2011040408 - Solar Power Purchase Agreement - Cororation Yard - Fresh Air Energy IIMEETING DATE: 4/4/11
ITEM NO:
COUNCIL AGENDA REPORT
DATE: MARCH 29, 2011
TO: MAYOR AND TOWN COUNCIL
FROM: GREG LARSON, TOWN MANAGER
SUBJECT: SOLAR POWER PURCHASE AGREEMENT
A. AUTHORIZE THE TOWN MANAGER TO EXECUTE A SOLAR POWER
PURCHASE AGREEMENT BETWEEN THE TOWN OF LOS GATOS
AND FRESH AIR ENERGY —II, LLC. IN ORDER TO PROVIDE SOLAR
POWER FOR THE TOWN SERVICE CENTER AT 41 MILES AVENUE,
AND THE POLICE OPERATIONS BUILDING AT 15900 LOS GATOS
BOULEVARD.
B. AUTHORIZE THE TOWN MANAGER TO EXECUTE FUTURE
AMENDMENTS TO THE POWER PURCHASE AGREEMENT THAT DO
NOT EXTEND THE TERM OF THE AGREEMENT OR RESULT IN A
RATE INCREASE OF MORE THAN 1%.
RECOMMENDATION:
1. Authorize the Town Manager to execute a solar power purchase agreement between the
Town of Los Gatos and Fresh Air Energy -II, LLC. in order to provide solar power for the
Town Service Center at 41 Miles Avenue, and the Police Operations Building at 15900
Los Gatos Boulevard.
2. Authorize the Town Manager to execute future amendments to the power purchase
agreement that do not extend the term of the agreement or result in a rate increase of
more than 1 %.
PREPARED BY: TODD CAPURSO
Director of Parks and Public Works
Reviewed by: -' Assistant Town Manager
/Finance Community
Town Attorney Clerk Administrator
elopment
N:\PPW\MANAGEMENT\COUNCIL\COUNCIL REPORTS\2011 Reports\April 4\Solar PPA.docx
PAGE 2
MARCH 29, 2011
MAYOR AND TOWN COUNCIL
SUBJECT: SOLAR PURCHASE POWER AGREEMENT
BACKGROUND:
In early 2010 the Town of Los Gatos along with Santa Clara County, VTA, South Bay Waste
Management Authority, the cities of Mountain View, Milpitas, Cupertino, and Morgan Hill,
conducted a group procurement process to select a provider for a solar Power Purchase
Agreement (PPA). A solar PPA allows a facility to install solar panels with no capital
investment and purchase power directly from the solar provider in lieu of PG&E. The
advantages of a PPA include a known fixed cost for energy over a 20 year period, substantial
energy cost savings, and use of renewable energy. The purchasing power of this large group
worked to the participants' advantage, with prices coming in 10-14% below market rates.
Four town -owned sites were evaluated as potential PPA sites: the Town Service Yard at 41 Miles
Avenue, the Adult Recreation Center at 208 East Main Street, the Police Operations Building at
15900 Los Gatos Boulevard, and the parking lot at Oak Meadow Park. Of these four sites, two
wereletermined to be viable sites, the Service Yard, and the Police Operations Building.
• The Adult Recreation Center was determined to have shading issues and space
limitations that were too costly to mitigate.
• Oak Meadow Park was eliminated because the installation and operation costs did
not support a strong economic incentive model for the solar provider. Although
this site did not provide a business model suitable for a PPA, the Town may want
to consider this site for its own solar installation in the future.
• The Police Operations building installation is proposed as a roof -top system.
• The Service Yard system will be installed on top of the existing vehicle canopy.
DISCUSSION:
Staff recommends pursing a solar power purchase agreement for the Police Operations Building
and the Service Yard. It is estimated that these new panels will provide at least 75% of the
electrical power needs for these sites, and will result in a 20-year energy cost savings of
approximately $280,000 (using conservative estimates). This savings estimate is based on the
proposed solar rate, current energy use for these sites, and a PG&E rate escalation of 4.5% per
year. If approved, the installation of the panels is projected to be complete by November 2011.
The power purchase agreement, by nature of the type of agreement, has some terms that may
differ from a standard purchase contract. The main terns of this agreement are highlighted
below:
• Term of agreement — The term of the agreement is 20 years. After the initial term, the
Town has the option to renew for an additional 5 years. After 10 years, the Town may
elect to purchase the generating facility equipment at a price equal to the fair market
value at that point in time.
PAGE 3
MARCH 29, 2011
MAYOR AND TOWN COUNCIL
SUBJECT: SOLAR PURCHASE POWER AGREEMENT
DISCUSSION (cont'd.):
• Termination — The Town has the option to terminate the agreement at any time after the
commercial operation date. Termination during the first 10 years of the agreement is
subject to a significant termination fee. The agreement contains a table that outlines the
termination fee for each year. Termination provisions are also included for the period
prior to construction, for events that would impact the proposed energy price, as well as
unanticipated environmental review requirements.
• Deposit — In order to ensure that adequate funds are available for the removal of the
generation equipment and the remediation of the site following expiration or termination
of the agreement, Fresh Air Energy —II will make deposits into a removal fund throughout
the life of the contract.
• Payment and Performance — The Town will pay for the energy generated by the solar
panels. At times when the panels generate more energy than can be used, the Town will
receive credit from PG&E that will then off -set energy use during times when the panels
are not providing electricity (nights, cloudy days). Once every three years, a
reconciliation of energy production will be performed. If during that three year period
less than 80% of the expected annual contract quantity is delivered via the solar panels,
Fresh Air Energy —II will pay the town any difference between the solar rate and the
PG&E rate for the amount of the shortfall.
• Site access — A site access agreement is included within the power purchase agreement to
ensure that Fresh Air Energy — II has access to their equipment for maintenance and
repair.
• Renewable Energy Credits (RECs) — The Town will keep the renewable energy credits
associated with the production of solar power at these sites.
CONCLUSION:
Staff is recommending that the Town Council authorize the Town Manager to execute the power
purchase agreement between Town of Los Gatos and Fresh Air Energy -II LLC., and authorize
the Town Manager to execute future amendments to the power purchase agreement that do not
extend the term of the agreement or result in a rate increase of more than 1 %
ENVIRONMENTAL ASSESSMENT:
This action is not a project defined under CEQA, and no further action is required.
PAGE 4
MARCH 29, 2011
MAYOR AND TOWN COUNCIL
SUBJECT: SOLAR PURCHASE POWER AGREEMENT
FISCAL IMPACT:
There are no immediate fiscal impacts associated with this agreement. However, there is a
projected energy cost savings of approximately 15%, or $280,000 for the two sites identified
over the duration of the agreement. This on -going energy savings will be reflected in future
operating budgets.
Attachments:
1. Solar Power Purchase Agreement between the Town of Los Gatos and Fresh Air Energy -II
LLC.
2. Estimated cost savings per site.
3. Proposed solar panel layouts for 41 Miles Avenue and 15900 Los Gatos Boulevard .
ATTACHMENT 1
SOLAR POWER PURCHASE AGREEMENT
BETWEEN
TOWN OF LOS GATOS
AND
FRESH AIR ENERGY II - LLC.
TOWN OF LOS GATOS
POWER PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE 1: DEFINITIONS 2
ARTICLE 2: TERM 9
ARTICLE 3: ENGINEERING AND CONSTRUCTION REQUIREMENTS 12
ARTICLE 4: DELIVERY OF POWER, METERING & MONITORING 17
ARTICLE 5: BILLING AND PAYMENT 23
ARTICLE 6: DEPOSIT REQUIREMENTS 24
ARTICLE 7: SELLER'S ADDITIONAL OBLIGATIONS 25
ARTICLE 8: FORCE MAJEURE 31
ARTICLE 9: REMOVAL 33
ARTICLE 10: DISPUTE RESOLUTION 33
ARTICLE 11: DEFAULT & REMEDIES 34
ARTICLE 12: REPRESENTATIONS, WARRANTIES AND COVENANTS 39
ARTICLE 13: ASSIGNMENT AND FINANCING 42
ARTICLE 14: OTHER TERMS & CONDITIONS 43
TOWN OF LOS GATOS
POWER PURCHASE AGREEMENT
This agreement ("Agreement" or "PPA"), by and between TOWN OF LOS GATOS (hereafter
referred to as "Buyer") and FRESH AIR ENERGY — II, LLC. (hereafter referred to as
"Seller") is effective April 4, 2011 ("Effective Date").
RECITALS
A. Buyer wishes to meet its power requirements cost effectively, efficiently and in an
environmentally -friendly manner;
B. Buyer has solicited proposals from persons, firms, organizations, and/or other legal
entities to provide such power from renewable resources in a cooperative/joint
solicitation led by the Town of Los Gatos;
C. Seller is in the business of designing, constructing and operating solar photovoltaic
("PV"), fuel cell or hybrid electric generating systems for the purpose of selling power
generated by the systems to its customers;
D. Buyer has selected Seller to design, construct, own and operate a solar PV, fuel cell or
hybrid generating system to be located on its property subject to the terms, conditions,
covenants and provisions set forth herein;
E. Seller intends to construct, own, and operate renewable energy -powered generating
facilities and desires to sell electricity produced by such generating facilities together
with other attributes to Buyer pursuant to the terms, conditions, covenants and provisions
set forth herein;
F. Buyer desires to purchase electricity generated by Seller's generating facility, together
with all Environmental Attributes pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein and other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
agree as follows:
ARTICLE 1: DEFINITIONS
References in the Agreement to the terms or phrases below shall have the meanings as set forth
in this Article. In the event of a conflict between the information in this Article and any more
specific provision of the Agreement, the more specific provision shall control.
1.1
"Adjusted Delivered Energy" means the sum of (i) the Delivered Energy from the
Generating Facility and (ii) any Energy that would have been delivered if the
Seller had not been directed by the Buyer to reduce the Delivered Energy from the
Generating Facility.
1.2 "Affiliate" means, with respect to any specified Person, any other Person directly
or indirectly controlling or controlled by such specified Person.
1.3 "Agreement" has the meaning set forth in the preamble of this Agreement.
1.4 "Annual Escalation Adjustment" means the (3%) increase to be applied
commencing on the e first anniversary date of the Commercial Operation Date, and
every anniversary date thereafter during the Term, as described in Exhibit 4 [Base
Contract Price].
1.5 "Business Day" means a normal working day excluding weekends and holidays.
1.6 "Base Contract Price" means the price in $U.S. per kWh to be paid by Buyer to
Seller for the purchase of the Adjusted Delivered Energy, as specified in Article 4
and Exhibit 4 [Base Contract Price].
1.7 "Buyout Option" or "Purchase Option" means the option that Seller grants to
Buyer pursuant to Article 2.3 to terminate this Agreement and purchase a
Generating Facility.
1.8 "Buyer Address for Payments" means the address to which invoices to the Buyer
should be sent, currently: 110 East Main Street, Los Gatos, CA 95031.
"Buyer Address for Notices" means the addresses to which notices to the Buyer
should be sent as set forth in Article 14.
1.10 "California Solar Initiative means the program providing ratepayer funded
incentives for eligible solar energy systems adopted by the PUC and implemented
through chapter 8.8 (commencing with Section 25780) to Division 15 of the
California Public Utilities Code.
1.11 "Commercial Operation" means that: (i) the Generating Facilities have been
constructed in accordance with Prudent Industry Practice, all Permits,
Requirements of Law, the specifications set forth in Exhibit 2 [Description of
Generating Facilities] and Exhibit 11 [Engineering & Construction Requirements]
and (ii) Seller has successfully completed the Commissioning Tests.
1.12 "Commissioning Tests" means the tests set forth in Section 7.9.
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1.13 "Commercial Operation Date" means the date on which Commercial Operation
first occurs and the Generating Facilities commence generating electricity for sale
to the Buyer at the Project Sites.
1.14 "Contract Capacity" means the maximum instantaneous output of the Generating
Facility in kilowatts measured at the Delivery Point.
1.15 "Contract Year" means each year beginning on January 1st and ending on
December 31st of such year following the Commercial Operation Date; provided,
however, that the first Contract Year shall commence on the Commercial
Operation Date and end on the following December 31st, and the last Contract
Year shall end on the relevant anniversary of the Commercial Operation Date as
set forth in Section 2.2.
1.16 "Days" unless otherwise specified, shall mean calendar days.
1.17 "Delivered Energy" the amount of energy delivered by Seller as recorded by
Seller's Meters.
1.18 "Delivery Point" means the metering point at the high side of the transformer for
each Generating Facility..
1.19 "EA Agency" means any local, state or federal entity, or any other Person, that
has responsibility for or jurisdiction over a program involving transferability of
Environmental Attributes, including the Clean Air Markets Division of the United
States Environmental Protection Agency, the California Resources, Conservation
and Development Commission, the California Public Utilities Commission, and
any successor agency thereto.
1.20 "Energy" means the electricity generated by each Generating Facility pursuant to
this Agreement, as expressed in units of kWh.
1.21 "Environmental Attributes" means any and all credits, benefits, emissions
reductions, offsets, and allowances, howsoever entitled, attributable to the
generation from the Generating Facilities, and its displacement of conventional
energy generation. Environmental Attributes including but not limited to: (i) any
avoided emissions of pollutants to the air, soil or water such as sulfur oxides
(Sox), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (ii)
any avoided emissions of carbon dioxide (CO2), methane (CH4) and other
greenhouse gases that have been determined by the United Nations
Intergovernmental Panel on Climate Change to contribute to the actual or
potential threat of altering the Earth's climate by trapping heat in the atmosphere;
and (iii) the reporting rights to these avoided emissions such as Green Tag
Reporting Rights.
1.22 `Environmental Attributes Reporting Rights" means all rights to report ownership
of the Environmental Attributes to any Person, including under the Energy Policy
Act of 1992, and any regulations promulgated thereof.
3
1.23 "Environmental Laws" shall mean and include all federal, state and local laws,
statutes, ordinances, regulations, resolutions, decrees and/or rules now or
hereinafter in effect, as may be amended from time to time, and all implementing
regulations, directives, orders, guidelines, and federal or state court decisions,
interpreting, relating to, regulating or imposing liability (including, but not limited
to, response, removal, remediation and damage costs) or standards of conduct or
performance relating to industrial hygiene, occupational health, and/or safety
conditions, environmental conditions, or exposure to, contamination by, or clean-
up of, any and all Hazardous Materials, including without limitation, all federal or
state superlien or environmental clean-up statutes.
1.24 "Existing Financial Incentives" means (i) the ITC and any tax deductions or other
benefits under the Internal Revenue Code or applicable state law available as a
result of the ownership and operation of the Generating Facilities or the Output
generated by the Generating Facilities (including without limitation tax credits,
accelerated depreciation, or bonus depreciation) that are in effect on the Effective
Date and (ii) any other financial incentives that result from the ownership and
operation of the Generating Facilities or the Output that are in effect on the
Effective Date.
1.25 "Expected Annual Contract Quantity" means the amount of Delivered Energy and
Environmental Attributes that Seller expects to deliver to Buyer hereunder in a
given Contract Year other than the first and last Contract Years (which may be
partial years and therefore subject to a pro-rata adjustment), as set forth in Exhibit
5 [Expected Contract Quantity Form].
1.26 "Expected Commercial Operation Date" means the date on which the Parties
expect the Generating Facilities to achieve Commercial. Operation, established in
accordance with Section 3.7.
1.27 "Financing Party" means, as applicable (i) any Person (or its agent) from whom
Seller (or an Affiliate of Seller) leases the Generating Facility, or (ii) any Person
(or its agent) who has made or will make a loan to or otherwise provide financing
to Seller (or an Affiliate of Provider) with respect to the System.
1.28 "Force Majeure Event" has the meaning set forth in Article 8.
1.29 "GAAP" means Generally Accepted Accounting Principles in the United States
of America that is consistently applied.
1.30 "Generating Facilities" means Seller's electricity generating facilities as more
particularly described in Exhibit 2 [Description of Generating Facilities],
excluding the Sites, land rights, and interests in land.
1.31 "Governmental Authority" means any federal or state government, or political
subdivision thereof, including, any municipality, township or county, or any entity
or authority exercising executive, legislative, judicial, regulatory or administrative
4
functions of or pertaining to government, including, any corporation or other
entity owned or controlled by any of the foregoing.
1.32 "Green Tag Reporting Rights" are the right of a Green Tag purchaser to report
the ownership of accumulated Green Tags in compliance with federal or state law,
if applicable, and to a federal or state agency or any other party at the Green tag
purchaser's discretion, and include those Green Tag Reporting Rights accruing
under Section 1605(b) of The Energy Policy Act of 1992 and any present or
future federal, state, or local law, regulation or bill, and international or foreign
emissions trading program. "Green Tags" are accumulated on MWh basis and one
Green Tag represents the Environmental Attributes associated with one (1) MWh
of energy.
1.33 "Hazardous Substances" shall mean any and all (a) substances, products, by-
products, waste, or other materials of any nature or kind whatsoever which is or
becomes listed, regulated or addressed under any Environmental Laws, and (b)
any materials, substances, products, by-products, waste, or other materials of any
nature or kind whatsoever whose presence in and of itself or in combination with
other materials, substances, products, by-products, or waste may give rise to
liability under any Environmental Law or any statutory or common law theory
based on negligence, trespass, intentional tort, nuisance, strict or absolute liability
or under any reported decisions of any state or federal court; and (c) any
substance, product, by-product, waste or any other material which may be
hazardous or harmful to the air, water, soil, environment or affect industrial
hygiene, occupational health, safety and/or general welfare conditions, including
without limitation, petroleum and/or asbestos materials, products, by-products, or
waste.
1.34 "Interconnection" means the interconnection of the Generating Facilities with the
Transmission System, including construction, installation, operation, and
maintenance of all Interconnection Facilities.
1.35 "Interconnection Agreement" means the agreement between Seller, the
Transmission Provider, and if applicable, the ISO which sets forth the terms and
conditions for Interconnection of the Generating Facilities to the Transmission
System, as amended from time to time.
1.36 "Interconnection Facilities" means all of the facilities installed for the purpose of
interconnecting the Generating Facilities to the Transmission System, including
transformers and associated equipment, relay and switching equipment and safety
equipment.
1.37 "Interest Rate" means the interest rate applicable for refunds calculated pursuant
to 18 C.F.R. Section 35.19a of the FERC Regulations, as that section may be
amended or superseded from time to time. The monthly interest rate shall be
prorated by days from the date a payment is due until the date a payment is
received.
5
1.38 "Investment Tax Credit" or "ITC" means the energy credit under Section 48 of the
Internal Revenue Code
1.39 "kWh" means one kilowatt of electricity supplied for one hour.
1.40 "Lender(s)" means any Person(s) extending credit to Seller to finance the
construction of the Generating Facilities.
1.41 "Material Change," in the context of a Generating Facilities, means a change
which significantly changes the size, weight, generating capacity, technology or
the footprint of the Generating Facilities.
1.42 "Mechanical Completion" means when (i) installation of all necessary
components and systems of the Generating Facilities (except for completion of
painting, final grading, and similar portions of the construction work not affecting
the operability, safety, or mechanical and electrical integrity of the Generating
Facilities) has been completed; (ii) the Generating Facilities are mechanically and
electrically sound; and (iii) the Generating Facilities are ready for initial
operation, adjustment, and testing.
1.43 "Meter" or "Meters" means the physical metering devices, data processing
equipment and apparatus associated with the meters owned by Seller or
Transmission Provider or its designee, and used to determine the quantities of
Energy generated by each Generating Facility and to record other related
parameters required for the reporting of data to Seller.
1.44 "Metered Energy" means the amount of Energy measured at the Meter for each
Generating Facility, including any adjustments programmed into the Meter for
distribution losses after the Delivery Point.
1.45 "Monitoring System" means physical devices, data processing equipment and
apparatus associated with real-time monitoring of the quantities and quality of
energy generated by each Generating Facility and complying with all
requirements of Article 4. The Monitoring System shall meet or exceed PG&E
monitoring and reporting standards.
1.46 "MW" means one megawatt of electric energy.
1.47 "MWh" means one megawatt of electricity supplied for one hour.
1.48 "Option Price" has the meaning set forth in Section 2.3.
1.49 "Outage" means a physical state in which all or a portion of the Generating
Facilities is unavailable to provide Energy to the Delivery Point, including any
reduction in the capacity of the Generating Facilities, and including tilting the
photovoltaic panels away from the configuration set forth in the most recent
approved as built drawings, whether planned or unplanned.
6
1.50 "Output" means (i) the Contract Capacity, or (ii) associated Energy produced by
Generating Facility, as applicable.
1.51 "Parties" means Buyer and Seller, and each such Party's respective successors
and permitted assignees.
1.52 "Party" means Buyer or Seller, and each such Party's respective successors and
permitted assignees.
