Document:

Exhibit 10.15

 

EXECUTION COPY

 

OPERATION AND MAINTENANCE AGREEMENT

 

between

 

NRG Energy Services LLC, a Delaware limited liability company,

 

and

 

High Plains Ranch II, LLC

 

Dated as of September 30, 2011

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS   AND RULES OF INTERPRETATION
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Definitions
    	
1
    
	
 
    	
1.2
    	
Rules of   Interpretation
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
TERM,   EXPIRATION AND TERMINATION
    	
10
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Initial   Term; Renewal Terms
    	
10
    
	
 
    	
2.2
    	
Early   Termination by Either Party
    	
11
    
	
 
    	
2.3
    	
Early   Termination by Owner
    	
11
    
	
 
    	
2.4
    	
Early   Termination by Operator
    	
11
    
	
 
    	
2.5
    	
Early   Termination by Collateral Agent
    	
12
    
	
 
    	
2.6
    	
Rights   and Duties Upon Termination
    	
12
    
	
 
    	
2.7
    	
Final   Settlement
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
SCOPE   OF WORK
    	
12
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Standard   of Performance
    	
12
    
	
 
    	
3.2
    	
Management   of Employees
    	
13
    
	
 
    	
3.3
    	
Duties   of Operator Prior to Substantial Completion
    	
13
    
	
 
    	
3.4
    	
Specific   Duties of Operator During Operations
    	
13
    
	
 
    	
3.5
    	
Emergency
    	
17
    
	
 
    	
3.6
    	
Notification   to Owner
    	
17
    
	
 
    	
3.7
    	
Safety
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
CHANGE   ORDERS
    	
18
    
	
 
    	
 
    	
 
    
	
5.
    	
OPERATOR’S   AUTHORITY; SUBCONTRACTING; PARTS
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Operator’s   Authority
    	
19
    
	
 
    	
5.2
    	
Subcontracts
    	
19
    
	
 
    	
5.3
    	
Parts
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
COOPERATION
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
General
    	
20
    
	
 
    	
6.2
    	
Owner   Representative
    	
20
    
	
 
    	
6.3
    	
Actions   by Owner
    	
20
    
	
 
    	
6.4
    	
Operator   Representative
    	
20
    
	
 
    	
6.5
    	
Actions   by Operator
    	
21
    
	
 
    	
6.6
    	
Access   to Information and Plant; Special Assistance
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
OWNER’S   RESPONSIBILITIES
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Responsibilities   of Owner
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
COMPENSATION   AND PAYMENTS
    	
22
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Compensation
    	
22
    
	
 
    	
8.2
    	
Invoices   and Reconciliation
    	
22
    
	
 
    	
8.3
    	
Cash   Requirements
    	
23
    
	
 
    	
8.4
    	
Cash   Neutral
    	
23
    
	
 
    	
8.5
    	
Interest   on Delinquent Funds
    	
23
    
	
 
    	
8.6
    	
No   Waiver
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
COMPLIANCE   WITH LAWS AND PERMITS
    	
23
    
	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Requirements   of Law Generally
    	
23
    
	
 
    	
9.2
    	
Hazardous   Materials Management
    	
24
    
	
 
    	
9.3
    	
Compliance   with Permits
    	
24
    
	
 
    	
9.4
    	
Inapplicability   of Article 10 to Contamination Claims
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
ALLOCATION   OF RISKS AND LIABILITY
    	
24
    
	
 
    	
 
    	
 
    
	
 
    	
10.1
    	
General   Indemnity by Operator
    	
24
    
	
 
    	
10.2
    	
General   Indemnity by Owner
    	
25
    
	
 
    	
10.3
    	
Cooperation   Regarding Claims
    	
25
    
	
 
    	
10.4
    	
Limitations   of Liability
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
CONSEQUENTIAL   DAMAGES; DISCLAIMER
    	
26
    
	
 
    	
 
    	
 
    
	
12.
    	
INSURANCE
    	
26
    
	
 
    	
 
    	
 
    
	
 
    	
12.1
    	
Operator’s   Insurance
    	
26
    
	
 
    	
12.2
    	
Owner’s   Insurance
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
FORCE   MAJEURE
    	
26
    
	
 
    	
 
    	
 
    
	
 
    	
13.1
    	
Excused   Performance; Duty to Mitigate
    	
27
    
	
 
    	
13.2
    	
Obligations   to Pay Monies
    	
27
    
	
 
    	
13.3
    	
Notice   of Force Majeure Event
    	
27
    
	
 
    	
13.4
    	
Notice   of Cessation of Force Majeure Event
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
BOOKS   AND RECORDS
    	
27
    
	
 
    	
 
    	
 
    
	
15.
    	
INTELLECTUAL   PROPERTY
    	
27
    
	
 
    	
 
    	
 
    
	
16.
    	
EVENTS   OF DEFAULT
    	
28
    
	
 
    	
 
    	
 
    
	
 
    	
16.1
    	
Operator   Defaults
    	
28
    
	
 
    	
16.2
    	
Owner   Defaults
    	
28
    
	
 
    	
16.3
    	
Event   of Default Remedies
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
17.
    	
ASSIGNMENT
    	
29
    
	
 
    	
 
    	
 
    
	
 
    	
17.1
    	
Assignment
    	
29
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
17.2
    	
Financing   Cooperation
    	
30
    
	
 
    	
 
    	
 
    
	
18.
    	
TITLE   TO MATERIALS
    	
30
    
	
 
    	
 
    	
 
    
	
19.
    	
MISCELLANEOUS
    	
30
    
	
 
    	
 
    	
 
    
	
 
    	
19.1
    	
Notices
    	
30
    
	
 
    	
19.2
    	
Severability
    	
30
    
	
 
    	
19.3
    	
Confidentiality
    	
31
    
	
 
    	
19.4
    	
Successors   and Assigns
    	
33
    
	
 
    	
19.5
    	
Governing   Law
    	
33
    
	
 
    	
19.6
    	
Entire   Agreement; Conflicts
    	
33
    
	
 
    	
19.7
    	
No   Partnership Created
    	
34
    
	
 
    	
19.8
    	
No   Third Party Rights
    	
34
    
	
 
    	
19.9
    	
Counterparts
    	
34
    
	
 
    	
19.10
    	
No   Liens
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
20.
    	
[RESERVED]
    	
34
    
	
 
    	
 
    	
 
    
	
21.
    	
OPERATOR   REPRESENTATIONS AND WARRANTIES
    	
34
    
	
 
    	
 
    	
 
    
	
22.
    	
OWNER   REPRESENTATIONS AND WARRANTIES
    	
36
    
	
 
    	
 
    	
 
    
	
23.
    	
SURVIVAL
    	
37
    
	
 
    	
 
    	
 
    
	
24.
    	
DAVIS-BACON   ACT
    	
37
    

 

iii

 

EXHIBIT LIST

 

	
Exhibit A
    	
 
    	
Plant   Description
    
	
Exhibit B
    	
 
    	
Monthly   Report Components
    
	
Exhibit C
    	
 
    	
Insurance
    
	
Exhibit D-1
    	
 
    	
Preliminary   Pre-Commercial Operating Budget
    
	
Exhibit D-2
    	
 
    	
Preliminary   Annual Maintenance Plan
    
	
Exhibit D-3
    	
 
    	
Estimated   Ten Year Budget
    
	
Exhibit E
    	
 
    	
Compensation   Terms
    
	
Table E-1
    	
 
    	
Details   of Positions and Functions Included in Basic Corporate Overhead Expense
    
	
Exhibit F
    	
 
    	
OEM   Manuals
    
	
Exhibit G
    	
 
    	
Project   Agreements
    
	
Exhibit H
    	
 
    	
[Reserved]
    
	
Exhibit I
    	
 
    	
Owner   and Operator Representatives
    
	
Exhibit J
    	
 
    	
Permits
    
	
Exhibit K
    	
 
    	
[Reserved]
    
	
Exhibit L
    	
 
    	
Form of   Mortgagee Consent
    
	
Exhibit M
    	
 
    	
Davis-Bacon   Act Requirements
    
	
Exhibit M-1
    	
 
    	
Davis-Bacon   Wage Determination
    
	
Exhibit N
    	
 
    	
Form of   Operator Parent Guarantee
    
	
Exhibit O
    	
 
    	
Form of   Lien Waiver
    

 

i

 

OPERATION AND MAINTENANCE AGREEMENT

 

This OPERATION AND MAINTENANCE AGREEMENT (as amended from time to time, the “Agreement”) is being entered into by and between NRG Energy Services LLC, a Delaware limited liability company (“Operator”), and High Plains Ranch II, LLC, a Delaware limited liability company (“Owner”), as of September 30, 2011 (the “Effective Date”). Each of the Owner and the Operator are sometimes hereinafter designated as a “Party,” and they are collectively designated as the “Parties.”

 

RECITALS:

 

A.            Owner owns that certain 250 MW solar power generation plant located near San Luis Obispo, California, as further described in Exhibit A (the “Plant”).

 

B.            Owner desires to hire Operator to operate and maintain the Plant in accordance with the terms of this Agreement.

 

C.            Operator desires to operate and maintain the Plant for Owner in accordance with the terms of the Agreement.

 

D.            Simultaneously with the execution of this Agreement, NRG Energy, Inc. has delivered Owner a guaranty of Operator’s obligations hereunder substantially in the form of Exhibit N hereto.

 

AGREEMENT:

 

Accordingly, in consideration of the mutual covenants herein, and intending to be legally bound hereby, Owner and Operator hereby agree as follows:

 

1.             DEFINITIONS AND RULES OF INTERPRETATION.

 

1.1          Definitions. The following capitalized terms, when used herein (and in the Appendices attached hereto), shall have the meanings specified in this Section 1.1.

 

“Adjustment Payment” has the meaning specified in Exhibit E.

 

“Affiliate” means, with respect to a Person, any entity which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlled by” and “under common control with”), when used with respect to a Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, through ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning specified in the Preamble.

 

“Annual Maintenance Plan” means an annual plan for operation and maintenance of the Plant that is approved by Owner pursuant to Section 3.4.11, as the same may be revised from

 

1

 

time to time pursuant to a Change Order. Each Annual Maintenance Plan shall be substantially in the same form as the Annual Maintenance Plan for 2012 attached hereto as Exhibit D-2 and will conform in all respects to the requirements of the LGA.

 

“Annual O&M Budget” means a budget detailed by month of anticipated revenues and anticipated expenditures of the Owner with respect to the Plant and execution of the Annual Maintenance Plan, such budget to include debt service, proposed distributions, maintenance, repair and operation expenses (including reasonable allowance for contingencies), capital expenditures, costs and expenses related to the purchase of parts or other personal property of any nature necessary or useful to the operation, maintenance, service or repair of the Plant, management expenses and fees, taxes, insurance premiums, reserves and all other anticipated operating costs for each applicable fiscal year of Owner for the Plant and will conform in all respects to the requirements of the LGA.

 

“Annual Profit Fee” has the meaning specified in Exhibit E.

 

“Applicable Law” means any law, ordinance, statute, regulation, decision, ruling, or other similar requirement issued by any Governmental Authority having jurisdiction over a Party or the Plant, including actions by regulatory and judicial agencies or tribunals, as the same may be modified, amended or repealed from time to time, including all Environmental Laws and the U.S. Federal Corrupt Practices Act.

 

“Associated Parties” means the directors, officers, partners, shareholders, members, managers, trustees, employees, Affiliates, controlling Persons, representatives and agents (including financial advisors, attorneys and accountants) of any Party or Person.

 

“Basic Corporate Overhead Expense” has the meaning specified in Exhibit E.

 

“Block” has the meaning specified in the EPC Agreement.

 

“Block Substantial Completion” has the meaning specified in the EPC Agreement.

 

“Books and Records” has the meaning specified in Section 14.

 

“Business Day” means any day other than a Saturday, Sunday, public holiday under the Applicable Laws of the State of California or other day on which banking institutions in California are authorized or required by Applicable Law to be closed.

 

“CAISO” means the California Independent System Operator Corporation or successor entity.

 

“Capital Improvement Expenses” has the meaning specified in Exhibit E.

 

“Change Order” has the meaning specified in Section 4.

 

“Change of Law” means the enactment, re-enactment, adoption, promulgation, amendment, modification, repeal or other change of any Applicable Law after the Effective Date affecting the Work or the Plant; provided, however, a change in the interpretation or application

 

2

 

of any Applicable Law by any Governmental Authority after the Effective Date shall not be considered a “Change of Law” unless the interpretation was a formal published interpretation by the applicable Governmental Authority.

 

“Claims” means, collectively, all claims, demands, actions, suits or proceedings (judicial, governmental or otherwise) asserted, threatened or filed against a Person, and any fines, penalties, losses, liabilities, damages and expenses incurred by such Person as a result thereof, including reasonable attorneys’ fees and costs of investigation, litigation, settlement and judgment, and any contractual obligations of such Person to provide indemnity for any such claims, demands, actions, suits or proceedings, fines, penalties, losses, liabilities, damages and expenses to any other Person.

 

“Collateral Agent” has the meaning set forth in the LGA.

 

“Compensation” means the amount to be paid to Operator by Owner, as determined pursuant to Exhibit E.

 

“Confidential Information” has the meaning specified in Section 19.3.1.

 

“Contingency” means the budgeted amount identified as “Contingency” in the Annual Maintenance Plan to be determined by Owner and Operator as provided in Section 3.4.11.

 

“CPI” means the “United States City Average All Items for All Urban Consumers (CPI-U, 1982-84=100)” published by the Bureau of Labor Statistics of the U.S. Department of Labor. If the publication of the Consumer Price Index of the U.S. Bureau of Labor Statistics is discontinued, comparable statistics on the purchasing power of the consumer dollar published by a responsible financial periodical reasonably agreed by Operator and Owner shall be used for making such computations.

 

“Davis-Bacon Act” means Subchapter IV of Chapter 31 of Part A of Subtitle II of Title 40 of the United States Code, including and as implemented by the regulations set forth in Parts 1, 3 and 5 of title 29 of the Code of Federal Regulations.

 

“Davis-Bacon Act Covered Contract” has the meaning specified in Exhibit M.

 

“Day” means a calendar day; provided, however, that, if any period of Days referred to in this Agreement shall end on a Day that is not a Business Day, then the expiration of such period shall be automatically extended until the end of the first succeeding Business Day.

 

“Debarment Regulations” has the meaning set forth in Section 21(g).

 

“Direct Labor Expenses” has the meaning specified in Exhibit E.

 

“Direct Operating Expenses” has the meaning specified in Exhibit E.

 

“Disclosing Party” has the meaning specified in Section 19.3.1.

 

3

 

“DOE” means the U.S. Department of Energy, an agency of the United States of America.

 

“Early Termination Costs” means the actual reasonable out of pocket costs incurred by Operator arising out of or relating to an early termination of this Agreement, as agreed by the Parties (such agreement not to be unreasonably withheld, delayed or conditioned) and which may include expenses of demobilization, the reassignment or severance of Plant Personnel, and the discontinuance of support functions which have performed Work and for which Operator has not already received Compensation during the Term of this Agreement, including all costs related to transitioning the Operator’s role to a new operator, including costs for terminating Subcontractors that are not assigned to Owner, costs for terminating any employees of Operator that are not retained by Owner or the new Operator and operating costs incurred by Operator arising from or as a result of the termination, assistance with the transfer of Permits and for costs arising from or as a result of the termination, acquisition or assignment of software and other licenses, data file and record system conversions, the purchase of supplier inventories maintained for the benefit of the Plant, training and instruction of the new operator’s personnel, to the extent not already paid for by Owner as part of the Direct Operating Expenses or Capital Improvement Expense.

 

“Effective Date” has the meaning specified in the Recitals.

 

“Emergency” means any event or circumstance which (a) requires prompt action, and (b) in the reasonable opinion of a prudent operator, could be expected to have an adverse effect on the Plant, endanger the health or safety of any Person, or cause significant damage to property.

 

“Environmental Allocation” has the meaning specified in the Exhibit E.

 

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (i) the environment, (ii) the preservation or reclamation of natural resources, (iii) the management, environmental release or threatened environmental release of any hazardous substance or (iv) health and safety matters, including the California Environmental Quality Act, California Public Resource Code §§ 21000 et  seq.; Comprehensive Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. §§ 9601 et  seq.; the Resource Conservation and Recovery Act, as the same may be amended from time to time, 42 U.S.C. §§ 6901 et  seq.; the Federal Water Pollution Control Act, 33 U.S.C. §§ 1251 et  seq.; the National Environmental Policy Act, 42 U.S.C. §§ 4321 et  seq.; the Endangered Species Act, 16 U.S.C. §§ 1531 et  seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 et  seq.; the Clean Air Act, 42 U.S.C. §§ 7401 et  seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 3803 et  seq.; the Oil Pollution Act of 1990, 33 U.S.C. §§ 2701 et  seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.C. §§ 11001 et  seq.; the Hazardous Material Transportation Act, 49 U.S.C. §§ 1801 et  seq. and the Occupational Safety and Health Act, 29 U.S.C. §§ 651 et  seq.; and any state and local counterparts or equivalents, in each case as amended from time to time.

 

“EPC Agreement” means that certain Engineering, Procurement and Construction Agreement between EPC Contractor and Owner, dated as of even date hereof.

 

4

 

“EPC Contractor” means SunPower.

 

“Event of Default” means, with respect to Owner, an Owner Event of Default and with respect to Operator, an Operator Event of Default.

 

“Financing” means any development, bridge, construction, direct or indirect tax equity, lease equity, and/or permanent equity and/or debt financing or refinancing of (including any prospective sale-leaseback transaction), or any other extension of credit for, the development, construction, ownership, leasing, operation or maintenance (including working capital) of the Plant, whether that financing or refinancing takes the form of private debt or equity, public debt or equity or any other form.

 

“Financing Agreements” means any agreement entered into by Owner evidencing a Financing (and any documents relating to or ancillary to the foregoing).

 

“Financing Party” means any Person providing Financing and any trustee or agent acting on any such Person’s behalf, and their successors and assigns.

 

“Fiscal Year” means a calendar year beginning on January 1st and ending on December 31st.

 

“Force Majeure Event” means any event or circumstance or combination of events or circumstances that (i) adversely affects, prevents or delays any Party (including such Party’s Subcontractors) in the performance of its obligations hereunder, (ii) is beyond the reasonable control of the affected Party, and (iii) is the type of event customarily recognized as a force majeure event including earthquake, fire, flood, hurricane, storm, tornado, or other act of God, civil disturbance, war (declared or not), terrorism, hostilities, blockade, revolution, regional or national strike, insurrection or riot that prevents the affected Party from securing requisite equipment, supplies, materials or labor or otherwise performing its obligations (other than the payment of money). Material, equipment, labor or supply price escalation shall not be considered a Force Majeure Event. Economic hardship including lack of money or credit resulting in the inability to make payments shall not be considered a Force Majeure Event. For clarity, Change of Law and the inability to obtain Financing for the Plant shall not be considered a Force Majeure Event.

 

“Forecast Budget” has the meaning specified in Section 3.4.11.

 

“Foreign Asset Control Regulations” has the meaning given such term in Section 21(e).

 

“Governmental Authority” means any federal, state, local, municipal or other governmental, regulatory, administrative, judicial, public or statutory instrumentality, court or governmental tribunal, agency, commission, authority, body or entity, or any political subdivision thereof, having legal jurisdiction over the matter or Person in question.

