Document:

Exhibit 10.13

 

EXECUTION VERSION

 

OPERATION AND MAINTENANCE AGREEMENT

 

between

 

NRG Energy Services LLC

 

and

 

NRG Solar Borrego I LLC

 

Dated as of August 1, 2012

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS   AND RULES OF INTERPRETATION
    	
1
    
	
 
    	
1.1
    	
Definitions
    	
1
    
	
 
    	
1.2
    	
Rules of   Interpretation
    	
9
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
TERM,   EXPIRATION AND TERMINATION
    	
9
    
	
 
    	
2.1
    	
Initial   Term; Renewal Terms
    	
9
    
	
 
    	
2.2
    	
Early   Termination by Either Party
    	
10
    
	
 
    	
2.3
    	
Early   Termination by Owner
    	
10
    
	
 
    	
2.4
    	
Early   Termination by Operator
    	
10
    
	
 
    	
2.5
    	
Rights   and Duties Upon Termination
    	
10
    
	
 
    	
2.6
    	
Final   Settlement
    	
11
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
SCOPE   OF WORK
    	
11
    
	
 
    	
3.1
    	
Standard   of Performance
    	
11
    
	
 
    	
3.2
    	
Management   of Employees
    	
11
    
	
 
    	
3.3
    	
Duties   of Operator Prior to Project Substantial Completion
    	
11
    
	
 
    	
3.4
    	
Specific   Duties of Operator During Operations
    	
12
    
	
 
    	
3.5
    	
Emergency
    	
15
    
	
 
    	
3.6
    	
Notification   to Owner
    	
15
    
	
 
    	
3.7
    	
Safety
    	
16
    
	
4.
    	
CHANGE   ORDERS
    	
16
    
	
 
    	
 
    	
 
    
	
5.
    	
OPERATOR’S   AUTHORITY; SUBCONTRACTING; PARTS
    	
17
    
	
 
    	
5.1
    	
Operator’s   Authority
    	
17
    
	
 
    	
5.2
    	
Subcontracts
    	
17
    
	
 
    	
5.3
    	
Parts
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
COOPERATION
    	
18
    
	
 
    	
6.1
    	
General
    	
18
    
	
 
    	
6.2
    	
Owner   Representative
    	
18
    
	
 
    	
6.3
    	
Actions   by Owner
    	
18
    
	
 
    	
6.4
    	
Operator   Representative
    	
18
    
	
 
    	
6.5
    	
Actions   by Operator
    	
18
    
	
 
    	
6.6
    	
Access   to Information and Plant; Special Assistance
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
OWNER’S   RESPONSIBILITIES
    	
19
    
	
 
    	
7.1
    	
Responsibilities   of Owner
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
COMPENSATION   AND PAYMENTS
    	
20
    
	
 
    	
8.1
    	
Compensation
    	
20
    

 

i

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2
    	
Invoices   and Reconciliation
    	
20
    
	
 
    	
8.3
    	
Cash   Requirements
    	
20
    
	
 
    	
8.4
    	
Cash   Neutral
    	
21
    
	
 
    	
8.5
    	
Interest   on Delinquent Funds
    	
21
    
	
 
    	
8.6
    	
No   Waiver
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
COMPLIANCE   WITH LAWS AND PERMITS
    	
21
    
	
 
    	
9.1
    	
Requirements   of Law Generally
    	
21
    
	
 
    	
9.2
    	
Hazardous   Materials Management
    	
21
    
	
 
    	
9.3
    	
Compliance   with Permits
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
ALLOCATION   OF RISKS AND LIABILITY
    	
22
    
	
 
    	
10.1
    	
General   Indemnity by Operator
    	
22
    
	
 
    	
10.2
    	
General   Indemnity by Owner
    	
22
    
	
 
    	
10.3
    	
Cooperation   Regarding Claims
    	
23
    
	
 
    	
10.4
    	
Limitations   of Liability
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
11.
    	
CONSEQUENTIAL   DAMAGES; DISCLAIMER
    	
23
    
	
 
    	
 
    	
 
    
	
12.
    	
INSURANCE
    	
24
    
	
 
    	
12.1
    	
Operator’s   Insurance
    	
24
    
	
 
    	
12.2
    	
Owner’s   Insurance
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
13.
    	