1.53 "Permits" means, collectively, all federal, state or local authorizations,
certificates, permits, licenses, and approvals required by any Governmental
Authority for the construction, ownership, operation and maintenance of the
Generating Facilities.
1.54 "Person" means an individual, a corporation, a partnership, a joint venture or any
other form of business association.
1.55 "PG&E" means the Pacific Gas and Electric Company.
1.56 "Preliminary Requirements" has the meaning set forth in Article 3.
1.57 "Project Site(s)" or "Sites" means the real property, on which the Generating
Facilities are to be built and located.
1.58 "Prudent Industry Practice" means those practices, methods and equipment, as
changed from time to time, that: (i) when engaged in, or employed, are commonly
used in the State of California in prudent electrical engineering and operations to
operate electricity equipment lawfully and with safety, reliability, efficiency and
expedition; or (ii) in the exercise of reasonable judgment considering the facts
known, when engaged in could have been expected to achieve the desired result
consistent with applicable law, safety, reliability, efficiency, and expedition.
Prudent Industry Practices are not limited to an optimum practice, method,
selection of equipment or act, but rather are a range of acceptable practices,
methods, selections of equipment or acts.
1.59 "Renewable Energy Credit" has the meaning set forth in California Public
Utilities Code section 399.12(h) as may be amended from time to time or as
further defined or supplemented by applicable law.
1.60 "Replacement Price" shall mean, at Buyer's sole discretion, the price at which
Buyer, acting in a commercially reasonable manner, purchased or purchases a
replacement for any Adjusted Delivered Energy required to be, but not delivered
by Seller hereunder, plus costs reasonably incurred by Buyer in purchasing such
substitute electricity, and additional transmission and distribution charges, if any,
reasonably incurred by Buyer, to the Delivery Point.
1.61 "Requirements of Law". means, collectively, any federal or state law, treaty,
franchise, rule, regulation, order, writ, judgment, injunction, decree, award or
7
determination of any arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon Seller or Buyer or any of their property or
to which Seller or Buyer or any of their respective properties are subject.
1.62 "Right of Access" means the Right of Access(es) described in Exhibit 8 of this
Agreement, and which is to be executed by Seller and the Buyer for use of the
Project Sites for the construction and operation of the Generating Facilities.
1.63 "Schedule" "Scheduled" 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 of Energy to be delivered for each interval on any given day on which
the delivery of Energy is scheduled to occur during the Term at the Delivery
Point.
1.64 "Seller" means Fresh Air Energy — II, LLC, the entity that has executed .this
Agreement as of the date hereof. Seller shall have the meaning set forth in the
preamble. For purposes of access rights and other rights necessary for Seller to
perform its obligations hereunder, the term "Seller" shall include Seller's
authorized agents, contractors and subcontractors. The term "Contractor" may be
used in place of the term "Seller."
1.65 "Seller Address" means: 650 Townsend Street, Ste. 310, San Francisco, CA
94103.
1.66 "Sites" has the same meaning as "Project Sites"
1.67 "Seller's Project Management Team" means individuals identified by Seller as
responsible for oversight and contract management of all phases of project
design/build, operations, maintenance, verification and billing account
management.
1.68 "Taxes" means any federal, state, local or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental, customs duties, capital stock, franchise, profits,
withholding, social .security (or similar), unemployment, disability, real property
(including assessments, fees or other charges based on the use or ownership of
real property), personal property, transactional, sales, use, transfer, registration,
value added, alternative or add on minimum, estimated tax, or other tax of any
kind whatsoever, or any liability for unclaimed property or escheatment under
common law principles, including any interest, penalty or addition thereto,
whether disputed or not, including any item for which liability arises as a
transferee or successor -in -interest.
1.69 "Term" has the meaning set forth in Article 2.
1.70 "Transmission Provider" means any entity or entities responsible for the
interconnection of each Generating Facility (e.g. PG&E) with a Control Area or
8
distributing or transmitting Energy on behalf of Seller from each Generating
Facility to the Delivery Point, and on behalf of the Buyer from the Delivery Point.
1.71 "Transmission Provider Tariffs" means the duly authorized tariff, rules,
schedules, protocols and other requirements of the Transmission Provider, as
these may be amended from time to time.
1.72 "Transmission System" means the facilities used for the distribution and
transmission of electricity, including any modifications or upgrades made to such
facilities, owned or operated by the Transmission Provider
1.73 "WREGIS" means the Western Renewable Energy Generation Information
System or any successor renewable energy tracking program.
ARTICLE 2: TERM
2.1 Term: The term of the Agreement shall commence on the Effective Date and
shall continue for twenty (20) years from the Commercial Operation Date of the
applicable Generating Facility ("Initial Term"), unless and until terminated earlier
pursuant to the provisions of the Agreement. After the Initial Term, the
Agreement may renew for additional five year terms ("Renewal Terms"), if a
written request for renewal is given by the Buyer at least one hundred eighty
(180) days prior to the expiration of the Initial Term. The parties shall confer and
agree on a schedule for the Price, Escalation Rate, the Expected Annual Contract
Quantity and termination and amendment procedure for any Renewal Term. The
remainder of the terms and conditions shall remain substantially the same for the
Renewal Term as for the Initial Term. If Seller consents to renewal, it shall
provide written notice of consent to the renewal within sixty (60) days of the date
of the request by Buyer. If consent by Seller is not provided within such sixty
(60) day period, the Agreement shall expire as of the last day of the Initial Term.
No later than 60 days after Seller provides such consent, Buyer shall confirm to
Seller in writing of its intent to proceed with its option to renew. In the event
Buyer does not provide such confirmation, the Agreement shall expire as of the
last day of the Initial Term. Upon expiration of the Initial or Renewal Term,
Seller shall cause the applicable Generating Facility to be removed from the
Buyer's Sites pursuant to Article 9.
2.2 This Agreement (including all terms and conditions) shall apply to each
Generating Facility described in Exhibit 2 as if separately executed for each such
Generating Facility.
2.3 Purchase Option.
After the ten (10) year anniversary of the Effective Date, so long as a Buyer
Default shall not have occurred and be continuing, Buyer has the option to
purchase the Generating Facility for a purchase price (the "Option Price") equal to
9
the Fair Market Value of the Generating Facility at the date of the purchase. To
exercise its purchase option, Buyer shall, not less than one hundred and eighty
(180) days prior to the proposed purchase date ("Purchase Date"), provide written
notice to Seller of Buyer's intent to exercise its option to purchase the Generating
Facility on such Purchase Date. Within thirty (30) days of receipt of Buyer's
notice, Seller shall specify the Option Price, and Buyer shall then have a period of
sixty (60) days after notification to confirm or retract its decision to exercise the
purchase option or to dispute the determination of the Fair Market Value of the
Generating Facility. In the event Buyer confirms its exercise of the purchase
option in writing to Seller (whether before or after any determination of the Fair
Market Value determined pursuant to Section 2.4), (i) the Parties shall promptly
execute all documents necessary to (A) cause title to the Generating Facility to
pass to Buyer on the Purchase Date, free and clear of any Liens, and assign all
vendor warranties for the. Generating Facility to Buyer, and (ii) Buyer shall pay
the Option Price to Seller on the Purchase Date, such payment to be made in
accordance with any previous written instructions delivered to Buyer by Seller or
Seller's Financing Party, as applicable, for payments under the Agreement. Upon
execution of the documents and payment of the Option Price, in each case as
described in the preceding sentence, the Agreement shall terminate automatically.
In the event Buyer retracts its exercise of, or does not timely confirm, the
purchase option, the provisions of the Agreement shall beapplicable as if the
Buyer had not exercised any option to purchase the Generating Facility.
2.4 Determination of Fair Market Value.
If Buyer disputes Seller's Option Price as not reflecting the Fair Market Value of
the Generating Facility, then, within thirty (30) days of receipt of notification of
the Option Price from Seller, the Parties shall mutually select an independent
appraiser with experience and expertise in the solar photovoltaic industry. Such
appraiser shall act reasonably and in good faith to determine Fair Market Value
and shall provide such determination in a written opinion delivered to the Parties.
The valuation determined by the appraiser shall be binding upon the Parties in the
absence of fraud or manifest error. The determination of Fair Market Value by
the independent appraiser shall not create an obligation on the part of the Buyer to
purchase the applicable Generating Facility. The Parties shall equally share such
appraisal costs.
2.5 Buyer's Option to Terminate:
(a) Buyer may terminate the Agreement at any time, after the Commercial Operations
Date of the Generating Facility upon at least ninety (90) days' prior written
notice. Buyer and Seller shall confer on a mutually -acceptable timetable for
disconnection, removal, remediation, clean-up and payment. Buyer shall promptly
pay to Seller as liquidated damages the Termination Fee pursuant to the schedule
in Exhibit 1 and Seller shall cause the applicable Generating Facility to be
10
removed from the Buyer's Sites pursuant to Article 9. Upon payment of the
Termination Fee, this agreement shall automatically terminate.
(b) Seller's Obligations upon Notice of Termination
Upon receipt of the notice specified in 2.5(a), Seller shall commence and perform,
with diligence, all actions necessary on the part of Seller to effect the termination
of this Agreement on the date specified by the Buyer and to minimize the liability
of Seller and Buyer to third parties as a result of termination. All such actions
shall be subject to the prior approval of the Buyer. Such actions shall include,
without limitation:
(c)
(i) Halting the performance of all services and other work under this
Agreement on the Site(s) and date(s) and in the manner specified by Buyer
(ii) Not placing any further orders or subcontracts for materials, services,
equipment or other items for the Site(s) noticed for termination.
(iii) Terminating all existing orders and subcontracts for the Site(s) and
Generating Facility or Facilities noticed for Termination.
(iv) At the Buyer's direction, assigning to the Buyer any or all of Seller's right,
title, and interest under the orders and subcontracts terminated. Upon such
assignment, Buyer shall have the right, in its sole discretion, settle or pay
any or all claims arising out of the termination of such orders and
subcontracts.
(v) Subject to Buyer's approval, settling all outstanding liabilities and all
claims arising out of the termination of orders and subcontracts.
(vi) Completing performance of any services or work that Buyer designates to
be completed prior to the date of termination specified by the Buyer.
(vii) Taking such action as may be necessary, or as the Buyer may direct, for
the protection and preservation of any property related to this Agreement
which is in the possession of Seller and in which Buyer has or may acquire
an interest.
Non -Recoverable Costs: In no event shall Buyer be liable for costs, not included
in Termination Fee identified in Exhibit 1, incurred by Seller or any of its
subcontractors after the termination date specified by Buyer. Such non-
recoverable costs include, but are not limited to, anticipated profits on this
Agreement, post -termination employee salaries, post- termination administrative
expenses, post -termination overhead or unabsorbed overhead, attorneys' fees or
other costs relating to the prosecution of a claim or lawsuit, prejudgment interest,
or any other expense which is not reasonable.
11
2.6 Seller's Option to Terminate Prior to Installation. In the event that Seller is
unable to obtain financing for the Generating Facilities at the prices in this
Agreement within six (6) months after the Effective Date, Seller may (at its sole
discretion) terminate the Agreement, in which case neither party shall have any
liability to the other.
2.7 Seller Obligations for Termination Prior to Installation
(a) Remediation: If Seller exercises its rights found in section 2.6 with regard
to a specific Generating Facility, Seller shall take all actions necessary to
return the Buyer's site where the applicable Generating Facility was to be
installed to the condition the Seller first encountered it in at Seller's own
cost.
(b) In the event Seller exercises its rights to terminate pursuant to section 2.6
with regard to a specific Generating Facility, Seller will also provide to
Buyer, within five (5) business days, all analysis, designs, structural
evaluations and any other work product related to such Generating
Facility. Such materials and work product will be provided by Seller to
Buyer at no cost to Buyer.
ARTICLE 3: ENGINEERING AND CONSTRUCTION REQUIREMENTS
3.1 All elements of engineering and construction of Generating Facilities are Seller's
responsibility.
3.2 Seller shall provide services as described herein and pursuant to Exhibit 11 —
Engineering and Construction Requirements.
3.3 Seller shall establish mutually agreeable milestones with the Buyer to complete
all Work in this Agreement.
3.4 Seller shall provide bi-weekly status reports throughout this phase, as well as any
additional briefing requested by Buyer.
3.5 Seller will create, maintain and provide to Buyer, minutes of meetings between
Buyer's representatives and Seller's Project Management Team.
3.6 CEQA Compliance
(a) Compliance with the California Environmental Quality Act ("CEQA"),
Pub. Res. Code § 21000 et seq., is a condition precedent to the Buyer's
obligations under this Agreement. The Seller shall not have any right to
install the Generating Facilities until the Buyer has fully complied with
CEQA and issued a notice to proceed to Seller. Buyer agrees to begin the
initial analysis within ten (10) days after the Effective Date of this
Agreement. If that analysis indicates that an exemption or a negative
12
declaration will suffice, then Buyer will proceed to complete the
exemption or —negative declaration in accordance with applicable law.
Seller shall promptly reimburse Buyer for Buyer costs, up to but not
exceeding $3,000 per site for negative declaration, and $250 for
exemption letter per site, for such analysis and completion of exemption or
negative declaration no later than 30 days after Buyer sends invoice for
same to Seller. Seller shall promptly proceed to perform its obligations
under this Agreement. If Buyer determines that the costs for such analysis
and completion of exemption or negative declaration for each applicable
Generating Facilities shall exceed the stated maximum amount eligible for
reimbursement, it shall notify Seller in advance prior to expending more
than the maximum amount and state in writing the additional costs Buyer
reasonably expects to incur for such analysis and completion of exemption
or negative declaration for each applicable Generating Facilities. Seller
may, in its sole discretion, agree to pay Buyer additional sums to defray
such costs. If Seller does not agree to do so within thirty (30) days of
receipt of Buyer's written notification of such additional costs, then the
Agreement shall terminate as to the applicable Generating Facility, and
neither Party shall have any liability to the other Party (other than any
such liabilities that have accrued prior to such termination).
(b) If the Buyer reasonably determines that a mitigated negative declaration
("MND") or environmental impact report ("EIR") is required to comply
with CEQA, then Buyer shall promptly provide Seller with a written
statement detailing the reasons that Buyer believes that an MND or EIR is
required? to comply with CEQA for the applicable Generating Facility and
the estimated cost to comply with CEQA for the applicable Generating
Facility. Unless within thirty (30) days of receipt of Buyer's written
statement, Seller issues Buyer a written statement signed by an authorized
representative of Seller agreeing to pay for all of the estimated cost to
comply with CEQA for the applicable Generating Facility and agreeing to
proceed with MND or EIR, then this Agreement will terminate as to the
applicable Generating Facility, and neither Party shall have any liability to
the other Party (other than any such liabilities that have accrued prior to
such termination).
3.7 Engineering - Design Phase
(a) Within sixty (60) days of the Effective Date, Buyer shall provide Seller
with all applicable, and to the extent available, blueprints, plans, and
structural reports for each Project Site. Within thirty (30) days of
receiving such reports, Seller will provide Buyer with a report
demonstrating that the Generating Facility proposed for a Project Site can
meet the structural support and weight standards that Buyer reported to
Seller. Within ninety (90) days of the Effective Date, Seller shall provide
written notices to Buyer that the Site(s) is/are adequate for purposes of
proceeding with construction of the Generating Facilities ("Notice(s) of
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Site Acceptance.") Seller shall proceed with all activities necessary to
allow commencement of the construction phase, including completing the
Preliminary Requirements (as set forth below). Upon completion of the
Preliminary Requirements phase, Seller shall proceed with the installation
& construction phase.
(b) Preliminary Requirements:
(i)
Prior to the execution of the Power Purchase Agreement, the Seller
must comply with the Design Phase Insurance Requirements
included in Exhibit 7.
(ii) Seller must comply with all requirements set forth in Exhibit 11
[Engineering & Construction Requirements].
(iii) Within two months of the Effective Date:
1. Seller shall execute the Right of Access Agreement for
each site substantially in the form in which it has been
authorized and drafted by the Buyer;
2. Seller shall notify the Buyer in writing of the Expected
Commercial Operation Date. Such Expected Commercial
Operation Date shall be no later than the earlier of (1) the
applicable Generating Facility's . CSI Reservation
Expiration deadline including approved extensions and (2)
fifteen (15) months from the Effective Date;
3. Seller shall provide Buyer with a project plan and
milestone schedule for approval such that the Expected
Commercial Operation date may be achieved and that all
design standards specified in the Agreement are met or
exceeded. This project plan shall be subject to approval by
the Buyer, and may be amended by Buyer. Seller shall
create a revised project plan upon Buyer's request.
(iv) Within six (6) calendar months from the Effective Date:
1. Seller must have submitted to Buyer for approval the final
100% detailed engineering drawings and specifications for the
Generating Facilities.
2. Seller must have obtained a financing commitment for
construction of the System and submitted satisfactory proof thereof
to the Buyer. If the financing commitment is conditioned on any
assignment to the Lender of an interest in this Agreement or the
Right of Access(es), Seller shall also submit satisfactory proof to
Buyer that the assignee meets all requirements of this Agreement,
14
(c)
and agrees to comply, without modification, with the terius and
condition of this Agreement and the Site Right of Accesses.
(v) Within the earlier of the CSI Reservation Expiration date including
approved extensions or fifteen_(15) calendar months from the
Effective Date, Seller must have obtained from the Transmission
Provider Permission to Operate (PTO) Letter for each Site.
Failure to Complete the Preliminary Requirements by the deadline: If
Seller fails to complete the Preliminary Requirements in conformance
with the timeline above, following thirty (30) days for Seller to cure each
separate Preliminary Requirement, Buyer may terminate this Agreement
without penalty, liability or expense of any kind to •Buyer by providing to
Seller a written notice of termination after the deadline for completion of
the Preliminary Requirements. The Buyer may extend deadlines at its
option.
3.8 Construction Phase:
(a) Prior to the commencement of construction, the Seller must comply with
the Insurance Requirements for construction phase included in Exhibit 7.
(b) Seller must comply with all requirements set forth in Exhibit 11
[Engineering & Construction Requirements].
(c) Seller shall provide to Buyer an Installation & Construction plan that shall
include, at a minimum, the following:
(i) Detailed array layout with stringing configuration
(ii) Mounting and racking details
(iii) Details of electrical transmission showing conduit routing and
location of electrical enclosures, conduit support details, and
enclosure mounting details
(iv) Electrical single line diagram
(v) Electrical three line diagram
(vi) Monitoring plan
(vii) Construction project plan with timeline
(viii) Certification by Seller that the design complies with all applicable
laws, codes and regulations of all governmental jurisdictions
15
(d) Seller shall cause the System to be designed, installed and constructed in
accordance with the California Building Code, with the laws and
regulations of all governmental authorities with jurisdiction, with all
requirements of the Agreement and pursuant to the final approved project
design, and at Seller's sole cost. Upon completion of construction of the
System, Seller shall be responsible for verifying System performance on
an ongoing basis.
(e) Minimum Standards: Seller shall ensure that minimum design standards
are followed, including;
(i)
All power generation and transmission equipment shall be UL
listed for its use
(ii) Generating Facility must meet all regulatory and environmental
requirements including but not necessarily limited to PG&E, CSI,
CPUC, Fire Marshall, UL, UBC, and CEQA.
(iii)
Requirements of Material
1. Fasteners and hardware throughout system shall be
stainless steel or material of equivalent corrosion resistance
2. Racking components shall be anodized aluminum, hot
dipped galvanized steel, or material of equivalent corrosion
resistance
3. Unprotected steel shall not to be used in any components
(iv) All conductors, RHW and otherwise, must be covered to prevent
exposure to sunlight
(v) Seller will warranty roof penetrations (if any) against leakage for
twenty (20) years ("Warranty"). This Warranty specifically
excludes any leakage that is the result of pre-existing roof
conditions, and all roof and underlying damage caused by the
Generating Facility installation that is the result of pre-existing
roofing and underlying conditions. If the Generating Facility fails
to conform to this Warranty, the Seller will, at its sole option,
either repair or replace any Generating Facility or component at no
cost to the Buyer. This repair or replacement remedy shall be the
sole and exclusive remedy provided under this Warranty and the
original System warranty period will remain in effect and will not
be extended, nor will a new warranty period begin, upon repair or
replacement of defective System components. This Warranty is
effective from the date of completion of the Generating Facility
installation. Seller will work with Buyer's existing roofing
16
contractors and manufacturers to ensure original roof warranties, if
applicable, stay in effect.
Both parties acknowledge that cooperation by Buyer's existing
roofing contractors will be required in order to maintain original
roof warranties. Should existing roofing contractor be unwilling to
maintain roof warranty, Seller will inform Buyer in writing, and
Buyer will advise Seller how to proceed.