 

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,

 

5

 

infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

 

“Indemnified Party” has the meaning specified in Section 10.3.

 

“Initial Term” has the meaning specified in Section 2.1.

 

“Intellectual Property” or, interchangeably, “IP”, shall mean all intellectual property and similar proprietary rights held by any Person in any jurisdiction, including all such rights in and to (i) computer software or hardware, whether or not copyrightable, including all databases, source codes, object codes, programs, applications, tables, models, repositories, specifications and documentation; (ii) original works of authorship, whether copyrightable or not, copyrights, and all renewals, modifications, translations thereof, and any Moral Rights relating thereto; (iii) patents; (iv) trademarks, service marks, brand names, certification marks, trade dress, assumed names, trade names and other indications of origin; and (v) know-how and other business information, trade secrets, ideas, concepts, methodologies, processes, development tools, techniques, inventions, innovations, diagrams, sketches, drawings, models, manuals, photographs, calculations, maps, notes, reports, data, models, samples and documentation, in each case to the extent proprietary, confidential and not in the public domain.

 

“LGA” means the Loan Guaranty Agreement dated of even date herewith by and among Owner, the U.S. Department of Energy, acting by and through the Secretary of Energy (or appropriate authorized representative thereof), for itself as guarantor, and the U.S. Department of Energy, acting by and through the Secretary of Energy (or appropriate authorized representative thereof), as the loan servicer.

 

“Licensed Materials” means the the drawings, specifications, documents, designs, plans or software prepared by or on behalf of Operator and/or the Subcontractors in connection with or used in the performance of Operator’s obligations hereunder.

 

“Major Maintenance” has the meaning specified in Exhibit D-2.

 

“Materials” means any and all material, equipment, and supplies, including consumable supplies, tools, spare parts and office supplies, necessary for the performance of the Work.

 

“Moral Rights” shall mean certain rights of authors of original works subject to copyright, including but not limited to all rights of integrity, paternity, attribution, disclosure and withdrawal with respect to any original work, and any other rights that may be known or referred to as “moral rights.”

 

“Mortgagee Consent” shall mean an agreement entered into by Operator and a Financing Party substantially in the form attached hereto as Exhibit L.

 

“NOVs” has the meaning specified in the Exhibit E.

 

“OEM Manuals” means the manuals attached hereto as Exhibit F.

 

“OFAC” has the meaning given such term in Section 21(e).

 

6

 

“Operating Year” has the meaning specified in Exhibit E.

 

“Operator” has the meaning specified in the Preamble.

 

“Operator Event of Default” has the meaning specified in Section 16.1.

 

“Operator Indemnified Party” means Operator, its successors and assigns, and each of their Associated Parties.

 

“Operator Related Parties” means Operator and its Affiliates, and their respective members, shareholders, partners, directors, officers and employees.

 

“Operator Representative” has the meaning specified in Section 6.4.

 

“Overtime” has the meaning specified in Exhibit E.

 

“Owner” has the meaning specified in the preamble.

 

“Owner Event of Default” has the meaning specified in Section 16.2.

 

“Owner Indemnified Party” means Owner, the Financing Parties, each of their successors and assigns, each of their Associated Parties.

 

“Owner Representative” has the meaning specified in Section 6.2.

 

“Paid Absences” has the meaning specified in Exhibit E.

 

“Party” or “Parties” has the meaning specified in the Preamble.

 

“Patriot Act” has the meaning given such term in Section 21(e).

 

“Payroll Additives” has the meaning specified in Exhibit E.

 

“Payroll Taxes” has the meaning specified in Exhibit E.

 

“Permit” means the permission granted by any Governmental Authority to do an act that would otherwise be impermissible, including all licenses, permits, consents, authorizations, approvals, ratifications, certifications, registrations, exemptions, variances, exceptions and similar consents granted or issued by any Governmental Authority, and, with respect to the Plant, the Permits set forth on Exhibit J.

 

“Permitted Excess Expenditures” means expenditures that do not exceed ten percent, (10%) when considered individually, of the amount allocated for such expenditures, or five percent (5%) when considered in the aggregate of the entire amount of the applicable Annual O&M Budget.

 

“Person” means an individual, corporation, partnership, limited liability company, trust, unincorporated association, joint venture, joint-stock company, Governmental Authority, or any other entity.

 

7

 

“Plant” has the meaning specified in the Recitals.

 

“Plant Budget Allocation” has the meaning specified in the Exhibit E.

 

“Plant Control Systems” means remote monitoring systems used by Operator in compliance with Prudent Operating Practices, which may include a SCADA System and/or “Solar Field Integrated Control” systems.

 

“Plant Availability Allocation” has the meaning specified in the Exhibit E.

 

“Plant Personnel” means the personnel of Operator or its Affiliates or the Subcontractors of any of them who are assigned to the Plant on a full time basis to perform the Work.

 

“Post-Substantial Completion Work” has the meaning specified in Section 3.4.

 

“PPA” means, collectively, (i) the Power Purchase and Sale Agreement between Owner and Pacific Gas and Electric Company, a California corporation (“PG&E”), dated as of April 28, 2009, as amended and (ii) the Amended and Restated Power Purchase and Sale Agreement between Owner (as successor by merger to High Plains Ranch III, LLC) and PG&E, dated as of March 5, 2010.

 

“Pre-Commercial Operating Budget” means a budget detailed by month covering the period from the Effective Date until the commencement of commercial operations of the Plant. A preliminary Pre-Commercial Operating Budget is set forth in Exhibit D-1. A revised Pre- Commercial Operating Budget shall be delivered in compliance with Section 3.3.2.

 

“Pre-Substantial Completion Work” has the meaning specified in Section 3.3.

 

“Prohibited Person” has the meaning given such term in Section 21(g).

 

“Project Agreements” means the agreements listed on Exhibit G.

 

“Project Records” means all records relating to the Plant accumulated, prepared or maintained by the Operator per request of or for Owner as part of the Work under this Agreement during the Term, whether prepared on paper, stored electronically, or by any other media.

 

“Prudent Operating Practices” means any of the practices, methods and acts engaged in or approved by a significant portion of the photovoltaic solar power generation industry in the United States during the relevant time period, or any of the practices, methods and acts which, in the exercise of reasonable judgment in light of the facts known at the time the decision was made, could have been expected to accomplish the desired result at a reasonable cost consistent with good electric power generation practices, reliability, safety and expedition. Prudent Operating Practices is not intended to be limited to the optimum practice, method or act to the exclusion of all others, but rather to refer to a range of acceptable practices, methods and acts.

 

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“PV Competitor” means SunEdison, Fotowatio Renewable Ventures, their Affiliates, and any Person (or any such Person’s Affiliates) engaged primarily in the business of manufacturing photovoltaic modules, except General Electric Company and Samsung.

 

“Receiving Party” has the meaning specified in Section 19.3.1.

 

“Reconciliation Amount” has the meaning specified in Section 8.2

 

“Recordable Injury or Illness” means any injury or illness that, in accordance with the California Occupational Safety and Health Act of 1973, as amended, and the CalOSHA standards at 8 CCR 14300 - 14300.48, is required to recorded on an employer’s Cal/OSHA Form 300.

 

“Renewal Term” has the meaning specified in Section 2.1.

 

“Requirements” has the meaning specified in Section 3.1.

 

“Safety Allocation” has the meaning specified in the Exhibit E.

 

“Salary and Wages” has the meaning specified in Exhibit E.

 

“SCADA System” means the Plant’s remote control and monitoring system, including central computer and remote PC system.

 

“Site Rules” means those reasonable rules, regulations and procedures related to the safe performance of the work and security of the site developed by Operator for Owner’s review and approval.

 

“Straight Time” has the meaning specified in Exhibit E.

 

“Subcontractor” means subcontractor, consultant or supplier.

 

“Substantial Completion” has the meaning set forth in the EPC Agreement.

 

“SunPower” means SunPower Corporation, Systems, a Delaware corporation.

 

“Support Personnel” means the personnel of Operator or its Affiliates or the contractors of any of them who are assigned, as their principal work location, to work sites other than the Plant. The Direct Labor Expenses of Support Personnel while working on a project for the Plant are billed directly to Owner. Support Personnel may perform Work on a part time basis. Table E-1 of Exhibit E provides a matrix of the positions and functions in the Support Personnel classification and the positions and functions included in the Basic Corporate Overhead Expense. Support Personnel shall not include Plant office personnel.

 

“Term” means the Initial Term and any Renewal Terms.

 

“Terminating Party” is defined in Section 2.6.

 

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“Work” means the duties and obligations of Operator required under this Agreement, including the Post-Substantial Completion Work and the Pre-Substantial Completion Work.

 

1.2          Rules of Interpretation.

 

(a)           Whenever the context may require, any pronoun used in this Agreement includes the corresponding masculine, feminine, or neuter forms, and the singular form of nouns, pronouns, and verbs include the plural and vice versa.

 

(b)           As used in this Agreement, accounting terms not defined in this Agreement shall have the respective meanings given to them under generally accepted accounting principles in the United States of America.

 

(c)           The words “hereof,” “herein,” “hereunder,” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Except as expressly set forth herein, a reference to a Section, an Article, an Exhibit or a Schedule means a Section in, an Article of, an Exhibit to or a Schedule to, this Agreement.

 

(d)           The terms “include,” “includes” and “including” shall be construed as followed by the words “without limitation.”

 

(e)           The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(f)            Any agreement, instrument or Applicable Law defined or referred to herein (or provision thereof) means such agreement, instrument or Applicable Law (or provision thereof) as from time to time amended, supplemented or otherwise modified and includes references to all attachments thereto and provisions incorporated therein.

 

(g)           Any references to a Person are also to its successors and permitted assigns and, in the case of any Governmental Authority, shall be construed as including a reference to any Governmental Authority succeeding to its functions and capacities.

 

(h)           The descriptive headings of all Articles and Sections of this Agreement are formulated and used for convenience only and are not be deemed to affect the meaning or construction of any such Article or Section.

 

(i)            All Exhibits, Appendices and Schedules attached hereto are incorporated herein and made a part hereof.

 

2.             TERM, EXPIRATION AND TERMINATION.

 

2.1          Initial Term; Renewal Terms. This Agreement shall be for an initial term of five (5) years commencing on the Effective Date (the “Initial Term”). Upon expiration of the Initial Term, the term of this Agreement shall automatically be extended in five (5) year increments (each, a “Renewal Term”), unless either Party delivers written notice of termination to the other

 

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Party no later than 180 days prior to the expiration of the Initial Term or the applicable Renewal Term, as the case may be.

 

2.2          Early Termination by Either Party. This Agreement may be terminated by either Party upon thirty (30) Days’ prior written notice to the other Party upon the occurrence and continuation of an Event of Default by the other Party which remains uncured beyond all applicable notice and cure periods, subject, however, to any and all the rights of Financing Parties hereunder. In the event of termination pursuant to this Section 2.2, Section 2.3, Section 2.4 or Section 16, Owner shall pay to Operator to the extent not yet paid:

 

2.2.1       All Direct Operating Expenses and Capital Improvement Expenses incurred by Operator that have not been paid or reimbursed by Owner through the effective date of termination;

 

2.2.2       Any Basic Corporate Overhead Expenses and Annual Profit Fees earned but not paid through the effective date of termination (provided that, if such termination is due to an Operator Event of Default, Operator shall forfeit any Annual Profit Fees earned after the Event of Default giving rise to such termination); and

 

2.2.3       Unless such termination is due to an Operator Event of Default, Operator’s Early Termination Costs.

 

2.3          Early Termination by Owner. In addition to its right to terminate this Agreement pursuant to Section 2.2, Owner may terminate this Agreement for its convenience, subject to the prior written consent of each Financing Party, by providing Operator not less than one (1) year’s prior written notice of the effective date of termination. Owner will also be entitled to terminate this Agreement by delivery of thirty (30) days written notice of termination to the Operator (i) if the existence of a Force Majeure Event continues for more than one hundred twenty (120) days or if the cumulative aggregate duration of Force Majeure Event exceeds one hundred fifty (150) days or (ii) in the event of the destruction, condemnation or other loss of all or substantially all of the Plant without reconstruction or repair so as to effectively terminate the operation of the entire Plant permanently. In the event this Agreement is terminated for Owner’s convenience or pursuant to clause (i) above of this Section 2.3 prior to the end of the Initial Term, Owner shall pay the amounts set forth in Section 2.2 and pay the Early Termination Costs. In the event this Agreement is terminated pursuant to (ii) above of this Section 2.3, Operator will, subject to any rights of offset in favor of Owner, be entitled to payment of all accrued but unpaid Compensation, including, for the avoidance of doubt, Early Termination Costs.

 

2.4          Early Termination by Operator. In addition to its right to terminate the Agreement pursuant to Section 2.2, Operator may terminate this Agreement if Operator ceases to be an Affiliate of any member of Owner; provided that: (i) termination pursuant to this Section 2.4 shall be effective on the earlier of (a) one (1) year after written notice of such termination is received by Owner and (b) the date upon which the Parties reasonably agree that Owner and Operator have completed all activities necessary to enable Owner to assume responsibility for operation and maintenance of the Plant, including transition to a replacement operator, if any, and (ii) Operator may not terminate this Agreement pursuant to this Section 2.4 without the prior written consent of the DOE to such termination and such replacement operator,

 

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if any. In the event this Agreement is terminated pursuant to this Section 2.4, Owner shall make the payments set forth in Sections 2.2.1 and 2.2.2 but, for the avoidance of doubt, not including Early Termination Costs.

 

2.5          Early Termination by Collateral Agent. If Collateral Agent should foreclose, directly or indirectly, on the equity interest of the Owner, the Collateral Agent may terminate this Agreement, provided that: (i) Collateral Agent’s notice of termination may only be delivered following the effective date of such foreclosure and (ii) termination pursuant to this Section 2.5 shall be effective thirty (30) days after such written notice of such termination is received by Operator.

 

2.6          Rights and Duties Upon Termination. On the effective date of expiration or termination of this Agreement by Owner under Section 2.2 or Section 2.3 or by Collateral Agent under Section 2.5 (as applicable, the “Terminating Party”), the Terminating Party shall assume and become responsible for the operation and maintenance of the Plant, including entering into new contracts with third parties for the provision of goods and services. If the Plant is to continue in operation, Terminating Party and Operator shall cooperate with each other and with any new operator to achieve an orderly transition, including (a) if permitted by the terms of the applicable contract or by the contractual counterparty, the assignment to the Terminating Party or its designee of all contracts relating to the Plant entered into by Operator, and (b) to the extent assignable, the transfer to the Terminating Party or its designee of all Permits required by a Governmental Authority to be held in Operator’s name as a proxy for the Terminating Party. If this Agreement is terminated for reasons other than an Operator Event of Default, Operator shall be compensated for all such transition services through the Early Termination Costs payable pursuant to Section 2.2.3. If, however, this Agreement is terminated due to an Operator Event of Default, Operator shall not receive the Early Termination Costs payable pursuant to Section 2.2.3.

 

2.7          Final Settlement. Within three (3) months after the effective date of expiration or termination of this Agreement, Operator shall provide to Owner a settlement statement which reconciles all payments received from Owner with fees and expenses compensable to Operator in accordance with this Agreement. Owner shall pay the amount owed to Operator as shown on the settlement statement within thirty (30) Days of receipt of the settlement statement, and such amount shall be subject to audit in accordance with Section 14. The Parties shall use reasonable commercial efforts to complete the audit and reach mutual agreement on all matters related to the settlement statement within three months after it is presented to Owner.

 

3.             SCOPE OF WORK.

 

3.1          Standard of Performance. During the Term, Operator shall perform the Work in accordance with the OEM Manuals, Annual Maintenance Plan, Prudent Operating Practices, Applicable Law, all applicable Permits, the Site Rules, Project Agreements, Financing Agreements, any conditions or requirements required to maintain warranties covering the Plant, or any portion or component thereof in effect, and the other requirements of this Agreement (the “Requirements”). If there are any conflicts between or among the standards of performance derived from the Requirements, Operator shall promptly notify Owner of the conflict, and Operator shall request Owner’s instructions as to how to reconcile the conflict. The Parties shall

 

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cooperate and negotiate in good faith to make such modifications to this Agreement to the extent such a modification is necessary to resolve the conflict.

 

3.2          Management of Employees. The exclusive management, direction and control of Plant Personnel, Support Personnel and any other employees of Operator shall always reside in Operator. Subject to compliance with the Requirements, Operator shall complete the Work according to Operator’s own means and methods, which shall be in the exclusive charge and control of Operator.

 

3.3          Duties of Operator Prior to Substantial Completion. Prior to Substantial Completion, Operator shall perform the following activities (“Pre-Substantial Completion Work”):

 

3.3.1       Operator shall familiarize itself with the Plant, review all relevant Plant related agreements, prepare operations and maintenance plans and manuals conforming to the OEM Manuals (to the extent such OEM Manuals are available) and all other specific operation and maintenance manuals received from major equipment vendors, prepare training procedures, provide adequately trained and certified Plant Personnel and Support Personnel, assist with the acceptance and performance tests under the supervision, direction and control of the EPC Contractor and other major equipment suppliers pursuant to the respective Project Agreements, and prepare for operation and maintenance of the Plant and conduct of the Post-Substantial Completion Work following Substantial Completion. The Pre-Substantial Completion Work shall also include the work described in Exhibit H attached hereto.

 

3.3.2       No later than three months before the expected date of Block Substantial Completion of the first Block, Operator shall submit the final Pre-Commercial Operating Budget for approval by Owner.

 

3.3.3       No later than three months before the expected date of Block Substantial Completion of the first Block, Operator shall submit the final Annual Maintenance Plan for the first Operating Year for approval by Owner. Operator shall use the form attached in Exhibit D-2 for the Annual Maintenance Plan.

 

3.4          Specific Duties of Operator During Operations. Following Block Substantial Completion of each Block, Operator shall perform the following activities with respect to the such Block and the other portions of the operating Plant in conformity with the Annual Maintenance Plan (the “Post-Substantial Completion Work”):

 

3.4.1       Supervise and manage the day-to-day operation of the Plant, Plant Personnel and Support Personnel, and provide contractual administration on behalf of Owner with respect to any Subcontractor of Operator performing any function or services at or in connection with the Plant in accordance with the terms and conditions of applicable purchase orders and contracts. If Operator becomes aware of any breach or failure of any other contractor of Operator in the performance of its duties or obligations under any purchase order or contract, Operator shall provide prompt written notice of the

 

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same to Owner. Owner shall be responsible for taking any legal or other action necessary to cause its other contractors to comply with their obligations or responsibilities.

 

3.4.2       Provide training required to enable Operator’s employees to obtain, develop or maintain the skills and techniques necessary to enable Operator to perform its obligations under this Agreement in accordance with the Requirements.

 

3.4.3       Repair and maintain the Plant, including all scheduled and unscheduled maintenance and repairs required to keep the Plant in safe and efficient operating condition. Operator shall conduct scheduled outages for periodic maintenance as provided for in the Annual Maintenance Plan. Operator shall diligently conduct repair efforts related to unplanned outages and restore the Plant to operation as soon as is reasonably practicable in accordance with Prudent Operating Practices. At the reasonable request of Owner, Operator shall use all reasonable efforts to reschedule any previously scheduled outage and minimize any attendant costs to Owner.

