
right to terminate this Agreement in the event that all required
Permits and interconnection and transmission agreements have not
been obtained by Seller on or before August 31, 2009. |
| |
If either Party elects to terminate this Agreement under
the terms of this Section 2.06(a), the terminating Party shall
provide written notice to the other Party at least five Business
Days prior to the effective date of such termination. If either
Party exercises a termination right, as set forth in this Section
2.06(a), except as otherwise provided in Section 2.05, neither
Party shall be responsible for making a Termination Payment to the
other Party.
| (b)
|
Termination
Rights of Buyer . |
| |
| |
(i)
|
Buyer shall have the right to
terminate this Agreement prior to expiration of the Term if the
Capacity Factor of the Generating Facility is equal to or less than
70% of the Contract Capacity for any consecutive 12 month period
following the Initial Operation Date. |
| |
| |
|
Buyer shall provide written
notice of its intent to terminate this Agreement pursuant to this
Section 2.06(b) at least 30 days in advance of the date on which
Buyer will terminate this Agreement. |
| |
| |
(ii)
|
Buyer shall have the right to
terminate this Agreement if Buyer cannot purchase firm transmission
service (with roll-over rights) on terms reasonably acceptable to
Buyer. |
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| |
(iii)
|
Buyer shall have the right to
terminate this Agreement if Buyer, Seller and Lender have not
agreed on the terms and conditions of the Subordination Agreement
and Security Documents all as acceptable to Buyer in its reasonably
exercised discretion prior to the Initial Operation
Date. |
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| (c)
|
Uncured
Defaults . Upon the occurrence of an
uncured Event of Default, the Non- Defaulting Party may terminate
this Agreement as set forth in Section 6.02. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 5
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(d)
|
End of Term
. At the end of the Term as set forth in Section
1.02, this Agreement shall automatically terminate. |
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| 2.07
|
Subordinated
Security Interests and Mortgage . |
| |
| |
(a)
|
Prior to the Initial Operation
Date, as security for Seller’s obligation to pay any amounts
that may be owed by Seller to Buyer pursuant to this Agreement,
Seller or Buyer, as appropriate, shall execute, deliver, file and
record, separate agreements, documents, fixture filings, financing
statements or instruments (the “Security Documents”)
under which Seller will grant to Buyer, in a form reasonably
acceptable to Buyer and subject to characterization as real or
personal property in Buyer’s sole discretion, fully perfected
security interest(s), or mortgage lien(s) in the Generating
Facility and in any and all real and personal property rights,
contractual rights, or other rights that Seller acquires in
connection with the Generating Facility (collectively the
“Secured Interests”). |
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| |
|
Seller expressly grants Buyer
the right to file and or record, as appropriate, such fixture
filings, financing statements and other Security Documents in order
to perfect its security interests in the Generating Facility. The
Secured Interests shall be subordinate in right of payment,
priority and remedies only to the interests of Lender, all as more
fully described in the Subordination Agreement. The Secured
Interests shall not include a pledge, assignment, or other interest
in any ownership interest, whether stock or other equity interest,
in Seller. |
| |
| |
(b)
|
The Parties shall confirm,
define, and perfect the Secured Interests by executing, delivering,
filing, and recording, at the expense of Seller, the Security
Documents. |
| |
| |
|
The Security Documents shall
contain financial and operating covenants intended to preserve and
maintain the value of the Security Interests and substantially
similar to those in favor of Lender. In addition, Seller agrees to
file and expressly grants Buyer the right to file or, in the case
of a fixture filing record, such Uniform Commercial Code financing
statements and to take such further action and execute such further
instruments as shall reasonably be required by Buyer to confirm and
continue the validity, priority, and perfection of the Secured
Interests. The granting of the Secured Interests shall not be to
the exclusion of, nor be construed to limit the amount of any
further claims, causes of action or other rights accruing to Buyer
by reason of any breach or default by Seller under this Agreement
or the termination of this Agreement prior to the expiration of its
term. The Secured Interests shall be discharged and released, and
Buyer shall take any steps reasonably required by Seller to effect
and record such discharge and release, upon the expiration of the
Term and satisfaction by Seller of all of its obligations hereunder
or as required by the terms of the Subordination Agreement. Seller
shall reimburse Buyer for its reasonable costs associated with the
discharge and release of the Secured Interests. |
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| |
(c)
|
The Security Documents shall
provide that if Buyer acts to obtain title to the Generating
Facility pursuant to the interests provided by Seller under the
Security Documents, Seller shall take all steps necessary, subject
to Lender’s priority |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 6
security rights, to transfer
all permits and licenses necessary to operate the Generating
Facility to Buyer, and shall diligently prosecute and cooperate in
such transfers.
| 2.08
|
Rights and Obligations
Surviving Termination . Applicable
provisions of this Agreement shall continue in effect after
termination, including early termination, to the extent necessary
to enforce or complete the duties, obligations or responsibilities
of the Parties arising prior to termination and, as applicable, to
provide for: final billings and adjustments related to the period
prior to termination, repayment of any money due and owing to
either party pursuant to this Agreement, and the indemnifications
specified in this Agreement. |
| |
ARTICLE THREE.