(vi) Seller shall be responsible for protection of Buyer's property
pursuant to Exhibit 11 [Engineering and Construction
Requirements Exhibit].
(vii) Array layout shall be designed to provide walking access around
the perimeter of the roof and convenient access to existing roof
mounted HVAC equipment
(viii) Parking canopy systems shall be designed to include safety
lighting, impact resistance, and height requirements as specified by
site.
(ix) A Monitoring System shall be included for each Generating
Facility.
ARTICLE 4: DELIVERY OF POWER, METERING & MONITORING
4.1 Purchase & Sale
(a) Commencing on the Commercial Operation Date and continuing
throughout the Term, Seller shall sell and deliver at the Delivery Point,
and Buyer shall purchase and accept from Seller at the Delivery Point, and
pay for, the Adjusted Delivered Energy as follows:
Adjusted Delivered Energy multiplied by the Base Contract Price as per
Exhibit 4.
Seller shall only Schedule and deliver Energy and Environmental
Attributes from the Generating Facilities.
The Output represents a package of services and benefits including
reduction in the Buyer's peak demand from the Local Electric Utility.
(b) Annual Escalation Adjustment. Commencing on the first anniversary date
of the Actual Commercial Operation Date, and every anniversary date
thereafter during the Term, the applicable Base Contract Price shall be
escalated to reflect the Annual Escalation Adjustment as set forth in
Exhibit 4- Base Contract Price.
17
(c) Meters
(i)
The transfer of Energy from Seller to Buyer shall be measured by
Meters at the Delivery Point, which are selected, provided,.
installed, owned, maintained, programmed and operated, at the
Seller's sole cost and expense, by Seller or its designee. Meters
and all metering activities shall comply with all applicable
requirements of the Transmission Provider Tariffs and the Buyer -
PG&E Interconnection Agreement. Seller shall exercise reasonable
care in the maintenance and operation of the Meters and
Monitoring Systems.
(ii) Meter Reading and Communications Equipment. After Operation
Date, Seller shall, at its sole cost and expense, read, or cause to be
read, the Meters at least as frequently as is needed during the
Term. Seller shall install, own and maintain, at its sole cost and
expense, communications equipment and services necessary to
allow remote reading of the Meters pursuant to the requirements of
the Meter Service Agreement for ISO Metered Entities, whether or
not the Generating Facilities are an ISO Metered Entity. Seller
shall apply verification, editing and estimation techniques to
ensure that the meter data accurately represent actual Output and
are in compliance with all applicable requirements of (i) the
Transmission Provider; and (ii) the Buyer -PG&E Interconnection
Agreement.
(iii) Seller shall at its sole cost and expense, install any updates or
upgrades to the Meters, and all associated measuring equipment
necessary to permit an accurate determination of the quantities of
Energy delivered under this Agreement.
(iv) Transmission Provider and PG&E Requirements. If and to the
extent requested to do so by Buyer, Seller shall submit to the
Transmission Provider and/or PG&E, or allow the Transmission
Provider and/or PG&E to retrieve, any meter data required by the
Transmission Provider and/or PG&E related to each Generating
Facility and associated with the provision of transmission or
distribution for the Output of each Generating Facility in
accordance with the Transmission Provider Tariffs, and the Buyer
PG&E Interconnection Agreement.
(v) Meters must meet the Performance Based Incentive eligibility
requirements outlined by the California Energy Commission and
Seller must provide to Buyer, prior to Commercial Operation Date,
documentation certifying the meters accuracy to less than 2%.
During the Term, Buyer may request calibration testing of the
meter to ensure accuracy of billings to Buyer, Buyer shall be
18
responsible for the cost of such testing. Seller shall furnish a copy
of all . technical specifications and accuracy calibrations for the
meter when testing is performed. If testing of the metering
equipment indicates that such equipment is in error by more than
two percent (2%), then Seller shall promptly repair or replace such
equipment and shall reimburse Buyer for the cost of testing which
determined the inaccuracy of the equipment by more than 2%.
Seller shall make a corresponding adjustment to the records of the
amount of electricity delivered by the Facility based on such test
results for (i) the actual period of time when such error caused
inaccurate meter readings, if that period can be determined to the
mutual satisfaction of the Parties, or (ii) if such period cannot be so
determined, then a period equal to one-half of the period from the
later of the date of the most recent test confiuining accurate
metering or the date the meter was placed into service, but not to
exceed twelve (12) months.
(d) Energy.
(i) Buyer agrees, subject to the limitation addressed in Section 4.1 (d)
(ii) — (iii), to purchase one hundred percent (100%) of the Adjusted
Delivered Energy.
(ii) In the event that the Adjusted Delivered Energy exceeds 100% of
Expected Annual Contract Quantity at a particular site for any
given year, and is greater than Buyer's electrical consumption at
the Site, Buyer has the first option, but is not required, to purchase
Adjusted Delivered Energy above 100% of Expected Annual
Contract Quantity for such site. If Buyer does not purchase excess
Adjusted Delivered Energy, Seller shall have the right to resell
such excess energy to a third party, pursuant to all applicable laws,
in which case proceeds from the sale of such electricity will solely
accrue to the Seller.
(iii) For any Adjusted Delivered Energy which exceeds 120% of the
Expected Annual Contract Quantity (specified in Exhibit 5) that
Buyer purchases subject to (ii), Buyer agrees to pay for such
excess Adjusted Delivered Energy at the lesser of the Base
Contract Price and the Replacement Price.
(iv) At the end of each three (3) Contract Year Period, if the Adjusted
Delivered Energy is less than 80 percent (80%) of the total
Expected Annual Contract Quantity for such three (3) Contract
Years, Seller shall pay to Buyer the product of the positive
difference between the Replacement Price and the Base Contract
Price for the kwh shortfall, if any, between the Adjusted Delivered
19
Energy and 80% of the Expected Annual Contract Quantity for the
three (3) year period.
(v) If Seller is prevented from generating or delivering the Adjusted
Delivered Energy due to a Force Majeure Event, Seller's obligation
under this Section shall be reduced to the extent of such impact.
(vi) The Parties recognize and agree that (A) with the exception of an
event of a default pursuant to 11.1(b) payment of amounts by
Seller to Buyer pursuant to this Section is an appropriate remedy,
and (B) any such payment does not constitute a forfeiture or
penalty of any kind, but rather constitutes anticipated costs to
Buyer under the terms of this Agreement.
4.2 Monitoring System and Web Interface
(a) Seller shall provide the Buyer with a Monitoring System for each
Generating Facility.
(b) The Monitoring System shall include, without limitation, ability to
monitor Revenue grade AC production data. Additionally, for Generating
Facilities over 250KW in size, Seller shall include building consumption
data, and weather station with ability to monitor or access localized
weather data, to include ambient temperature and irradiance.
(c) Seller shall make available to Buyer a web -based tool or interface to view,
collect and store data, in real time, including the energy delivered and
greenhouse gas emissions reduced.
4.3 Delivery Point
(a) Allocation of Costs and Risks. Except as expressly set forth in this
Agreement, Seller shall be responsible for any costs or charges imposed
on or associated with the Output or the delivery of the Output hereunder
up to and at the Delivery Point. Except as expressly set forth in this
Agreement, the Buyer shall be responsible for any costs or charges
imposed on or associated with the Output, or its receipt, after the Delivery
Point.
4.4 Environmental Attribute's
(a) Throughout the Term, Seller shall transfer to Buyer, and Buyer shall
receive from the Seller, all rights, titles and interest in and to the
Environmental Attributes, if any, whether now existing or subsequently
generated or acquired (other than by direct purchase from a third party) by
Seller, or that hereafter come into existence, during the Term, as a
component of the Adjusted Delivered Energy purchased by Buyer from
Seller hereunder. Seller agrees to transfer and make such Environmental
20
Attributes available to Buyer immediately to the fullest extent allowed by
applicable law upon Seller's production or acquisition of the
Environmental Attributes. Seller agrees that the Base Contract Price is the
full compensation for all Environmental Attributes.
(b) Seller shall not assign, transfer, convey, encumber, sell or otherwise
dispose of any portion of the Environmental Attributes to any Person other
than Buyer, other than in connection with sales of Output permitted
pursuant to Sections 4.1.(d)(ii) and 11.2(b).
(c) During the Term, Seller shall not report to any Person that the
Environmental Attributes granted hereunder to the Buyer belong to
anyone other than the Buyer, and the Buyer may report under any program
that such attributes purchased hereunder belong to it.
(d) Seller shall document the production of Environmental Attributes under
this Agreement by delivering on an annual basis to Buyer an attestation of
Environmental Attributes produced by the Generating Facilities and
purchased by Buyer in the preceding calendar year on or before the
Commencement Anniversary of each year following a Contract Year,
Seller shall document the transfer of Environmental Attributes to Buyer
under this Agreement by delivering to the Buyer an attestation of
Environmental Attributes transferred under this Agreement in the
preceding Contract Year. The form of attestation is set forth as Exhibit 6
[Form of Attestation]. Exhibit 6 [Form of Attestation] may be updated or
changed by Buyer as necessary to ensure that the Buyer receives full and
complete title to, and the ability to record with any EA Agency as its own,
all of the Environmental Attributes purchased hereunder.
(e) Documentation. At Buyer's option, the Parties, each at their own expense,
shall execute all such documents and instruments in order to affect the
transfer of the Environmental Attributes specified in this Agreement to the
Buyer or its designees, as Buyer may reasonably request. Upon
notification by an EA Agency that any transfers contemplated by this
Agreement will not be recorded, the Parties shall promptly cooperate in
taking all reasonable actions necessary so that such transfer can be
recorded. Each Party shall promptly give the other Party copies of all
documents it submits to the EA Agency to effectuate any transfers.
4.5 Tax Credits and Financial Incentives
(a) Buyer agrees and acknowledges that the ITC and Section 1603 Grant shall
be owned by Seller.
(b) In connection with Seller's rights and interests in performance based
incentive payments to be made under the California Solar Initiative after
the Commercial Operation Date, Buyer agrees to cooperate with Seller,
21
(c)
including signing authorizations needed by Seller, to obtain or transfer any
such performance based incentives under the California Solar Initiative.
Seller acknowledges that Buyer has made no statements, representations
or warranties regarding the eligibility of the Generating Facilities for the
ITC or the CSI, and Seller is not relying on any statement, representation
or warranty by Buyer or any third party with respect to the ITC or CSI in
entering into this Agreement.
4.6 Temporary Shutdowns, Sale of Site, Relocation of Facility
(a) Buyer may request that Seller temporarily stop operation of a Generating
Facility for any purpose reasonably related to Buyer's maintenance and
improvement of the Site at which a Generating Facility is located. For a
shutdown up to seventy-two (72) hours that does not occur within thirty-six (36)
months of a prior requested shutdown, Buyer shall not be obligated to pay Seller
for lost revenues associated with the shutdown. Subject to the exception
mentioned in this section, for all other shutdown periods requested by Buyer,
Buyer will pay Seller an amount equal to the sum of payments that Buyer would
have made to Seller hereunder for Adjusted Delivered Energy from the
Generating Facility that would have been produced during the period of the
shutdown, unless the shutdown is for maintenance or repairs that were due to
the failure of components or installation of the Generating Facility. If a
shutdown request has not been made by Buyer for 36 months, and the shutdown
period that the Buyer subsequently requests is longer than 72 hours, Buyer shall
only be responsible for payment to Seller for the Adjusted Delivered Energy
that would have been produced from the 73rd hour of the shutdown until the end
of the shutdown. Determination of the amount of energy that would have been
produced during the period of the shutdown shall be based, duringthe first year
of the Facility's Operations Period, on the estimated levels of production and,
after the first year of the Operations Period, based on actual operation of the
Facility in the same period in the previous calendar year, unless Seller and
Buyer mutually agree to an alternative methodology. (b) In the event Buyer
requires the Generating System to be temporarily removed for reroofing or any
other purpose, Buyer shall pay all costs associated with the removal and
relocation of the Generating Facility, including installation and testing costs and
interconnection costs. Buyer shall also be liable for shutdown costs, if
applicable, identified in Section 4.6 (a).
4.7 Utility Rate Schedule Changes
To the extent that Seller has represented to Buyer that Buyer will be able to
change Utility Rate Schedules at a site where Seller will be installing a
Generating Facility, and such Utility Rate Schedule change is subsequently not
possible, and comparable savings to those projected are not possible, Buyer shall
have the right, but not the obligation, to terminate this Agreement with respect to
such Generating Facility, provided written notice of such termination occurs
22
before commencement of construction of the Generating Facility. Upon
termination of the Agreement for such Generating Facility, Buyer shall have no
further obligations under this Agreement for such Generating Facility.
ARTICLE 5: BILLING AND PAYMENT
5.1 Billing and Payment
(a) Generally. During the Term, on a monthly basis, Seller shall invoice
Buyer, and Buyer shall make payment for Energy delivered to Buyer
during the prior month, in accordance with Article 4. Such payment shall
be full compensation to Seller for the Adjusted Delivered Energy received
under this Agreement. Invoices furnished by Seller under this Agreement
must be in a form acceptable to the Buyer, must include a unique invoice
number and must indicate past due amounts, if any. All amounts paid by
Buyer to Seller shall be subject to audit by the Buyer.
(b) Payment. All payments shall be made on or before thirty (30) days after
receipt of an undisputed invoice. Each Party shall make payments by
electronic funds transfer or by other mutually agreeable method(s), to the
account designated by the other Party.
(c)
Method of Payment. Buyer shall make all payments under the Agreement
by electronic funds transfer in immediately available funds to the account
designated by Seller from time to time. All payments that are not paid
when due, and whose nonpayment is not attributable to any act or
omission by Seller, shall bear interest, at a rate of ten (10%) percent per
annum, accruing from the date payment became past due until the date
payment is made in full. All payments made hereunder shall be non-
refundable, be made free and clear of any tax, levy, assessment, duties or
other charges and not subject to reduction, withholding, set-off, or
adjustment of any kind.
(d) Disputed Payments. If a bona fide dispute arises with respect to any
invoice, Buyer shall not be obligated to pay such invoice during such
dispute and not be deemed in default under the Agreement and the Parties
shall not suspend the performance of their respective obligations
hereunder, so long as Buyer promptly pays all undisputed amounts owed
hereunder. If an amount disputed by Buyer is subsequently deemed to
have been due in the amount claimed by the Seller, interest shall accrue at
the rate of 10% per annum on such amount from the date becoming past
due under such invoice until the date paid.
5.2 Allocation of Taxes and Possessory Interest Tax
(a) Delivery Point. Seller shall pay or cause to be paid all Taxes due under or
by virtue of this Agreement or the sale and delivery of Output sold
23
hereunder including but not limited to ad valorem, franchise or income
taxes which are solely related to the sale of Output.
(b) Real Estate or Property Taxes. Seller shall pay or cause to be paid all real
estate or personal property taxes, possessory interest taxes, business or
license taxes or fees, service payments in lieu of such taxes or fees, annual
or periodic license or use fees, excises, assessments, bonds, levies, fees or
charges of any kind which are now or hereafter assessed, levied, charged,
confirmed or imposed by any Governmental Authority on Seller's
occupancy and use of the Property (or any portion or component thereof)
or. on Seller's ownership or operation of the Generating Facilities.
(c) Buyer Credit for Payment of Taxes. If the Buyeris required by law or
regulation to remit or pay Taxes which are Seller's responsibility
hereunder, the Buyer may deduct the amount of any such Taxes from the
sums due to Seller under this Agreement. Nothing shall obligate or cause a
Party to pay or be liable to pay any Taxes for which it is exempt under the
law.
ARTICLE 6: DEPOSIT REQUIREMENTS
6.1 Deposit Requirements during Operation.
(a) Removal and Disposal Fund — General. In order to ensure that funds are
available for the removal of the Generating Facilities and remediation of
the Site upon the expiration or termination of this Agreement, Seller
agrees to establish an interest bearing escrow account at a federally
insured banking institution to hold funds dedicated for such purpose (the
"Removal Fund"). The terms for the escrow account shall be reasonably
acceptable to the Buyer and the Seller.
(b) Interest. All interest earned shall become part of the Removal Fund.
(c) Deposits. Seller shall make deposits into the Removal Fund in annual
amounts of $6 per KW, one -twelfth (1/12th) of which shall be the
"Monthly Contribution." The Seller shall deposit the first Monthly
Contribution into the Removal Fund on the first day of the month
following the Commercial Operation Date, and shall deposit additional
Monthly Contributions on the first day of each subsequent month during
the Term. Seller agrees to deposit the Monthly Contribution until the
Removal Fund (including interest income) has a balance equal to or
greater than $120 per KW. Such Removal Fund shall be disbursed, as
needed, on a pro-rata per KW basis for individual Sites.
(d) Remediation Cost Estimate and Additional Deposit. Five (5) years prior to
the expiration of this Agreement, Seller shall provide Buyer with an
estimate of the cost to remove the Generating Facilities and restore each
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Project Site in accordance with Section 9.1 below. Seller and Buyer shall
then meet and confer within thirty (30) days after such estimate is
provided to resolve any concerns regarding such estimated cost, and a
revised estimate taking those concerns into account shall then constitute
the final restoration cost estimate. If the final restoration cost estimate as
approved by Buyer exceeds $120 per KW, Seller shall then increase the'
Monthly Contributions due by the amount necessary to ensure that the
escrow fund, including all interest earned thereon, is on deposit as of the
scheduled termination date in an amount equal to the final restoration cost
estimate.
(e) If this Agreement expires or terminates and, in accordance with this
Agreement, the Seller has the obligation to pay for the removal of the
Generating Facilities and the remediation of the Sites, then Seller shall
remove the Generating Facilities and remediate the Sites within 90 days of
the date of expiration or termination of this Agreement. Within fifteen (15)
days of notice by the Seller to the Buyer that removal of the Generating
Facilities has been completed and that the Sites has been remediated,
Buyer shall either (1) certify in writing that Seller has completed removal
and remediation in accordance with this Agreement or (2) list in writing
any outstanding tasks. Upon Buyer's certification that Seller has
completed removal and remediation in accordance with the requirements
of this Agreement, which certification shall not be unreasonably
conditioned, withheld or delayed, the funds in the Removal Fund shall be
released to the Seller. In the event that the Seller and its Lenders fail to
fully remove the Generating Facilities and remediate the Project Site(s) as
required in this Agreement within the applicable deadline set forth in this
Agreement, the Buyer may access the Removal Fund and use the available
balance to undertake removal of the Generating Facilities and remediation
of the Site(s). Seller shall be responsible for payment of all Buyers'
reasonable removal or remediation costs, including any in excess of the
Removal Fund. Any excess funds remaining in the Removal Fund after the
completion of payment for the removal of the Generating Facilities and
remediation of the Sites by the Buyer shall be released to Seller within
sixty (60) days of payment of the last related invoice.
(f)
Disbursement if Seller does not have obligation to pay for removal and
remediation. If this Agreement expires or terminates, and in accordance
with this Agreement, Seller does not have the obligation to pay for the
removal of the Generating Facilities and the remediation of the Site(s), the
Removal Fund shall be released to Seller within sixty (60) days of the date
of expiration or termination of this Agreement.
ARTICLE 7: SELLER'S ADDITIONAL OBLIGATIONS
7.1 Seller shall reimburse the Buyer for Buyer's payment of the California Solar
Initiative rebate reservation fee within 30 days of receipt of the Buyer's invoice
25
for such payment. In addition, Seller shall apply for any rebates from the State of
California, PG&E or other electricity provider on behalf of the Buyer.
7.2 Seller shall provide Buyer with an as -built plan set after project completion.
7.3 Seller shall develop, finance, own, maintain and operate the Generating Facilities
in accordance with this Agreement, the requirements of the California Solar
Initiative (CSI) Program including. Warranty Requirements, all Requirements of
Law, all Permits, the Transmission Provider Tariffs and Prudent Industry Practice.
Additionally, Seller shall obtain the warranties described in Exhibit 9 [Panel and
Inverter Warranties] for the equipment detailed in that Exhibit.
7.4 Seller agrees it shall pay prevailing wages in connection with the construction and
operation of the Generation Facilities.
7.5 Milestones
(a) Generally.
Seller shall diligently pursue all milestones established pursuant to
Article 3 and the Expected Commercial Operation Date. The Parties agree
that time is of the essence in connection with the completion of the
Generating Facilities, and that Milestones for the development, financing
and construction of the Generating Facilities must be achieved in a timely
fashion. Seller shall strive to achieve the Milestones mutually agreed to at
the time of PPA execution by the Seller and Buyer.
(b) Monthly Reports.
Unless otherwise specified in this Agreement, starting on the Effective
Date, Seller shall provide to Buyer the monthly progress reports
concerning the progress towards completion of the Milestones. Seller
shall provide to the Buyer additional information concerning Seller's
progress towards, or confirmation of, achievement of the Milestones, as
the Buyer may reasonably request from time to time.