 

3.4.4       Provide all engineering and technical services required to support the operation and maintenance of the Plant. In connection therewith, Operator shall use, and shall be entitled to reasonably rely on, the most recent technical data and other information (including any Intellectual Property) which Owner has furnished to Operator.

 

3.4.5       Provide environmental services in accordance with Section 9.2 as required to support operation and maintenance of the Plant in a manner consistent with all Requirements, including all Permits and the requirements of cognizant Governmental Authorities, and in accordance with all Applicable Laws, including obtaining and maintaining such Permits as are required by a Governmental Authority to be in Owner’s name (to the extent possible and lawful, otherwise Permits shall be held in Operator’s name) and documenting use, on-site storage, and coordination of disposition of Hazardous Materials and wastes in accordance with applicable Environmental Laws. Operator shall assist Owner in obtaining and maintaining any Permits, registrations or authorizations necessary for operation of the Plant that are required by a Governmental Authority to be held in Owner’s name.

 

3.4.6       Operate and maintain the Plant in a manner consistent with the Requirements, including with respect to personnel safety and equipment protection.

 

3.4.7       Maintain records of the operations and maintenance of the Plant (including operating logs and other information required by the PPA), maintain financial books and records relative to the costs of operating and maintaining the Plant in accordance with U.S. generally accepted accounting principles, consistently applied, and make such records available for inspection by Owner or any designees of Owner during normal business hours. Provide to Owner within fifteen (15) Business Days after the end of each month a report in respect of Direct Operating Expenses and Capital Improvement Expenses, comparing the actual expenses to the approved Annual Maintenance Plan’s Annual O&M Budget for the preceding month and for the applicable year through the end of such preceding month.

 

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3.4.8       Use commercially reasonable efforts to secure and enforce all warranties (including any availability or other performance guarantees) for Materials and services purchased for the Plant and administer any Claims related thereto, including those provided by any Subcontractor of Operator.

 

3.4.9       Provide security and property management services, such as janitorial, landscaping, weed abatement, road maintenance, drainage control, perimeter fence repairs, gate maintenance and building maintenance services, in accordance with Prudent Operating Practices.

 

3.4.10     Provide to Owner by the fifteenth (15th) Business Day of each month a report for the prior month based on the components set forth in Exhibit B. Operator shall also provide to Owner any other information regarding the operation and maintenance of the Plant reasonably requested by Owner. Upon the reasonable request of Owner, Operator’s Representative shall meet with Owner to discuss the performance of the Work and operation of the Plant.

 

3.4.11     On or before November 1st of each calendar year, prepare and submit to Owner a proposed Annual Maintenance Plan for approval by Owner. This plan shall include the following items as further described below.

 

·                  The proposed Annual O&M Budget for next calendar year;

 

·                  The Forecast Budget (as defined below);

 

·                  Support for the Annual O&M Budget and the Forecast Budget; and

 

·                  Year over year trend analysis.

 

The proposed Annual O&M Budget for the next calendar year will be based on Operator’s assessment of the Work to be performed during such year and the proposed means of performing such Work in accordance with the Requirements. The proposed Annual O&M Budget shall include line item budget appropriations for Direct Operating Expenses, Capital Improvement Expenses, the recommended amount for the Contingency, expenses of Operator’s Subcontractors and anticipated cash flow requirements for such year.

 

In addition, as part of the Annual Maintenance Plan the Operator shall also provide a Forecast Budget for the following five years (the “Forecast Budget”). As support of the Annual O&M Budget and the Forecast Budget, the Operator shall provide descriptions of Operator’s underlying assumptions relating to, and Operator’s recommendations regarding, scheduled and unplanned outages (including timing and cost for Major Maintenance (as set forth in Exhibit D-2)), major maintenance and capital repairs, and improvements and additions, which are included in such proposed Annual Maintenance Plan.

 

Owner shall indicate in writing its comments on the proposed Annual Maintenance Plan, and submit any recommended changes thereto, within fifteen (15) Days after its receipt of the proposed Annual Maintenance Plan. Operator

 

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shall confer with Owner about such comments or recommended changes and submit a revised Annual Maintenance Plan (accompanied by a written statement of Operator’s reasons for accepting or rejecting any such comments or recommended changes) not later than fifteen (15) Days following receipt of such comments or recommended changes, unless Operator has obtained Administrator’s written consent to submit such revised Annual Maintenance Plan at a later date. This process shall continue until the Annual Maintenance Plan is approved. If Owner fails to approve an Annual Maintenance Plan for any calendar year prior to the commencement of such year, the Parties shall use the prior year’s Annual Maintenance Plan with respect to Direct Operating Expenses and other expenses less than $100,000 per project item, including Major Maintenance and Capital Improvement Expenses, until a new Annual Maintenance Plan is agreed, except that the Annual O&M Budget for the prior year shall be increased annually for inflation (but not decreased for deflation) based on the CPI.

 

Operator shall operate and maintain the Plant in accordance with the Annual Maintenance Plan approved by Owner for the period in question or, if applicable, the Pre-Commercial Operating Budget. Operator shall make recommendations to Owner with respect to budget and scope adjustments that may be required to maintain overall compliance with the Annual Maintenance Plan, and Owner may consider such recommendations in its sole discretion.

 

3.4.12     Operator shall maintain a continuous improvement program (including steps to maintain improvement of budget development and outage management processes) that is designed to target improving Plant performance metrics such as reliability and availability. Operator shall provide Owner with copies of such improvement program and any modification to such program on a timely basis. Operator shall also make system performance enhancement recommendations as part of the performance reporting process for any changes, adjustments or modifications that should be made to Plant.

 

3.4.13     Operator shall continuously monitor the Plant remotely through the SCADA System. If Operator detects an alarm or error message in the course of such monitoring, it shall take such actions remotely through the SCADA System or at the Plant as are reasonably necessary to respond to such alarm or error message, including effecting remote resets, when possible, or by performing manual resets at the Plant, in each case, as soon as reasonably practicable. Promptly after taking any such actions, Operator shall make its personnel at the Plant and Owner aware of the existence and nature of such actions and the related error or alarm codes. Operator shall also provide analytical services to analyze generation shortfalls, including the cause of such shortfall and propose resolutions for equipment operating below expected standards of operation.

 

3.4.14     Administer all Project Agreements and other service contracts relating to the operation and/or maintenance of the Plant, including the following with regard to Owner’s obligations under the PPA: communications with or related to CAISO including notices of emergencies and outages required to be provided to CAISO, scheduling

 

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deliveries of energy with CAISO (including acting as or engaging a third party to act as the scheduling coordinator for the Plant) to the extent PG&E is not acting as the scheduling coordinator for the Plant, provide accounting and reports of electric production in connection with the power sales, provide all planned outage and forced outage notifications to PG&E required under the PPA and all forecasts of energy required to be delivered to PG&E under the PPA.

 

3.4.15     Perform any such additional services related to the operation, maintenance, renewals, replacements, additions and retirements pertaining to the Plant as Owner, by written notice to Operator, requests Operator to undertake and as Operator agrees in writing to undertake.

 

3.5          Emergency. In the event of any Emergency, Operator shall perform the following (and, unless such Emergency is caused by Operator’s acts or omission, shall be entitled to reimbursement for all reasonable costs, expenses and obligations incurred in connection therewith):

 

3.5.1       Operator shall take immediate and diligent action in accordance with Applicable Laws and Prudent Operating Practice to attempt to prevent such threatened damage, injury or loss and, as necessary, mitigate to the greatest extent reasonably practicable such damage, injury or loss;

 

3.5.2       Operator shall notify all third parties, including fire departments, government agencies, and national response centers, as required by Applicable Law; and

 

3.5.3       Operator shall notify the Owner’s Representative of any emergency, by telephone, facsimile or electronic mail, as soon as practicable following the occurrence of such Emergency given the circumstances, which notice shall include detail with respect to any action being taken or instigated by Operator in response thereto.

 

3.6          Notification to Owner. Upon obtaining knowledge thereof, Operator shall promptly deliver Notice of each of the following to Owner’s Representative:

 

3.6.1       Any pending or threatened litigation, claim, dispute, action, investigation or proceeding by any Person concerning the Plant or the Work;

 

3.6.2       Any refusal or threatened refusal to grant, renew, or extend any existing Permit, or any pending or threatened litigation, claim, dispute, action or proceeding that might adversely affect the granting, renewal or extension of any relevant Permit;

 

3.6.3       Any material outage of more than twenty percent (20%) of the operating capacity of the Plant (other than as required to perform scheduled or routine maintenance) for a period of four (4) or more continuous hours;

 

3.6.4       Any incidents at the Plant resulting in death, lost time injury or serious injury to any individual, with written notice to follow within twenty-four (24) hours;

 

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3.6.5       Any discovery of Hazardous Materials at the Plant that are not already recorded on the logs Operator is required to maintain in accordance with Applicable Law and previously notified to Owner or any incident the occurrence of which might reasonably require Operator to provide notification to a Governmental Authority under Applicable Law or Permits or which otherwise may reasonably be expected to result in any regulatory liability to Owner; and

 

3.6.6       Any other event or circumstance that reasonably could be expected to adversely impact the operation of the Plant in any material manner including labor disputes, material violation of any Applicable Laws or Permits, or material damage to any of the major pieces of equipment comprising the Plant.

 

3.7          Safety. Operator shall take reasonable safety and other precautions consistent with Prudent Operating Practices to protect persons and property from damage, injury or illness arising out of the performance of the Work. Operator shall prepare for Owner’s review and approval a safety manual that shall incorporate the following elements: (i) identification of the Person(s) responsible to implement and enforce the safety program; (ii) identification of safety hazards and correction procedures; (iii) requirements for safety meetings and safety training procedures; (iv) procedures for documenting safety infractions; and (v) general safety regulations and procedures. Operator shall maintain in form and content reasonably acceptable to Owner statistics regarding jobsite accidents, injuries and illnesses at the Plant as required by Applicable Law, which shall be available for inspection by and submitted to Owner upon its written request.

 

4.             CHANGE ORDERS. If Owner and Operator agree that Operator’s scope of responsibilities under this Agreement shall be or has been increased or, consistent with Prudent Operating Practices, decreased, or if it appears to either Party that a change is required to the Annual Maintenance Plan to conform the Annual Maintenance Plan to actual circumstances or events, Owner and Operator may in their respective discretion agree upon such amendments to this Agreement, or the Annual Maintenance Plan, as the case may be. Such amendments shall be reflected in a document executed by both Owner and Operator (a “Change Order”). Without limiting the generality of the foregoing, if Owner and Operator agree that Operator’s costs of performing the Work are materially increased as a result of any change in Applicable Law, any change to any agreement, instrument or document referred to herein relating to the Plant or any expenditures or services required of Operator in connection with any cooperation provided under Section 6.1 that would not otherwise be required to operate or maintain the Plant, in each case occurring after the date hereof, occurring as a result of actions outside Operator’s control, and affecting the scope of Operator’s responsibilities under this Agreement, then Owner and Operator shall agree upon an equitable adjustment to the Basic Corporate Overhead Expense and/or an adjustment to Operator’s Compensation whereby Operator shall be entitled, upon submission of proper invoices and supporting documentation, to be reimbursed for such increased costs and shall reflect such adjustment in a written Change Order. In addition and without limiting the generality of the foregoing, if Operator’s costs of performing the Work are materially increased as a result of any expenditures or services required of Operator in connection with any cooperation provided under Section 6.1 in furtherance of the contracts listed in such section that would not otherwise be required to operate or maintain the Plant, then Owner and Operator shall agree upon an equitable adjustment to the Basic Corporate Overhead Expense and/or an adjustment to Operator’s compensation whereby Operator shall be entitled, upon

 

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submission of proper invoices and supporting documentation, to be reimbursed for such increased costs and shall reflect such adjustment in a written Change Order. If any such change in scope is initiated by Operator, Operator shall notify Owner of its estimate of the increased costs caused by such change in scope at or prior to the time the relevant Change Order is submitted to Owner for approval.

 

5.             OPERATOR’S AUTHORITY; SUBCONTRACTING; PARTS.

 

5.1          Operator’s Authority. Operator shall have the authority to procure and make expenditures for such items, parts, materials and services as are deemed necessary by Operator in completing the Work, provided that such procurement and expenditures comply with the Annual Maintenance Plan (or, if applicable, the Pre-Commercial Operating Budget), the Requirements, and the other terms and conditions of this Agreement. In doing so, Operator shall keep Owner timely informed and obtain Owner’s prior approval for any expenditures that are not set forth in the Annual Maintenance Plan or that do not qualify as Permitted Excess Expenditures. Operator shall not require Owner’s prior approval, and Owner shall reimburse Operator for, any Permitted Excess Expenditures, provided however, if the payee of a Direct Operating Expense or Capital Improvement Expense is the Operator or an Operator Related Party, such expense shall not exceed the applicable line item amount set forth in the applicable Annual O&M Budget unless the Operator has received the prior written consent of the Owner in respect to such expense. Notwithstanding the foregoing, during an Emergency or other unexpected contingency, Operator is authorized to make such expenditures and take such other actions, whether budgeted or not, as Operator shall determine to be reasonably necessary in order to comply with this Agreement, applicable Permits, Applicable Laws or to otherwise protect the Plant, individuals or other property and to maintain the Plant in a safe condition consistent with Prudent Operating Practices. If any such unbudgeted costs and expenditures are incurred, Operator shall promptly notify Owner of such action, specifying the particulars of the events giving rise to such costs and expenditures, and shall promptly submit a revision to the Annual Maintenance Plan to encompass the costs and expenditures incurred, as well as those expected to be incurred, as a result of such Emergency or other unexpected event, and such costs and expenditures reasonably incurred shall be reimbursed in accordance with Exhibit E. Notwithstanding anything in this Section 5.1 to the contrary, Operator shall not make any Permitted Excess Expenditures or other expenditures (including expenditures related to an Emergency or unexpected contingency) not included within an Annual Maintenance Plan (or, if applicable, the Pre-Commercial Operating Budget) if such expenditure or Owner’s reimbursement of the same would cause Owner to breach or otherwise fail to comply with the LGA.

 

5.2          Subcontracts. The subcontracts and Subcontractors proposed by the Operator in the Annual Maintenance Plan shall be reviewed and approved by Owner; provided that Operator’s subcontract with SunPower Corporation Systems, dated as of even date herewith, is hereby approved for the duration of the Term, including any Renewal Term. In each monthly report delivered pursuant to Section 3.4.10, Operator shall notify Owner of any other Subcontractors it intends to engage in the future for work expected to result in more than $250,000 in fees to such Subcontractor. Owner shall have ten (10) Business Days from its receipt of such report to object to any such Subcontractor, and Operator shall not engage any Person to which Owner has so objected. Any future subcontracts entered into by Operator to procure equipment, supplies or services for the Plant shall be in a form to be agreed upon by

 

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Owner and Operator, which form shall conform to the applicable terms and provisions of this Agreement. No subcontract entered into by Operator shall prohibit or restrict assignment of such agreement by Operator to Owner. Owner’s Representative shall have the right to review and approve (such approval not to be unreasonably withheld, conditioned or delayed) any material changes to the form purchase order. Operator shall not be relieved of any of its obligations or liabilities under this Agreement by reason of any subcontract and shall be responsible for the acts and omissions of its Subcontractors in their performance of the Work to the same extent as if such acts and omissions were performed or made by Operator.

 

5.3          Parts. Operator may not, in performing the Work, procure and employ used, non- OEM, reverse engineered, and/or refurbished Materials, equipment and parts without the express approval and permission of Owner. Materials, equipment and parts procured by Operator shall meet all specifications and requirements of Owner, shall comply with all Requirements including any conditions required to maintain warranties covering the Plant or any portion or component thereof in effect, and shall be inspected and tested by Operator in accordance with Prudent Operating Practices and any obvious defects shall be noted and handled appropriately.

 

6.             COOPERATION.

 

6.1          General. During the Term of this Agreement, each Party shall act in good faith and provide such reasonable assistance and cooperation as the other Party may request in connection with the performance of their respective duties and obligations under this Agreement.

 

6.2          Owner Representative. From time to time during the Term, Owner shall designate, by written notice signed by an executive officer of Owner delivered to Operator, an individual and an alternate (to act in the absence of such representative) (each, an “Owner Representative”) with authority to act for Owner in all matters pertaining to this Agreement and the Plant, to receive notices and communications from Operator with respect to this Agreement and the Plant, and to deliver to Operator, on behalf of Owner, notices, communications, decisions and approvals with respect to this Agreement and the Plant. The name of the Owner Representative (including the alternate) as of the date hereof is attached hereto as Exhibit I. In the event that Owner replaces an Owner Representative (or such alternate), Owner shall promptly notify Operator and Operator shall prepare and distribute a new Exhibit I reflecting such changes, and Exhibit I shall be deemed revised.

 

6.3          Actions by Owner. The manner of making any decision or giving any approval by Owner shall be determined by Owner for itself, but any communication received by Operator from a Person designated by Owner as its Owner Representative (unless such designation shall have been previously revoked) may be conclusively relied upon by Operator as having been authorized by Owner.

 

6.4          Operator Representative. From time to time during the Term, Operator shall designate, by written notice signed by an executive officer of Operator delivered to Owner an individual and an alternate (to act in the absence of such representative) (each, an “Operator Representative”) with authority to act for Operator in all matters pertaining to this Agreement and the Plant, to receive notices and communications from Owner with respect to this Agreement and the Plant, and to deliver to Owner, on behalf of Operator, notices, communications,

 

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decisions and approvals with respect to this Agreement and the Plant. The name of the Operator Representative (including the alternate) as of the date hereof is attached hereto as Exhibit I. In the event that Operator replaces an Operator Representative (or such alternate), Operator shall promptly notify Owner and Operator shall prepare and distribute a new Exhibit I reflecting such changes, and Exhibit I shall be deemed revised.

 

6.5          Actions by Operator. The manner of making any decision or giving any approval by Operator shall be determined by Operator for itself, but any communication received by Owner from a Person designated by Operator as its Operator Representative (unless such designation shall have been previously revoked) may be conclusively relied upon by Owner as having been authorized by Operator.

 

6.6          Access to Information and Plant; Special Assistance. Operator shall provide Owner access to all documents, data, information and records that relate to operation and maintenance of the Plant; provided, however, that Operator shall not be required to provide any privileged or proprietary information, personnel information, or other information that does not relate to the Plant and otherwise is not required to operate and maintain the Plant in accordance with Prudent Operating Practices, the Requirements and this Agreement. At the request of Owner from time to time, Operator shall provide Owner with such data and assistance as may be reasonably requested by Owner to enable Owner to discharge satisfactorily its responsibilities as Owner of the Plant, including its responsibilities to its lenders, security holders, regulatory authorities and others. At all times during the Term of this Agreement, Owner and any Affiliates approved by Owner or other Owner designees shall have access to the Plant to inspect and observe any and all aspects of its construction, operation, maintenance, repair, and overall condition, including any command and control facilities for the Plant, subject only to reasonable health and safety rules and regulations which shall be provided to by Operator and Owner and approved by Owner in its reasonable discretion (including any changes made from time to time).