SELLER’S OBLIGATIONS
| 3.01
|
Conveyance of Entire
Output . Seller shall convey all
Metered Amounts, Environmental Attributes and Ancillary Services
(excluding amounts that Buyer is unable to take during a Force
Majeure with respect to Buyer) during the Term to Buyer. In the
event of a change in law or regulation relating to any product sold
to Buyer under this Agreement that becomes effective subsequent to
the effective date of this Agreement, Seller agrees that it will
take such actions as may be reasonably requested by Buyer, to
permit Buyer to obtain the full benefit of the aforesaid, as so
subsequently defined; provided that such subsequent actions will
leave the Seller economically no worse off than if the change in
law or regulation had not occurred. |
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| |
Seller shall register, at its
sole expense, the Generating Facility in the WREGIS, and take all
other actions necessary to ensure that the Environmental Attributes
are issued, tracked and transferred to Buyer. Upon Buyer’s
request, Seller shall provide Buyer with an attestation certificate
in the form attached to this Agreement as Exhibit G, or such other
form as agreed to by the Parties. |
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| |
Seller shall convey title to
and risk of loss of all Metered Amounts, Environmental Attributes
and Ancillary Services to Buyer at the Delivery Point. |
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| |
Seller shall not sell any
Metered Amounts, Environmental Attributes and Ancillary Services to
any entity other than Buyer, except that in the event of a Buyer
Force Majeure or a Buyer Event of Default Seller may, but shall not
be obligated to, sell the Metered Amounts, Environmental Attributes
and Ancillary Services to a third party during the occurrence of
such events. |
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| 3.02
|
Seller’s Energy
Delivery Obligation . Beginning on
the Initial Operation Date, Seller shall sell and deliver to Buyer
all electric energy, net of Station Use, from the Generating
Facility to Buyer subject to the limitations set forth in Section
3.01 and Article 5. |
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| 3.03
|
Site Location
. Seller may, with Buyer’s prior written
consent not to be unreasonably withheld, change the location of the
Site; provided that
, the replacement location is in the Animas
Valley, Hidalgo County, New Mexico and Buyer, either directly or
indirectly, |
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The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 7
| |
does not incur any
additional transmission or wheeling costs because of such location
change. Seller shall promptly provide a revised Exhibit B
describing any new Site in the event Seller requests Buyer’s
consent to change the Site location. |
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| 3.04
|
Operation . Seller shall
operate the Generating Facility and provide, or retain qualified
third-parties to provide, all the operation, engineering,
purchasing, repair, supervision, training, inspection, testing,
protection, use, management, improvement, replacement,
refurbishment, retirement, and maintenance activities associated
with operating the Generating Facility in accordance with Prudent
Electrical Practices. |
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| 3.05
|
Forecasting . Seller shall
prepare a forecast of electric energy, in MWh, in accordance with
the provisions of Exhibit D. The information contained in Exhibit D
may be changed or amended from time to time by Seller, as agreed to
in writing by the Buyer or Buyer’s designated representative.