FORCE   MAJEURE
    	
24
    
	
 
    	
13.1
    	
Excused   Performance; Duty to Mitigate
    	
24
    
	
 
    	
13.2
    	
Obligations   to Pay Monies
    	
24
    
	
 
    	
13.3
    	
Notice   of Force Majeure Event
    	
24
    
	
 
    	
13.4
    	
Notice   of Cessation of Force Majeure Event
    	
25
    
	
 
    	
 
    	
 
    	
 
    
	
14.
    	
BOOKS   AND RECORDS
    	
25
    
	
 
    	
 
    	
 
    
	
15.
    	
INTELLECTUAL   PROPERTY
    	
25
    
	
 
    	
 
    	
 
    
	
16.
    	
EVENTS   OF DEFAULT
    	
25
    
	
 
    	
16.1
    	
Operator   Defaults
    	
26
    
	
 
    	
16.2
    	
Owner   Defaults
    	
26
    
	
 
    	
16.3
    	
Event   of Default Remedies
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
17.
    	
ASSIGNMENT
    	
27
    
	
 
    	
17.1
    	
Assignment
    	
27
    
	
 
    	
17.2
    	
Financing   Cooperation
    	
27
    

 

ii

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
18.
    	
TITLE   TO MATERIALS
    	
28
    
	
 
    	
 
    	
 
    
	
19.
    	
MISCELLANEOUS
    	
28
    
	
 
    	
19.1
    	
Notices
    	
28
    
	
 
    	
19.2
    	
Severability
    	
28
    
	
 
    	
19.3
    	
Confidentiality
    	
28
    
	
 
    	
19.4
    	
Successors   and Assigns
    	
30
    
	
 
    	
19.5
    	
Governing   Law
    	
30
    
	
 
    	
19.6
    	
Entire   Agreement; Conflicts
    	
31
    
	
 
    	
19.7
    	
No   Partnership Created
    	
31
    
	
 
    	
19.8
    	
No   Third Party Rights
    	
31
    
	
 
    	
19.9
    	
Counterparts
    	
31
    
	
 
    	
19.10
    	
No   Liens
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
20.
    	
[RESERVED]
    	
31
    
	
 
    	
 
    	
 
    
	
21.
    	
OPERATOR   REPRESENTATIONS AND WARRANTIES
    	
31
    
	
 
    	
 
    	
 
    
	
22.
    	
OWNER   REPRESENTATIONS AND WARRANTIES
    	
32
    
	
 
    	
 
    	
 
    
	
23.
    	
SURVIVAL
    	
33
    

 

iii

 

EXHIBIT LIST

 

	
Exhibit A
    	
Plant   Description
    
	
Exhibit B
    	
Monthly   Report Components
    
	
Exhibit C
    	
Insurance
    
	
Exhibit D-1
    	
Preliminary   Annual Maintenance Plan
    
	
Exhibit D-2
    	
Estimated   Five Year Budget
    
	
Exhibit E
    	
Compensation   Terms
    
	
Attachment 1
    	
Table   E-1 - Details of Positions and Functions Included in Basic Corporate Overhead   Expense
    
	
Attachment 2
    	
Availability
    
	
Exhibit F
    	
OEM   Manuals
    
	
Exhibit G
    	
Project   Agreements
    
	
Exhibit H
    	
Additional   Pre-Project Substantial Completion Work Details
    
	
Exhibit I
    	
Owner   and Operator Representatives
    
	
Exhibit J
    	
Permits
    
			

 

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 NRG Solar Borrego I LLC, a Delaware limited liability company (“Owner”), as of August 1, 2012 (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 26 MW solar power generation plant located in Borrego Springs, 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.

 

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 3.4.12, as the same may be revised from 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-1.

 

1

 

“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.

 

“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 (including CAISO) 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.

 

“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 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

 

2

 

claims, demands, actions, suits or proceedings, fines, penalties, losses, liabilities, damages and expenses to any other Person.

 

“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 3.4.12.

 

“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.

 

“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.

 

“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.

 

“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.

 

3

 

“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 November 30, 2011.

 

“EPC Contractor” means Sunora.

 

“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.

 

4

 

“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 3.4.12.