 

7.             OWNER’S RESPONSIBILITIES.

 

7.1          Responsibilities of Owner. Owner shall be responsible for the following:

 

(a)                                 Providing Operator and its Subcontractors with access to and within the Plant at all times and without prior notice as reasonably necessary for Operator to perform the Work;

 

(b)                                 If Owner brings third parties onto the Plant site, Owner shall comply, and be responsible for each third party’s compliance, with the safety requirements of the Plant site and any operating or other procedures or protocols related to the Plant. Owner shall not give Plant access to any competitor of the vendor supplying the major generation equipment to the Plant, without first obtaining Operator’s consent;

 

(c)                                  All communications regarding power sales (except with CAISO, which shall be Operator’s responsibility in accordance with Section 3.4.14), contracting regarding power sales, and bidding regarding power sales;

 

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(d)                                 Providing all facilities and infrastructure required for Operator’s and its Subcontractors’ performance of the Work;

 

(e)                                  Obtaining all Permits or licenses required by a Governmental Authority to be in Owner’s name which are necessary to enable Operator or its Subcontractors to operate and maintain the Plant;

 

(f)                                   Water supply, telephone service, public address system, local data network, in—plant radio system, water and waste disposal (other than Hazardous Materials) and all other utilities as deemed desirable by mutual agreement of Owner and Operator for the execution of the Work;

 

(g)                                  Providing Operator with reasonably prompt written notice of any changes in the expected date of Substantial Completion when compared to that set forth in the schedule for such event set forth in the EPC Agreement; and

 

(h)                                 Proving Operator with copies, within a reasonable time period following any request from Operator, of any agreements or other documentation the review of which is part of Operator’s Work hereunder.

 

8.             COMPENSATION AND PAYMENTS.

 

8.1          Compensation. During the Term of this Agreement, Owner shall pay to Operator, as compensation for performance of its duties and obligations hereunder, the Compensation determined and payable pursuant to Exhibit E.

 

8.2          Invoices and Reconciliation. On the Effective Date, Operator shall invoice Owner for the Compensation anticipated to be owed for the Work to be performed during the remainder of the month in which the Effective Date occurs and the following month of the Term, based on the budget for such period set forth in the Annual Maintenance Plan, or, if applicable, the Pre-Commercial Operating Budget. Thereafter, by the eighth (8th) Business Day of each month during the Term, Operator shall (i) invoice Owner for Compensation anticipated to be owed for the Work to be performed during the following month based on the budget included in the Annual Maintenance Plan (or, if applicable, the Pre-Commercial Operating Budget) plus any Reconciliation Amount owed to Operator as a result of the Compensation paid in the month prior to the issuance of the invoice being less than the actual Compensation earned during such month in accordance with Exhibit E or minus any Reconciliation Amount owed to Owner as a result of the Compensation paid in such prior month being in excess of the actual Compensation earned during such month in accordance with Exhibit E, and (ii) provide an executed lien waiver in the form of Exhibit O for the Operator. Operator shall determine at the end of each month, whether the anticipated Compensation invoiced to Owner for such month was less than or in excess of the actual amount of Compensation earned during such month, as determined pursuant to Exhibit E (such amount, the “Reconciliation Amount”). Owner shall pay all undisputed invoiced amounts of such Compensation to Operator no later than thirty (30) Days following the date of receipt by Owner of the applicable invoice; provided, however, that Owner shall pay all undisputed amounts in the invoice delivered on the Effective Date within five (5) Business Days of the Effective Date. Notwithstanding the provisions of Section 19.1, invoices sent pursuant to this

 

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Section 8.2 shall be addressed to “Accounts Payable” and sent by e-mail (with a follow-up paper invoice to be sent pursuant to the notice provisions of Section 19.1 hereto) to the e-mail address indicated by notice by Owner from time to time.

 

8.3          Cash Requirements.

 

8.3.1       If at any time during any month Operator requires additional sums from Owner for unanticipated expenses in excess of 10% over the amounts for Direct Operating Expenses and Capital Improvement Expenses pre-funded by Owner in accordance with Section 8.2, Operator promptly shall notify Owner. Subject to Section 5.1, within fifteen (15) Business Days after receipt of such notice, Owner shall pay by electronic funds transfer the amount of such shortfall to Operator.

 

8.3.2       Operator shall not be under any obligation to use its own funds to pay any Subcontractors or vendors any amounts included in the Compensation that have not been paid by Owner and shall be indemnified by Owner, beginning on the Effective Date, for Claims suffered by Operator as a result of Owner’s failure to provide funds in accordance with this Section 8.

 

8.4          Cash Neutral. Notwithstanding any provision in this Section 8 to the contrary, all payments to be made by Owner under this Section 8 are due and are to be received by Operator in advance of Operator’s incurrence of the expense to which such payments from Owner are to be applied. The Parties acknowledge and agree that the Work, including the procurement of any equipment, supplies and other services, are being performed hereunder on a cost pass-through basis to the Owner.

 

8.5          Interest on Delinquent Funds. Any delinquent payment under this Agreement shall bear interest, from the date due until paid, at a rate per annum equal to the prime rate from time to time charged by JPMorgan Chase Bank, N.A. in New York City, or any successor institution, plus two percent (2%), but not in excess of the maximum lawful rate of interest permitted by any Applicable Laws. Each change in the interest rate payable on delinquent payments hereunder shall become effective on the date of each such change in the prime rate. The payment of any such interest shall not excuse or cure any delinquent payment due to either Party under this Agreement.

 

8.6          No Waiver. No payment by Owner shall prejudice or constitute a waiver of its right, within the time frame set forth in Section 14, to audit or make a Claim in respect of the correctness of any billing submitted by Operator.

 

9.             COMPLIANCE WITH LAWS AND PERMITS.

 

9.1          Requirements of Law Generally. Operator shall comply with all Applicable Laws (including, but not limited to, Environmental Laws) applicable to Operator’s performance of the Work. Owner shall comply with all Applicable Laws (including, but not limited to, Environmental Laws) applicable to its obligations hereunder and otherwise applicable to the ownership of the Plant.

 

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9.2          Hazardous Materials Management. Following Substantial Completion, Operator shall be responsible for the on-site management of all Hazardous Materials generated by or used in the operation or maintenance of the Plant. Following Substantial Completion, Owner shall be identified to any Governmental Authority as the party responsible for the generation, treatment, storage and disposal of all hazardous or toxic wastes (including waste Hazardous Materials) generated by or used in the operation or maintenance of the Plant (and, therefore, Owner shall be designated as the “generator” on all manifests relating to all such hazardous or toxic wastes). Operator shall use commercially reasonable and diligent efforts to prevent the release of any Hazardous Materials into the air, soil, surface water or groundwater at the Plant (other than as permitted by applicable Environmental Laws). Owner shall indemnify, defend, and hold harmless the Operator Indemnified Parties from and against any Claims arising from unpermitted releases of Hazardous Materials into the air, soil, surface water or groundwater at the Plant caused by Owner or any its representatives, employees or agents (excepting Operator, its representatives, employees, agents, contractors or Subcontractors (including without limitation, any Plant Personnel or Support Personnel). Operator shall defend, indemnify and hold the Owner Indemnified Parties harmless against, and shall reimburse Owner for any Claims resulting from or related to any unpermitted releases of Hazardous Materials into the air, soil, surface water or groundwater at or from the Plant caused by the acts or omissions of Operator, its representatives, employees, agents, contractors or Subcontractors (including any Plant Personnel or Support Personnel). The amount of any indemnity payable under this Section 9.2 shall be reduced by the amount of all net insurance proceeds received by the indemnified parties in respect of the occurrence of the event giving rise to the indemnification obligation hereunder. Except in the case of gross negligence, fraud or willful misconduct, the total aggregate liability of Operator for investigation, remediation or other response costs arising out of, connected with or resulting from unpermitted releases of Hazardous Materials into the air, soil, surface water or groundwater at the Plant, whether based in contract, in tort (including negligence and strict liability) under warranty or otherwise, and notwithstanding any other provisions of this Agreement, shall in no event exceed $5,000,000.

 

9.3          Compliance with Permits. Operator shall comply with all Permits, and the terms and conditions thereof, applicable to the Plant (whether such Permits are issued in the name of Operator or Owner).

 

9.4          Inapplicability of Article 10 to Contamination Claims. Liability of either Party to the other Party for any Claims for investigation, remediation or other response costs arising out of, connected with or resulting from unpermitted releases of Hazardous Materials into the air, soil, surface water or groundwater at the Plant shall be governed by Section 9.2, and Article 10 shall not apply to such Claims. Notwithstanding the foregoing, and for the sake of clarity, Operator’s liability for the violation of Environmental Laws other than as relates to Claims for the foregoing shall be governed by Article 10.

 

10.          ALLOCATION OF RISKS AND LIABILITY.

 

10.1        General Indemnity by Operator. Subject to Section 9.4, Operator shall indemnify, defend and hold harmless the Owner Indemnified Parties from and against any and all Claims of whatsoever kind or character, that could be brought by Operator or that are brought by any of Operator’s directors, officers, managers or employees or by any party other than Owner or any of

 

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its Affiliates, including reasonable attorneys’ fees and expenses, for injury or death of persons or physical loss of or damage to property of Persons arising from (1) Operator’s (including it employees’ or agents’) fraud, gross negligence or willful misconduct, (2) claims from Governmental Authorities related to the failure of Operator or any Operator Related Party to pay taxes for which any such party is responsible, or (3) the violation of any Applicable Law by Operator or any Operator Related Party, except to the extent such injury, death, loss or damage arises from: (i) the fraud, gross negligence or willful misconduct of any Owner Indemnified Party; or (ii) the breach of this Agreement by Owner; or (iii) the violation of any Applicable Law by any Owner Indemnified Party.

 

The amount of any such indemnity payable by the Operator shall be reduced by the amount of all net insurance proceeds received by the Owner Indemnified Parties in respect of the occurrence of the event giving rise to the indemnification obligation hereunder.

 

10.2        General Indemnity by Owner. Subject to Section 9.4, Owner shall indemnify, defend and hold harmless the Operator Indemnified Parties from and against any and all Claims of whatsoever kind or character that are related to the Work or the Plant, that could be brought by Owner or that are brought by any of Owner’s directors, officers, managers or employees or by any party other than an Operator Related Party or an Operator’s Subcontractor of any tier, including reasonable attorneys’ fees and expenses, for injury or death of persons or physical loss of or damage to property of Persons, arising from (1) the fraud, gross negligence or willful misconduct of any Owner Indemnified Party, (2) claims from Governmental Authorities related to the failure of any Owner Indemnified Party to pay taxes for which any such party is responsible, or (3) the violation of any Applicable Law by any Owner Indemnified Party, except to the extent such injury, death, loss or damage arises from: (i) the fraud, gross negligence or willful misconduct of any Operator Related Party or any Operator Subcontractor of any tier in connection with performance of the Work; or (ii) the breach of this Agreement by the Operator; or (iii) the violation of any Applicable Law by Operator’s Related Parties or Operator’s Subcontractors of any tier.

 

The amount of any such indemnity payable by the Owner shall be reduced by the amount of all insurance proceeds received by the Operator Indemnified Party in respect of the occurrence of the event which gave rise to the indemnification obligation hereunder.

 

10.3        Cooperation Regarding Claims. If any Party (each an “Indemnified Party”) shall receive notice or have knowledge of any claim that may result in a claim for indemnification by such Indemnified Party against a Party pursuant to this Section 10, such Indemnified Party shall, as promptly as possible, give the indemnifying Party notice of such claim, including a reasonably detailed description of the facts and circumstances relating to such claim, and a complete copy of all notices, pleadings and other papers related thereto, and in reasonable detail the basis for its potential claim for indemnification with respect thereto; provided that failure promptly to give such notice or to provide such information and documents shall not relieve the indemnifying Party from the obligation hereunder to respond to or to defend the Indemnified Party failing to give such notice against such claim. The Party against whom indemnification is claimed shall, upon its acknowledgment in writing of its obligation to indemnify the Indemnified Party seeking indemnification, be entitled to assume the defense or to represent the interests of the Indemnified Party seeking indemnification in respect of such claim, which shall include the right to select and

 

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direct legal counsel and other consultants reasonably acceptable to the Indemnified Party, appear in proceedings on behalf of such Indemnified Party and to propose, accept or reject offers of settlement, all at its sole cost, in consultation with the Indemnified Party and provided, however, that without the Indemnified Party’s consent, which consent may not be unreasonably withheld, the indemnifying Party may only consent to entry of a judgment or settlement that does not provide for injunctive or other nonmonetary relief affecting the Indemnified Party or the Plant.

 

10.4       Limitations of Liability. Except in the case of fraud or willful misconduct, the total aggregate liability of Operator arising out of, connected with or resulting from this Agreement or from the performance or breach hereof, or from any Work performed by Operator, whether based in contract, in tort (including negligence and strict liability) under warranty or otherwise, and notwithstanding any other provisions of this Agreement, shall be limited to the Annual Profit Fee (without any adjustment through the Adjustment Payment) and the Basic Corporate Overhead Expenses for the year in which such liability arose (or, for any year prior to the commencement of commercial operations at the Plant, $100,000 in the aggregate). The foregoing limit of liability will not apply to indemnity claims under Section 9.2 or Section 10.1.

 

11.          CONSEQUENTIAL DAMAGES; DISCLAIMER. Neither Party shall be liable to the other Party for any punitive, incidental, indirect, special or consequential loss or damage, including loss of revenues, income or profits, cost of capital, loss of goodwill or reputation connected with or resulting from performance or non-performance of any obligations under this Agreement, except (a) to the extent arising from the gross negligence, fraud or willful misconduct of the liable Party, or (b) any indemnification obligations of either Party hereunder for third party Claims. The Parties further agree that this waiver and disclaimer of liability shall apply at all times, whether in contract, equity, tort or otherwise, regardless of the fault, negligence (in whole or in part), strict liability, breach of contract or breach of warranty of the Party whose liabilities are so limited.

 

12.          INSURANCE.

 

12.1        Operator’s Insurance. At its own expense Operator shall secure and maintain, or cause to be secured and maintained, the insurance policies required to be maintained by it under Exhibit C in accordance with the terms and conditions set forth therein. Operator shall, within five (5) days after each request by Owner, provide certificates of insurance to Owner, evidencing all insurance policies required pursuant to this Section 12.1. Operator shall also provide detailed summaries (reasonably acceptable to Owner) of all insurance policies required by this Section 12.1, upon reasonable advance notice by Owner.

 

12.2        Owner’s Insurance. The Owner shall procure, or cause to be procured, at the expense of the Owner, the insurance policies required to be maintained by it under Exhibit C in accordance with the terms and conditions set forth therein. Owner shall, within five (5) Days after each request by Operator provide certificates of insurance to Operator, evidencing all insurance policies required pursuant to this Section 12.2. Owner shall also provide detailed summaries (reasonably acceptable to Operator) of all insurance policies required pursuant to this Section 12.2 upon reasonable advance notice by Operator.

 

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13.          FORCE MAJEURE.

 

13.1        Excused Performance; Duty to Mitigate. Notwithstanding any other provision of this Agreement (excepting Section 13.2), any obligation of either Party under this Agreement shall be excused to the extent that such Party’s inability to perform is caused by a Force Majeure Event. Both Parties shall make all commercially and technically reasonable efforts to cure, mitigate or remedy the effects of a Force Majeure Event.

 

13.2        Obligations to Pay Monies. Notwithstanding that a Force Majeure Event may otherwise exist, the provisions of this Section 13 shall not excuse the payment of money due by any Party; provided, however, that Owner shall have no obligation to pay for Work that is not performed during a Force Majeure Event.

 

13.3        Notice of Force Majeure Event. The Party claiming a Force Majeure Event shall, as a condition precedent for relief for the Force Majeure Event, give notice to the other Party of any Force Majeure Event as soon as reasonably practicable, but not later than ten (10) Days after the date on which such Party knew of the commencement of the Force Majeure Event. Notwithstanding the above, if the Force Majeure Event results in a breakdown of communications rendering it not reasonably practicable to give notice within the applicable time limit specified herein, then the Party claiming a Force Majeure Event shall give such notice as soon as reasonably practicable after the reinstatement of communications, but not later than five (5) Days after the reinstatement of such communications.

 

13.4        Notice of Cessation of Force Majeure Event. The Party claiming a Force Majeure Event shall give notice to the other Party of (a) the cessation of the relevant Force Majeure Event and (b) the cessation of the effects of such Force Majeure Event, and such Party shall resume performance of its obligations as soon as reasonably practicable thereafter.

 

14.          BOOKS AND RECORDS. All Project Records shall be and remain the sole and exclusive property of the Owner, which shall have and retain all rights, including any Intellectual Property rights, therein. Operator shall maintain on a current basis proper, accurate, detailed and complete books, records and accounts relating to the operation and maintenance of the Plant (including logs of all repairs, parts and materials used and any other data to be maintained under the Requirements) and the performance of the Work (collectively referred to as “Books and Records”), including all operating data and operating logs maintained pursuant to Section 3.4, and as necessary to document Compensation earned by Operator. Operator shall ensure that such Books and Records are kept in a manner that enables them to be separated from Operator’s own corporate books and records of account. Throughout the Term and for a period of one (1) year (or such longer period as required by Governmental Authority) following the end of the Term, Owner shall have the right, upon three (3) Business Days’ prior written notice and during normal business hours, to inspect and audit the Books and Records. If any overpayments of Compensation are identified in such audit, the undisputed amount of the overpayment shall be refunded to Owner within thirty (30) Days after Operator receives Owner’s invoice for the same.

 

15.          INTELLECTUAL PROPERTY. Any Licensed Materials, and all Intellectual Property, if any, contained in the Licensed Materials or otherwise owned by Operator or its Subcontractors and incorporated into the Plant by Operator or its Subcontractors in connection with the performance of the Work, are and shall remain the exclusive property of Operator or its Subcontractors, as the case may be. Operator hereby grants a fully paid-up, non-exclusive,

 

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perpetual, irrevocable, world-wide license for Owner to use the Licensed Materials and all Intellectual Property therein and such Intellectually Property so incorporated into the Plant (the “Operator IP), as set forth below:

 

(a)           Owner shall not, without the prior written consent of Operator, use the Licensed Materials or Operator IP, in relation to any project other than the Plant or for any expansion of the Plant; and

 

(b)           Owner may use such Licensed Materials and Operator IP soley and to the extent required for the operation, maintenance, repair and service of the Plant.

 

The Licensed Materials covered by the license set forth in this Article 15 are inseparable from the Materials and Work being furnished pursuant to this Agreement. As a result, this license, and all rights and obligations contained in this license, (i) shall continue with respect to the Plant for so long as the Plant remains in service and (ii) shall transfer with any transfer of the Plant or any portion thereof to any Person. All copies, but not the Intellectual Property therein, of the Licensed Materials that are provided to Owner by Operator or its Subcontractors in connection with the performance of the Work shall become the property of Owner.