Such written agreement shall be considered an element of
administration of the Agreement and shall be deemed a change or an
amendment of this Agreement not requiring the further consent of
either Party. |
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| 3.06
|
Scheduled
Outages . |
| |
| |
(a)
|
No later than
November 15 th
of each year of the Term, and at least 60 days
prior to Initial Synchronization, Seller shall submit to Buyer its
schedule of proposed planned Outages (“Outage
Schedule”) for the subsequent two calendar year
period. |
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| |
(b)
|
Seller shall
provide the following information for each proposed planned
outage: |
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| |
|
(i)
|
Start date and
time; |
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| |
|
(ii)
|
End date and time;
and |
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| |
|
(iii)
|
Capacity online, in MW, during
the planned outage. |
| |
| |
(c)
|
Within 20 Business
Days after Buyer’s receipt of an Outage Schedule, Buyer shall
notify Seller in writing of any reasonable request for changes to
the Outage Schedule, and Seller shall, consistent with Prudent
Electrical Practices, accommodate Buyer’s requests regarding
the timing of any planned outage. |
| |
| |
(d)
|
If a condition
occurs at the Generating Facility which causes Seller to revise its
planned outages, Seller shall provide Notice to Buyer as soon as
commercially practicable, but in no event later than 20 Business
Days after Seller learns of the occurrence of the condition, with
an estimate of the length of such planned outage after the
condition causing the change becomes known to Seller. |
| |
| |
(e)
|
No planned outages
shall be scheduled during the months of June, July, August and
September without the prior express written consent of
Buyer. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 8
| 3.07
|
Exchange
Arrangement . Notwithstanding any
provision in this Agreement to the contrary, subject to the written
consent of Buyer, which consent may be given or withheld in
Buyer’s sole discretion, Seller may enter into an agreement
with Columbus Electric Cooperative to exchange power generated by
the Generating Facility and associated Environmental Attributes for
power supplied by Columbus Electric Cooperative solely to the
extent necessary for Station Use, transmission wheeling and line
losses. |
| |
ARTICLE FOUR. BUYER’S
OBLIGATIONS
| 4.01
|
Obligation to
Pay . Buyer shall make monthly
payments to Seller during the Term calculated in the manner
described in Section 4.02. |
| |
| 4.02
|
Payment
Statement and Payment . |
| |
| |
(a)
|
On or about the
10 th day of each month after the Initial Operation Date and
every month thereafter, and continuing through and including the
first month following the end of the Term, Seller shall provide to
Buyer (i) daily and hourly records of Metered Amounts during the
preceding month; and (ii) an itemized invoice calculating the
amount payable to Seller for the previous month, based upon: (1)
the sum of the Contract Price multiplied by the Metered Amounts for
such month; plus (2) the Transmission Costs. The invoice shall list
all components of charges and how the charges are calculated.
Seller shall provide or cause to be provided to Buyer a monthly
record of all Transmission Costs at the time the invoice is
rendered for such charges. Buyer shall pay the undisputed amount of
such invoices on or before the later of the (x) 25
th day of
each month or (y) 15 days after receipt of the invoice. If either
the invoice date or payment date is not a Business Day, then such
invoice or payment shall be provided on the next following 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 undisputed 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. |
| |
| |
|
(i)
|
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. In the event adjustments to payments are required as a
result of inaccurate meter(s), Buyer shall use corrected
measurements to recompute the amount due from Buyer to Seller
during the period of inaccuracy. The Parties agree to use good
faith efforts to resolve the dispute or identify the adjustment as
soon as possible. Upon resolution of the dispute or calculation of
the |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 9
adjustment, any required
payment shall be made within 15 days of such resolution along with
interest accrued at the Interest Rate from and including the due
date, 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, 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 Section 10.01
within 36 months after the invoice is rendered by Seller and
received by Buyer or any specific adjustment to the invoice is
made. If an invoice is not rendered by Seller and received by Buyer
within 36 months after the close of the month during which
performance under this Agreement occurred, the right to payment for
such performance is waived.
| (b)
|
Upon 30 days prior written
notice, but not more than once each year, Buyer shall have the
right at all times during normal business hours to audit the
accounts, books and records of Seller to the extent necessary to
verify the accuracy of any statement, charge, computation, or
demand made under or pursuant to this Agreement and Seller’s
compliance with provisions of this Agreement. Any such audit(s)
shall be undertaken by Buyer or its representative(s) at reasonable
times and appropriate locations and in conformance with generally
accepted auditing standards. Seller agrees to fully cooperate with
any such audit(s). This right to audit shall extend for a period of
three years following the date of each payment under this
Agreement. Seller agrees to retain all necessary
records/documentation during this audit period or until any dispute
in connection with an audit is resolved, whichever is longer. The
costs of any audit shall be paid by Buyer, unless the audit reveals
a discrepancy or discrepancies in excess of 3% of the amounts
reported in favor of Buyer, in which case, Seller shall pay the
costs of the audit. Seller shall be notified in writing of any
exception taken as a result of an audit and shall respond in
writing to such notification within 30 days. Upon resolution of any
exception, Seller shall directly refund the amount of any exception
to Buyer within 30 days, with monthly, compounded interest
calculated from the date of the original payment by Buyer to the
date of payment by the Seller, using the Interest Rate. |
| |
| 5.01
|
No Default for Force
Majeure . Neither Party shall be
considered to be in default in the performance of any of its
obligations set forth in this Agreement (except for obligations to
pay money) when and to the extent failure of performance is caused
by Force Majeure. |
| |
| 5.02
|
Requirements Applicable to
the Claiming Party . If a Party,
because of Force Majeure, is rendered wholly or partly unable to
perform its obligations when due under this |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 10
Agreement, that Party (the
“Claiming Party”), shall be excused from whatever
performance is affected by the Force Majeure to the extent so
affected.