 

“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, 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.

 

5

 

“Licensed Materials” means 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.

 

“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.”

 

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

 

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

 

“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.

 

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

 

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

 

6

 

“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.

 

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

 

“PPA” means the Power Purchase and Sale Agreement between Owner and San Diego Gas and Electric Company, a California corporation (“SDG&E”), dated as of January 25, 2011, as amended.

 

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

 

“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.

 

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

 

“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

 

7

 

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.

 

“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.

 

“Sunora” means Sunora Energy Solutions I LLC, a Delaware limited liability company.

 

“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.

 

8

 

“Work” means the duties and obligations of Operator required under this Agreement, including the Post-Project Substantial Completion Work and the Pre-Project 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 one (1) year increments

 

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(each, a “Renewal Term”), unless either Party delivers written notice of termination to the other 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 or pursuant to Section 2.4, 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 180 days’ 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.

 

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 termination pursuant to this Section 2.4 shall be effective 180 days after written notice of such termination is received by Owner.

 

2.5                               Rights and Duties Upon Termination. On the effective date of expiration or termination of this Agreement by Owner or Contractor, Owner 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, Owner 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 Owner or its designee of all contracts relating to the Plant entered into by Operator, and (b) to the extent assignable, the transfer to Owner or its

 

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designee of all Permits required by a Governmental Authority to be held in Operator’s name as a proxy for the Owner.

 

2.6                               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, the Project Agreements 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 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 Project Substantial Completion. Prior to Project Substantial Completion, Operator shall perform the following activities (“Pre-Project 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 Plant Personnel and Support Personnel, assist with plant commissioning and 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-Project Substantial Completion Work following Project Substantial Completion. The Pre-Project Substantial Completion Work shall also include the work described in Exhibit H attached hereto.

 

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3.3.2                     No later than three months before the expected date of Project Substantial Completion, Operator shall submit the final Annual Maintenance Plan for the first Operating Year for approval by Owner. The preliminary Annual Maintenance Plan is set forth in Exhibit D-1.

 

3.4                               Specific Duties of Operator During Operations. Following Project Substantial Completion, Operator shall perform the following activities with respect to the operating Plant in conformity with the Annual Maintenance Plan (the “Post-Project 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 other contractor of Owner 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 Owner in the performance of its duties or obligations under any purchase order or contract, Operator shall provide prompt written notice of the 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

 

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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.

 

3.4.8                     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.

 

3.4.9                     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.

 

3.4.10              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.

 

3.4.11              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.

 

3.4.12              On or before October 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.

 

·                  Planned outages for the following year in the form required under the PPA;

 

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

 

·                  The Forecast Budget (as defined below); and

 

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

 

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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 (as set forth in Exhibit D-1)), 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; provided that Owner may submit changes to planned outage schedule after such date if Owner receives comments from SDG&E under the PPA after such date. Operator 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) promptly following receipt of such comments or recommended changes. 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 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. 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.

 

3.4.13              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 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.

 

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3.4.14              Operator shall continuously monitor the Plant remotely through the SCADA System. If Operator detects an alarm or error message or observes that a piece of equipment is not operating properly 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.

 

3.4.15              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, provide accounting and reports of electric production in connection with the power sales, provide all planned outage and forced outage notifications to SDG&E required under the +PPA and all forecasts of energy and Plant availability required to be delivered to SDG&E under the PPA.

 

3.4.16              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:

 

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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                     Copies of any outage or other notifications required to be delivered to CAISO or SDG&E under Section 3.4.15;

 

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;

 

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

 

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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 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, 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. 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.

 

5.2                               Subcontracts. No subcontract entered into by Operator shall prohibit or restrict assignment of such agreement by Operator to Owner. 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.