 

16.          EVENTS OF DEFAULT.

 

16.1        Operator Defaults. The occurrence of any one or more of the following events shall constitute an event of default by Operator hereunder (an “Operator Event of Default”):

 

16.1.1     Except as otherwise expressly addressed in this Section 16.1, Operator is in material breach of its obligations or its representations and warranties under this Agreement and such material breach continues uncured for ten (10) Days after receipt of written notice from Owner, provided that Operator’s cure period may be extended to up to thirty (30) Days for such breaches not reasonably susceptible to cure within ten (10) Days and further provided that Operator continuously and diligently pursues the cure of the breach to completion;

 

16.1.2     Operator assigns this Agreement and its obligations hereunder, except as permitted under Section 17.1;

 

16.1.3     Operator terminates its existence (except in the case of merger or other corporate reorganization to the extent permitted under the Financing Agreements) or voluntarily commences or acquiesces to bankruptcy, insolvency, reorganization, stay, moratorium or similar debtor-relief proceedings; or shall have become insolvent or generally does not pay its debts as they become due, or admits in writing its inability to pay its debts, or makes an assignment for the benefit of creditors; or

 

16.1.4     Insolvency, receivership, reorganization, bankruptcy, or similar proceedings shall have been commenced against Operator and such proceedings remain undismissed or unstayed for a period of ninety (90) Days.

 

16.2        Owner Defaults. The occurrence of any one or more of the following events shall constitute an event of default by Owner hereunder (an “Owner Event of Default”):

 

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16.2.1     Owner fails to pay to Operator any payment required under this Agreement that is not in dispute, and such failure continues for thirty (30) Days after receipt of written notice of such failure;

 

16.2.2     Except as otherwise expressly addressed in this Section 16.2, Owner is in material breach of its obligations or its representations and warranties under this Agreement and such material breach continues uncured for ten (10) Days after receipt of written notice from Operator, provided that Owner’s cure period may be extended to up to thirty (30) Days for such breaches not reasonably susceptible to cure within ten (10) Days and further provided that Owner continuously and diligently pursues the cure of the breach to completion;

 

16.2.3     Owner terminates its existence (except in the case of merger or other corporate reorganization to the extent permitted under the Financing Agreements) or voluntarily commences or acquiesces to bankruptcy, insolvency, reorganization, stay, moratorium or similar debtor-relief proceedings, or shall have become insolvent or generally does not pay its debts as they become due, or admits in writing its inability to pay its debts, or makes an assignment for the benefit of creditors; or

 

16.2.4     Insolvency, receivership, reorganization, bankruptcy, or a similar proceeding shall have been commenced against Owner and such proceeding remains undismissed or unstayed for a period of ninety (90) Days.

 

16.3       Event of Default Remedies. The sole and exclusive remedy of each Party upon the occurrence and continuation of an Event of Default by the other Party is the termination of this Agreement and payment of the amounts required to be paid under and in accordance with Section 2.2, provided however, that this provision shall not limit the indemnity obligations of the Parties hereunder.

 

17.          ASSIGNMENT.

 

17.1        Assignment. This Agreement shall be binding upon and shall inure to the benefit of the successors and permitted assigns of Owner and Operator. Neither Owner nor Operator shall, without the written consent of the other Party, assign or transfer this Agreement, which consent shall be at such other Party’s sole discretion. Notwithstanding the foregoing, without the written consent of Operator, (a) Owner may assign all of its rights and obligations under this Agreement to a Financing Party as collateral security in connection with obtaining or arranging any Financing for the Plant; provided, however, Owner shall deliver, at least ten (10) Days prior to any such assignment to Operator (i) written notice of such assignment and (ii) a copy of the instrument of assignment and (b) the Financing Party or the Financing Party’s agent may assign this Agreement or their right under this Agreement, including in connection with any foreclosure or other enforcement of their security interest. If Operator executes a consent to assignment or other direct agreement with a Financing Party, the notice requirement set forth in Section 17.1(a) shall be deemed satisfied. Any assignment which does not comply with the requirements of this Section 17.1 shall be null and void; provided, however, that no assignment by Owner to a Financing Party otherwise permitted by this Section 17.1 shall be void or nullified solely due to a failure to give the notice required by this Section 17.1.

 

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17.2       Financing Cooperation. Operator shall provide such cooperation as Owner may reasonably request in connection with obtaining Financing for the Plant; provided, however, that such cooperation does not (a) adversely affect the rights or increase the duties and obligations of Operator under this Agreement in any material respect or (b) cause Operator to incur any additional third party expenses in the performance of its obligations hereunder. At any time and from time to time during the Term of this Agreement, after receipt of a written request by Owner, Operator shall (x) execute and deliver to Owner and/or the Financing Parties, estoppel statements reasonably acceptable to Operator certifying to its knowledge whether or not (i) this Agreement is in full force and effect, (ii) any modifications have been made hereto, (iii) whether there exist any defaults hereunder or any disputes hereunder between the Parties, (iv) any events have occurred that would, with the giving of notice or the passage of time, constitute a default hereunder, and (v) all amounts then due and owing hereunder have been paid, (y) execute customary consents, at expense of Owner, in a form reasonably acceptable to Operator, to Owner’s assignment of this Agreement to a Financing Party as collateral security and (z) provide such legal opinions at the expense of Owner as may reasonably be requested in connection with any collateral assignment and consent. Operator acknowledges that the form of Mortgagee Consent attached hereto as Exhibit L is acceptable and agrees that it shall execute such Mortgagee Consent within twenty-five (25) Days’ request from Owner.

 

18.         TITLE TO MATERIALS. Title to any Materials shall pass directly from the supplier to Owner when purchased and shall be free and clear of all liens and encumbrances created or imposed by Operator. Operator shall keep and maintain the Plant free and clear of all liens and encumbrances resulting from the action or inaction of Operator or its Subcontractors hereunder or from any Work done hereunder at the request of Operator or its Subcontractors, other than (a) liens and encumbrances arising by, through or under Owner; and (b) liens and encumbrances which are being diligently contested in good faith and by appropriate proceedings for which appropriate reserves have been established. Notwithstanding the foregoing, Operator shall not be responsible for preventing liens and encumbrances that result from Owner’ failure to timely pay amounts owing to Operator under this Agreement.

 

19.          MISCELLANEOUS.

 

19.1       Notices. All notices, requests, demands, waivers, consents and other communications hereunder shall be in writing and shall be considered properly served, given or made if delivered either in person, by facsimile, by overnight courier or by U.S. mail, first class postage prepaid, directed to the Parties or their permitted assignees at the addresses set forth in Exhibit I. Notice by facsimile, or by hand delivery, shall be effective at the close of business on the day actually received, if received during business hours on a Business Day. Notice by overnight U.S. mail or courier shall be effective on the next Business Day after being sent, and notice by regular U.S. mail shall be effective three (3) Business Days after being sent. Any Party may, at any time, by written notice to the other Party, designate different Persons or addresses for the receipt of notices hereunder.

 

19.2        Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be valid, binding and enforceable under Applicable Law. In the event that any of the terms, covenants or conditions hereof or the application thereof to either Party or any circumstance shall be held by a court of competent jurisdiction to be invalid in any

 

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jurisdiction, the remaining terms, covenants and conditions hereof and the application thereof to either Party or any other circumstance, or in any other jurisdiction, shall not be affected thereby.

 

19.3       Confidentiality.

 

19.3.1     Confidential Information. For purposes of this Agreement, the term “Confidential Information” means proprietary information concerning the business, operations and assets of Operator or Owner (as the case may be), their respective parent companies, subsidiaries or affiliates (collectively, the “Disclosing Party”) that is clearly marked “Proprietary” or “Confidential” if disclosed in writing, and, if disclosed orally or visually, is communicated to be confidential at the time of disclosure and reduced to a writing marked “Proprietary” or “Confidential” within a period of thirty (30) days after the initial oral or visual disclosure by the Disclosing Party to the Party receiving the information (“Receiving Party”). Subject to the preceding sentence, Confidential Information may include information or materials prepared in connection with the performance of the Services under this Agreement, or any related subsequent agreement, designs, drawings, specifications, techniques, models, data, documentation, manuals, source code, object code, diagrams, flow charts, research, development, processes, procedures, know-how, manufacturing, development or marketing techniques and materials, development or marketing timetables, strategies and development plans, business plans, customer, supplier or personnel names and other information related to customers, suppliers or personnel, pricing policies and financial information, and other information of a similar nature, whether or not reduced to writing or other tangible form (provided the requirements of the preceding sentence are satisfied), and any other trade secrets. In no event, shall Confidential Information include (a) information known to Receiving Party prior to obtaining the same from Disclosing Party (provided that such knowledge did not involve a breach of confidentiality obligations by any Person from whom such knowledge was directly or indirectly obtained) as reflected by the written records of Receiving Party; (b) information in the public domain at the time of disclosure by Disclosing Party; (c) information obtained by Receiving Party from a third party rightfully in the possession of such information and who did not receive same, directly or indirectly, from Disclosing Party; or (d) information approved for public release by express prior written consent of an authorized officer of Disclosing Party.

 

19.3.2     Use of Confidential Information.

 

(a)           General. Receiving Party hereby agrees that it shall use the Confidential Information for the purposes of this Agreement and/or the Plant. Receiving Party agrees to use the same degree of care Receiving Party uses with respect to its own proprietary or confidential information, which in any event shall result in a reasonable standard of care to prevent unauthorized use or disclosure of the Confidential Information. Except as otherwise provided herein, Receiving Party shall keep confidential and not disclose the Confidential Information. Operator and Owner shall cause each of their directors, officers, managers, employees, agents, partners, representatives, Subcontractors, successors and permitted assigns to become familiar with, and abide by, the terms of this Section 19.3.2.

 

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(b)           Disclosures Required under Applicable Law. Notwithstanding the provisions of this Section 19.3, a Receiving Party may disclose any of the Confidential Information of the Disclosing Party to the extent required by Applicable Law. Prior to making or permitting any such disclosure, Receiving Party shall provide Disclosing Party with prompt Notice of any such requirement so that Disclosing Party (with Receiving Party’s assistance, if requested) may seek a protective order or other appropriate remedy. In any such event, the Receiving Party shall use commercially reasonable efforts, at the sole cost and expense of the Disclosing Party, to ensure that all Confidential Information that is so disclosed shall be accorded confidential treatment, to the extent possible, and shall so disclose only that portion of the Confidential Information that is legally required to be disclosed.

 

(c)           Permitted Disclosures. Notwithstanding the foregoing, each Party has the right to disclose Confidential Information without the consent of the Disclosing Party; (i) as required by any court or other Governmental Authority, or by any stock exchange on which the shares of any Party are listed; (ii) as required in connection with any government or regulatory filings, including filings with any regulating authorities covering the relevant financial markets; (iii) to its attorneys, accountants, financial advisors or other agents that require such information in connection with their work; (iv) to actual and prospective lenders, investors and other financing sources and their advisors, in each case to the extent necessary or advisable in connection with any Person obtaining financing for the Plant; (v) in connection with an actual or prospective merger or acquisition or similar transaction involving such Party or the parent entity of such Party, (vi) in the case of disclosures by Operator, to its Subcontractors (of any tier), and (vii) in the case of disclosures by Owner, Affiliates of Owner and any Person that has an equity interest in the Plant. In each of cases (iii) through (vii) above, the Disclosing Party shall obtain from the third party to whom it seeks to disclose or to whom it has disclosed Confidential Information a binding confidentiality undertaking in writing agreeing to keep and use such information in confidence that is substantially similar to the undertakings of the Parties in this Article XIV (provided that no such agreement in writing shall be required from third parties who are in any event bound by legal or professional ethical obligations to maintain such confidentiality).

 

(d)           No Disclosure to Competitors. Notwithstanding anything to the contrary in this Agreement, except as required in the case of an emergency that is life-threatening or that can result in bodily injury, Owner shall not disclose any Confidential Information to a PV Competitor, without Operator’s consent.

 

19.3.3     Publicity. Notwithstanding anything to the contrary in this Agreement, Operator and its Subcontractors shall have the right to utilize general information about the Plant, including photographs, in its promotional materials and public statements. All such usage of general information about the Plant, including photographs, must indicate that NRG is the owner of the Plant and cannot disparage the Plant or operation of them. During the Term, Operator shall be allowed: (1) to have reasonable room on the single NRG sign at the main entrances to the Project (specifications to be mutually agreed upon) identifying SunPower as the facility supplier and when required under its subcontract with SunPower, identifying SunPower as the operation and maintenance

 

32

 

provider, and (2) to grant access to the Site to SunPower’s guests, who shall not be a Competitor of NRG, for promotional purposes, including the taking of photographs. Owner shall have the right to join on any tours by Contractor, including those tours with media, political and community members. Operator shall require all of its Subcontractors’ guests admitted to the Site to observe all applicable safety standards. In addition to the foregoing, during the Term for each Project, Operator may make available to SunPower read-only access to summary data relating to the performance of the Plant, which data shall only be used for purposes internal to SunPower and shall not otherwise be disclosed to any third parties.

 

19.3.4     Return of Confidential Information. At any time upon the request of Disclosing Party, Receiving Party shall promptly deliver to Disclosing Party or destroy if so directed by Disclosing Party (with such destruction to be certified by Receiving Party) all documents (and all copies thereof, however stored) furnished to or prepared by Receiving Party that contain Confidential Information; provided, however, that the Receiving Party may retain one copy of such Confidential Information; and provided, further, that all such retained Confidential Information shall be held subject to the terms and conditions of this Agreement.

 

19.3.5     Termination of Confidentiality. The confidentiality provisions set forth in this Agreement shall remain in full force and effect, until the date that is two (2) years after the end of the Term. After such date, unless otherwise agreed in writing by the Parties, no information previously designated as Confidential Information under this Section 19.3.5 shall need to be treated as confidential by the Receiving Party.

 

19.3.6     Remedies for Breach of Confidentiality Obligations. The Parties acknowledge that the Confidential Information is valuable and unique, and that damages would be an inadequate remedy for breach of the obligations set forth in this Section 19.3 and the obligations of each Party under this Section 19.3 are specifically enforceable. Accordingly, the Parties agree that a breach or threatened breach of this Section 19.3 by either Party, shall entitle the other Party to seek an injunction preventing such breach, without the necessity of proving damages or posting any bond. Any such relief shall be in addition to, and not in lieu of, monetary damages or any other legal or equitable remedy available to such Party, its direct and indirect parent companies, subsidiaries or Affiliates.

 

19.4       Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

 

19.5        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of California, exclusive of any conflict of laws provisions that would apply the laws of another jurisdiction.

 

19.6        Entire Agreement; Conflicts. This Agreement constitutes the entire agreement between the Parties pertaining to the subject matter hereof and supersedes all prior agreements, representations, communications and understandings, written or oral, express or implied, pertaining thereto. Any modifications, amendments, or changes to this Agreement shall be

 

33

 

binding upon the Parties only if agreed upon in writing and signed by the authorized representatives of the Parties. In the event of any conflict between the provisions of Sections 1 through 25 of this Agreement and the exhibits and schedules attached hereto, the provisions of Sections 1 through 25 shall control.

 

19.7        No Partnership Created. Operator is an independent contractor and nothing contained herein shall be construed as constituting any relationship with Owner other than that of purchaser and independent contractor, nor shall it be construed as creating any relationship whatsoever including employer/employee, partners or joint venture parties, between Owner and Operator’s employees.

 

19.8        No Third Party Rights. Except with respect to the indemnities set forth in this Agreement, the Parties do not intend to create rights in, or grant remedies to, any third Party as a beneficiary of this Agreement or of any duty, covenant, obligation or understanding established under this Agreement.

 

19.9        Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement, notwithstanding that both of the Parties are not signatories to the original or to the same counterpart. A copy of this Agreement signed by a Party and delivered by facsimile, email or other electronic transmission to the other Party shall have the same effect as the delivery of an original of this Agreement containing the original signature of such signing Party.

 

19.10      No Liens. The Operator will not create, permit or suffer to exist any liens created by through or under the Operator (or its employees, agents, representatives, contractors, Subcontractors or vendors) on the Work or other facilities, equipment or materials used to provide or incorporated into the Work, as applicable. However, and for the avoidance of doubt, the Operator may enter into agreements with third parties, within the scope of the Work, that could result in liens and encumbrances against the Plant, including liens and encumbrances in favor of carriers’, warehouseman’s, mechanics’, materialmen’s, repairmen’s or other like liens arising in the ordinary course of business and within the scope of the authority of the Operator hereunder. In the event such a lien is made against the Plant and the Owner has provided to the Operator adequate funds and other support necessary to discharge such lien, the Operator will take all prompt steps to discharge such lien filed against any such item. If the Operator fails to discharge promptly any such lien, the Owner will have the right to notify Operator in writing and to take any reasonable action to satisfy, defend, settle or otherwise remove the lien at the Operator’s expense, but only to the extent the Owner provided adequate funds to the Operator to discharge such lien.

 

20.         [RESERVED]

 

21.          OPERATOR REPRESENTATIONS AND WARRANTIES. The Operator represents and warrants to the Owner as follows:

 

(a)           The Operator is a limited liability company duly organized in the State of Delaware, qualified to conduct business in the States of Delaware and California and validly

 

34

 

existing and in respect of which no action relating to insolvency or liquidation has, to the knowledge of the Operator, been taken.

 

(b)           The execution, delivery and performance of this Agreement by the Operator have been duly authorized by all necessary action on the part of the Operator and do not and will not require the consent of (i) any trustee or holder of any indebtedness or other obligation of the Operator or (ii) any other Person that is not a Governmental Authority (other than any such consents which have already been obtained by the Operator).

 

(c)           This Agreement has been duly executed and delivered by the Operator. This Agreement constitutes the legal, valid, binding and enforceable obligation of the Operator, subject to any applicable principles of equity or other similar law.

 

(d)           No governmental authorization, approval, order, license, permit, franchise or consent, and no registration, declaration or filing with any Governmental Authority is required on the part of the Operator in connection with the execution, delivery and performance of this Agreement, except those which have already been obtained or which the Operator anticipates will be obtained in a timely manner and in the ordinary course of performance by the Operator and the Owner of this Agreement.

 

(e)           To the extent applicable, Operator and its Affiliates are in compliance, in all material respects, with (i) The United States Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the U.S. Department of Treasury (31 C.F.R. Subtitle B, Chapter V, as amended), or any ruling issued thereunder or any enabling legislation or Presidential Executive Order granting authority therefor (the “Foreign Asset Control Regulations”), (ii) all applicable orders, rules and regulations of The Office of Foreign Asset Control of the U.S. Department of Treasury (“OFAC”), and (iii) the USA PATRIOT Act of 2001, as amended from time to time (“Patriot Act”).

 

(f)            The performance of this Agreement and payment of any amounts due hereunder will not violate any Foreign Asset Control Regulations or any anti-boycott laws and regulations.