(c) Notice of Failure to Achieve a Milestone.
Upon becoming aware that Seller will, or is reasonably likely to, fail to
achieve one or more Milestone(s) by the required date, for any reason
including a Force Majeure Event, Seller shall so notify the Buyer in
writing immediately. Such notice shall explain the cause of the delay,
provide an updated date for achievement of the Milestone(s), and describe
Seller's plan for meeting such Milestone(s). Seller's notice will also
explain any impact such delay may or will have on any other Milestone,
and the measures to be taken to mitigate such impact.
(d) Facility Mechanical Completion Inspection.
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Seller shall notify Buyer when Mechanical Completion of the Generating
Facilities is achieved. At discretion of Buyer, Seller shall schedule and
arrange for Buyer to conduct an inspection of the Generating Facilities.
The inspection shall be scheduled for a date, mutually agreeable to Seller
and Buyer, which is within ten (10) Business Days of Seller's notification
of Mechanical Completion. Based on the inspection, Buyer may, within
ten (10) Business Days of the inspection, prepare and provide to Seller a
punch list of any observed defects or deficiencies in the construction work
or discrepancies between installed equipment and workmanship and this
Agreement. Seller shall be responsible for completion, correction, or
otherwise addressing issues identified by the Buyer, and shall provide a
written response to document actions taken in response to the punch list
items. If requested by Buyer, Seller shall schedule and arrange a follow-up
inspection for Buyer after all punch list items are resolved. All punch list
items shall be resolved prior to the Commercial Operation Date of the
Generating. Facilities except those items specifically excepted by mutual
agreement between Buyer and Seller.
(e) Force Majeure Event. In the event that a Force Majeure Event causes any
delay in the achievement of a Milestone, such Milestone's deadline may
be extended, together with any Force Majeure Event extensions for other
Milestones, for a period not to exceed, in the aggregate, six (6) months.
The extension of the deadline for any Milestone shall extend the deadline
for all subsequent Milestones, provided that in no event shall the
combined extensions for Force Majeure Events for any or all of the
Milestones exceed six (6) months. The extension provided for in this
Section shall be the only effect of a Force Majeure Event on Seller's
obligations with respect to the Milestones.
(f)
Waiver of Right. The Buyer may, at its discretion, grant waivers for
Seller's failure to meet any of the Milestones, but in no way shall any such
waiver constitute a waiver of any future failures by Seller to meet other
Milestones.
7.6 Compliance: Seller shall, in its own name and at its own expense, seek, obtain,
maintain, comply with and, as necessary, renew and modify from time to time, all
Permits and other authorizations that are required by any Requirements of Law,
the Transmission Provider Tariffs or any Governmental Authority as are
necessary for Seller to engage in the activities and obligations required by the
Agreement.
7.7 Maintenance, Audit and Inspection of Records
(a) Maintenance of Records. Seller shall maintain any and all documents and
records which demonstrate performance under this Agreement and the
lease, and all ledgers, books of account, invoices, vouchers, cancelled
checks, and other documents evidencing or relating to charges for
27
services, or expenditures and disbursements charged to Buyer for a
minimum period of five (5) years, or for any longer period required by
law, from the date of final payment to Seller pursuant to this Agreement.
(b) Inspection. Any documents required to be maintained pursuant to this
Agreement shall be made available for inspection or audit at no cost to
Buyer, at any time during regular business hours, upon written request by
a designated representative of the Buyer. Seller shall provide copies of
such documents to Buyer for inspection at a time and place that is
convenient to Buyer.
Custody of Records. Where Buyer has reason to believe that any of
Seller's documents relating to this Agreement may be lost or discarded
due to dissolution, disbandment or termination of Seller's business, Buyer
may, by written request by any of the above -named officers, require that
custody of the Seller's documents be given to Buyer. Seller shall comply
with Buyer's reasonable written request.
(c)
7.8 Insurance:
Seller shall obtain and maintain the policies of insurance in amounts and with
coverage as set forth in Exhibit 7 [Insurance Requirements].
7.9 Commissioning and Performance Reports
(a) Seller shall comply with all applicable ISO, Transmission Provider and
CSI Handbook Field Verification requirements for preoperational testing.
Subsequently, Seller will perform an annual performance evaluation for
the tam of this agreement on approximately the annual anniversary that
the first commissioning test was performed. No later than seventy-two
(72) hours prior to conducting its Commissioning Tests, Seller shall notify
Buyer of the date on which it intends to conduct such tests. Within seven
(7) days of the successful completion of Seller's Commissioning Test,
Seller shall provide to Buyer written notification of the Commercial
Operation Date, including any relevant data demonstrating that
Commercial Operation has occurred. Buyer has the right to be present
during any Commissioning Test, and to receive all information, including
meter and performance data associated with such tests. Seller may change
the date for such tests upon written notice to Buyer, provided that Buyer
has at least 24 hours' notice of the date of such tests.
(b) Seller will provide Buyer with an annual performance evaluation report of
the energy production over the last 12 months as compared to the expected
energy production over that same period.
7.10 Obligation to Interconnect:
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Seller shall be solely responsible for Interconnection of the Generating Facilities
to the Transmission System. Seller shall, at its own cost and expense, negotiate
and enter into an Interconnection Agreement and such other agreements with the
Transmission Provider as needed to enable Seller to transmit Energy to the
Delivery Points. Seller shall be responsible for all costs under the Interconnection
Agreement and any other agreements with the Transmission Provider including
but not limited to the costs of any upgrades to the Transmission System associated
with the Interconnection of the Generating Facilities. Seller shall, at its own cost
and expense, maintain the Interconnection Facilities including metering facilities.
7.11 WREGIS
As applicable, prior to the Commercial Operation Dates, Seller shall register the
Generating Facilities in the WREGIS, and take all other actions necessary to
ensure that the Energy or Environmental Attributes produced by the Generating
Facilities are issued and tracked for purposes of satisfying the requirements of the
California Renewables Portfolio Standard and transferred to Buyer as applicable.
In the event that WREGIS is not in operation as of the Actual Commercial
Operation Date, Seller shall perform its obligations, as required under this Section
as soon as WREGIS is in operation.
7.12 Facility Conformance to Buyer Specifications. Seller shall assure that each
Generating Facility remains in conformance with the most recent version of the
as -built drawings approved by the Buyer; all specifications and requirements of
this Agreement during the Temt"i, including when maintenance is performed or
when modifications are implemented. Buyer may, at any time, prepare and
provide to Seller a letter or notice of any observed defects, deficiencies or
deviations between each Generating Facility and the most recent version of the as -
built drawings approved by the Buyer, or any specification or requirement of this
Agreement. Within twenty (20) Days of Buyer's notification, Seller shall correct
or address the issue(s) or propose to Buyer a reasonable schedule for correcting or
addressing the issue(s). The schedule shall be subject to the written consent of the
Buyer which consent shall not be unreasonably withheld or delayed. If Seller
fails to correct or address undisputed and material issue(s) identified by Buyer
within 20 days, Buyer shall have the right to withhold any payments due to Seller
until the issue(s) identified by Buyer are addressed by Seller. Such withholding
of payments) shall not cause the Buyer to be considered in default or to be
obligated to pay any kind of penalty or late charge interest on the withheld
payments.
7.13 Coordination with the ISO, Transmission Provider and Western Electricity
Coordinating Council ("WECC")
(a) ISO, Transmission Provider and WECC Standards. Each Party shall
undertake its obligations under this Agreement in compliance with all
applicable (i) operating policies, criteria, rules, guidelines, tariffs and
29
protocols of the ISO and Transmission Provider; (ii) WECC scheduling
practices; and (iii) Prudent Utility Practices.
(b) Start-ups and Shut -downs. Seller shall coordinate all Generating Facilities
start-ups and shut -downs, in whole or in part, with Buyer in accordance
with the reasonable protocols established by Buyer and applicable
requirements of the ISO Tariff.
7.14 Seller shall use commercially reasonable efforts to minimize the number and
duration of Outages during periods when the Generating Facilities otherwise
would be able to produce Energy. Planned Outages shall be limited to no more
than five (5) calendar days per Contract Year. Seller shall be responsible for all
expenses and costs, excluding those resulting from Buyer's shutdown addressed
in Section 4.6, associated with all requirements and timelines for generation
Outage scheduling, including, if applicable, those posted on the ISO's website.
Planned and forced Outages shall be coordinated between Seller and the Buyer.
7.15 Transmission and Distribution Maintenance Information: If either Party receives
information through the ISO or from the Transmission Provider regarding
maintenance that will directly affect the Generating Facilities, it will provide this
information promptly to the other Party.
7.16 Modifications to the Generating Facilities
Upon approval by Buyer of the design of the Generating Facilities, Seller shall
have no right to make a Material Change to the Generating Facilities nor attach
fixtures or erect additions or structures in or upon the Facility (collectively
"Alterations") without receiving prior written approval of Buyer prior to
undertaking any such Alterations. Seller shall submit to Buyer detailed and
complete plans and specifications for a Material Change. Buyer may, in its sole
discretion, waive the requirement for detailed plans upon Seller's demonstration
that the Material Change consists solely of modification or replacement of like -
kind equipment. Buyer shall not unreasonably delay or withhold written approval
of Seller's Material Change, provided that such Material Change shall impose no
additional burdens or obligations on Buyer. As a condition to consenting to the
Material Change, Buyer may impose reasonable requirements, including the
requirement that Seller provide Buyer with a surety bond or other financial
assurance that the cost of the Material Change will be paid when due, and
reimbursement of any costs incurred by Buyer in responding to Seller's request or
inspecting such Material Change. Any such Material Change performed by Seller
shall be performed in accordance with all Applicable Laws and Requirements,
including any and all necessary permits and approvals to be obtained from Buyer.
Seller agrees to provide Buyer with sufficient advance notice of any proposed
Material Change to allow the coordination and consideration by Buyer of the
construction schedule for such Material Change. Notwithstanding the foregoing,
Seller's routine repair, replacement, or maintenance of the equipment components
of the Generating Facilities shall not require Buyer's consent. Seller shall provide
30
Buyer with written notice 48 hours in advance of any routine repair, replacement,
or maintenance of the equipment components of the Generating Facilities. Such
notice will include the time, location and nature of the planned repair or
maintenance.
ARTICLE 8: FORCE MAJEURE
8.1 Force Majeure Events
(a) Excuse. Subject to Section 8,2 below, and except as expressly set forth
herein, neither Party shall be considered in default under this Agreement
for any delay or failure in its performance under this Agreement
(including any obligation to deliver or accept Output) if such delay or
failure is due to a Force Majeure Event, but only to the extent that:
(i)
Such Force Majeure Event is not attributable to fault or negligence
or action or inaction on the part of that Party;
(ii) Such Force Majeure Event is caused by factors beyond that Party's
reasonable control; and
(iii) Despite taking all commercially reasonable technical precautions
and measures to prevent, avoid, mitigate or overcome such event
and the consequences thereof, the Party affected has been unable to
prevent, avoid, mitigate or overcome such event or consequences.
(b) "Force Majeure Event" may include, subject to this section:
(i) acts of Nature such as storms, floods, lightning, volcanic eruptions,
forest fires, and earthquakes;
(ii) sabotage or destruction by a third party of facilities and equipment
relating to the performance by the affected Party of its obligations
under this Agreement;
(iii) Utility Transmission System outage or failure not caused by Seller
or Seller activities;
(iv) war, riot, acts of a public enemy or other civil disturbance;
(v) strike, walkout, lockout or other significant labor dispute; or
(vi) theft, vandalism, accidents, or construction related power
interruptions and mechanical moves
curtailment by the ISO, or its successor, but only to the extent that
the ISO declares a "Force Majeure" under the ISO Tariff.
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(c) Exclusion. "Force Majeure Event" does not include the following:
(i) economic hardship of either Party;
(ii) an Outage, except if caused directly by an event or circumstance
that meets the requirements set forth in this Section 8.1;
(iii) failure or delay in the granting of Permits;
(iv) failures or delays by the Transmission Provider or the ISO in
entering into, or performing under, all agreements with Seller
contemplated by this Agreement;
(v) curtailment or interruption of transmission services, other than by
the ISO where the ISO declares a "Force Majeure" under the ISO
Tariff; or
(vi) insufficiency, unavailability, failure, or diminishment of solar
resource, except as a result of an event that would otherwise
qualify as a Force Majeure Event
(d) Notwithstanding anything to the contrary, due to the constitutional
limitations on Buyer, a Force Majeure event shall include a "budget non -
appropriation event" in which the Buyer's appropriation for any year
covered in this Agreement does not appropriate funds for the procurement
of any utility services for Buyer. During the continuation of a budget non -
appropriation event as defined above, if the Buyer does not otherwise have
other funds available to make payments otherwise due on this Agreement,
the Buyer shall not be obligated to pay for (and the Seller shall not be
required to deliver) any services provided under this Agreement until the
budget non -appropriation event has terminated. Buyer agrees that it shall
use its best efforts to seek appropriation for utility services during the term
of this Agreement. If a budget non -appropriation event continues for more
than 180 days, Seller (but not Buyer) may terminate this Agreement.
8.2 Conditions
(a) In addition to the conditions set forth in Section 8.1(a) above, a Party may
rely on a claim of a Force Majeure Event to excuse its performance only to
the extent that such Party:
(i)
provides prompt notice of such Force Majeure Event to the other
Party, giving an estimate of its expected duration and the probable
impact on the performance of its obligations under this Agreement;
(ii) exercises all reasonable efforts to continue to perfoiiii its
obligations under this Agreement;
32
(iii) expeditiously takes action to correct or cure the event or condition
excusing performance so that the suspension of performance is no
greater in scope and no longer in duration than is dictated by the
problem; provided, however, that settlement of strikes or other
labor disputes shall be completely within the sole discretion of the
Party affected by such strike or labor dispute;
(iv) exercises all reasonable efforts to mitigate or limit damages to the
other Party; and
(v) provides prompt notice to the other Party of the cessation of the
event or condition giving rise to its excuse from performance.
8.3 Termination Due To Force Majeure Event
In addition to and without limiting any other provisions of this Agreement, if a
Party is prevented from performing its material obligations under this Agreement
for a period of 180 consecutive or non-consecutive days or more (whether full or
partial days) due to a Force Majeure Event, the other Party may terminate this
Agreement, without liability of either Party to the other, upon ninety (90) days
written notice at any time during the Force Majeure Event. Seller shall be
responsible for removing the applicable Generating Facility and restoring the Site
where the applicable Generating Facility was installed to the condition described
in article 9.1 within ninety (90) days after provision of written notice.
ARTICLE 9: REMOVAL
9.1 Removal of Personal Property and the Generating Facilities
Unless the parties otherwise mutually agree in writing, upon expiration of any
Initial or Renewal Terms, Seller shall, in a manner that minimizes the disruption
of Buyer's business to the extent commercially practicable, (i) remove the
Generating Facility's modules and related equipment from the Site other than roof
standoffs secured to the Site, (ii) repair, in a commercially reasonable manner,
any damage to the Site caused by the Generating Facility and such removal, but
leaving roof standoffs in place, and (iii) remove all trash and debris introduced to
the Site by Seller or its representatives, leaving the Site in substantially the same
condition existing prior to installation of the Facility (reasonable wear and tear
excepted, and with roof standoffs still in place). This section shall survive
termination of this Agreement.
ARTICLE 10: DISPUTE RESOLUTION
10.1 Buyer and Seller shall negotiate in good faith in event of any dispute during the
performance of this Agreement. If the dispute cannot be resolved between the
Buyer's Project Manager and the Seller's Project Manager after 2 days of
33
negotiations, at either the Buyer's or Seller's option, the matter may be promptly
escalated to the next level of command within each party's organization. If the
dispute or problem cannot be resolved within five (5) additional business days,
the matter shall be promptly escalated to the CEO level of the Buyer and director
of the Seller who shall attempt to resolve the dispute within five (5) business
days.
10.2 Notwithstanding anything to this contrary, this Article is not intended to limit or
restrict the rights of either party to seek any judicial remedy.
ARTICLE 11: DEFAULT & REMEDIES
11.1 Seller Event of Default
A Seller Event of Default shall occur under this Agreement upon the occurrence
of any of the following events (severally "Seller Event of Default" and
collectively "Seller Events of Default"):
(a) Seller Schedules and/or delivers to Buyer, without Buyer's consent,
energy or other product from a resource other than the Generating
Facilities specified in this Agreement; or
(b) Seller fails for any reason, except as a result of a Force Majeure Event, to
deliver at least one-half of the Expected Annual Contract Quantity during
a Contract Year; or
(c) Seller sells or transfers Output to any Person other than Buyer other than
pursuant to a Buyer Event of Default; or
(e) Seller shall have failed to pay, when due, any rent, fee, charge or
obligation of Seller requiring the payment of money under the teiiiis of
this Agreement within thirty (30) days from receipt of notice from Buyer
of such past due amount; or
(f)
(g)
Seller shall have failed to maintain any insurance required pursuant to this
Agreement; or
Seller shall have failed to achieve Commercial Operation Date by the
Expected Commercial Operation Date as such deadline is established
pursuant to Article 3; or
(h) Any representation or warranty made by Seller hereunder shall have been
false or misleading in any material respect; or
(i)
Seller shall have made a general assignment of its assets for the benefit of
its creditors without prior written approval by Buyer; or
34
(j) Seller shall have assigned or otherwise transferred its interest in this
Agreement in violation of the provisions contained in this Agreement
whether voluntarily or by operation of law; or
(k) Seller shall have failed to maintain continuous operations at any Project
Site for any thirty (30) consecutive days, have been dispossessed by
process of law or otherwise, or have otherwise abandoned the Site; or
(1) A court shall have made or entered any decree or order: (i) adjudging
Seller to be bankrupt or insolvent; (ii) approving as properly filed a
petition seeking reorganization of Seller or an arrangement under the
bankruptcy laws or any other applicable debtor's relief law or statute of
the United States or any state thereof; (iii) appointing a receiver, trustee or
assignee of Seller in bankruptcy or insolvency or for its property; (iv)
directing the winding up or liquidation of Seller and such decree or order
shall have continued for a period of sixty (60) days; or (v) Seller shall
have voluntarily submitted to or filed a petition seeking any such decree or
order; or
(m)
The sequestration or attachment of or execution or other levy on Seller's
interest in this Agreement or the Site or any improvements located thereon
shall have occurred and Seller shall have failed to obtain a return or
release` of such property within thirty (30) days thereafter, or prior to sale
pursuant to such levy, whichever first occurs; or
(n) The occurrence of any act or omission on the part of Seller which operates
to suspend, revoke or terminate any certificate, permit, franchise,
approval, authorization or power necessary for Seller to lawfully conduct
the operations which Seller is required or permitted to conduct on the Site;
or
(o) Any lien shall be filed against the Sites because of any act or omission of
Seller, and shall not be discharged or contested by Seller in good faith by
proper legal proceedings within twenty (20) calendar days after receipt of
notice thereof by Buyer; or
An Event of Default by Seller under one of the Rights of Access, as
defined therein; or
Seller shall have failed to perform any term, covenant, or condition of this
Agreement to be performed by Seller, including those referred to in the
immediately preceding subparagraphs, and Seller shall have failed to cure
the same within sixty (60) days after written notice from Buyer, provided,
however, Buyer may give Seller additional time to cure at Buyer's option.
Buyer and Seller shall attempt to resolve all such disputes pursuant to
Article 10's dispute resolution procedure, provided however, nothing shall
35
prejudice Buyer's rights and remedies in the event that Seller fails to cure
within the 60-day period or within any other period granted by Buyer.
11.2 Buyer Event of Default
A Buyer Event of Default shall occur under this Agreement upon the occurrence
of any of the following events (severally "Buyer Event of Default" and
collectively "Buyer Events of Default", and together with Seller Event of Default,
individually and collectively "Event of Default" and "Events of Default"):
(a) Buyer shall have failed to pay, when due, any rent, fee, charge or
obligation of Buyer requiring the payment of money under the terms of
this Agreement within thirty (30) days from receipt of notice from Seller
of such past due amount; or
(b) A court shall have made or entered any decree or order: (i) adjudging
Buyer to be bankrupt or insolvent; (ii) approving as properly filed a
petition seeking reorganization of Buyer or an arrangement under the
bankruptcy laws or any other applicable debtor's relief law or statute of
the United States or any state thereof; (iii) appointing a receiver, trustee or
assignee of Buyer in bankruptcy or insolvency or for its property; (iv)
directing the winding up or liquidation of Buyer and such decree or order
shall have continued for a period of sixty (60) days; or (v) Buyer shall
have voluntarily submitted to or filed a petition seeking any such decree or
order; or
(c)
Any representation or warranty made by Buyer hereunder shall have been
false or misleading in any material respect; or
(d) Buyer shall have assigned or otherwise transferred its interest in this
Agreement in violation of the provisions contained in this Agreement
whether voluntarily or by operation of law; or
(e) If the Buyer sells or vacates the Site, fails to pay Seller for a period of
three (3) consecutive months and is unable to assign its obligations under
this Agreement to the new owner or occupier of the Site in accordance
with Section.