 

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5.3                               Parts. Operator may not, in performing the Work, procure and employ used, non-OEM or reverse engineered equipment and parts without the express approval and permission of Owner. Materials, equipment and parts procured by Operator 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 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 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, 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

 

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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, reports 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 as specified in Section 3.4.15), contracting regarding power sales, and bidding regarding power sales;

 

(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

 

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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 Project Substantial Completion when compared to that set forth in the schedule for such event set forth in the EPC Agreement; and

 

(h)                                 Providing 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. Thereafter, by the eighth (8th) Business Day of each month during the Term, Operator shall 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 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. 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. To the extent not otherwise set off against amounts owed by Owner, Operator shall pay all undisputed amounts owed by Operator to Owner under this Agreement no later than thirty (30) Days following the date of receipt by Operator of Owner’s invoice for the same. Notwithstanding the provisions of Section 19.1, invoices sent to Owner pursuant to this 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

 

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accordance with Section 8.2, Operator shall promptly notify Owner. Subject to Section 5.1, Owner shall pay by electronic funds transfer the amount of such shortfall to Operator by the later to occur of (a) fifteen (15) Business Days after receipt of such notice, or (b) as soon as allowed by the Financing Agreements.

 

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 Environmental Laws) applicable to Operator’s performance of the Work. Owner shall comply with all Applicable Laws (including Environmental Laws) applicable to its obligations hereunder and otherwise applicable to the ownership of the Plant.

 

9.2                               Hazardous Materials Management. Following Project 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 Project 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

 

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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 (i) 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 any Plant Personnel or Support Personnel) or (ii) Hazardous Materials existing at the Plant site prior to the date Contractor mobilizes to the Plant site. 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), except for Hazardous Materials existing at the Plant site prior to the date Contractor mobilizes to the Plant site. 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.

 

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).

 

10.                               ALLOCATION OF RISKS AND LIABILITY.

 

10.1                        General Indemnity by Operator. 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 Person other than Owner or any of its Affiliates (other than Operator), 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. 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 Person 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

 

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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 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); provided that such limitation of liability shall not apply to damages to the extent insurance proceeds are received from insurance required under this Agreement, it being the Parties specific intent that the limitation of liability will not relieve insurers’ obligations for such insured risks.

 

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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.

 

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

 

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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, 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 solely for 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

 

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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 thirty (30) Days after receipt of written notice from Owner, provided that Operator’s cure period may be extended for such breaches not reasonably susceptible to cure within thirty (30) Days and Operator commences to cure such breach within such thirty (30) Day period and thereafter 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”):

 

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 thirty (30) Days after receipt of written notice from Operator, provided that Owner’s cure period may be extended for such breaches not reasonably susceptible to cure within thirty (30) Days and Owner commences to cure such breach within such thirty (30) Day period and thereafter 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,

 

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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.

 

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

 

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such legal opinions at the expense of Owner as may reasonably be requested in connection with any collateral assignment and consent.

 

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 electronic delivery, 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 electronic delivery, 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 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,

 

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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.

 

(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

 

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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).

 

19.3.3              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.

 

19.3.4              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.

 

19.3.5              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.

 

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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 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.

 

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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 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)                                  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.

 

(f)                                   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:

 

(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.

 

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(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.

 

[Signatures begin on next page]

 

33

 

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/ John   M Belk
    	
 
    
	
 
    	
 
    	
 
    
	
Name: 
    	
John M   Belk
    	
 
    
	
 
    	
 
    	
 
    
	
Title: 
    	
President
    	
 
    

 

OWNER:

 

NRG Solar Borrego I LLC,

a Delaware limited liability Company

 

	
By:
    	
/s/ Randall   Hickok
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Randall   Hickok
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
Vice   President
    	
 
    

 

[Signature Page to O&M Agreement]Exhibit 10.14

 

ASSET MANAGEMENT AGREEMENT

 

 

By and among

 

 

NRG SOLAR ALPINE LLC,

as the Owner,

 

 

and

 

 

NRG SOLAR ASSET MANAGEMENT LLC,

as Administrator

 

 

March 15, 2012

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE I
    	
DEFINITIONS AND USAGE
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
ADMINISTRATOR’S RESPONSIBILITIES
    	
4
    
	
 
    	
 
    	
 
    
	
2.1
    	
Engagement
    	
4
    
	
 
    	
 
    	
 
    
	
2.2
    	
Responsibilities   On and After the Effective Date
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
STANDARD OF PERFORMANCE
    	
8
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
COMPENSATION AND PAYMENT
    	
8
    
	
 
    	
 
    	
 
    
	
4.1
    	
Management   Fees and Expenses
    	
8
    
	
 
    	
 
    	
 
    
	