 

(g)           Neither the Operator, any Operator Affiliate, or any Person who owns or controls Operator, nor any of their members, directors, officers, parents or subsidiaries: (x) is subject to United States or multilateral economic or trade sanctions in which the United States participates, (y) is owned or controlled by, or act on behalf of, any governments, corporations, entities or individuals that are subject to United States or multilateral economic or trade sanctions in which the United States participates, or (z) is a Prohibited Person or otherwise is named, identified or described on any blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom United States persons may not conduct business, including lists published or maintained by OFAC, lists published or maintained by the U.S. Department of Commerce, and lists published or maintained by the U.S. Department of State. For purposes of this Agreement, the term “Prohibited Person” shall mean a Person that is: (i) named, identified, or described on the list of “Specially Designated Nationals and Blocked Persons” (Appendix A to 31 CFR chapter V) as published by OFAC at its official website,

 

35

 

http://www.treas.gov/offices/enforcement/OFAC/sdn/, or at any replacement website or other replacement official publication of such list; (ii) named, identified or described on any other blocked persons list, designated nationals list, denied persons list, entity list, debarred party list, unverified list, sanctions list or other list of individuals or entities with whom United States persons may not conduct business, including lists published or maintained by OFAC, lists published or maintained by the U.S. Department of Commerce, and lists published or maintained by the U.S. Department of State; (iii) debarred or suspended from contracting with the U.S. Government or any agency or instrumentality thereof; (iv) debarred, suspended, proposed for debarment with a final determination still pending, declared ineligible or voluntarily excluded (as such terms are defined in (i) The Government-wide Debarment and Suspension (Non-procurement) regulations (Common Rule), 53 Fed. Reg. 19161 (May 26, 1988), (ii) Subpart 9.4 (Debarment, Suspension, and Ineligibility) of the Federal Acquisition Regulations, 48 C.F.R. 9.400 - 9.409, and (iii) the revised Government-wide Debarment and Suspension (Non-procurement) regulations (Common Rule), 60 Fed. Reg. 33037 (June 26, 1995), the “Debarment Regulations”) from contracting with the any United States federal government department or any agency or instrumentality thereof or otherwise participating in procurement or non-procurement transactions with any United States federal government department or agency pursuant to any of the Debarment Regulations; (v) or has been indicted, convicted or had any judgment, order, decision, or decree, or any action of a similar nature, of or by a governmental authority having jurisdiction over such Person or any of its properties rendered against it for any of the offenses listed in any of the Debarment Regulations; (vi) subject to U.S. or multilateral economic or trade sanctions in which the U.S. participates; (vii) owned or controlled by, or acting on behalf of, any governments, corporations, entities or individuals that are subject to U.S. or multilateral economic or trade sanctions in which the U.S. participates; or (viii) an Affiliate of a Person listed above.

 

(h)           No event has occurred and no condition exists that is likely to result in the Operator, any Operator Affiliate, or any Affiliate of Operator or any Person who owns or controls the Operator, nor any of their members, directors, officers, parents or subsidiaries, becoming a Prohibited Person.

 

(i)            The execution, delivery and performance of this Agreement by Operator will not conflict with, result in the breach of, constitute a default under or accelerate performance required by any of the terms of its certificate of formation, limited liability company agreement or any Applicable Laws or any covenant, agreement, understanding, decree or order to which it is a party or by which it or any of its properties or assets is bound or affected.

 

(j)            There are no actions, suits, proceedings or investigations pending or, to Operator’s knowledge, threatened against Operator at law or in equity before any court or other Governmental Authority or any arbitration panel, which individually or in the aggregate may result in any material adverse effect on its business, properties or assets or its condition, financial or otherwise, or in any impairment of its ability to perform its obligations under the Agreement.

 

22.          OWNER REPRESENTATIONS AND WARRANTIES. The Owner represents and warrants to the Operator as follows:

 

36

 

(a)           The Owner is a limited liability company duly organized in the State of Delaware, qualified to conduct business in the States of Delaware and California and validly existing and in respect of which no action relating to insolvency or liquidation has, to the knowledge of the Owner, been taken.

 

(b)           The execution, delivery and performance of this Agreement by the Owner have been duly authorized by all necessary action on the part of the Owner and do not and will not require the consent of any trustee or holder of any indebtedness or other obligation of the Owner or any other party to any other agreement with the Owner (other than any such consents which have already been obtained by the Owner).

 

(c)           This Agreement has been duly executed and delivered by the Owner. This Agreement constitutes the legal, valid, binding and enforceable obligation of the Owner, subject to any applicable principles of equity or other similar law.

 

(d)           No governmental authorization, approval, order, license, permit, franchise or consent, and no registration, declaration or filing with any Governmental Authority is required on the part of the Owner in connection with the execution, delivery and performance of this Agreement, except those which have already been obtained or which the Owner anticipates will be timely obtained in the ordinary course of performance by the Operator and the Owner of this Agreement.

 

(e)           The execution, delivery and performance of this Agreement by Owner will not conflict with, result in the breach of, constitute a default under or accelerate performance required by any of the terms of its certificate of formation, limited liability company agreement or any Applicable Laws or any covenant, agreement, understanding, decree or order to which it is a party or by which it or any of its properties or assets is bound or affected.

 

(f)            There are no actions, suits, proceedings or investigations pending or, to Owner’s knowledge, threatened against Owner at law or in equity before any court or other Governmental Authority or any arbitration panel, which individually or in the aggregate may result in any material adverse effect on its business, properties or assets or its condition, financial or otherwise, or in any impairment of its ability to perform its obligations under the Agreement.

 

23.          SURVIVAL. All provisions of this Agreement that are expressly or by implication to come into or continue in force and effect after the expiration or termination of this Agreement, including Section 2.6, Section 2.7, Section 9, Section 10, Section 11, Section 19.6, Section 19.7 and this Section 23 shall remain in effect and be enforceable following termination or expiration of this Agreement.

 

24.          DAVIS-BACON ACT.

 

(a)           This Section 24 and the provisions of Exhibit M and Exhibit M-1 shall apply only to Work conducted under this Agreement prior to the first portions of the Plant to begin operation.

 

(b)           Pursuant to Section 1705(c) of Title XVII, all laborers and mechanics employed in the performance of the Plant, including those employed by contractors and

 

37

 

Subcontractors, shall be paid wages at rates not less than those prevailing on similar work in the relevant locality as determined by the U.S. Secretary of Labor pursuant to the Davis-Bacon Act. Operator shall cause the contract clauses set out in 29 C.F.R. 5.5(a)(1) through (10) to be incorporated into all Davis-Bacon Act Covered Contracts, in each case.

 

(c)           The Operator, on DOE’s behalf, shall systematically review the certified payroll records that it maintains for its own laborers and mechanics pursuant to subparagraph (b)(3)(i) of Exhibit M and those that it receives for the laborers and mechanics of any Subcontractor pursuant to subparagraph (b)(3)(ii)(A) of Exhibit M. The Operator shall promptly notify the DOE contracting officer in writing when it receives any complaint related to non-compliance with the Davis-Bacon Act, or discovers in the course of its systematic review of the certified payroll records an incident that the Operator reasonably believes to be a case of such non-compliance and which, in each case, the Operator cannot resolve on its own and shall forward to the DOE contracting officer (1) the complaint or a written summary of the non-compliant incident, (2) a summary of the Operator’s investigation into such complaint or such incident, and (3) the relevant certified payroll records. Certified payroll records maintained by the Operator shall be preserved for three (3) years after completion of work. Notwithstanding anything to the contrary in subparagraph (b)(3)(ii)(A) of Exhibit M, the Operator shall maintain such certified payroll records at a site designated by the Operator and shall make such records available to DOE and the U.S. Department of Labor when necessary, and upon request, for purposes of an investigation or audit of compliance with prevailing wage requirements. Certified payroll records maintained by the Operator shall be considered federal government records for the purposes of the Freedom of Information Act, 42 U.S.C. § 552. The Operator shall provide such records to DOE within five (5) Days of receipt of any request for such records from DOE.

 

(d)           If and to the extent performance of the Work began prior to the Effective Date, Operator shall immediately retroactively adjust, and cause each Subcontractor to retroactively adjust, the wages of each affected laborer and mechanic employed in the performance of the Plant prior to the Effective Date, and pay or cause to be paid to each such laborer or mechanic such additional wages, if any, as are necessary for such laborers and mechanics to have been paid at rates not less than those prevailing on similar work in the relevant locality during the period such work was performed, as determined by the Secretary of Labor pursuant to the Davis-Bacon Act; provided, however, that this clause (d) shall not apply if and to the extent the Operator obtains an exemption pursuant to the provisions of 29 C.F.R. 1.6(g).

 

(e)           The Operator shall take no action, nor omit to perform any obligation, which causes Owner to be in violation of the requirements of the Davis-Bacon Act (currently as set forth in Exhibit M) as they relate to the Work, at any time prior to the first portions of the Project beginning operation.

 

[Signatures begin on next page]

 

38

 

IN WITNESS WHEREOF, the Parties hereto have caused this Operation and Maintenance Agreement to be effective as of the date first above written.

 

OPERATOR:

 

	
NRG   Energy Services LLC,
    	
 
    
	
a   Delaware limited liability company
    	
 
    
	
 
    	
 
    
	
By:   
    	
/s/   David Stickler
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   
    	
David   Stickler
    	
 
    
	
 
    	
 
    	
 
    
	
Title:   
    	
President
    	
 
    

 

OWNER:

 

High Plains Ranch II, LLC,

a Delaware limited liability company

 

	
By:
    	
/s/ Richard Grosdidier
    	
 
    
	
 
    	
 
    	
 
    
	
Name:   
    	
Richard   Grosdidier
    	
 
    
	
 
    	
 
    	
 
    
	
Title:   
    	
Vice   President, Finance
    	
 
    

 

[Signature Page to O&M Agreement]Exhibit 10.16

 

EXECUTION VERSION

 

PROJECT ADMINISTRATION AGREEMENT

 

Dated as of August 16, 2010

 

By and Between

 

SOUTH TRENT WIND LLC

 

and

 

NRG TEXAS POWER LLC

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    	
DEFINITIONS   AND USAGE
    	
1
    
	
 
    	
 
    	
 
    
	
Section 1.01
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
ADMINISTRATOR’S   RESPONSIBILITIES
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.01
    	
Direction from Project Company
    	
3
    
	
 
    	
 
    	
 
    
	
Section 2.02
    	
Responsibilities
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
STANDARD   OF PERFORMANCE
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.01
    	
Diligence, Care and Prudence
    	
7
    
	
 
    	
 
    	
 
    
	
Section 3.02
    	
Limitation on Liability
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
COMPENSATION   AND PAYMENT
    	
8
    
	
 
    	
 
    	
 
    
	
Section 4.01
    	
Wind Farm Services Fees
    	
8
    
	
 
    	
 
    	
 
    
	
Section 4.02
    	
Billing and Payment
    	
9
    
	
 
    	
 
    	
 
    
	
Section 4.03
    	
Records
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
Delays;   Force Majeure
    	
9
    
	
 
    	
 
    	
 
    
	
Section 5.01
    	
Delays
    	
9
    
	
 
    	
 
    	
 
    
	
Section 5.02
    	
Force Majeure
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
DISPUTE   RESOLUTION
    	
10
    
	
 
    	
 
    	
 
    
	
Section 6.01
    	
Procedure
    	
10
    
	
 
    	
 
    	
 
    
	
Section 6.02
    	
Continuation of Work
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
COMMENCEMENT   AND TERMINATION
    	
10
    
	
 
    	
 
    	
 
    
	
Section 7.01
    	
Term
    	
10
    
	
 
    	
 
    	
 
    
	
Section 7.02
    	
Renewals
    	
10
    
	
 
    	
 
    	
 
    
	
Section 7.03
    	
Early Termination
    	
11
    

 

i

 

	
ARTICLE VIII
    	
DEFAULT
    	
11
    
	
 
    	
 
    	
 
    
	
Section 8.01
    	
Events of Default
    	
11
    
	
 
    	
 
    	
 
    
	
Section 8.02
    	
Bankruptcy
    	
11
    
	
 
    	
 
    	
 
    
	
Section 8.03
    	
Remedies
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
INDEMNIFICATION   AND LIMITATION OF DAMAGES
    	
12
    
	
 
    	
 
    	
 
    
	
Section 9.01
    	
Indemnification
    	
12
    
	
 
    	
 
    	
 
    
	
Section 9.02
    	
Limitation on Liability; Exclusion of   Consequential Damages
    	
12
    
	
 
    	
 
    	
 
    
	
Section 9.03
    	
Supremacy
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    	
MISCELLANEOUS
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.01
    	
Assignment
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.02
    	
Authorization
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.03
    	
Governing Law, Jurisdiction, Venue
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.04
    	
Independent Contractor
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.05
    	
Notice
    	
13
    
	
 
    	
 
    	
 
    
	
Section 10.06
    	
Usage
    	
15
    
	
 
    	
 
    	
 
    
	
Section 10.07
    	
Entire Agreement
    	
15
    
	
 
    	
 
    	
 
    
	
Section 10.08
    	
Amendment
    	
15
    
	
 
    	
 
    	
 
    
	
Section 10.09
    	
Confidential Information
    	
15
    
	
 
    	
 
    	
 
    
	
Section 10.10
    	
Discharge of Obligations
    	
16
    
	
 
    	
 
    	
 
    
	
Section 10.11
    	
Third Party Beneficiaries
    	
16
    
	
 
    	
 
    	
 
    
	
Section 10.12
    	
Severability
    	
16
    
	
 
    	
 
    	
 
    
	
Section 10.13
    	
Binding Effect
    	
16
    
	
 
    	
 
    	
 
    
	
Section 10.14
    	
Counterparts
    	
16
    

 

ii

 

	
Schedule   1: 
    	
Principal   Project Documents
    

 

iii

 

PROJECT ADMINISTRATION AGREEMENT

 

This PROJECT ADMINISTRATION AGREEMENT (this “Agreement”) is made as of this 16th day of August, 2010 (the “Effective Date”), by and between SOUTH TRENT WIND LLC, a Delaware limited liability company (the “Project Company”) and NRG TEXAS POWER LLC, a Delaware limited liability company (the “Administrator”).

 

W  I  T  N  E  S  S  E  T  H:

 

WHEREAS, the Project Company owns a 101.2 MW wind project in Nolan and Taylor Counties, Texas (the “Wind Farm”) and the Administrator has expertise in providing administrative services to wind projects; and

 

WHEREAS, the Project Company desires to engage the Administrator and the Administrator wishes to accept such engagement, to provide administrative services to the Project Company on the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

ARTICLE I

DEFINITIONS AND USAGE

 

Section 1.01   Definitions. Unless the context shall otherwise require or the express terms of this Agreement shall otherwise provide, capitalized terms used in this Agreement shall have the following meanings:

 

“Administrative Agent” has the meaning given to such term in the Financing Agreement.

 

“Administrative Services” means the responsibilities of the Administrator under Article II of this Agreement.

 

“Administrator” is defined in the preamble.

 

“Administrator Protected Party” is defined in Section 9.01(a).

 

“Affiliate” of a Person (“First Person”) shall mean a Person which directly or indirectly controls, or is controlled by, or is under common control with, the First Person, and shall also include any limited partnership or limited liability company of which the First Person or an Affiliate thereof is the general partner, managing member or manager, as the case may be. “Control” of a Person shall mean the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities of that Person.

 

“Agreement” is defined in the preamble.

 

“Approved Budget” is defined in Section 2.02(k).

 

1

 

“BOP O&M Agreement” is defined on Schedule 1.

 

“BOP O&M Contractor” is defined on Schedule 1.

 

“Build Out Agreement” means any agreement entered into between the Project Company and any other Person with respect to an adjacent wind farm to the Wind Farm.

 

“Certified Public Accountants” means a firm of independent public accountants selected from time to time by the Project Company. The initial Certified Public Accountants are KPMG with respect to financial matters and KPMG with respect to compliance matters.

 

“Core Duties” means the following services to be provided with respect to the Project Company: (i) supervision, monitoring and enforcement with respect to Service Providers, (ii) bookkeeping and record keeping, (iii) overall coordination of the Project Company’s administrative activities (including, the Administrative Services), (iv) reporting to and communication with the Project Company, (v) depositing funds into the accounts maintained on behalf of the Project Company pursuant to Section 2.01(a) hereof, (vi) payment of the Project Company’s administrative expenses out of Project Company funds, and (vii) the making of distributions out of available cash as provided under the relevant provisions of the Project Company LLC Agreement and, prior to the Discharge Date, the Financing Agreement and the Depository Agreement.

 

“Depository” means The Bank of New York Mellon, a New York Banking Corporation, in its capacity as Depository pursuant to the Depository Agreement.

 

“Depository Agreement” means the Depository Agreement, dated as of June 14, 2010, among the Project Company; Mizuho Corporate Bank, Ltd., acting through its New York Branch, and the Depository (as amended, modified and supplemented from time to time).

 

“Discharge Date” has the meaning given to such term in the Financing Agreement.

 

“Effective Date” is defined in the preamble.

 

“Emergency Expenditure” is defined in Section 4.01(c).

 

“Events of Default” is defined in Section 8.01.

 

“FERC” means the Federal Energy Regulatory Commission and any successor thereto.

 

“Financing Agreement” means the Amended and Restated Financing Agreement, dated as of June 14, 2010, among the Project Company; Bayerische Landesbank, acting through its New York Branch; HSH Nordbank AG, New York Branch; Banco Espirito Santo, S.A., New York Branch; Norddeutsche Landesbank Girozentrale, acting through its New York Branch, Mizuho Corporate Bank, Ltd., acting through its New York Branch, and the lenders party thereto from time to time (as amended, modified and supplemented from time to time).

 

2

 

“Fiscal Year” means the calendar year and in the case of the initial Fiscal Year the period beginning on the Effective Date and ending on December 31, 2010.

 

“Force Majeure” means any circumstances beyond the reasonable control of the Administrator that causes delay in, or failure of, performance of obligations under this Agreement, and then only to the extent the circumstance is not the result of the willful misconduct or negligent act or omission of the Administrator. To the extent that the following fall within the foregoing limitations, they will fall within the definition of “Force Majeure”: acts of God; fire; accident; flood; explosion; war; hurricane; tornado; riot; government action or inaction; national strike, collective bargaining obligations or labor dispute.

 

“FPA” means the Federal Power Act of 1935, as amended, 16 U.S.C. § 792 et  seq.

 

“GAAP” means generally accepted United States accounting principles, consistently applied.

 

“GDP Implicit Price Deflator” means the most recent revision of the implicit price deflator for the gross domestic product as computed and published by the United States Department of Commerce.

 

“Independent Engineer” means (i) prior to the Discharge Date, the Independent Engineer, under, and as defined in, the Financing Agreement and (ii) on any after the Discharge Date, Garrad Hassan Group Limited, or any other Person with experience serving as an independent engineer on utility scale wind projects.

 

“O&M Agreement” is defined on Schedule 1.

 

“O&M Contractor” is defined on Schedule 1.

 

“Person” means any individual, corporation, partnership, joint venture, association, limited liability company, joint stock company, trust, unincorporated organization or governmental authority.

 

“Principal Project Documents” means those documents listed on Schedule 1.

 

“Project Company” is defined in the preamble.

 

“Project Company LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of the Project Company dated as of June 14, 2010.

 

“Project Company Protected Party” is defined in Section 9.01(b).

 

“Reference Rate” means the rate as published, from time to time, in The Wall Street Journal as the prime lending rate or “prime rate” plus one percent (1%).

 

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“Relevant Experience” means for a period of at least two (2) years prior to the relevant date, owned or managed more than (1) 150 MW of wind generation assets or (2) 500 MW of electric generation assets that include 50 MW of wind generation assets.

 

“Sale Termination Option Period” is defined in Section 7.03(c).

 

“Service Providers” means the BOP O&M Contractor, the O&M Contractor, and each other party hired by the Project Company or the Administrator on behalf of the Project Company, to perform services for the Project Company or with respect to the Wind Farm, including other providers of scheduling, maintenance, repair and warranty services, certified public accountants, tax return preparers, law firms, engineering firms, power and renewable energy credit brokers or marketers, and other professional advisors and consultants.

 

“Term” is defined in Section 7.01.

 

“Wind Farm” is defined in the recitals.

 

“Wind Farm Site” means the real property estates created by the real property documents described on Schedule 1.