(f) Buyer shall have failed to perform any term, covenant, or condition of .this
Agreement to be performed by Buyer, and Buyer shall have failed to cure
the same within sixty (60) days after written notice from Seller , provided,
however, Seller may give Buyer additional time to cure at Seller's option.
Buyer and Seller shall attempt to resolve all such disputes pursuant to
Article 10's dispute resolution procedure, provided however, nothing shall
prejudice Seller's rights and remedies in the event that Buyer fails to cure
within the 60-day period or within any other period granted by Seller.
36
11.3 Termination for Event of Default and Other Remedies
(a) Termination for Event of Default. In the Event of Default, the non -
defaulting Party may terminate the Agreement by notifying the defaulting
Party in writing of (i) the decision to terminate; and (ii) the effective date
of the termination. In the event of termination of the Agreement for an
Event of Default under the Right of Access as defined therein, this
Agreement will terminate on the same date as the date of the termination
of the Right of Access.
(b) Remedies. For all claims, causes of action and damages with respect to an
Event of Default, in addition to the right to termination under Section
11.3(a), the non -defaulting Party shall be entitled (1) to foreclose upon, or
otherwise employ, any security provided by the defaulting Party, (2) to
recover actual damages allowed by law, and (3) to seek equitable remedies
including specific performance of all or any part of this Agreement unless
otherwise limited by this Agreement. In addition, Buyer shall have the
right (but no obligation) to cure (or cause to be cured) on behalf of Seller
any Event of Default; Seller shall pay to Buyer on demand all costs and
expenses incurred by the Buyer in effecting such cure, with interest
thereon from the date of incurrence at the Interest Rate. Buyer shall have
the right to offset from any amounts due to Seller under this Agreement or
any other agreement between Buyer and Seller all damages, losses, costs
or expenses incurred by Buyer as a result of such Event of Default and any
liquidated damages due from Seller pursuant to the terms of this
Agreement or any other agreement. Neither the enumeration of Events of
Default nor the termination of this. Agreement by a non -defaulting Party
shall limit the right of a non -defaulting Party to rights and remedies
available at law or in equity. Except as otherwise specifically and
expressly provided herein, all remedies provided for in this Agreement
may be exercised individually or in combination with any other remedy
available hereunder or under applicable laws, rules and regulations. The
exercise of any remedy shall not preclude or in any way be deemed to
waive any other remedy.
11.4 Limitation
(a) Except as otherwise specifically and expressly provided in this
Agreement, neither Partyshall be liable to the other_under this Agreement
for any indirect, special or consequential damages, including loss of use,
loss of revenues, loss of profit, interest charges, or cost of capital or claims
of its customers or members to which service is made.
(b) Under no circumstances shall the non -defaulting Party be required to make
a termination payment or any other payment to the defaulting Party
(except for payments due under this Agreement for performance prior to
termination).
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11.5 Effect of Termination - Survival of Obligations
(a) Removal and Restoration. Unless the Parties otherwise mutually agree in
writing, upon termination (for any reason other than a purchase by Buyer
in accordance with Article 2), Seller shall remove all of its property from
the Sites within ninety (90) days of such termination or expiration,
including any materials, equipment and, if it has been constructed, the
Generating Facilities and remediate and restore the Sites to the conditions
described in Article 9. In addition, the Seller shall comply with all the
requirements of the Right of Access for the remediation and return of the
Sites to its owner.
Seller shall, in a manner that minimizes the disruption of Buyer's business
to the extent commercially practicable, (i) remove the Generating
Facility's modules and related equipment from the Site other than roof
standoffs secured to the Site, (ii) repair, in a commercially reasonable
manner, any damage to the Site caused by the Generating Facility and
such removal, but leaving roof standoffs in place, and (iii) remove all trash
and debris introduced to the Site by Seller or its representatives, leaving
the Site in substantially the same condition existing prior to installation of
the Facility (reasonable wear and tear excepted, and with roof standoffs
still in place). This section shall survive termination of this Agreement.
(b) Abandonment. If Seller has an obligation to remove the Generating
Facilities from the Sites and remediate the Sites due to the termination or
expiration of this Agreement, but Seller and/or its Lender(s) fails to
complete its removal and remediation obligations within one hundred and
twenty_(120) days of such termination, then any part of the Generating
Facilities and all personal property of Seller not removed from the Sites
within one hundred twenty (120) days after such termination of this
Agreement -shall be deemed abandoned by Seller and shall become the
property of Buyer, and Buyer may, at its option, remove and warehouse or
otherwise dispose of such property or retain ownership thereof
indefinitely, as it determines in its sole discretion.
(c) Survival of Obligations. The following rights, obligations or provisions
shall survive termination or expiration of this Agreement:
(i)
obligations by one Party to the other for payment of any amounts,
or for performance of any duties, that have accrued or arose prior
to, or have directly resulted from, the expiration or termination of
this Agreement;
(ii) indemnity obligations pursuant to the Agreement, which shall
survive to the full extent of the statute of limitations period
applicable to any third party claim;
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(iii) limitation of liability provisions pursuant to the Agreement;
(iv) for a period of one (1) year after the expiration or termination date,
the right to dispute an invoice;
(v) seller removal and remediation obligations
(vi) Sections 6.1(e), (f), 9.1, 11.3(b), 11.5(a), (b), (c), 11.6, 14.12,
14.25, 14.28, 14.29, and 14.35.
11.6 Indemnification
Each Party ("Indemnifying Party") shall defend, indemnify and hold
harmless the other Party, and its permitted successors and assigns, and
their officers, directors, employees, agents, affiliates and representatives
(each, an "Indemnified Party") from and against any and all losses,
including but not limited to losses arising from personal injury or death, or
damage to property, to the extent such losses result from or arise out of the
negligence and/or willful misconduct by the Indemnifying Party, its
employees, subcontractors or agents.
11.7 Buyer's Right to Operate in the Event of Seller's Default
(a) If (i) Seller fails to achieve (A) the Commercial Operation Date set forth
in the Milestones, or (B) a revised estimated Commercial Operation Date
that has received written approval by the Buyer, or (ii) an Event of Seller's
Default under Article 11 occurs, then the Buyer or its designee may, but
shall not be obligated to, step-in and assume operational control from
Seller of the Generating Facility. The Buyer, its employees, contractors
and designees shall have the unrestricted right to enter the Generating
Facility to the extent necessary to operate the Generating Facility.
Notwithstanding the foregoing, Seller shall not be excused from any
obligation or remedy available to the Buyer as a result of the Buyer's
operation of, or election not to operate, the Generating Facility. The Buyer
shall pay Seller the applicable Base Contract Price for Adjusted Delivered
Energy provided hereunder, less any costs incurred by the Buyer to
operate the Generating Facility. Upon the Buyer's satisfaction that Seller
has the ability to operate the Generating Facility in accordance with this
Agreement, Seller shall resume operational control.
ARTICLE 12: REPRESENTATIONS, WARRANTIES AND COVENANTS
12.1 Seller's Representations, Warranties and Covenants
Seller represents, warrants and covenants to the Buyer that as of the date of
execution of this Agreement:
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(a) Seller is duly organized and validly existing as a Limited Liability
Corporation under the laws of the State of California, and has the lawful
power to engage in the business it presently conducts and contemplates
conducting in this Agreement and Seller is duly qualified in each
jurisdiction wherein the nature of the business transacted by it makes such
qualification necessary;
(b) Seller has the legal power and authority to make and carry out this
Agreement and to perform its obligations hereunder; all such actions have
been duly authorized by all necessary proceedings on its part;
(c) This Agreement has been duly and validly executed and delivered by
Seller and, as of the Effective Date, constitutes a legal, valid and binding
obligation of Seller, enforceable in accordance with its terms against
Seller, except to the extent that its enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally or by general principles of
equity;
(d) There are no actions, suits, proceedings or investigations pending or, to the
knowledge of Seller, threatened in writing against Seller, at law or in
equity before any Governmental Authority, which individually or in the
aggregate are reasonably likely to have a materially adverse effect on the
business, properties or assets or the condition, financial or otherwise, of
Seller, or to result in any impairment of Seller's ability to perform its
obligations under this Agreement;
Seller will deliver to Buyer at the Delivery Point the Adjusted Delivered
Energy free and clear of all liens, security interests, claims and
encumbrances or any interest therein, or thereto, by any Person.
Prior to conveyance to Buyer, Seller holds and will hold throughout the
Term, the rights to all Environmental Attributes, which it has conveyed
and has committed to convey to Buyer hereunder; and
The execution, delivery and performance of this Agreement by Seller will
not conflict with its governing documents, any applicable laws, or any
covenant, agreement, understanding, decree or order to which Seller is a
party or by which it is bound or affected.
12.2 Seller's Additional Representations, Warranties and Covenants
(a) Seller warrants, represents and covenants that all of its operating and
maintenance personnel shall be adequately qualified and trained
throughout the term of the Agreement.
(b) Seller represents, warrants and covenants that any goods and/or services
furnished under this Agreement shall be covered by commercial
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(c)
warranties substantially similar to those Seller provides to any of its
customers for the same or substantially similar goods and/or. services.
Any warranties provided by Seller shall supplement, and shall not limit or
reduce, any rights afforded to Buyer by any clause in this Agreement, any
applicable Uniform Commercial Code warranties, including, without
limitation, Implied Warranty of Merchantability and Implied Warranty of
Fitness for a Particular Purpose as well as any other express warranty.
In the event the Buyout Option is exercised by Buyer, the existing system
warranties and covenants shall be transferred from Seller to Buyer.
(d) Seller expressly warrants that all goods supplied shall be new, suitable for
the use intended, of the grade and quality specified, free from all defects in
conformance with specifications furnished by the Buyer, and in
compliance with all applicable federal, state and local laws and
regulations.
(e)
(f)
During the provision of goods and services, Seller may not disclaim any
warranty, express or implied, and any such disclaimer shall be void.
Additionally, the warranties above shall not be. deemed to exclude Seller's
standard warranties or other rights and warranties that the Buyer may have
or obtain.
Seller covenants to maintain and repair Project Sites if such maintenance
and repairs are necessary as a result of Sellers' authorized or permitted
use, normal wear and tear of roofs excluded.
12.3 Buyer Representations and Warranties
Buyer represents and warrants to Seller that as of the Effective Date of this
Agreement:
(a) Buyer has the legal power and authority to make and carry out this
Agreement and to perform its obligations hereunder and all such actions
have been duly authorized by all necessary proceedings on its part; and
(b) This Agreement has been duly and validly executed and delivered by
Buyer and, as of the Effective Date, constitutes a legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms against
Buyer, except to the extent that its enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally or by general principles of
equity; and
(c)
There are no actions, suits, proceedings or investigations pending or, to the
knowledge of Buyer, threatened in writing against Buyer, at law or in
equity before any Governmental Authority, which individually or in the
aggregate are reasonably likely to result in any impairment of the Buyer's
41
ability to perform its obligations under this Agreement. Seller and Buyer
further understand and agree that the Buyer is entering into this
Agreement in its capacity as a purchaser of electric power. Nothing in this
Agreement shall limit in any way Seller's obligation to obtain any
required approvals from departments, boards, commissions or
governmental entities having jurisdiction over this Agreement. By
entering into this Agreement, Buyer is in no way modifying Seller's
obligation to cause the Generating Facilities to be installed and operated in
accordance with all Requirements of Law.
ARTICLE 13: ASSIGNMENT AND FINANCING
13.1 Assignment by Seller.
Seller shall not sell, transfer or assign (collectively, an "Assignment") the
Agreement or any interest therein, without the prior written consent of Buyer,
which shall not be unreasonably withheld, conditioned or delayed; however, that,
without the prior consent of Buyer,. Seller may (i) assign this Agreement to an
Affiliate of Seller; (ii) assign this Agreement as collateral security in connection
with any financing of the Generating Facility (including, without limitation,
pursuant to a sale -leaseback transaction). In the event that Seller identifies such
secured Financing Party in a written notice to Buyer, then Buyer shall comply with
the provisions set forth in Exhibit 10 of these General Terms and Conditions. ). In
the event of a collateral assignment, the assignee shall assume all obligations under
this Agreement if assignor defaults on its obligations to assignee and assignee
exercises its rights as a secured party under its collateral assignment and thereafter
becomes the successor -in -interest to Seller under this Agreement. In all other
assignments, Seller or any of its successors and assigns, shall cause Assignee to
assume in writing the rights and obligations of this Agreement, which shall, in any
event, bind and benefit any successors or assigns of the Seller.
Any Financing Party shall be an intended third -party beneficiary of this Section
13.1. Any assignment by Seller pursuant to this Section 13.1without any required
prior written consent of Seller shall not release Buyer of its obligations hereunder.
13.2. Acknowledgment of Collateral. Assignment. In the event that Seller identifies a
secured Financing Party in a written notice to Buyer, then. Buyer hereby:
(a) Acknowledges the collateral assignment by Seller to the Financing Party, of
Seller's right, title and interest in, to and under the Agreement, as consented
to under Section 13.1 of the Agreement.
(b) Acknowledges that the Financing Party as such collateral assignee shall be
entitled to exercise any and all rights of lenders generally with respect to the
Seller's interests in this Agreement.
(c) Acknowledges that it has been advised that Seller has granted a first priority
42
perfected security interest in the Generating Facility to the Financing Party
and that the Financing Party has relied upon the characterization of the
Generating Facility as personal property, as agreed in this Agreement in
accepting such security interest as collateral for its financing of the
Generating Facility. Any Financing Party shall be an intended third party
beneficiary of this Section 13.2.
13.3 Assignment by Buyer. Buyer shall not assign the Agreement or any interest
therein, without Seller's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Any assignment by Buyer without
the prior written consent of Seller shall not release Buyer of its obligations
hereunder.
13.4 The consent of Buyer to any transfer described in this Section shall not relieve
Seller of its obligation to obtain the further consent of Buyer for any subsequent
transfer.
ARTICLE 14: OTHER TERMS & CONDITIONS
14.1 Notices
All deliveries, notices, requests, demands or other communications provided for
or required by this Agreement shall be in writing and shall be deemed to have
been given when sent by registered or, certified mail, return receipt requested;
when sent by overnight carrier; or upon email confirmation to sender of receipt of
a facsimile communication which is followed by a mailed hard copy from sender.
Notices shall be addressed to:
Buyer Town of Los Gatos
Title: Parks and Public Works Director
Address 1: 41 Miles Ave
City: Los Gatos
State: CA
Zip: 95030
Phone: 408-399-5770
Email: PPW2@losgatosca.gov
With a copy to:
Title: Town Attorney
Address: 110 East Main Street
City: Gatos
State: CA
Zip: 95031
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Seller: Fresh Air Energy II, LLC.
Name: John Gorman and Erik Stuebe
Titles: CEO, and President, respectively
Company: Fresh Air Energy II, LLC.
Address 1: 650 Townsend Street, Ste. 310
City: San Francisco
State: CA
Zip: 94107
Phone: 415-626-1802
E-Mail: johng@ecoplexus.com, eriks@ecoplexus.com
Each party may designate a different person and address by sending written notice
to the other party, to be effective no sooner than ten (10) days after the date of the
notice.
14.2 Compliance with All Laws
Seller shall at all times comply with all applicable laws, ordinances, rules and
regulations. Seller shall keep itself fully informed of Buyer's charter, codes,
ordinances and regulations and of all state, and federal laws in any manner
affecting the performance of this Agreement, and must at all times comply with
all applicable local codes, ordinances, and regulations and all applicable laws as
they may be amended from time to time. Seller shall procure and maintain all
Permits necessary for its performance under this Agreement, and shall pay its
respective charges and fees in connection therewith.
14.3 No Dedication
Any undertaking by one Party to the other under any provision of this Agreement
shall not constitute the dedication of the Generating Facilities or any portion
thereof to the public or to any portion thereof.
14.4 Non -Waiver of Rights
Waivers of any rights hereunder must be in writing and shall not be implied from
perfotuuance or usage of trade. The failure of either party to this Agreement to
enforce or insist upon compliance with or strict performance of any of the terms
or conditions hereof, or to take advantage of any of its rights hereunder, shall not
constitute a waiver or relinquishment of any such terms, conditions or rights, but
the same shall be and remain at all times in full force and effect.
14.5 Headings
All titles, subject headings, section titles and similar items are provided for the
purpose of reference and convenience and are not intended to be inclusive,
definitive or to affect the meaning of the contents or scope of the Agreement.
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14.6 No Third Party Beneficiary
This Agreement shall not be construed to create rights in, or to grant remedies to,
any third party (other than a permitted successor or assignee bound to this
Agreement) as a beneficiary of this Agreement or any duty, obligation or
undertaking established herein.
14.7 Forward Contract
The Parties acknowledge and agree that this Agreement and the transactions
contemplated by this Agreement constitute a "forward contract" within the
meaning of the United States Bankruptcy Code.
14.8 Governing Law
This Agreement is made in the State of California and shall be interpreted and
governed by the laws of the State of California without regard to conflict of law
principles.
14.9 Governing Law
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of California without reference to any choice of law
principles. The Parties agree that the courts of the State of California and the
Federal Courts sitting therein shall have jurisdiction over any action or proceeding
arising under the Agreement to the fullest extent permitted by Applicable Law.
The Parties waive to the fullest extent permitted by Applicable Law any objection
it may have to the laying of venue of any action or proceeding under this
Agreement in any courts described in this Section 14.9.
14.10 Nature of relationship
(a) The duties, obligations and liabilities of the Parties are intended to be
several and not joint or collective. The Agreement shall not be interpreted
or construed to create an association, joint venture, fiduciary relationship
or partnership between Seller and the Buyer or to impose any partnership
obligation or liability or any trust or agency obligation or relationship
upon either Party. A Party shall not have any right, power or authority to
enter into any agreement or undertaking for, or act on behalf of, or act as
or be an agent or representative of or otherwise bind the other Party.
(b) Seller shall perform pursuant to this Agreement as an independent
contractor and not as an officer, agent, servant, or employee of Buyer.
Seller shall be solely responsible for the acts and omissions of its officers,
agents, employees, contractors, and subcontractors, if any. Nothing herein
shall be considered as creating a partnership or joint venture between the
Buyer and Seller. No person performing any services and/or supplying all
goods shall be considered an officer, agent, servant, or employee of Buyer,
45
(c)
nor shall any such person be entitled to any benefits available or granted to
employees of the Buyer.
Seller shall be responsible for all obligations and payments, whether
imposed by federal, state or local law, including, but not limited to, FICA,
income tax withholdings, unemployment compensation, insurance, and
other similar responsibilities related to Seller's performing services and
work, or any agent or employee of Seller providing same.
(d) Any terms in this Agreement referring to direction from Buyer shall be
construed as providing for direction as to policy and the result of Seller's
work only, and not as to the means by which such a result is obtained.
Buyer does not retain the right to control the means or the method by
which Seller performs work under this Agreement.
(e) Payment of Taxes and Other Expenses. Should Buyer, in its discretion, or
a relevant taxing authority such as the Internal Revenue Service or the
State Employment Development Division, or both, determine that Seller is
an employee for purposes of collection of any employment taxes, the
amounts payable under this Agreement shall be reduced by amounts equal
to both the employee and employer portions of the tax due (and offsetting
any credits for amounts already paid by Seller which can be applied
against this liability). Buyer shall then forward those amounts to the
relevant taxing authority. Should a relevant taxing authority determine a
liability for past services performed by Seller for the Buyer, upon
notification of such fact by Buyer, Seller shall promptly remit such
amount due or arrange with Buyer to have the amount due withheld from
future payments to Seller under this Agreement (again, offsetting any
amounts already paid by Seller which can be applied as a credit against
such liability).
(f) A determination of employment status pursuant to the 14.10 (e) shall be
solely for the purposes of the particular tax in question, and for all other
purposes of this Agreement, Seller shall not be considered an employee of
Buyer. Notwithstanding the foregoing, should any court, arbitrator, or
administrative authority determine that Seller is an employee for any other
purpose, then Seller agrees to a reduction in the Buyer's financial liability
so that Buyer's total expenses under this Agreement are not greater than
they would have been had the court, arbitrator, or administrative authority
determined that Seller was not an employee.