4.2
    	
Billing   and Payment
    	
9
    
	
 
    	
 
    	
 
    
	
4.3
    	
Default   Interest
    	
9
    
	
 
    	
 
    	
 
    
	
4.4
    	
Records
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
DELAYS
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    	
DISPUTE RESOLUTION
    	
10
    
	
 
    	
 
    	
 
    
	
6.1
    	
Procedure
    	
10
    
	
 
    	
 
    	
 
    
	
6.2
    	
Continuation   of Work
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
COMMENCEMENT AND TERMINATION
    	
10
    
	
 
    	
 
    	
 
    
	
7.1
    	
Term
    	
10
    
	
 
    	
 
    	
 
    
	
7.2
    	
Renewals
    	
11
    
	
 
    	
 
    	
 
    
	
7.3
    	
Early   Termination
    	
11
    
	
 
    	
 
    	
 
    
	
7.4
    	
Termination   Payment
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
DEFAULT
    	
12
    
	
 
    	
 
    	
 
    
	
8.1
    	
Events   of Default
    	
12
    
	
 
    	
 
    	
 
    
	
8.2
    	
Bankruptcy
    	
12
    
	
 
    	
 
    	
 
    
	
8.3
    	
Remedies
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
INDEMNIFICATION AND LIMITATION OF DAMAGES
    	
13
    
	
 
    	
 
    	
 
    
	
9.1
    	
Basis   of Compensation
    	
13
    
	
 
    	
 
    	
 
    
	
9.2
    	
Disclaimers
    	
13
    
	
 
    	
 
    	
 
    
	
9.3
    	
Total   Limitation of Administrator’s Liability
    	
13
    
	
 
    	
 
    	
 
    
	
9.4
    	
Indemnification
    	
14
    
	
 
    	
 
    	
 
    
	
9.5
    	
Exculpation
    	
15
    

 

 

TABLE OF CONTENTS

(continued)

 

	
 
    	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
9.6
    	
Exclusion   of Consequential Damages
    	
15
    
	
 
    	
 
    	
 
    
	
9.7
    	
Availability   of Insurance
    	
15
    
	
 
    	
 
    	
 
    
	
9.8
    	
Survival
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE X
    	
REGULATORY
    	
15
    
	
 
    	
 
    	
 
    
	
10.1
    	
Foreign   Asset Control
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE XI
    	
MISCELLANEOUS
    	
16
    
	
 
    	
 
    	
 
    
	
11.1
    	
Assignment
    	
16
    
	
 
    	
 
    	
 
    
	
11.2
    	
Authorization
    	
16
    
	
 
    	
 
    	
 
    
	
11.3
    	
Governing   Law
    	
16
    
	
 
    	
 
    	
 
    
	
11.4
    	
Independent   Contractor
    	
16
    
	
 
    	
 
    	
 
    
	
11.5
    	
Notice
    	
16
    
	
 
    	
 
    	
 
    
	
11.6
    	
Usage
    	
17
    
	
 
    	
 
    	
 
    
	
11.7
    	
Entire   Agreement
    	
18
    
	
 
    	
 
    	
 
    
	
11.8
    	
Amendment
    	
18
    
	
 
    	
 
    	
 
    
	
11.9
    	
Confidential   Information
    	
18
    
	
 
    	
 
    	
 
    
	
11.10
    	
Discharge   of Obligations
    	
19
    
	
 
    	
 
    	
 
    
	
11.11
    	
Third   Party Beneficiaries
    	
19
    
	
 
    	
 
    	
 
    
	
11.12
    	
Severability
    	
19
    
	
 
    	
 
    	
 
    
	
11.13
    	
Binding   Effect
    	
19
    
	
 
    	
 
    	
 
    
	
11.14
    	
Representations   and Warranties
    	
19
    
	
 
    	
 
    	
 
    
	
11.15
    	
Counterparts
    	
20
    
	
 
    	
 
    
	
Exhibits
    	
 
    
	
 
    	
 
    
	
Exhibit A
    	
Initial Approved Budget
    
	
Exhibit B
    	
Project Documents
    

 

ii

 

ASSET MANAGEMENT AGREEMENT

 

THIS ASSET MANAGEMENT AGREEMENT (the “Agreement”) is made as of this 15th day of March, 2012 (the “Effective Date”), by and between NRG SOLAR ALPINE LLC, a Delaware limited liability company (as further defined below, the “Owner”), and NRG SOLAR ASSET MANAGEMENT LLC, a Delaware limited liability company (as further defined below, the “Administrator”).