 

“Wind Farm Services Fee” is defined in Section 4.01(a).

 

ARTICLE II

ADMINISTRATOR’S RESPONSIBILITIES

 

Section 2.01   Direction from Project Company. The Administrator shall perform the Administrative Services set forth herein and in accordance with the direction, instructions, decisions and policies of the Project Company. The Administrator shall perform the Administrative Services solely in accordance with the authority granted to the Administrator herein, or as directed by the Project Company. The Administrator may rely on any such request, notice, communication, authorization, consent, approval or direction as having been given or made by the Project Company.

 

Section 2.02   Responsibilities. The Administrator shall provide the following administrative services on behalf of the Project Company:

 

(a)         Maintain, in the name and for the exclusive benefit of the Project Company, bank accounts in a manner consistent with the provisions of the Financing Agreement into or through which the Administrator shall promptly deposit the funds received by it on behalf of the Project Company with respect to the Wind Farm.

 

(b)         (i) Collect on behalf of the Project Company, or cause to be so collected, all payments due to the Project Company with respect to the Wind Farm or otherwise; and

 

(ii) promptly (but in no event later than the date such payment is due and payable) remit or direct to be remitted (including directions to the Depository) from funds of the Project Company amounts in payment of the expenses of the Project Company as provided for in the

 

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Approved Budget or in any approved variance therefrom, or which constitute Emergency Expenditures, and in accordance with the Financing Agreement;

 

(c)          Subject to the expenditure limitations set forth in the Approved Budget, or otherwise approved by the Project Company, purchase or lease, at the sole expense of the Project Company (but subject to Section 4.01 (c) of this Agreement), any materials, supplies and equipment necessary for the performance of the services to be performed by the Administrator or the Project Company pursuant to this Agreement; provided that nothing herein shall imply any guarantee or undertaking by the Administrator with respect to the collection of amounts due to the Project Company which remain uncollected after commercially reasonable efforts by the Administrator, at the sole expense of the Project Company (but subject to Section 4.01 (c) of this Agreement) to collect such amounts, and nothing herein shall imply any duty of the Administrator under any circumstances to expend its own funds in payment of the sole expenses of the Project Company. In addition, the Administrator shall (i) determine the need for, and, if it reasonably determines that doing so would be in the commercial interests of the Project Company, make or instruct the Project Company to make draws under a working capital or other facility of the Project Company permitted under the Financing Agreement or, after the Discharge Date, any Affiliate of the Project Company, if any, and (ii) establish appropriate reserves, as it determines necessary to meet the Project Company’s cash flow requirements, in each case, in accordance with the direction and approval of the Project Company, and shall cause such funds to be deposited into the Project Company’s accounts as required pursuant to the terms of the Financing Agreement, prior to the Discharge Date (to the extent such funds are available);

 

(d)         Maintain complete and accurate financial books and records of the Project Company’s operations in accordance with prudent business practices and GAAP and make such books and records available for inspection and copying during normal business hours on its premises by any Person authorized by the Project Company to inspect or copy such books and records, subject to appropriate confidentiality safeguards;

 

(e)          Supervise and monitor the Project Company’s and each counterparty’s compliance (and where necessary or desirable, at the Project Company’s sole expense (but subject to Section 4.01(c) of this Agreement) and enforce each counterparty’s compliance) with the administrative terms and conditions of all contracts under which the Project Company has any obligations or rights, including the Principal Project Documents or, in the case of Principal Project Documents with respect to which and to the extent the performance of the Project Company’s obligations, or the supervision and monitoring of the counterparty’s compliance with the administrative terms of which, the Project Company has delegated such functions to a Service Provider (including the BOP O&M Contractor and the O&M Contractor), supervise and monitor the administrative aspects of such Service Provider’s performance of such delegated functions;

 

(f)           Perform on behalf of the Project Company all reporting and other routine administrative responsibilities reasonably believed by the Administrator to be required under the Principal Project Documents (except to the extent required to be performed by the BOP O&M Contractor and the O&M Contractor under the BOP O&M Agreement and O&M Agreement, respectively) and appropriately maintain the corporate documents of the Project Company;

 

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(g)          Prepare and file or cause to be prepared and filed by the Certified Public Accountants on behalf of the Project Company, on a timely basis all federal, state and local tax returns and related information and filings required to be filed by the Project Company or delivered to the Project Company, pay out of the Project Company’s funds (which shall be in accordance with the Financing Agreement and the Depository Agreement prior to the Discharge Date) all taxes and other governmental charges shown to be due thereon before they become delinquent and make all tax elections believed by the Administrator to be necessary or desirable for the Project Company;

 

(h)         Within thirty (30) days after the end of each quarter (or more often, at the Administrator’s option), prepare, or cause to be prepared, and submit to the Project Company, a status report relating to the financial operations of the Wind Farm for such quarter (or for the applicable shorter period, if such report is submitted more frequently than quarterly), in a format to be agreed upon by the Administrator (and the BOP O&M Contractor or O&M Contractor, if appropriate) and the Project Company (but in each case as required by the Financing Agreement). The Wind Farm operations report, which may be combined with other operations reports provided by the BOP O&M Contractor and/or the O&M Contractor, will detail variances between actual and budgeted financial performance;

 

(i)             Within forty-five (45) days after the end of each quarter, prepare, or cause to be prepared, and submit to the Project Company, unaudited internal GAAP financial statements for each quarter, in a format to be agreed upon by the Administrator (and the BOP O&M Contractor or O&M Contractor, if appropriate ) and the Project Company (but in each case as required by the Financing Agreement) which would include project GAAP income allocations;

 

(j)            Supervise and monitor the Service Providers with respect to the administrative aspects of their performance of services for the Project Company and, where necessary or desirable, at the Project Company’s sole expense (but subject to Section 4.01(c) of this Agreement), enforce each Service Provider’s compliance with its administrative obligations to the Project Company; provided that the Administrator’s responsibility for matters that are subject to the Project Company’s arrangements with Service Providers (other than Service Providers performing Core Duties) shall consist solely of such supervision, monitoring and enforcement and shall not include responsibility for the proper performance of any such matters;

 

(k)         At least fifty (50) days prior to the end of each Fiscal Year, prepare, or cause to be prepared, and submit to the Project Company a proposed budget and operating plan of the Wind Farm for the immediately following Fiscal Year, which shall be in a format to be agreed upon by the Administrator and the Project Company and subject to approval of the Project Company and, prior to the Discharge Date, the Administrative Agent (as so approved, the “Approved Budget”). The Approved Budget shall be prepared in accordance with the directions and requirements of the Project Company and the Financing Agreement;

 

(l)             Notify the Project Company of any material variance from the Approved Budget promptly after learning of such variance;

 

(m)     Within ninety (90) days after the end of each Fiscal Year, cause the Project Company’s Certified Public Accountants to prepare, review and submit to the Project Company annual

 

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audited financial statements for the Project Company, and assist and cooperate with the Project Company’s Certified Public Accountants in connection with all audits made of the Project Company’s books and records;

 

(n)         Provide such readily available information to each of the Project Company and/or the Administrative Agent as it may reasonably request from time to time;

 

(o)         Represent the Project Company in business matters with third parties to the extent contemplated by the Principal Project Documents and as directed by the Project Company, subject to the terms of the Financing Agreement, and cause the Project Company to execute such additional documents reasonably deemed necessary or desirable by the Administrator to effectuate the transactions and agreements contemplated by the Principal Project Documents; provided that with respect to any such material additional document the Administrator shall be entitled to request and rely upon instructions from the Project Company;

 

(p)         (i) Cause the Project Company to obtain and maintain all commercially available insurance required by the Project Company to be maintained on behalf of the Project Company and the Wind Farm in accordance with the Principal Project Documents and the Financing Agreement and (ii) on an annual basis, provide the Project Company with certificates from the insurance broker verifying the insurance maintained with respect to the Project Company and the Wind Farm and setting forth the details of all active insurance policies in connection therewith;

 

(q)         Engage Service Providers as reasonably believed by the Administrator to be necessary or desirable (provided that any contract proposed to be entered into with a Service Provider that is an Affiliate of the Administrator shall be subject to the approval of the Project Company, or as instructed by the Project Company, to represent or perform services for the Project Company; provided that the Administrator shall be entitled to request and rely upon instructions from the Project Company with respect to the engagement of any Service Provider; and provided, further that it is understood that to the extent the Administrator engages a Service Provider to perform a Core Duty, the Administrator shall bear the cost and expense associated with engaging such Service Provider and shall remain responsible for the proper performance of such Core Duty;

 

(r)            (i) Procure and maintain all required governmental approvals and permits and prepare and submit all filings of any nature that are required to be made thereunder, (ii) prepare and submit all filings of any nature that are required to be made by the Project Company under any laws, regulations or ordinances applicable to the Project Company, (iii) upon becoming aware of any adverse change or possible adverse change to the Project Company’s status as an entity not required to seek FERC approval under the FPA, take all reasonable steps, in consultation with the Project Company, necessary to maintain or re-obtain, as applicable, such status, and (iv) maintain the Project Company’s status as an “Exempt Wholesale Generator;” provided that, in each case, if responsibility for such activity or duty has been delegated to a Service Provider, the Administrator shall supervise and monitor such Service Provider’s performance of such delegated activity or duty;

 

(s)           Not take any affirmative action as would cause the Project Company in any material respect to violate any federal, state or local laws and regulations, including environmental laws and regulations, and to the extent that the Administrator has knowledge of any such existing or

 

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prospective violation take, or direct Service Providers to take, commercially reasonable actions, at the sole expense (but subject to Section 4.01 (c) of this Agreement) of the Project Company (unless such existing or prospective violation arises from a breach of the Administrator’s duties hereunder), to redress or mitigate any such violation;

 

(t)            (i) Give prompt written notice to the Project Company of any litigation, material disputes with governmental authorities, material defaults or material force majeure events under the Principal Project Documents and material losses suffered by the Wind Farm promptly after learning of the same, and (ii) furnish to the Project Company, or direct a Service Provider to so furnish, copies of all material documents furnished to the Project Company or the Administrator by any governmental authority or furnished to any governmental authority by the Project Company;

 

(u)         Subject to the Financing Agreement and the Depository Agreement, make distributions out of available cash as provided under the relevant provisions of the Project Company LLC Agreement and as required and directed by the Project Company;

 

(v)         Perform such other administrative tasks as the Project Company may reasonably request from time to time in connection with or related to the Project Company and/or the Wind Farm, subject to appropriate exculpatory provisions as the Administrator may reasonably request, consistent with the terms of this Agreement;

 

(w) Engage the Independent Engineer to perform all functions required by the Independent Engineer as may be directed by the Project Company from time to time; and

 

(x)         Administer on behalf of the Project Company, the collection and payment (including the submittal of invoices) of expenses required to be paid under any co-tenancy or similar agreement concerning common facilities entered into pursuant to a Build Out Agreement in a timely manner such that the Project Company or the counterparties to such agreements will have sufficient notice to be able to pay their respective expenses when due and payable pursuant to and in accordance with such agreements.

 

ARTICLE III

STANDARD OF PERFORMANCE

 

Section 3.01   Diligence, Care and Prudence. The Administrator shall use such diligence, care and prudence in the performance of its duties set forth in Article II hereof (including in supervising, monitoring and enforcing any rights) and shall devote such time, effort and skills of its employees as an ordinary administrator in like position would do in like circumstances; provided that the Administrator shall be deemed to have satisfied its duties:

 

(a)         in respect of supervision or monitoring of the BOP O&M Contractor and the O&M Contractor and monitoring of the Wind Farm Site (in the absence of actual knowledge of specific operational, maintenance or legal compliance issues requiring more extensive supervisory activities), and without any further investigation, verification or consultation by the Administrator, through (i) four (4) site visitations during each twelve (12) month period, (ii) semi-monthly telephone or personal communication with responsible officers of the BOP O&M

 

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Contractor and the O&M Contractor, and (iii) diligent review of periodic reports required to be issued by the BOP O&M Contractor and the O&M Contractor under the BOP O&M Agreement and the O&M Agreement, respectively;

 

(b)         in respect of supervision or monitoring of Service Providers providing legal, accounting, tax preparation, engineering and advisory services, by diligent review of the work product of such Service Providers, and without any duty to conduct further investigation, verification or consultation, in the absence of actual knowledge that such work product is incorrect or incomplete; and

 

(c)          in respect of any specific matter or circumstance requiring interpretation, application, or enforcement of Principal Project Documents, by relying conclusively on the advice of qualified legal counsel and/or qualified industry consultants engaged to advise the Project Company or the Wind Farm with respect to such matter or circumstance.

 

It is understood and agreed that the Administrator is not guaranteeing or undertaking to procure any financial or other outcome with respect to the Project Company or Wind Farm.

 

Section 3.02   Limitation on Liability. The Administrator shall have no liability under this Agreement for failure to take actions as to which it has requested the consent of the Project Company for the Administrator to perform if such consent is not timely given (including actions requiring a variance from the Approved Budget for which a request for variance by the Administrator has been made and not timely approved), or for actions taken at the direction of the Project Company, or for actions requiring the expenditure of Project Company funds if such funds are not available.

 

ARTICLE IV

COMPENSATION AND PAYMENT

 

Section 4.01   Wind Farm Services Fees. Following the Effective Date, the Project Company shall pay to the Administrator the following fees for the Administrative Services and pay or reimburse the following expenses:

 

(a)         Services. For each Fiscal Year (prorated to the extent that such year consists of more or less than twelve (12) months) the Administrator shall be paid an amount equal to Two Hundred Thousand Dollars ($200,000) per annum (the “Wind Farm Services Fee”), payable in monthly increments on the first day of each month of a Fiscal Year and adjusted annually to reflect changes in the GDP Implicit Price Deflator; provided that if the first day of the Term is not the first day of the month, the payment for the balance of that month shall be payable on the first day of the Term, or at the option of the Administrator, at the same time as the payment for the succeeding month.

 

(b)         Expenses. It is understood by the Project Company that the Wind Farm Services Fee is inclusive of the Administrative Services. No additional fees for the performance of the Administrative Services will be charged to the Project Company in addition to the Wind Farm Services Fee. If the Administrator, at the request of the Project Company, performs services not

 

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contemplated by the Administrative Services, the fee for such additional services shall be such amounts payable at such times as the Administrator and the Project Company shall agree.

 

It is understood that all out-of-pocket expenses incurred in the administration and operation of the Project Company and the Wind Farm are solely for the account of the Project Company and may be disbursed by the Administrator from the Project Company’s funds, subject to the consent of the Project Company and the Administrative Agent as outlined in Section 4.01(c). The Administrator shall be reimbursed for all reasonable expenses that the Administrator incurs in connection with performance of its obligations under this Agreement (not including any cost of retaining Service Providers to perform Core Duties, internal general and administrative overhead expenses, or the salaries of or benefits provided to any of the Administrator’s employees), subject to the consent of the Project Company to the extent required pursuant to Section 4.01(c).

 

(c)          Consent. The Administrator shall obtain the Project Company’s prior written consent before incurring any single expense hereunder in excess of Fifty Thousand Dollars ($50,000) and/or aggregate annual expenses of One Hundred Fifty Thousand Dollars ($150,000) unless such expenses are included in the Approved Budget or any variance thereof that has been approved by the Project Company and, prior to the Discharge Date, the Administrative Agent; provided, however, that consent shall not be required (i) as to any Emergency Expenditure or (ii) for reimbursement of the Administrator for any expense of a Service Provider (incurred in accordance with this Agreement) which, for the convenience of the Project Company, performs services by contract with the Administrator rather than directly with the Project Company, provided that the Project Company has consented to such arrangement. For this purpose, an “Emergency Expenditure” shall mean an expense with respect to the Project Company or the Wind Farm that is not included in an Approved Budget or any approved variance therefrom and that is incurred, in the reasonable judgment of the Administrator, to avoid or to mitigate a material risk of physical injury to any person, a material financial loss or damage to the Project Company or the Wind Farm or a violation of law. The Administrator shall give prompt written notice to the Project Company of any Emergency Expenditure.

 

Section 4.02   Billing and Payment. Within fifteen (15) days following the Administrator’s submission of an invoice to the Project Company reflecting any expenses due and payable by the Project Company (and including material identifying and substantiating, in reasonable detail, the nature of such expenses and the basis for reimbursement thereof), or reflecting the Wind Farm Services Fee, the Project Company shall:

 

(a)         Approve such payment to the Administrator of the expenses plus the portion of the Wind Farm Services Fee specified in such invoice, less any portion of such expenses that the Project Company disputes in good faith;

 

(b)         With respect to any disputed portion of such invoice, provide the Administrator with a written statement explaining, in reasonable detail, the basis for such dispute. The parties shall attempt to resolve any such disputed portion in accordance with Article VI hereof; and

 

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(c)   Any amount owed hereunder that remains unpaid more than ten (10) days after the date such amount is due and payable under this Agreement shall accrue interest at the Reference Rate beginning on the first (1st) day after such amount became due and payable.

 

Section 4.03   Records. The Administrator shall retain copies of invoices submitted by it under Section 4.02 and of any third party invoices or similar documentation contained or reflected therein, for a minimum period of three (3) years or such longer period to the extent required by law.

 

ARTICLE V

DELAYS; FORCE MAJEURE

 

Section 5.01   Delays. If the Administrator becomes aware of any event or circumstance that could prevent its performance of any of its obligations under this Agreement, the Administrator shall give prompt notice thereof to the Project Company. The Administrator shall attempt in good faith to minimize any such delay; provided,  however, that the Administrator shall not be obligated to undertake or perform any actions that are prohibited by contract or any applicable law or that would expose the Administrator to any material liability or to any material expense that is not reasonably expected to be promptly reimbursed or indemnified hereunder.

 

Section 5.02   Force Majeure. The Administrator will not be liable for, or be in default under this Agreement, as a result of the Administrator’s failure or inability to perform any of the Administrator’s obligations under this Agreement to the extent that such failure or inability is caused by an event of Force Majeure. If the Administrator claims there is a Force Majeure event, the Administrator will notify the Project Company in writing and state in detail the nature and cause of the event as soon as possible after the Administrator becomes aware of the event.

 

ARTICLE VI

DISPUTE RESOLUTION

 

Section 6.01   Procedure. The parties shall attempt, in good faith, to resolve or cure all disputes (including disputes with respect to claimed Events of Default) by mutual agreement in accordance with this Article VI before initiating any legal action or attempting to enforce any rights or remedies hereunder (including termination), at law or in equity (regardless of whether this Article VI is referenced in the provision of this Agreement which is the basis for any such dispute). If there is a dispute as to whether an Event of Default has occurred or if any other dispute under this Agreement has arisen, either party may give notice thereof to the other party which notice shall describe in reasonable detail the basis and specifics of the alleged Event of Default or dispute. Within five (5) days after delivery of such notice, the designated representatives of both parties shall meet to discuss and attempt to resolve or cure such dispute or claimed Event of Default. If such representatives are unable to resolve the dispute or claimed Event of Default within fifteen (15) days after delivery of such notice, the matter shall be referred to a “Senior Officer” of the Administrator and a “Senior Officer” of the Project Company for a resolution or cure. If such Senior Officers are unable to agree on an appropriate cure or resolution within ten (10) days after the matter has been referred to them, the Project Company shall be so informed by the Administrator and the parties may have recourse to mediation, arbitration or other alternative dispute resolution device of their mutual selection. If

 

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the parties cannot agree on an alternative dispute resolution device, each party may pursue its legal remedies.