14.11 No Subcontracting by Seller without Written Buyer Approval
Seller is prohibited from subcontracting this Agreement or any part of it unless
such subcontracting is first approved by the Buyer in writing. Seller shall be
responsible for directing the work of any approved subcontractors and for any
compensation due to any approved subcontractors. Seller shall ensure that all
46
Seller subcontractors comply with this Agreement and shall be responsible for
such compliance. Seller shall require any or all subcontractors to sign an
agreement requiring compliance with this Agreement. Buyer shall be the third
party beneficiary of such agreement(s). However, Buyer assumes no
responsibility whatsoever concerning compensation or any other responsibility or
liability to subcontractors.
14.12 Good Faith & Fair Dealing
The Parties agree to act reasonably and in accordance with the principles of good
faith and fair dealing in the performance of this Agreement. Unless expressly
provided otherwise in this Agreement: (i) wherever the Agreement requires the
consent, approval or similar action by a Party, such consent, approval or similar
action shall not be unreasonably withheld or delayed; and (ii) wherever the
Agreement gives a Party a right to determine, require, specify or take similar
action with respect to matters, such determination, requirement, specification or
similar action shall be reasonable.
14.13 Severability
Should any provision of this Agreement be or become void, illegal or
unenforceable, the validity or enforceability of the other provisions of this
Agreement shall not be affected and shall continue in full force and effect. The
Parties will, however, use their best endeavors to agree on the replacement of the
void, illegal, or unenforceable provision(s) with legally acceptable clauses that
correspond as closely as possible to the sense and purpose of the affected
provision.
14.14 Counterparts
This Agreement may be executed in two or more counterparts and by different
Parties on separate counterparts, all of which shall be considered one and the
same Agreement, and each of which shall be deemed an original.
14.15 Cooperation
The Parties agree to reasonably cooperate with each other in the implementation
and performance of the Agreement. Such duty to cooperate shall not require either
Party to act in a manner inconsistent with its rights under this Agreement.
14.16 Necessary Acts and Further Assurances
The Seller shall at its own cost and expense execute and deliver such further
documents and instruments and shall take such other actions as may be reasonably
required or appropriate to evidence or carry out the intent and purposes of this
Agreement.
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14.17 Time of the Essence
Time is of the essence in performance by the Seller.
14.18 Construction
The Parties acknowledge that this Agreement was jointly prepared by them, by
and through their respective legal counsel, and any uncertainty or ambiguity
existing herein shall not be interpreted against either Party on the basis that the
Party drafted the language, but otherwise shall be interpreted according to the
application of the rules on interpretation of contracts.
14.19 Entire Agreement, Integration/Merger Clause
This Agreement together with all exhibits attached hereto, constitute the entire
agreement between the Parties and supersedes any and all prior oral or written
understandings. No amendment, addition to or modification of any provision
hereof shall be binding upon the Parties, and neither Party shall be deemed to
have waived any provision or any remedy available to it, unless such amendment,
addition, modification or waiver is in writing and signed by a duly authorized
officer or representative of the Parties.
14.20 Non -Discrimination
Seller shall comply with all applicable Federal, State, and local laws and
regulations including Los Gatos's policies concerning nondiscrimination and
equal opportunity in contracting. Such laws include but are not limited to the
following: Title VII of the Civil Rights Act of 1964 as amended; Americans with
Disabilities Act of 1990; The Rehabilitation Act of 1973 (Sections 503 and 504);
California Fair Employment and Housing Act (Government Code sections 12900
et seq.); and California Labor Code sections 1101 and 1102. Seller shall not
discriminate against any subcontractor, employee, or applicant for employment
because of age, race, color, national origin, ancestry, religion, sex/gender, sexual
orientation, mental disability, physical disability, medical condition, political
beliefs, organizational affiliations, or marital status in the recruitment, selection
for training including apprenticeship, hiring, employment, utilization, promotion,
layoff, rates of pay or other forms of compensation. Nor shall Seller discriminate
in provision of services provided under this contract because of age, race, color,
national origin, ancestry, religion, sex/gender, sexual orientation, mental
disability, physical disability, medical condition, political beliefs, organizational
affiliations, or marital status.
14.22 Non -Exclusive Contract
This Agreement does not establish an exclusive contract between the Buyer and
the Seller for the purchase of electricity or power or any services. The Buyer
expressly reserves all its rights, including but not limited to, the following: the
right to utilize others to provide Electricity, products, support and services; the
48
right to request proposals from others with or without requesting proposals from
the Seller; and the unrestricted right to bid any such product, support or service.
14.23 Modification
This Agreement may be supplemented, amended, or modified only by the mutual
agreement of the parties.
14.24 Hazardous Substances
If any product being offered, delivered or supplied to the Buyer in connection
with this Agreement is listed in the Hazardous Substances List of the Regulations
of the Director of Industrial Relations with the California Occupational Safety and
Health Standards Board, or if the product presents a physical or health hazard as
defined in the California Code of Regulations, General Industry Safety Order,
Section 5194 (T8CCR), Hazard Communication, the Contractor must include a
Material Safety Data Sheet (MSDS) with delivery, or shipment. Each MSDS
must reference the contract/purchase order number, and identify the "Ship To
Address". All shipments and containers must comply with the labeling
requirements of Title 49, Code of Federal Regulations by identifying the
hazardous substance, name and address of manufacturer, and appropriate hazard
warning regarding potential physical safety and health hazard.
14.25 Disentanglement
Seller shall cooperate with Buyer and Buyer's other Sellers to ensure a smooth
transition at the time of termination of this Agreement, regardless of the nature or
timing of the termination. Seller shall cooperate with Buyer's efforts to ensure
that there is no interruption of Electricity and no adverse impact on the provision
of services or Buyer's activities. Seller shall return to Buyer all Buyer assets or
information in Seller's possession. Seller shall deliver to Buyer or its designee, at
Buyer's request, all documentation and data related to Buyer, including, but not
limited to, the Buyer Data and client files, held by Seller, and Seller shall destroy.
all copies thereof not turned over to Buyer, all at no charge to Buyer.
14.26 Accountability
Seller will be the primary point of contact and assume the responsibility of all
matters relating to the Agreement, including those involving the manufacturer
and/or deliverer and/or any subcontractor, as well as payment issues. If issues
arise, the Seller must take immediate action to correct or resolve the issues.
14.27 Conflict of Interest
Seller warrants that it presently has no interest and shall not acquire any interest,
direct or indirect, that would conflict in any manner or degree with the
performance of services required under this Agreement.
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14.28 Damage and Repair by Seller
Any and all damages caused by Seller's negligence or operations shall be
repaired, replaced or reimbursed by Seller at no charge to the Buyer. Repairs and
replacements shall be completed within 72 hours of the incident unless the Buyer
requests or agrees to an extension or another time frame. The cleanup of all
damage related to accidental or intentional release of any/all nonhazardous or
hazardous material (e.g. hydraulic fluid, fuel, grease, etc.) from Seller's vehicles
or during performance shall be responsibility of the Seller. All materials must be
cleaned up in a manner and time acceptable to Buyer (completely and
immediately to prevent potential as well as actual environmental damage). Seller
must immediately report each incident to the Buyer's Superintendent of Facilities.
Damage observed by Seller, whether or not resulting from Seller's operations or
negligence shall be promptly reported by Seller to Buyer. Buyer may, at its
option, approve and/or dictate the actions that are in Buyer's best interests.
14.29 Access and Retention of Records and Provision of Reports
Seller shall maintain financial records adequate to show that Buyer funds paid
were used for purposes consistent with the terms of the contract between Seller
and Buyer. Records shall be maintained during the terms of the Agreement and
for a period of three (3) years from its termination, or until all claims have been
resolved, whichever period is longer, unless a longer period is required under any
contract.
14.31 Cooperation with Review
Seller shall cooperate with Buyer's periodic review of Seller's performance. Such
review may be conducted annually at the option of the Buyer. Seller shall make
itself available to review the progress of the project and Agreement, as requested
by the Buyer, upon reasonable advanced notice. Seller agrees to extend to the
Buyer or his/her designees and/or designated auditor of the Buyer, the right to
monitor or otherwise evaluate all work performed and all records, including
service records and procedures to assure that the project is achieving its purpose,
that all applicable Buyer, State, and Federal regulations are met, and that adequate
internal fiscal controls are maintained. The Seller shall be responsible for
receiving, replying to, and complying with any audit exceptions set forth in Buyer
audits. The Seller shall pay to Buyer the full amount of any overcharge
determined to be due as a result of audit. This provision is in addition to other
inspection and access rights specified in this Agreement.
14.30 Audit Rights Under State Law
Pursuant to California Government Code Section 8546.7, the parties acknowledge
and agree that every contract involving the expenditure of public funds in excess
of $10,000 shall be subject to audit by the State Auditor.
50
14.31 Debaunient
Seller represents and warrants that it, its employees, Sellers, or agents are not
suspended, debarred, or excluded from, or ineligible for, receiving Federal or state
funds. Seller must within 30 calendar days advise the Buyer if, during the term of
this Agreement, the Seller becomes suspended, debarred or excluded from, or
ineligible for, receiving Federal or state funds.
14.32 California Public Records Act
The Buyer is a public agency subject to the disclosure requirements of the
California Public Records Act ("CPRA"). If Seller proprietary information is
contained in documents or information submitted to Buyer, and Seller claims that
such information falls within one or more CPRA exemptions, Seller must clearly
mark such information "CONFIDENTIAL AND PROPRIETARY," and identify
the specific lines containing the information. In the event of a request for such
infoiiiiation, the Buyer will make best efforts to provide notice to Seller prior to
such disclosure. If Seller contends that any documents are exempt from the CPRA
and wishes to prevent disclosure, it is required to obtain a protective order,
injunctive relief or other appropriate remedy from a court of law in Santa Clara
County before the Buyer's deadline for responding to the CPRA request. If Seller
fails to obtain such remedy within Buyer's deadline for responding to the CPRA
request, Buyer may disclose the requested information. Seller further agrees that it
shall defend, indemnify and hold Buyer harmless against any claim, action or
litigation (including but not limited to all judgments, costs, fees, and attorney's
fees) that may result from denial by Buyer of a CPRA request for information
arising from any representation, or any action (or inaction), by the Seller.
14.33 Debt Liability Disclaimer
The Buyer, including, but not limited to, any source of funding for Buyer, any
General Fund or any special self-insurance program, is not liable for any debts,
liabilities, settlements, liens, or any other obligations of the Seller or its heirs,
successors or assigns. The Buyer shall not be liable for and shall be held harmless
and indemnified by Seller for any claims or damages arising out of any other
contract to which Seller is a party, tort, action or inaction, negligent error in
judgment, act of negligence, intentional tort, negligent mistakes or other acts
taken or not taken by the Seller, its employees, agents, servants, invitees, guests or
anyone acting in concert with or on behalf of the Seller. The Buyer and its
agencies and divisions, including, has no obligation to defend or undertake the
defense on behalf of the Seller or its heirs, successors or assigns.
51
14.34 Us of Buyer's Name for Commercial Purposes
Seller may not use the name of the Buyer or reference any endorsement from the
Buyer in any fashion for any purpose, without the prior express written consent of
the Buyer as provided by the Director of Parks and Public Works.
14.35 Account Manager
Seller must assign an Account Manager to the Buyer to facilitate the contractual
relationship, be fully responsible and accountable for fulfilling the Buyer's
requirements. Seller represents and warrants that such person will ensure that the
Buyer receives adequate support, problem resolution assistance and required
information on a timely basis.
14.36 Title to System
Throughout the duration of the Agreement, Seller or Seller's Financing Party shall
be the legal and beneficial owner of the Generating Facility at all times, and the
System shall remain the personal property of Seller or Seller's Financing Party
and shall not attach to or be deemed a part of, or fixture to, the Site. The System
shall at all times retain the legal status of personal property as defined under
Article 9 of the Uniform Commercial Code. Buyer covenants that it will use
reasonable commercial efforts to place all parties having an interest in or lien
upon the real property comprising the Site on notice of the ownership of the
Generating Facility and the legal status or classification of the Generating Facility
as personal property. If there is any mortgage or fixture filing against the Site
which could reasonably be construed as attaching to the Generating Facility as a
fixture of the Site, Buyer shall provide, at Seller's request, a disclaimer or release
from such lien holder. If Buyer is the fee owner of the Site, Buyer consents to the
filing by Seller, on behalf of Buyer, of a disclaimer of the System as a fixture of
the Site in the office where real estate records are customarily filed in the
jurisdiction of the Site. If Buyer is not the fee owner, Buyer will, at Seller's
request, use commercially reasonable efforts to obtain such consent from such
owner
52
By signing below, signatory warrants and represents that he/she executed this Agreement in
his/her authorized capacity, that he/she has the authority to bind the entity listed to contractual
obligations and that by his/her signature on this Agreement, the entity on behalf of which he/she
acted, executed this Agreement.
TOWN OF LOS GATOS by: FRESH AIR ENERGY — II, LLC. by:
Greg Larson, Town Manager Erik Stuebe, President
APPROVED AS TO FORM:
Judith J. Propp, Town Attorney
53
EXHIBITS INCORPORATED INTO AGREEMENT
1. Exhibit 1 — Termination Payment Faun
2. Exhibit 2 — Description of Generating Facilities
3. Exhibit 3 — Sites Descriptions
4. Exhibit 4 — Base Contract Price
5. Exhibit 5 — Expected Contract Quantity Form
6. Exhibit 6 — Form of Attestation
7. Exhibit 7 — Insurance Requirements
8. Exhibit 8 — Right of Access
9. Exhibit 9 — Panel and Inverter Warranties
10. Exhibit 10 — General Conditions — Financing Parties
11. Exhibit 11 — Engineering and Construction Requirements
Exhibit 1
Termination Payment Form
Year of Contact
Contract Period, Months
Termination Payment ($
per Watt DC)
1
1-12
$6.90
2
13-24
$6.67
3
25-36
$6.44
4
37-48
$6.21
5
49-60
$5.98
6
61-72
$5.75
7
73-84
$5.52
8
85-96
$5.29
9
97-108
$5.06
10
109-120
$4.83
Exhibit 2
Description of Generating Facilities
The Generating Facilities consist of the following:
1. An approx. 66KW solar photovoltaic roof and parking canopy Generating Facility,
consisting of approx. of 236 panels, inverters, and racking, for LG-02, located at
41 Miles Avenue, Los Gatos, CA 95030.
2. An approx. 64KW solar photovoltaic rooftop Generating Facility for LG-03,
consisting of approx. 286 panels, inverters, and racking, located at 15900 Los
Gatos Blvd., Los Gatos, CA 95032.
NOTE: Generating Facility sizes may change subject to final system design.
Exhibit 3
Site Description
The Generating Facility(ies) will be installed at the following Address(es):
1. LG-02: 41 Miles Avenue, Los Gatos, CA 95030
2. LG-03: 15900 Los Gatos Blvd., Los Gatos, CA 95032
Exhibit 4
Base Contract Price
The Contract Prices for the Generating Facilities are:
1. For LG — 02: $0.185, escalating at 3% per Annum.
2. For LG — 03: $0.195, escalating at 3% per Annum.
YR 6
....................
YR 7
YR 8
YR 9
YR10
YR 11 ,.._......
YR12
YR 13
YR 14
YR 15
.......................................
YR 16
YR 17
YR 18
YR 20
TOTAL
86,609
1,823,085
Exhibit 5
Expected Annual Contract Quantity Form
(Annual KWH projected output)
YR 1
YR 2
YR 3:..__. ._ m 94,743
YR 4 94,265
95, 700 ` 115, 200
95,222 114,624
114,048
113,472
1
YR 5 93,786 112 896 i
93,308 112,320 t
}
92,829 ...............111,,744:..1
92, 351 111,168 1
91,872 1 110,592
91,394 1 110,016 .1
90,915 1 109,440 1
90,437 1 108,864 1
108,288
89,958
89,480 ! 107,712 1
89,001 ! 107,136..1
88,523 1 106,560 1
88,044 105,984
87,5661 105,408 3
87,087 104,832
104,256
,194,560
NOTE: Expected Contract Quantity is subject to change pro-rata, based on final system sizes
identifed in Exhibit 2.
Exhibit 6
Form of Attestation
Environmental Attribute Attestation and Bill of Sale
Fresh Air Energy — II LLC. ("Seller") hereby sells, transfers and delivers to the Town of Los
Gatos ("Buyer") the Environmental Attributes and Environmental Attributes Reporting Rights
associated with the generation of the indicated energy for delivery to the grid (as such terms are
defined in the Power Purchase Agreement ("Agreement") dated January 20, 2011 between Buyer
and Seller) arising from the generation for delivery to the grid of the energy by the Generating
Facility described below:
Facility name and location: LG-02 at : 41 Miles Avenue, Los Gatos, CA 95030 and LG-03
at 15900 Los Gatos Blvd., Los Gatos, CA 95032
Project Name: MV-02 and MV-03
EIA ID #: TBD
CEC ID#: TBD
Meter ID#: TBD
Fuel Type: Solar Photovoltaic
Capacity (KW): LG-02 — approx. 66 KW and LG-03 — approx. 80 KW
Commercial Operation Date: TBD
Dates MWhs generated Dates MWhs generated
TBD
In the amount of one Environmental Attribute for each megawatt hour generated; and Seller
further attests, warrants and represents as follows:
1. To the best of its knowledge, the information provided herein is true and correct;
2. This transfer to Buyer is the one and only sale of the Environmental Attributes and
associated Environmental Attributes Reporting Rights referenced herein;
3. The Facility generated and delivered to the grid the energy in the amount indicated as
undifferentiated energy; and
(Check one)
XSeller owns the facility.
To the best of Seller's knowledge, each of the Environmental Attributes associated with
the generation of the indicated energy for delivery to the grid have been generated and sold by
the Facility.
This serves as a bill of sale, transferring from Seller to Buyer all of Seller's right, title and
interest in and to the Environmental Attributes associated with the generation of the energy for
delivery to the grid.
Contact Person: Name: Phone:
WITNESS MY HAND,
Seller:
By:
Title:
Date:
Exhibit 7
Insurance Requirements
1. DESIGN PHASE INSURACE REQUIREMENTS
Insurance
Without limiting the Seller's indemnification of the Town, the Seller shall provide and maintain
at its own expense, during the term of this Agreement, or as may be further required herein, the
following insurance coverage and provisions:
A. Evidence of Coverage
Prior to commencement of formal design and engineering process, the Seller shall provide a
Certificate of Insurance certifying that coverage as required herein has been obtained. Individual
endorsements executed by the insurance carrier shall accompany the certificate. In addition, a
certified copy of the policy or policies shall be provided by the Seller upon request.
This verification of coverage shall be sent to the requesting Town department, unless
otherwise directed. The Seller shall not receive a Notice to Proceed with the work under the
Agreement until it has obtained all insurance required and such insurance has been approved by
the Town. This approval of insurance shall neither relieve nor decrease the liability of the Seller.
B. Qualifying Insurers
All coverage, except surety, shall be issued by companies which hold a current policy
holder's alphabetic and financial size category rating of not less than A- V, according to the
current Best's Key Rating Guide or a company of equal financial stability that is approved by the
Town's Insurance Manager.
C. Notice of Cancellation
All coverage as required herein shall not be canceled or changed so as to no longer meet the
specified Town insurance requirements without 30 days' prior written notice of such cancellation
or change being delivered to the Town of Los Gatos or their designated agent.
D. Insurance Required
1. Commercial General Liability Insurance for bodily injury (including death) and
property damage which provides limits as follows:
a. Each occurrence $1,000,000
b. General aggregate - $2,000,000
c. Personal Injury - $1,000,000
2. General liability coverage shall include:
a. Premises and Operations
b. Personal Injury liability
c. Severability of interest
3. General liability coverage shall include the following endorsement, a copy of
which shall be provided to the Town:
Additional Insured Endorsement, which shall read:
"Town of Los Gatos, and members of the Town Council, and the officers,
agents, and employees of the Town of Los Gatos, individually and
collectively, as additional insureds."
Insurance afforded by the additional insured endorsement shall apply as primary
insurance, and other insurance maintained by the Town of Los Gatos, its officers,
agents, and employees shall be excess only and not contributing with insurance
provided under this policy. Public Entities may also be added to the additional
insured endorsement as applicable and the Seller shall be notified by the
contracting department of these requirements.
4. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total
limits of not less than one million dollars ($1,000,000) combined single limit per
occurrence applicable to all owned, non owned and hired vehicles.
5. Workers' Compensation and Employer's Liability Insurance
a. Statutory California Workers' Compensation coverage including broad
form all states coverage.
b. Employer's Liability coverage for not less than one million dollars
($1,000,000) per occurrence.
6. Professional Errors and Omissions Liability Insurance
a. Coverage shall be in an amount of not less than two million dollars
($2,000,000) per occurrence/aggregate.
b. If coverage contains a deductible or self -retention, it shall not be greater
than fifty thousand dollars ($50,000) per occurrence/event.
c. Coverage as required herein shall be maintained for a minimum of two
years following termination or completion of this Agreement.