In order to be excused from
its performance obligations hereunder by reason of Force
Majeure:
| (a)
|
The Claiming Party, within 14
days after the initial occurrence of the claimed Force Majeure,
must give the other Party Notice describing the particulars of the
occurrence; and |
| |
| (b)
|
The Claiming Party must provide
timely evidence reasonably sufficient to establish that the
occurrence constitutes Force Majeure as defined in this
Agreement. |
| |
The suspension of the Claiming
Party’s performance due to Force Majeure shall be of no
greater scope and of no longer duration than is required by the
Force Majeure. In addition, the Claiming Party shall use
commercially reasonable and diligent efforts to remedy its
inability to perform. This Section shall not require the settlement
of any strike, walkout, lockout or other labor dispute on terms
which, in the sole judgment of the Claiming Party, are contrary to
its interest. It is understood and agreed that the settlement of
strikes, walkouts, lockouts or other labor disputes shall be at the
sole discretion of the Claiming Party. When the Claiming Party is
able to resume performance of its obligations under this Agreement,
the Claiming Party shall give the other Party prompt Notice to that
effect.
| 5.03
|
Startup Deadline
Extension . If Force Majeure occurs
prior to the Startup Deadline which prevents Seller from achieving
the Startup Deadline, then the Startup Deadline shall, subject to
Seller’s compliance with its obligations as the Claiming
Party under Section 5.02, be extended on a day-for-day basis for
the duration of the Force Majeure. |
| |
| 5.04
|
Termination
. The non-Claiming Party may terminate this
Agreement on Notice, which shall be effective five Business Days
after such Notice is provided, in the event of Force Majeure which
extends for more than 365 consecutive days. Upon the effectiveness
of such termination, Buyer shall no longer be required to pay
Seller’s pass through costs of any transmission, distribution
or other service agreements necessary to deliver the electric
energy from the Generating Facility to the Delivery
Point. |
| |
EVENTS OF DEFAULT:
REMEDIES
|
| 6.01
|
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)
|
With respect to
either Party: |
| |
| |
|
(i)
|
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 if the
representation or warranty is continuing in nature, if: |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 11
| |
(1) Such
misrepresentation or breach of warranty is not remedied |
| |
| |
|
within 10 Business
Days after Notice; or |
| |
| |
|
(2)
|
Such inaccuracy is not capable
of a cure, but the non-breaching Party’s damages resulting
from such inaccuracy can reasonably be ascertained and the payment
of such damages is not made within 15 Business Days after a Notice
of such damages is provided by the non-breaching Party to the
breaching Party. |
| |
| |
(ii)
|
Except for an
obligation to make payment when due, the failure to perform any
material covenant or obligation set forth in this Agreement (except
to the extent constituting a separate Event of Default or to the
extent excused by a Force Majeure) if such failure is not remedied
within 30 days after Notice of such failure (or such shorter period
as may be specified below), which Notice sets forth in reasonable
detail the nature of the failure; provided that, if such failure is
not reasonably capable of being cured within the 30 day cure period
specified above, the Party shall have such additional time (not
exceeding an additional 120 days) as is reasonably necessary to
cure such failure, so long as such Party promptly commences and
diligently pursues such cure; |
| |
| |
(iii)
|
A Party fails to
make when due any undisputed payment in a material amount
(including not making when due any material portion of the payment)
required under this Agreement and such failure is not cured within
30 days after Notice of such failure; |
| |
| |
(iv)
|
A Party becomes
Bankrupt; or |
| |
| |
(v)
|
A 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; |
| |
| (b)
|
With respect to
Seller: |
| |
| |
(i)
|
Seller removes from
the Site essential equipment upon which the Contract Capacity has
been based, except for the purposes of replacement, refurbishment,
repair or maintenance, and such equipment is not returned within
five Business Days after Notice from Buyer; |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 12
| (ii)
|
Seller fails to achieve Initial
Operation Date by the Startup Deadline set forth in Section
1.01; |
| |
| (iii)
|
Seller’s abandonment as
set forth in Section 9.05; or |
| |
| (iv)
|
A termination of, or cessation
of service under, any agreement necessary for the interconnection
of the Generating Facility to the Transmission Provider’s
electric system or transmission of the electric energy to the
Delivery Point or for metering the Metered Amounts and such service
is not reinstated, or alternative arrangements implemented, within