 

Section 6.02   Continuation of Work. Pending final resolution of any dispute, the parties shall continue to fulfill their respective obligations under this Agreement; provided,  however, that the Project Company may withhold any amount that is the subject of dispute from any payment otherwise due hereunder during the pendency of any dispute resolution proceeding. If the Administrator prevails in such dispute, the Project Company shall immediately pay to the Administrator the unpaid amount in dispute with interest thereon, which interest shall accrue, at the Reference Rate, for each day from and including the date on which such amount was originally due to, but excluding, the date of actual payment thereof.

 

ARTICLE VII

COMMENCEMENT AND TERMINATION

 

Section 7.01   Term. Except as may otherwise be provided herein, this Agreement shall commence on the Effective Date and remain in full force and effect following the Effective Date until and including the earlier of (A) the sale by the Project Company of the Wind Farm and the completion of all administrative duties necessary or desirable in connection with the winding up of the Project Company’s affairs and (B) the twenty-fifth (25th) anniversary of the Effective Date (the “Term”). In connection with the expiration of the Term or any termination pursuant to Section 7.03, the Administrator shall cooperate with all reasonable requests of the Project Company in connection with the transition of administrative services performed by the Administrator to the entity selected by the Project Company to undertake such services after such expiration or termination of the Term. Following any termination, the Administrator shall not be entitled to the Wind Farm Services Fee (or any other fees or reimbursement expenses other than reimbursement of reasonable expenses incurred by the Administrator in connection with the transition of the administrative services pursuant to the immediately preceding sentence) for the period after such termination, except in connection with a termination under Section 7.03(b)-(d) and 8.03 relating to an Event of Default by the Project Company.

 

Section 7.02   Renewals. The Project Company and the Administrator may agree to renew this Agreement beyond the Term, for additional terms that are to be agreed upon in a written agreement, executed by all parties hereto, and, once adopted, such agreement will become an integral part of this Agreement.

 

Section 7.03   Early Termination. Subject to Section 7.01, this Agreement may not be terminated except:

 

(a)   by mutual agreement of the parties; or

 

(b)   pursuant to the remedy provisions of Section 8.03; or

 

(c)   upon the occurrence of the sale or transfer (i) by NRG South Trent Holdings LLC of 100% of the membership interests NRG South Trent Holdings LLC owns in the Project Company (including pursuant to a private secured party sale under Section 9-610 of the Uniform Commercial Code as enacted in New York) or (ii) by the Project Company of all or substantially

 

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all of the assets of the Project Company, and in each such case, for a period of sixty (60) days thereafter (the “Sale Termination Option Period”), in which case, Project Company (or its transferee upon an assignment of this Agreement to transferee in connection with a sale or transfer of all or substantially all of the assets of Project Company to transferee) will have the right to terminate this Agreement, at its option, by providing sixty (60) days’ prior written notice to the Administrator of the Project Company’s (or, if applicable, its transferee’s) election to terminate this Agreement in accordance with this Section 7.03(c), which notice will state the effective date of termination and reference this Section 7.03(c); provided that, in order for any such termination to be effective, the Project Company (or the applicable buyer or transferee) shall pay the Administrator all amounts payable hereunder by the Project Company up through the effective date of termination, together with an amount equal to fifty percent (50%) of the Wind Farm Services Fee payable for the entire Fiscal Year (unprorated and assuming the Fiscal Year is a full calendar year) in which such termination occurs; and provided, further, that upon the expiration of the Sale Termination Option Period, if Project Company (or, if applicable, its transferee) shall not have exercised its right to terminate this Agreement in accordance with this Section 7.03(c), or if Project Company (or, if applicable, its transferee) shall have so exercised its right to terminate this Agreement but fails to make the payments required by this Section 7.03(c) by the time required by this Section 7.03(c), this Section 7.03(c) shall be void and have no further force or effect. For the avoidance of doubt, fifty percent (50%) of the Wind Farm Services Fee equals One Hundred Thousand Dollars ($100,000) plus any applicable adjustment to reflect changes in the GDP Implicit Price Deflator in accordance with Section 4.01(a); or

 

(d)   in addition to the terms of Section 7.03(c), the Project Company may also terminate this Agreement for convenience at any time during the stated term hereof upon sixty (60) days’ written notice to the Administrator, provided, that, in order for such termination to be effective, the Project Company shall pay the Administrator all amounts payable hereunder by the Project Company through the effective date of termination, and shall in addition pay (i) the Wind Farm Services Fee, provided this Agreement is terminated pursuant to this Section 7.03(d) on or before January 1, 2012, or (ii) 50% of the Wind Farm Services Fee, provided this Agreement is terminated pursuant to this Section 7.03(d) after January 1, 2012. For the avoidance of doubt, the Wind Farm Services Fee equals Two Hundred Thousand Dollars ($200,000) plus any applicable adjustment to reflect changes in the GDP Implicit Price Deflator in accordance with Section 4.01(a), and 50% of the Wind Farm Services Fee equals One Hundred Thousand Dollars ($100,000) plus any applicable adjustment to reflect changes in the GDP Implicit Price Deflator in accordance with Section 4.01(a).

 

ARTICLE VIII

DEFAULT

 

Section 8.01   Events of Default. Except as provided for in Article VI, Dispute Resolution, the following events shall be deemed to be events of default (“Events of Default”) by either party under this Agreement regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency or other proceeding that has or might have the effect of preventing such party from complying with the terms of this Agreement:

 

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(a)   Failure by a party hereto to make any payment required to be made hereunder (including, for the avoidance of doubt, payments to be made by such party to a third party), if such failure shall continue for twenty (20) days after written notice thereof has been given to the non-paying party; or

 

(b)   Failure to comply in any material respect with any material term, provision or covenant of this Agreement (other than the payment of sums to be paid by a party hereunder (including, for the avoidance of doubt, payments to be made by such party to a third party)), if such failure continues for thirty (30) days after written notice thereof has been given to the non-performing party; provided, however, that if such failure cannot reasonably be cured within such thirty (30) days and the non-performing party has commenced, and is diligently pursuing in good faith, to cure such failure, such thirty (30) day period shall be extended for such longer period as shall be necessary for such party to cure the failure, but in no event shall be extended for more than sixty (60) days without the prior written mutual agreement of the parties.

 

Section 8.02   Bankruptcy. Subject to the rights or remedies it may have, either party shall have the right to terminate this Agreement, effective immediately, if, at any time, (i) the other party shall file a voluntary petition in bankruptcy, or shall be adjudicated bankrupt or insolvent, or shall file any petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute or law relating to bankruptcy, insolvency or other relief for debtors, whether federal or state, or shall seek, consent to or acquiesce in the appointment of any trustee, receiver, conservator or liquidator of such party or of all or any substantial part of its properties or (ii) a court of competent jurisdiction shall enter an order, judgment or decree approving a petition filed against such party seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute or law relating to bankruptcy, insolvency or other relief for debtors, whether federal or state, and such party shall consent to or acquiesce in the entry of such order, judgment or decree, or the same shall remain unvacated and unstayed for an aggregate of sixty (60) days from the date of entry thereof, or any trustee, receiver, conservator or liquidator of such party or of all or any substantial part of its properties shall be appointed without the consent of or acquiescence of such party and such appointment shall remain unvacated and unstayed for an aggregate of sixty (60) days. The terms “acquiesce” and “acquiescence”, as used herein, include, but are not limited to, the failure to file a petition or motion to vacate or discharge any order, judgment or decree providing for such appointment within the time specified by law.

 

Section 8.03   Remedies. If (i) an Event of Default occurs hereunder and such Event of Default is not cured in accordance with the requirements of Section 8.01 or (ii) an event described in Section 8.02 occurs and such event is not cured in accordance with Section 8.02, then subject to resolution pursuant to Section 6.01 of any dispute as to the existence of such event (in the case of Section 8.02) or Event of Default (in the case of Section 8.01), this Agreement may be terminated immediately by the non-defaulting party, without obligation to or recourse by the defaulting party. If a termination pursuant to this Section 8.03 occurs, the terminating party shall have all rights and remedies allowed at law or in equity, subject however, to the specific limitations of liability set forth in Article IX.

 

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ARTICLE IX

INDEMNIFICATION AND LIMITATION OF DAMAGES

 

Section 9.01   Indemnification.

 

(a)   The Project Company shall indemnify and hold the Administrator, its Affiliates (except for the Project Company) and each of their respective officers, members and employees (each an “Administrator Protected Party”) harmless from any damage, loss, liability or expense (including reasonable attorneys’ fees) incurred by the Administrator Protected Party as a result of the Administrator’s performance of its obligations under this Agreement, except to the extent such damage, loss, liability or expense results from any Administrator Protected Party’s willful misconduct, gross negligence, or breach of its obligations under this Agreement.

 

(b)   The Administrator shall indemnify and hold the Project Company, its Affiliates (except for the Administrator) and each of their respective officers, members, directors and employees (each a “Project Company Protected Party”) harmless from any damage, loss, liability or expense (including reasonable attorneys’ fees but subject to the limitations of Section 9.02, below) incurred by the Project Company Protected Party as a result of the Administrator’s breach of its obligations under this Agreement except to the extent such damage, loss, liability or expense results from any Project Company Protected Party’s willful misconduct, gross negligence, or breach of its obligations under this Agreement.

 

Section 9.02   Limitation on Liability; Exclusion of Consequential Damages. The Administrator’s total liability during the term of this Agreement to the Project Company Protected Parties in any Fiscal Year on all claims of any kind, whether based on contract, indemnity, warranty, tort (including negligence), strict liability or otherwise, for all losses or damages arising out of connected with, or resulting from this Agreement or from the performance or breach thereof, or from any services covered by or furnished during the term of this Agreement, shall in no case exceed the Wind Farm Services Fee for such Fiscal Year; provided,  however, the foregoing limitation on liability shall not apply to (i) damage to a Project Company Protected Party caused by the gross negligence or willful misconduct of the Administrator with respect to the subject matter of this Agreement, (ii) amounts owed to third parties for which Administrator is obligated to indemnify a Project Company Protected Party under this Agreement, but only to the extent any such amount is covered by insurance obtained by the Administrator, or (iii) any amounts recoverable by Administrator as an insurance payment. Neither party shall be liable hereunder for punitive, consequential or intangible damages of any nature including, but not limited to, damages for lost profits or revenues or the loss or use of such profits or revenues, loss by reason of plant shutdown or inability to operate at rated capacity, increased operating expenses of plant or equipment, increased costs of purchasing or providing equipment, materials, labor, services, costs of replacement power or capital, debt service fees or penalties, inventory or use charges, damages to reputation, damages for lost opportunities or claims of customers, members or affiliates, regardless of whether said claim is based upon contract, warranty, tort (including negligence and strict liability) or other theory of law. For purposes of this section, loss of production tax credits under Section 45 of the Internal Revenue Code of 1986, as amended, associated with production to the extent lost as a result of breach of the Administrator’s duties hereunder shall not constitute consequential damages notwithstanding the fact that the underlying loss of production constitutes consequential damage for which no recovery is permitted.

 

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Section 9.03   Supremacy. The provisions expressed in this Article IX shall prevail over any conflicting or inconsistent provisions contained elsewhere in this Agreement and shall survive termination of this Agreement.

 

ARTICLE X

MISCELLANEOUS

 

Section 10.01  Assignment.

 

(a)   By the Administrator: The Administrator may not assign this Agreement without the prior written consent of the Project Company, except that the Administrator may, without such consent, assign this Agreement (i) to any Affiliate or (ii) to any Person that has (or whose obligations under this Agreement are guaranteed by an entity that has) Relevant Experience.

 

(b)   By the Project Company: This Agreement may be assigned by the Project Company to a successor owner of the Wind Farm without the prior consent (written or otherwise) of the Administrator; provided, that no such assignment shall impair the rights of the Administrator to operate the Wind Farm pursuant to this Agreement. The Project Company may pledge, collaterally assign, or encumber its rights under this Agreement to any lender of the Project Company. In such event, the Administrator agrees to execute a consent to assignment in form and substance reasonably acceptable to the Administrator and consistent with then-current financing practices. The Administrator also agrees that it shall, at any time and from time to time during the term of this Agreement, after receipt of a written request by the Project Company, execute and deliver to the Project Company and/or its lender, such estoppel statements as may reasonably be requested.

 

Section 10.02  Authorization. Except as expressly authorized in writing by the Project Company, or as contemplated under the Administrative Services, the Administrator shall not have the right or the obligation to create any obligation or to make any representation on behalf of the Project Company.

 

Section 10.03  Governing Law, Jurisdiction, Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to conflicts of law principles (except for Section 5-1401 of the New York General Obligations Law).

 

Section 10.04  Independent Contractor. Nothing contained in this Agreement and no action taken by any party to this Agreement shall be (A) deemed to constitute any party or any of such party’s employees, agents or representatives to be an employee, agent or representative of any other party; (B) deemed to create any company, partnership, joint venture, association or syndicate among or between any of the parties; or (C) except as contemplated under the Administrative Services, deemed to confer on any party any expressed or implied right, power or authority to enter into any agreement or commitment, express or implied, or to incur any obligation or liability on behalf of any other party, except as expressly authorized in writing. Notwithstanding anything to the contrary in this Section, each party acknowledges that it expects that communications between the parties and between either party and outside legal counsel in connection with legal services supervised, monitored and/or enforced by the Administrator

 

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pursuant to Section 2.02(j) hereof are privileged communications to which the attorney-client privilege will attach.

 

Section 10.05  Notice. All notices, requests, consents, demands and other communications (collectively “notices”) required or permitted to be given under this Agreement shall be in writing signed by the party giving such notice and shall be given to each party at its address or fax number set forth in this Section 10.05 or at such other address or fax number as such party may hereafter specify for such purpose by notice to the other party and shall be either delivered personally or sent by fax or telegraph or registered or certified mail, return receipt requested, postage prepaid, or by a nationally recognized overnight courier service. A notice shall be deemed to have been given (i) when transmitted if given by fax or telegraph or (ii) when delivered, if given by any other means. Notices shall be sent to the following addresses:

 

To the Administrator:

 

NRG Texas Power LLC

1301 McKinney, 23rd Floor

Houston, TX 77010

Telephone: 713-795-6405

Facsimile: 713-795-6233

Attention: Senior Vice President

 

With a copy to:

 

NRG Texas Power LLC

1301 McKinney, 23rd Floor

Houston, TX 77010

Telephone: 713-795-6235

Facsimile: 713-795-7444

Attention: General Counsel

 

To the Project Company:

 

South Trent Wind LLC

1301 McKinney, 23rd Floor

Houston, TX 77010

Telephone: 713-795-6405

Facsimile: 713-795-6233

Attention: Senior Vice President

 

With a copy to:

 

South Trent Wind LLC

1301 McKinney, 23rd Floor

Houston, TX 77010

Telephone: 713-795-6235

Facsimile: 713-795-7444

 

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Attention: General Counsel

 

Section 10.06  Usage.  This Agreement shall be governed by the following rules of usage: (i) a reference in this Agreement to a Person includes, unless the context otherwise requires, such Person’s successors and permitted assignees; (ii) a reference in this Agreement to a law, license, or permit includes any amendment, modification or replacement to such law, license or permit; (iii) accounting terms used in this Agreement shall have the meanings assigned to them by GAAP; (iv) a reference in this Agreement to an article, section, exhibit, schedule or appendix is to an article, section, exhibit, schedule or appendix of this Agreement unless otherwise stated; (v) a reference in this Agreement to any document, instrument or agreement shall be deemed to include all appendices, exhibits, schedules and other attachments thereto and all documents, instruments or agreements issued or executed in substitution thereof, and shall mean such document, instrument or agreement, or replacement thereof, as amended, modified and supplemented from time to time in accordance with its terms and as the same is in effect at any given time; (vi) unless otherwise specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and (vii) the words “include” and “including” and words of similar import used in this Agreement are not limiting and shall be construed to be followed by the words “without limitation”, whether or not they are in fact followed by such words.

 

Section 10.07  Entire Agreement.  This Agreement (including all appendices and exhibits hereto) constitutes the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersedes all prior written and oral agreements and understandings with respect to such subject matter.

 

Section 10.08  Amendment.  Neither this Agreement nor any of the terms hereof may be terminated, amended, supplemented, waived or modified orally, but only by a document in writing signed by the party against which the enforcement of such termination, amendment, supplement, waiver or modification is sought.

 

Section 10.09  Confidential Information.

 

(a)   Except as required by applicable law or explicitly required or permitted by this Agreement, no party shall, without the prior written consent of the other party, disclose any confidential information obtained from the other party to any third parties, other than (i) to consultants or to employees who have agreed to keep such information confidential as contemplated by this Agreement and who are reasonably believed to need the information to assist such party with the exercise or performance of any rights and obligations provided to, or imposed upon, such party in such document or (ii) to the Internal Revenue Service or any state taxing authority in connection with an audit by the Internal Revenue Service or such taxing authority involving such parties’ interest in the Project Company.

 

(b)   This Section 10.09 does not apply to information that the receiving party can demonstrate is presently a matter of public knowledge or which is or becomes available as a matter of public knowledge from a source which is not known to be prohibited from disclosing such information. In the event that a party is requested or required by legal or regulatory

 

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authority to disclose any confidential information, the party shall promptly notify the disclosing party of such request or requirement prior to disclosure so that the disclosing party may seek an appropriate protective order. Notwithstanding any other provision of this Agreement, the receiving party shall have the right to disclose only so much of the confidential information as, in the advice of its legal counsel, the receiving party is legally required to disclose. In such an event, the receiving party agrees to use good faith efforts to ensure that all confidential information that is so disclosed will be accorded confidential treatment.

 

Section 10.10  Discharge of Obligations. With respect to any duties or obligations discharged hereunder by the Administrator, the Administrator may discharge such duties or obligations through the personnel of an Affiliate of the Administrator; provided that, notwithstanding the foregoing, the Administrator shall remain fully liable hereunder for such discharged duties and obligations.

 

Section 10.11  Third Party Beneficiaries. Except as otherwise expressly stated herein, this Agreement is intended to be solely for the benefit of the parties hereto and their permitted assignees and is not intended to and shall not confer any rights or benefits to the general public or any other third party not a signatory hereto.

 

Section 10.12  Severability. Any provision of this Agreement that shall be prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable law, the parties hereto hereby waive any provision of law that renders any provision hereof prohibited or unenforceable in any respect.

 

Section 10.13  Binding Effect. The terms of this Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their successors and permitted assigns. Subject to Section 10.11, nothing in this Agreement, whether express or implied, shall be construed to give any Person other than a party hereto any legal or equitable right, remedy or claim under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

 

Section 10.14  Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

[REST OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Project Company and the Administrator have caused this Agreement to be executed as of the date first above written.

 

	
 
    	
SOUTH   TRENT WIND LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Arun Banskota
    
	
 
    	
 
    	
Name:
    	
Arun Banskota
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to Project Administration Agreement

 

 

	
 
    	
NRG   TEXAS POWER LLC
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Arun Banskota
    
	
 
    	
 
    	
Name:   
    	
Arun Banskota
    
	
 
    	
 
    	
Title:   
    	
Vice   President
    

 

Signature Page to Project Administration Agreement

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