7. Claims Made Coverage
If coverage is written on a claims made basis, the Certificate of Insurance shall
clearly state so. In addition to coverage requirements above, such policy shall
provide that:
a. Policy retroactive date coincides with or precedes the Consultant's start of
work (including subsequent policies purchased as renewals or
replacements).
b. Policy allows for reporting of circumstances or incidents that might give
rise to future claims.
E. Special Provisions
The following provisions shall apply to this Agreement:
1. The foregoing requirements as to the types and limits of insurance coverage to be
maintained by the Seller and any approval of said insurance by the Townor its
insurance consultant(s) are not intended to and shall not in any manner limit or
qualify the liabilities and obligations otherwise assumed by the Seller pursuant to •
this Agreement, including but not limited to the provisions concerning
indemnification.
2. The Town acknowledges that some insurance requirements contained in this
Agreement may be fulfilled by self insurance on the part of the Seller. However,
this shall not in any way limit liabilities assumed by the Seller under this
Agreement. Any self insurance shall be approved in writing by the Town upon
satisfactory evidence of financial capacity. Seller's obligation hereunder may be
satisfied in whole or in part by adequately funded self-insurance programs or self-
insurance retentions.
3. Should any of the work under this Agreement be sublet, the Seller shall require
each of its subcontractors of any tier to carry the aforementioned coverages, or
Seller may insure subcontractors under its own policies.
4. The Town reserves the right to withhold payments to the Seller in the event of
material noncompliance with the insurance requirements outlined above.
2. CONSTRUCTION PHASE INSURANCE REQUIREMENTS
Insurance
Without limiting the Seller's indemnification of the Town, the Seller shall provide and maintain
at its own expense, during the term of this Agreement, or as may be further required herein, the
following insurance coverage and provisions:
A. Evidence of Coverage
Prior to commencement of Construction, the Seller shall provide a Certificate of
Insurance certifying that coverage as required herein has been obtained. Individual endorsements
executed by the insurance carrier must accompany the certificate. In addition, a certified copy of
the policy or policies shall be provided by the Seller upon request.
This verification of coverage shall be sent to the requesting Town department, unless
otherwise directed. The Seller shall not receive a Notice to Proceed with the work under the
Agreement until it has obtained all insurance required and such insurance has been approved by
the Town. This approval of insurance shall neither relieve nor decrease the liability of the Seller.
B. Qualifying Insurers
1. All coverage, except surety, shall be issued by companies which hold a current
policy holder's alphabetic and financial size category rating of not less than A- V,
according to the current Best's Key Rating Guide or a company of equal financial
stability that is approved by the Town's Insurance Manager.
C. Notice of Cancellation
All coverage as required herein shall not be canceled or changed so as to no longer meet
the specified City insurance requirements without 30 days' prior written notice of such
cancellation or change being delivered to the City of Los Gatos or their designated agent.
D. Insurance Required
1. Commercial General Liability Insurance for bodily injury (including death) and
property damage which provides limits as follows:
a. Each occurrence - $2,000,000
b. General aggregate - $4,000,000
c. Products/Completed Operations aggregate ** - $4,000,000
d. Personal Injury - $2,000,000
A minimum of 50% of each of the aggregate limits must remain available at all
times unless coverage is project specific.
2. General liability coverage shall include:
a. Premises and Operations
b. **Products/Completed Operations with limits of four million dollars
($4,000,000) per aggregate to be maintained for three (3) years following
acceptance of the work by the Town.
c. Contractual Liability expressly including liability assumed under this
Agreement. If the Seller is working within fifty (50) feet of a railroad or
light rail operation, any exclusion as to performance of operations within
the vicinity of any railroad bridge, trestle, track, roadbed, tunnel,
underpass or crossway shall be deleted, or a railroad protective policy
provided.
d. Personal Injury liability
e. Owners' and Sellers' Protective liability
f. Severability of interest
g. Explosion, Collapse, and Underground Hazards (X, C and U)
h. Broad Form Property Damage liability
3. General liability coverage shall include the following endorsements, copies of which
shall be provided to the Town:
a. Additional Insured Endorsement, which shall read:
"Town of Los Gatos, and members of the Town Council, and the officers,
agents, and employees of the Townof Los Gatos, individually and
collectively, as additional insureds."
Insurance afforded by the additional insured endorsement shall apply as
primary insurance, and other insurance maintained by the Town of Los
Gatos, its officers, agents, and employees shall be excess only and not
contributing with insurance provided under this policy. Public Entities
may also be added to the additional insured endorsement as applicable and
the Seller shall be notified by the contracting department of these
requirements.
b. Contractual Liability Endorsement:
Insurance afforded by this policy shall apply to liability assumed by the
insured under written contract with the Townof Los Gatos.
c. X C & U (Explosion, Collapse and Underground) Endorsement:
Insurance afforded by this policy shall provide X, C and U Hazards
coverage.
4. Claims Made Coverage
If coverage is written on a claims made basis, the Certificate of Insurance shall
clearly state so. In addition to coverage requirements above, such policy shall
provide that:
a. Policy retroactive date coincides with or precedes the Seller's start of work
(including subsequent policies purchased as renewals or replacements).
b. Seller will make every effort to maintain similar insurance during the
required extended period of coverage following project completion,
including the requirement of adding all additional insureds.
c. If insurance is terminated for any reason, Seller agrees to purchase an
extended reporting provision of at least two years to report claims arising
from work performed in connection with this Agreement or Permit.
d. Policy allows for reporting of circumstances or incidents that might give
rise to future claims.
5. Automobile Liability Insurance
For bodily injury (including death) and property damage which provides total
limits of not less than one million dollars ($1,000,000) combined single limit per
occurrence applicable to all owned, non owned and hired vehicles.
6. Workers' Compensation and Employer's Liability Insurance
a. Statutory California Workers' Compensation coverage including broad
form all states coverage.
b. Employer's Liability coverage for not less than one million dollars
($1,000,000) per occurrence.
7. Sellers' Equipment Insurance
On an "all risk" basis covering equipment owned, leased, or used by the Seller. If
the total value of equipment is less than $100,000 Seller may self -insure this
exposure. If total equipment value is $100,000 or more, insurance is required.
Such insurance shall include an insurer's waiver of subrogation in favor of the
Town. Seller shall indemnify, defend, and hold harmless the Town for any loss or
damage to its equipment. This coverage may be waived by the Insurance
Manager, but the Seller hereby releases and holds harmless the Town for any loss
or damages to its equipment.
E. Special Provisions
The following provisions shall apply to this Agreement:
1. The foregoing requirements as to the types and limits of insurance coverage to be
maintained by the Seller and any approval of said insurance by the Town or its
insurance consultant(s) are not intended to and shall not in any manner limit or
qualify the liabilities and obligations otherwise assumed by the Seller pursuant to
this Agreement, including but not limited to the provisions concerning
indemnification.
2. The Town acknowledges that some insurance requirements contained in this
Agreement may be fulfilled by self-insurance on the part of the Seller. However,
this shall not in any way limit liabilities assumed by the Seller under this
Agreement. Any self-insurance shall be approved in writing by the Town upon
satisfactory evidence of financial capacity. Sellers obligation hereunder may be
satisfied in whole or in part by adequately funded self-insurance programs or self-
insurance retentions.
3. Should any of the work under this Agreement be sublet, the Seller shall require
each of its subcontractors of any tier to carry the aforementioned coverage, or
Seller may insure subcontractors under its own policies.
4. The Town reserves the right to withhold payments to the Seller in the event of
material noncompliance with the insurance requirements outlined above.
3. OPERATIONS AND MAINTENANCE PHASE INSURANCE REQUIREMENTS
Insurance
Without limiting the Seller's indemnification of the Town, Seller, shall at its own expense, provide
and maintain the following insurance coverage in full force and effect after the Commercial
Operation Date:
A. Evidence of Coverage
Prior to Commercial Operation Date, Seller shall provide a Certificate of Insurance
certifying that coverage as required has been obtained. Individual endorsements executed
by the insurance carrier shall accompany the certificate. In addition, a copy of the policy or
policies shall be provided by Seller upon request.
A periodic review/change of insurance requirements may be made every five years to
ensure appropriate coverage by Town standards is in place.
B. Qualifying Insurers
All policies shall be issued by companies which hold a current policy holder's alphabetic
and financial size category rating of not less than A- V, according to the current Best's Key
Rating Guide, unless otherwise approved by Town's Insurance Manager.
C. Notice of Cancellation
All coverage as required herein shall not be canceled or changed so as to no longer meet
the specified Town insurance requirements without 30 days' prior written notice of such
cancellation or change being delivered to the Town of Los Gatos or their designated
agent.
D. Insurance Required
1. Commercial General Liability Insurance - for bodily injury (including death) and
property damage which provides limits as follows:
a. Each occurrence $2,000,000
b. General aggregate - $4,000,000
c. Personal Injury - $2,000,000
2. General liability coverage shall include:
a. Premises and Operations
b. Personal Injury liability
f. Severability of interest
3. General liability coverage shall include the following endorsement, a copy of which
shall be provided to the Town:
Additional Insured Endorsement, which shall read:
"Town of Los Gatos, and members of the Board of Supervisors of the Town of
Los Gatos, and the officers, agents, and employees of the Town of Los Gatos,
individually and collectively, as additional insured's."
Insurance afforded by the additional insured endorsement shall apply as primary
insurance, and other insurance maintained by the Town of Los Gatos, its officers,
agents, and employees shall be excess only and not contributing with insurance
provided under this policy.
4. Automobile Liability Insurance
For bodily injury (including, death) and property damage which provides total limits
of not less than one million dollars ($1,000,000) combined single limit per
occurrence applicable to all owned, non -owned and hired vehicles.
5. Workers' Compensation and Employer's Liability Insurance
a. Statutory California Workers' Compensation coverage including broad form
all -states coverage.
b. Employer's Liability coverage for not less than one million dollars
($1,000,000) per occurrence.
EXHIBIT 8
RIGHT OF ACCESS
1. Buyer hereby grants to Seller and to Seller's agents, employees, contractors and
subcontractors throughout the Term (as defined in the PPA), and for a reasonable
period after the Term, but in no case later than one hundred eighty (180) calendar
days after the Term, to remove the applicable Generating Facility or Generating
Facilities and restore the Site(s) pursuant to this PPA, a right of access irrevocable
during the Term of the Agreement for the installation, operation, maintenance,
replacement and removal of the applicable Generating Facility or Generating
Facilities, including commercially reasonable access to, on, over, under and across
the Site(s) during reasonable business hours, and during non -business hours in the
event of any event or circumstance that poses an imminent risk to human health, the
environment, the applicable Generating Facility or Generating Facilities or the Site(s).
2. Buyer also grants to Seller, on a non-exclusive basis, the right to make necessary
connections to the local electric utility system.
3. Seller or its designee (including any Financing Party) shall have the non-exclusive
right without cost to access the Site(s) in order to perform its obligations under the
Agreement. Buyer will not charge Seller any rent for such right to access the Site(s).
Seller shall provide the Buyer reasonable notice of its proposed access and shall
comply with all reasonable Buyer requirements if presented to Seller from time to
time. Notwithstanding anything to the contrary in this Right of Access, Buyer shall
use commercially reasonable efforts to provide access to the sites to Seller twenty-
four (24) hours a day, seven (7) days a week for emergency purposes. Within twenty-
four (24) hours of such emergency access, Seller shall provide Buyer with a written
explanation of the nature of the emergency. All such emergency work shall be
diligently prosecuted to completion in order that such work shall not remain in a
partly finished condition any longer than necessary for completion.
4. The Generating Facilities are the personal property of Seller and shall not be
considered the property (personal or otherwise) of Buyer upon installation of the
applicable Systems at the applicable Sites. Each Generating Facility is more
particularly described in the PPA.
5. The Generating Facilities are the personal property of Seller and shall not be
considered a fixture of the applicable Sites. Accordingly, Buyer hereby grants Seller
and any Lender (as defined in the PPA) the right to file any UCC-1 financing
statement or fixture filing that confirms its interest in the applicable Generating
Facility.
6. During the Term, Seller's access rights are preserved and Buyer shall not interfere
with or permit any third party to interfere with such rights or access. The Right of
Access granted hereunder shall be irrevocable except upon expiration or earlier
termination of an applicable PPA, in which case, this Right of Access shall only be
revocable as it relates to the applicable PPA, which has expired or earlier terminated.
Seller shall have access to the Buyer's Sites beyond the Term of the PPA for the
purpose of removing the applicable Generating Facility or Facilities, remediation or
other purposes as provided in the PPA.
7. Upon any rejection or other termination of any one or more of the.PPAs pursuant to
any process undertaken with respect to Seller under the United States Bankruptcy
Code, at the request of any Financing Party made within ninety (90) days of such
termination or rejection, Buyer shall grant a new right of access in favor of the
Financing Parties or their designees on substantially the same terms as this Right of
Access.
8. Buyer will not take any action inconsistent with the foregoing.
TOWN OF LOS GATOS by: FRESH AIR ENERGY — II, LLC. by:
Greg Larson, Town Manager Erik Stuebe, President
APPROVED AS TO FORM:
Judith J. Propp, Town Attorney
Exhibit 9
Panel and Inverter Warranties
Seller hereby represents the following with regard to equipment warranties:
1) Generating Facility Warranty will comply with CSI Warranty and CPUC Code
3 87.5(d)(4) requirements
2) Solar PV. Panels utilized in Generating Facilities will include 20 — 25 Year performance
Warranty.
3) Inverters utilized in Generating Facilities will include minimum 10 Year Warranty.
4) After Buyer's notice that it elects to exercise its option to purchase, or otherwise assumes
ownership of the Facility, and upon payment of the Purchase Price, Seller shall transfer
Solar PV Panel and Inverter Warranties to Buyer.
Exhibit 10
General Conditions — Financing Parties
Buyer acknowledges that Seller will be financing the installation of the System either through a
lessor, lender or with financing accommodations from one or more financial institutions and that
the Seller may sell or assign the System and/or may secure the Seller's obligations by, among
other collateral, a pledge or collateral assignment of this Agreement and a first security interest
in the System. In order to facilitate such necessary sale, conveyance, or financing, and with
respect to any such financial institutions of which Seller has notified Buyer in writing Buyer
agrees as follows:
(a) Consent to Collateral Assignment. Buyer consents to either the sale or conveyance to a
lessor or the collateral assignment by Seller to the a lender that has provided financing of
the System, of the Seller's right, title and interest in and to this Agreement.
(b) Notices of Default. Buyer will deliver to the Financing Party, concurrently with delivery
thereof to Seller, a copy of each notice of default given by Buyer under the Agreement,
inclusive of a reasonable description of Seller default. No such notice will be effective
absent delivery to the Financing Party. Buyer will not mutually agree with Seller to
terminate the Agreement without the written consent of the Financing Party.
(c)
Rights Upon Event of Default. Notwithstanding any contrary term of this Agreement:
i. The Financing Party, as collateral assignee, shall be entitled to exercise, in the place
and stead of Seller, any and all rights and remedies of Seller under this Agreement in
accordance with the terms of this Agreement and only in the event of Seller's or Buyer's
default, the Financing Party shall also be entitled to exercise all rights and remedies of
secured parties generally with respect to this Agreement and the System.
ii. The Financing Party shall have the right, but not the obligation, to pay all sums due
under this Agreement and to perform any other act, duty or obligation required of Seller
thereunder or cause to be cured any default of Seller thereunder in the time and manner
provided by the terms of this Agreement. Nothing herein requires the Financing Party to
cure any default of Seller under this Agreement or (unless the Financing Party has
succeeded to Seller's interests under this Agreement) to perform any act, duty or
obligation of Seller under this Agreement, but Buyer hereby gives it the option to do so.
iii. Upon the exercise of remedies under its security interest in the System, including any
sale thereof by the Financing Party, whether by judicial proceeding, or under any power
of sale contained therein, or any conveyance from Seller to the Financing Party (or any
assignee of the Financing Party) in lieu thereof, the Financing Party shall give notice to
Buyer of the transferee or assignee of this Agreement. Any such exercise of remedies
shall not constitute a default under this Agreement.
iv. Upon any rejection or other termination of this Agreement pursuant to any process
undertaken with respect to Seller under the United States Bankruptcy Code, at the request
of the Financing Party made within ninety (90) days of such termination or rejection,
Buyer shall enter into a new agreement with the Financing Party or its assignee having
the same terms and conditions as this Agreement.
(d) Right to Cure.
i. Buyer will not exercise any right to terminate or suspend this Agreement unless it shall
have given the Financing Party prior written notice by sending notice to the Financing
Party (at the address provided by Seller) of its intent to terminate or suspend this
Agreement, specifying the condition giving rise to such right, and the Financing Party
shall not have caused to be cured the condition giving rise to the right of termination or
suspension within thirty (30) days after such notice or (if longer) the periods provided for
in this Agreement. The Parties respective obligations will otherwise remain in effect
during any cure period; provided that if such Seller default reasonably cannot be cured by
the Financing Party within such period and the Financing Party commences and
continuously pursues cure of such default within such period, such period for cure will be
extended for a reasonable period of time under the circumstances, such period not to
exceed additional ninety (90) days.
ii. If the Financing Party (including any Buyer or transferee), pursuant to an exercise of
remedies by. the Financing Party, shall acquire title to or control of Seller's assets and
shall, within the time periods described in Subsection (c)(i). above, cure all defaults under
this Agreement existing as of the date of such change in title or control in the manner
required by this Agreement and which are capable of cure by a third person or entity,
then such person or entity shall no longer be in default under this Agreement, and this
Agreement shall continue in full force and effect.
Schedule 1
Notice Information
Buyer:
Seller:
Financing Party
[To be provided by Seller when known.]
Exhibit 11
DESIGN AND CONSTRUCTION PHASE SERVICES
1. DESIGN PHASE
1.1. Standard of Care
• Seller must perform Services in accordance with those standards of care that are
generally recognized as being used by competent persons in its area of specialty in
the State of California.
• Seller must perform Services in compliance with all applicable federal, state and
local codes, statutes, laws, regulations and ordinances, including environmental,
energy conservation, and disabled access requirements.
• All designs must comply with all regulations and standards of the Fire Marshal
having jurisdiction over the Project.
• Seller must use its best efforts to verify interpretations of applicable law, codes,
regulations, and ordinances, from the appropriate Government Agency(s) and
authorities having jurisdiction over the Project. Such efforts will be undertaken in
accordance with the acceptable standard of care for this type of Project.
1.2. Signing and Stamping Documents
• Final Construction Documents and other submittal documents must be signed and
stamped by the Design Professional(s) as appropriate to the discipline of Work.
1.3. Insurance Requirements
• Seller's must meet the insurance requirements as set forth in Exhibits 7 (A and B)
for design and construction phases of the Work.
2. PERMITS FROM THE BUILDING DEPARTMENT (BUILDING OFFICIAL)
2.1. Overview
• Installation and Acceptance permits are required from the Building Department
(Building Official), having the jurisdiction of the project.
• The Seller is responsible for completing the installation permit application,
submitting the permit application to the Building Official, and receiving the
approved permit before proceeding with Work. The Building Official shall conduct
compliance inspections, and final acceptance inspections, of the Seller's work
related above items of work. The "compliance inspections" are for Fire Marshal
compliance only and do not relieve the Seller from performing all work to the
standards established by the entirety of the contract documents.
2.2. Submittals
2.2.1. A completed permit application to the Building Official; and
2.2.2. A copy of the Plans and Specifications to the Buyer for information.
2.3. Fees
2.3.1. The Seller is responsible for payment of all fees for the permit.
3. FIRE PROTECTION PLAN
4. GENERAL
4.1. Definitions
4.1.1. Hot Work - Hot work includes any operations capable of initiating fires or
explosions, including cutting, welding, brazing, soldering, grinding, thermal
spraying, thawing pipe, torch applied roofing, or any other similar activity.
4.1.2. Fire Marshal — Office of the Fire Marshal, Santa Clara County
4.1.3. SD&S No. SI-7 — Fire Marshal Standard Details & Specifications Number SI-7
(Construction Site Fire Safety)
4.2. Fire Protection Plan Requirements
4.2.1. Seller must prepare and submit a written Fire Protection Plan. Submission of the
Plan may be phased. See 1.06 below.
4.2.2. The written Fire Protection Plan must meet the requirements of the Contract
Documents and be consistent with the fire safety precautions specified in SD&S
No. SI-7.
4.2.3. At a minimum, the fire protection plan must include:
4.2.3.1. The name and contact phone number of the person(s) responsible for
compliance with the Fire Protection Plan.
4.2.3.2. Procedures for:
• Reporting emergencies to the fire department.
• Emergency notification, evacuation and/or relocation of all persons at
Project Site.