90 days after such termination or cessation. |
| |
| 6.02
|
Early
Termination . If an Event of Default
shall have occurred, there will be no opportunity for cure except
as specified in Section 6.01. The Party taking the default (the
“Non-Defaulting Party”) shall have the right, but shall
not be obligated: |
| |
| |
(a)
|
To designate by Notice, a day,
no earlier than 20 days after the Notice is effective, for the
early termination of this Agreement (an “Early Termination
Date”); |
| |
| |
(b)
|
To immediately suspend
performance under this Agreement; and |
| |
| |
(c)
|
To pursue all remedies
available at law or in equity against the Defaulting Party
(including monetary damages), except to the extent that such
remedies are limited by the terms of this Agreement. |
| |
| 6.03
|
Termination
Payment . As soon as practicable
after an Early Termination Date is declared, the Non-Defaulting
Party shall calculate the sum of all amounts owed by the Defaulting
Party under this Agreement, less any amounts owed by the
Non-Defaulting Party to the Defaulting Party, including the Forward
Settlement Amount (the “Termination Payment”) and
provide Notice to the Defaulting Party thereof. The Notice shall
include a written statement setting forth, in reasonable detail,
the calculation of such Termination Payment including the Forward
Settlement Amount, together with appropriate supporting
documentation. If the Termination Payment is positive, the
Defaulting Party shall pay such amount to the Non-Defaulting Party
within 10 Business Days after the Notice is provided. If the
Termination Payment is negative (i.e., the Non- Defaulting Party
owes the Defaulting Party more than the Defaulting Party owes the
Non-Defaulting Party), then
the Non-Defaulting Party shall pay such amount
to the Defaulting Party within 30 days after the Notice is
provided. The Parties shall negotiate in good faith to resolve any
disputes regarding the calculation of the Termination Payment. Any
disputes which the Parties are unable to resolve through
negotiation may be submitted for resolution through mediation as
provided in Article Eleven. |
| |
| 6.04
|
Duty to
Mitigate . Each Party agrees that it
has a duty to mitigate damages and covenants that it will use
commercially reasonable efforts to minimize any damages it may
incur as a result of the other Party's performance or
non-performance of the Agreement. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 13
ARTICLE SEVEN. LIMITATIONS
OF LIABILITIES
EXCEPT AS SET FORTH HEREIN,
THERE ARE NO WARRANTIES BY EITHER PARTY UNDER THIS AGREEMENT,
INCLUDING ANY 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, UNLESS THE PROVISION IN QUESTION PROVIDES THAT
THE EXPRESS REMEDIES ARE IN ADDITION TO OTHER REMEDIES THAT MAY BE
AVAILABLE. SUBJECT TO SECTION 9.13, IF NO REMEDY OR MEASURE OF
DAMAGES IS EXPRESSLY PROVIDED HEREIN, 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 PROVIDED IN THIS AGREEMENT, INCLUDING THE PROVISIONS OF
SECTION 9.02 (INDEMNITY), 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. GOVERNMENTAL
CHARGES
| 8.01
|
Cooperation to Minimize
Governmental Charges . Each Party
shall use commercially reasonable efforts to implement the
provisions of and to administer this Agreement in accordance with
the intent of the Parties so as to minimize all Governmental
Charges, so long as neither Party is materially adversely affected
or required to incur any material cost in connection
therewith. |
| |
The contents of
this document are subject to restrictions on disclosure as set
forth herein.
Page 14
| 8.02
|
Governmental
Charges . |
| |
| |
(a)
|
Seller shall pay or cause to be
paid all sales, use, gross receipts, occupation, production,
severance, excise, ad valorem or other taxes, royalties, fees,
licenses, or charges that are imposed by any federal, Indian, state
or local governmental authority (“Governmental
Charges”) on or with respect to the Metered Amounts (and any
contract associated with the Metered Amount) arising prior to and
at the point of interconnection with the Transmission
Provider. |
| |
| |
(b)
|
Buyer shall pay or cause to be
paid all Governmental Charges on or with respect to the Metered
Amounts (and any contract associated with the Metered Amount)
arising from and after the point of interconnection with the
Transmission Provider. In the event Seller is required by law or
regulation to remit or pay Governmental Charges which are
determined to be Buyer’s responsibility hereunder, Buyer
shall promptly reimburse Seller for such Governmental Charges plus
accrued interest, if any. |
| |
| |
(c)
|
If Buyer is required by law or
regulation to remit or pay Governmental Charges which are
determined to be Seller’s responsibility hereunder, Buyer may
deduct such amounts plus accrued interest, if any, from payments to
Seller made pursuant to Article Four. If Buyer elects not to deduct
such amounts from its payment to Seller, Seller shall promptly
reimburse Buye |
|