• Hot Work operations
• Management of hazardous materials
• Removal of combustible debris
• Emergency ingress and egress
4.3. Implementation
4.3.1. Seller is responsible for implementation of the requirements and provisions of the
approved Fire Protection Plan.
4.3.2. Seller is responsible for communicating the requirements of the Fire Protection
Plan to all SubSellers and other personnel working at the Project Site.
4.4. Submission
4.4.1. Submit two (2) copies of a Fire Protection Plan to Buyer.
4.4.2. Submission of the Plan may be phased. County Fire Marshal and Buyer must
approve the Fire Protection Plan prior to Seller performing Work at the Project
Site. Fire Marshal review time is 15 working days.
4.5. Inspection and Testing
4.5.1. The Seller is required to commission all systems of these documents.
4.6. Use of Project Site
4.6.1. Seller must confine operations at the Project Site to areas permitted by law,
ordinances, permits and the Contract Documents, and must not unreasonably
encumber the Project Site with any materials, equipment, temporary structures, or
temporary measures.
4.6.2. Seller's employees, or others subject to the Seller's control, are not permitted to
reside on the Project Site in temporary living facilities.
4.7. Workplace Environment
4.7.1. The use or possession of alcohol, weapons, or illegal controlled substances by the
Seller, or others subject to the Seller's control, on Town property is prohibited.
4.7.2. The Seller must ensure and maintain a workplace environment free of personal
harassment and intimidation.
4.7.3. Conduct that creates an intimidating, hostile, or offensive workplace environment
is prohibited. Such conduct includes, but is not limited to, the following:
• Verbal harassment, e.g., epithets, derogatory comments, or slurs;
• Physical harassment, e.g., assault, impeding or blocking movement, gestures,
staring, or any physical interference with normal work or movement;
• Visual forms of harassment, e.g., derogatory posters, letters, poems, graffiti,
cartoons, or drawings.
4.7.4. Unwelcome and unwanted sexual advances constitute sexual harassment that is
prohibited. For example, requests for sexual favors and verbal or physical
conduct of a sexual nature are prohibited.
4.7.5. It is the responsibility of the Seller to:
• Inform its employees and SubSellers that behavior that creates an intimidating,
hostile, or offensive workplace environment is prohibited;
• Create a workplace environment that is free from harassment; and,
• Take corrective action to stop prohibited behavior/conduct.
4.7.6. If in the opinion of the Buyer's Authorized Representative, any employee of the
Seller or Seller's SubSellers violate the prohibitions per this section, Seller must
immediately remove that person or SubSeller from the Project upon Buyer's
request, and such person or SubSeller must not be permitted to perform further
Work on the Project Site.
4.8. Disruption of Buyer's Normal Operations
4.8.1. Seller must give timely advance notice to Buyer of Work that is likely to be
disruptive to Buyer's normal operations at or near the Project Site. If Seller does
not so advise Buyer, Buyer has the right to temporarily suspend Seller's Work or
to require Seller to modify its Work operations to eliminate any disruption, and
Seller is not entitled to any adjustment in the Contract Sum or Contract Time for
any delay or additional costs associated therewith.
4.9. Cleanup
4.9.1. Seller must continuously keep the Project Site and surrounding areas free from
waste materials and/or rubbish caused by its operations or rubbish from any
source that accumulates within the Project Site and any other area designated by
the Buyer's Project Manager for use by the Seller.
4.9.2. When cleanup is paid for as a separate Bid item, full compensation for such work
must be included in the Bid price for cleanup.
4.9.3. When the Bid price is a lump sum, or there is no unit price item for cleanup, full
compensation for cleanup will be considered to have been included in the various
items of Work.
4.9.4. Seller must, before certifying that the entire Work of the Project is complete
and/or requesting Milestone Completion inspection, clean material storage sites
and all ground occupied or affected in connection with the Work or designated
portion of the Work, and must leave all parts of the Project in a neat and
presentable condition satisfactory to Buyer's Project Manager.
4.9.5. Upon completion of the Work or any designated part thereof, Seller must
promptly remove all its waste materials, rubbish and debris, and all its tools,
construction equipment, machinery and surplus materials from the Project area or
the completed part.
4.9.6. If the Seller fails to clean up as required by the Contract Documents, Buyer may
do so and the cost thereof will be charged to the Seller and deducted from
progress payments due or to become due to the Seller.
4.10. Disposal of Material Outside Project Area
4.10.1. Seller is responsible for making all arrangements and paying all costs for disposal
of materials outside the Project area.
4.10.2. When any material is to be disposed of outside the Project area, at other than a
public disposal site, Seller must first obtain a written consent from the property
Buyer of the proposed disposal site, and furnish Buyer a copy of said consent.
Property Buyer's written consent must acknowledge receipt of the soils testing
report, if any, for the materials to be disposed.
4.10.3. Disposal of Hazardous Materials must comply with all legal requirements,
including but not limited to containerization, labeling, manifesting, transportation,
disposal site, and use of properly trained personnel. No later than 15 Days after
Seller's request for Final Inspection, Seller must submit copies of all Hazardous
Waste Manifests signed by Toxic Substances Disposal Facilities ("TSDF's") and
certificates of disposal, to prove that Seller has legally disposed of such materials.
Submit four (4) copies of each manifest.
4.11. Hazardous Materials
4.11.1. Seller must comply with all Federal, State, County and local laws, statutes,
ordinances and other regulations covering the use, storage, transportation and
disposal of any Hazardous Materials on the Project. Seller must obtain all permits
and pay all fees and taxes for all services and materials required to perform the
Project.
4.11.2. The term "Hazardous Materials" as used herein means any material that, because
of its quantity, concentration, or physical or chemical characteristics, poses a
significant present or potential hazard to human health and safety or to the
environment if released into the workplace of the environment.
4.11.3. Prior to starting Work, Seller must submit to Buyer six (6) copies of a list of all
Hazardous Materials expected to be used on the Project. Seller must keep a copy
of the list at the Project Site. This list must include but not be limited to any
cleaners, solvents, paints or explosive charges used in the Work. Seller must
submit one (1) copy of OSHA Form 20 — Material Safety Data Sheet ("MSDS")
for each material listed and must advise every person at or near the Project Site of
these materials, of proper handling, and of proper action in case of accident or
exposure.
4.11.4. Seller must safely contain and store all its Hazardous Materials, and in the event
of spill or discharge, must immediately notify all required Federal, State, County
and local agencies including the fire department. Seller must protect personnel
from exposure and provide treatment as necessary.
4.11.5. Seller must immediately advise Buyer of any potentially Hazardous Materials
encountered at the Project Site and must take all necessary action to prevent
exposure of personnel until the material is identified and proper action can be
taken.
4.11.6. Seller must not store or use any Hazardous Materials near air intakes or doors and
windows serving persons on or off the Project Site without proper protection and
safeguards to prevent exposure.
4.11.7. Seller must exercise all required precautions and safeguards in the storage, use
and disposal of Hazardous Materials. Nothing in this, relieves Seller of
responsibility for compliance with all applicable laws and statutes, or other
provisions of the Contract, particularly Seller's responsibility for damage and
preservation of life and property.
4.12. Air Pollution Control
4.12.1. Seller and each Sub Seller must comply with all air pollution control rules,
regulations, ordinances, statutes, and Project specific permit requirements of the
Bay Area Air Pollution Control District and all other regulatory agencies that
apply to any Work performed. If there is a conflict between the Bay Area Air
Pollution Control District rules, regulations, ordinances, and statutes and the rules,
regulations, ordinances, and statutes of other regulatory agencies, the most
stringent shall govern.
4.12.2. Seller must not discharge smoke, dust or any other air contaminants into the
atmosphere in such quantity as will violate any regulations.
4.12.3. Seller must minimize dust nuisances resulting from performance of the Work,
both inside and outside the Project limits, by applying either water or dust
palliative, or both.
4.13. Water Pollution Control
4.13.1. Seller must comply with all Federal, State and local water pollution prevention
and storm drain pollution prevention rules, regulations, ordinances, statutes,
guidelines, and Project specific permit requirements.
4.13.2. If required by law, ordinance, regulation, code, permit or the requirements of the
Contract Documents, Seller must prepare a Project Specific Stalin Water
Pollution Prevention Program (SWPPP)..
4.13.3. Seller must exercise every reasonable precaution to protect storm drains, channels
and all bodies of water from pollution, and must conduct and schedule operations
so as to avoid or minimize muddying and silting of any waters. Seller must
construct whatever facilities are necessary or requested by Buyer to provide
prevention, control and abatement of water pollution.
4.13.4. No provision of the Contract Documents relieves Seller of responsibility for
compliance with California Fish and Game Code §5650 et seq, and §12015 et seq,
and applicable regulations of the Regional Water Quality Control Board, Santa
Clara County flood control and water district requirements, or other applicable
statutes relating to prevention and removal of water pollution.
4.13.5. Compliance with water pollution requirements does not relieve Seller from
responsibility to comply with all provisions of the Contract Documents,
particularly Seller's responsibilities for damage and preservation of property.
4.14. Sound Control
4.14.1. The Seller must comply with all CAL OSHA requirements.
4.14.2. The Seller must comply with all local sound control and noise level rules,
regulations, and ordinances that apply to any Work performed pursuant to the
requirements of the Contract Documents.
4.14.3. Each internal combustion engine, used for any purpose on the Project or related to
the Project, must be equipped with a muffler of a type recommended by the
Manufacturer. No internal combustion engine shall be operated on the Project
without said muffler
4.14.4. Noise level from and hours of Seller's operations, that are located within town
limits, must comply with city ordinances or requirements.
4.14.5. Noise level requirements apply to all equipment used in the Project including, but
not limited to, trucks, transit mixers, generators, air -tools, or equipment that may
or may not be owned by the Seller. The use of loud sound signals must be
avoided in favor of warning lights except those required by safety laws for the
protection of personnel.
4.15. Worker's Sanitary Provisions & Use of Buyer's Facilities
4.15.1. Seller must conform to the rules and regulations for sanitary provisions
established by the State, the Town of Los Gatos, and any other applicable
jurisdictions.
4.15.2. Seller must Provide and maintain toilets for use by its employees and the
employees. These accommodations must be maintained in a neat and sanitary
condition, and must comply with all applicable laws, ordinances and regulations
pertaining to public health and sanitation.
4.15.3. Seller's personnel must not use Buyer's facilities without Buyer's express written
permission, which will be at Buyer's sole discretion. Such Buyer's facilities
include but are not limited to toilet facilities, food service facilities (cafeteria and
coffee shop), utilities services of any kind, carts, fire extinguishers (except in
emergencies), parking, storage space and any other facilities and services.
4.16. Recycling of Materials
4.16.1. The California Department of Resources Recycling and Recovery (CalRecycle)
requires all Cities and Counties to develop a Source Reduction and Recycling
Program (SRRP) for all development projects such that solid waste intake to
landfills is reduced. This project is included in the CalRecycle/SRRP
requirements; therefore, the Seller is required to ensure that debris generated from
demolition or construction activities is recycled or salvaged in accordance with all
state and local requirements.
4.17. Submittals
4.17.1. General
Seller must submit copies of the shop drawings, product data, and other
construction documents to Buyer for information. Buyer may provide comments
to safe guard the operations of the facility at which the Generating Facility is
being installed.
4.18. Compliance with Laws and Regulations
4.18.1. Seller must keep informed of governmental regulations that may affect the Work.
Seller must observe and comply with, and must cause all agents, employees,
SubSellers and Suppliers to observe and comply with said regulations. Seller
shall hold harmless and indemnify Buyer and all its officers, employees and
consultants against any liability or claim arising from or based upon the violation
of any such regulations by Seller, its agents, employees, representatives or
SubSellers and Suppliers.
4.19. Taxes, Utilities, Pettnits, and Fees
4.19.1. Taxes: Seller must pay any or all taxes imposed by Federal, State, or local
governments, that were legally enacted as of the Bid date or subsequently enacted
during the Contract Time, including but not limited to Federal excise tax and all
State and local sales and use taxes solely attributable to the Generating Facilities.
Buyer will not furnish any tax exemption certificate or any document designed to
exempt Seller from payment of any tax on labor, services, materials,
transportation, or any other items Provided by Seller pursuant to the Contract
Documents.
Utilities:
4.19.2. Seller shall be responsible for all temporary power, water, and other utilities for
completion of its construction operations.
4.19.3. Permits & Fees: Seller must obtain and pay for all building permits, encroachment
permits, and all other permits and governmental fees, licenses and inspections
necessary for the proper execution and completion of the Work, unless otherwise
provided in the Contract Documents.
• Sellers must give all necessary notices and comply with all laws,
ordinances, rules, regulations and lawful Orders relating to the Work, and
to the preservation of the public health and safety.
• If Seller performs any work contrary to such laws, ordinances, Orders,
rules and regulations, Seller shall bear all costs attributable thereto.
• Seller must arrange, coordinate, and pay for all permit related inspections.
4.19.4. Royalties & License Fees: Seller must pay all royalties and license fees,
and must defend all suits or claims for infringement of any patent rights and save
Buyer and its Consultants on this Project harmless from loss on account thereof.
4.20. Equal Opportunity Requirements
4.20.1. The Town of Los Gatosis an equal opportunity employer. Seller must
comply with all applicable Federal, State, and local laws and regulations including
the Townof Los Gatos's equal opportunity requirements. Such laws include but are
not limited to the following: Title VII of the Civil Rights Act of 1964 as amended;
Americans with Disabilities Act of 1990; The Rehabilitation Act of 1973 (§503 and
504); California Fair Employment and Housing Act (Government Code § 12900 et
seq.); California Labor Code § 1101 and § 1102. Seller must not discriminate against
any SubSeller, employee, or applicant for employment because of age, race, color,
national origin, ancestry, religion, sex/gender, sexual orientation, mental disability,
physical disability, medical condition, political beliefs, organizational affiliations, or
marital status in the recruitment, selection for training including apprenticeship,
hiring, employment, utilization, promotion, layoff rates of pay or other forms of
compensation.
5. CONSTRUCTION BY BUYER OR BY SEPARATE CONTRACTORS
5.1. Buyer's Right to Perform Construction and Award Separate Contracts
5.1.1.Buyer has the right to perform work at any time related to the Project with its own
forces and/or to Award separate contracts in connection with other portions of the
Project or other work on the site pursuant to these or similar conditions of this
Contract.
5.2. Cooperation with Buyer's Forces and Other Contractors Employed by Buyer
5.2.1. Buyer will cooperate and coordinate its work with that of the work of
Buyer's own forces and of each separate contractor with the Work of the Seller,
who must cooperate therewith as provided herein.
5.2.2.. When one or more other contractors are employed by Buyer on related or
adjacent work, Seller must not cause any unnecessary delay or hindrance to the
other contractors.
5.2.3. If the performance of the Work of this Contract is likely to be interfered with by
the simultaneous perfoiiiiance of the work of some other separate contract or
contracts, the Buyer and Seller must mutually coordinate with little or no impact to
either party's work.
5.3. Mutual Responsibility
5.3.1. The Seller must cooperate fully with Buyer and all separate contractors including
utility companies with regard to the execution of their Work as follows:
• The Seller must cooperate fully with Buyer and all separate contractors with
regard to introduction and storage of their materials and equipment.
• The Seller must coordinate with Buyer, all separate contractors, and all utility
companies with regard to construction scheduling, sequence of operations and
site access
6. PROTECTION OF PERSONS AND PROPERTY
6.1. Safety Provisions
6.1.1. Seller is solely and completely responsible for conditions of the job site,
including safety of all persons and property during performance of work. This
requirement applies continuously and is not limited to Normal Hours Of Work. No
act, service, drawing or construction review, acceptance or other act by Buyer,
Buyer's Project Inspector, Consultant or any other representative of Buyer is
intended to include review of the adequacy of Seller's safety measures at or near the
Project Site, at any place of Fabrication, or anywhere else.
6.1.2. Seller must take all necessary precautions on the Work for the safety of its
workers, of Buyer's employees and the public, and must comply with all applicable
Federal, State, and local safety laws and codes to prevent accidents or injury to
persons on, about, or adjacent to where the Work is being performed.
6.1.3. Seller must erect and properly maintain at all times, as required by the
conditions and progress of the Work, all appropriate safeguards for the protection of
workers and the public, and post danger signs warning against construction hazards,
such as fire, toxics, pesticides, chemicals, odors, noise, vibration, equipment
operations, obstructions, falling objects, falls and all other construction related
hazards.
6.1.4. Seller must designate a responsible member of its organization who will
be present on the Project Site and who has the duty for prevention of accidents.
Prior to starting Work, Seller must submit a letter to the Buyer providing the name
and position of the person so designated.
6.2. Public Safety and Convenience
6.2.1. Seller must provide for the safety of the public during construction and
conduct its operations to minimize the amount of work posing potential hazards to
the public.
6.2.2. Seller must keep all walkways clear. Seller must protect pedestrians from
falling objects and water runoff.
6.2.3. Seller's equipment must enter and leave the Project area via access routes
designated or accepted in writing by Buyer, and move in the direction of public
traffic at all times. All movements on or across public traveled ways must not
endanger public traffic.
6.2.4. Seller must immediately remove any spillage, debris, dirt, or mud
resulting from hauling operations along or across any public traveled way.
6.2.5. Seller must minimize inconvenience or obstruction to the public. When
Seller's operations create a condition hazardous to the public, Seller must furnish,
erect, and maintain such Temporary Fencing, barricades, lights, signs, and other
devices as are necessary for direction of the public or to avoid accidents, damage, or
injury to the public. Seller must furnish such flagmen and guards as are necessary
to direct the public or to give adequate warning of any hazardous conditions.
6.3. Protection and Restoration of Property
6.3.1. Seller must immediately repair any damage, arising from or in
consequence of the performance of the Contract, to improvements or property,
whether above or below the ground, private or public, within or adjacent to the
Project.
6.3.2. In an Emergency affecting the safety of life or property, including
adjoining property, Seller must act at its discretion, with notice to Buyer, to prevent
such threatened loss or injury. Seller must maintain adequate protection against
damage to life and property involved in Project and on property adjacent.
6.4. Preservation of Cultural Resources
6.4.1. Pursuant to the National Historic Preservation Act of 1966, State laws and
Town ordinances, the following procedures are implemented to ensure historic
preservation of cultural resources discoveries.
6.4.2. In the event potentially historical, architectural, archaeological or cultural
resources (hereinafter "resources") are discovered during subsurface excavations at
the Project Site, the following procedures apply:
6.4.3. Seller to temporarily suspend all operations at the location of such
potential resources.
6.4.4. A qualified Consultant must be utilized to assess the value of such
resources and make recommendations.
6.4.5. If the Consultant determines that the potential find is indeed a cultural
resource, Buyer will, as expeditiously as possible, advise Seller in writing of the
action to be taken regarding the find, and the anticipated time frame and extent of
any Work suspension.
6.5. Buyer's Building Official ("Building Official") Approval
o References
• All applicable codes and standards.
o Overview
• The Seller's Work, including submission of Seller -required designs and
calculations, and actual on -site Work, is subject to approval by the
Buyer's Building Official ("Building Official"). The Seller's Work is
subject to code -compliance inspections by the Building Official. These
inspections are for code compliance only and do not relieve the Seller
from performing all work required.
• The Seller must obtain all Peituit and subsequent revisions as needed prior
to construction work.
o Fees
• All Plan Check and Building Permit fees as well as all trade permit fees,
i.e.: plumbing, electrical, mechanical, etc., will be paid for by the Seller
directly to the Building Official.
o Execution
• No work shall commence until the Seller has secured from the Building
Official and posted a Building Permit Record Card at the jobsite. This card
shall be maintained available at the jobsite by the Seller until the project
has been signed off as "complete" by the Building Official or his
designated representative. A sample card has been included at the end of
this section.
• Work shall not proceed beyond the point indicated in each successive
milestone section of the Building Card without obtaining the approval of
the Building Official. The Building Official, when requested by the Buyer,
shall make the requested inspections and shall indicate that portion of the
Work that is satisfactory as completed, or shall notify the Seller wherein
the same fails to comply with the CBC or other related Code. Any portions
that do not comply shall be corrected by the Seller at the Seller's expense,
and a request for re -inspected made.
• The process of obtaining Building Official approval of specific Work
takes place as follows:
• The Seller shall inspect the Work prior to requesting inspection by
Building Official.
• The Seller will request and coordinate the inspection by Building
Official.
• The Seller shall notify the Buyer's project representative to be
present at the time of inspection by the Building Official.
• Special Inspections. In addition to the inspections specified above, the
Seller is responsible for contracting for Special Inspection Services to
provide inspections during construction as delineated in the California
Building Code, Chapter 17 and the Contract Documents, specifically, but
not limited to Division 1, Section 01450. All costs for these Special
Inspections will be included in the Seller's Proposal for the performance
of the Work.