 

WITNESSETH:

 

The Owner shall enter into this Agreement with the Administrator to provide for, among other things, certain asset management and administrative services for the Project, on behalf of the Owner.

 

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

 

1.1          Definitions.  Unless the express terms of this Agreement shall otherwise provide, capitalized terms used in the recitals hereto shall have the meanings given to them in the recitals and capitalized terms used in this Agreement shall have the following meanings:

 

“Adjustment Date” is defined in Section 4.1(1).

 

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

 

“Administrator” means NRG Solar Asset Management LLC, a Delaware limited liability company in its capacity of providing Administrative Services under this Agreement.

 

“Administrator Indemnified Party” is defined in Section 9.4(2).

 

“Affiliate” means, with respect to any Person, any other Person which directly or indirectly: (a) owns or controls such Person; (b) is owned or controlled by such Person; or (c) is under common ownership or control with such Person.  For purposes of this definition, “control” shall mean, when used with respect to any specified Person, possession of the power to direct the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” is defined in the preamble.

 

“Approved Budget” is defined in Section 2.2(10).

 

 

“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.

 

“Commencement Date” means the Effective Date.

 

“Confidential Information” is defined in Section 11.9.

 

“Core Duties” shall consist of the following services to be provided hereunder with respect to the Project: (i) supervision, monitoring and administration of the Project Documents, (ii) supervising and monitoring compliance with the Financing Documents, (iii) bookkeeping, record keeping and preparation of financial statements as set forth in Section 2.2, (iv) overall coordination of the administrative activities of the Owner, (v) reporting to and communication with the Owner, (vi) administration of environmental reviews and audits in the ordinary course of business and (vii) supervision and administration of operating performance reviews.

 

“Effective Date” is defined in the preamble.

 

“EPC Agreement” means the Engineering, Procurement and Construction Contract, dated as of October 28, 2011, by and between the Owner and First Solar Electric (California), Inc., which provides for the design, engineering, procurement, site preparation, construction, testing and start-up of the Project.

 

“EPC Contractor” means First Solar Electric (California), Inc., as the “Contractor” under the EPC Agreement, and its permitted assigns.

 

“Events of Default” is defined in Section 8.1.

 

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

 

“Financing Documents” means the loan and credit agreements, notes, bonds, indentures, security agreements, lease financing agreements, mortgages, interest rate exchanges, or swap agreements, and any other documents relating to the development, bridge construction or the permanent financing for the Project, even if more than one financing arrangement exists at any time and even if the financing arrangements are of different tiers or tranches, including any credit enhancement, credit support, working capital financing, or refinancing documents, and any and all amendments, modifications or supplements to the foregoing that may be entered into from time to time.

 

“Fiscal Year” means in the case of the initial Fiscal Year the period beginning on the Effective Date and ending on December 31, 2012, and in the case of each subsequent Fiscal Year, the calendar year ending on each successive December 31st.

 

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“GAAP” means generally accepted accounting principles in the United States in effect from time to time, applied on a consistent basis.

 

“Indemnified Party” is defined in Section 9.4(3).

 

“Indemnifying Party” is defined in Section 9.4(3).

 

“Initial Term” is defined in Section 7.1.

 

“Laws” means all applicable federal, state, local, municipal, foreign or other laws, constitutions, statutes, rules, regulations, ordinances, Orders, treaties, codes and other legal requirements issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority, including the common law and Environmental Laws.

 

“LLC Agreement” means the Second Amended and Restated Limited Liability Company Agreement of NRG Solar Alpine LLC, entered into on May 6, 2010, as amended from time to time.

 

“Management Fee” is defined in Section 4.l(1).

 

“MW” means megawatt AC.

 

“Order” means any legally binding order, injunction, judgment, decree, ruling, writ or assessment of a Governmental Authority or decision of an authorized arbitrator.

 

“O&M Agreement” means the Operation and Maintenance Agreement, dated as of August 5, 2011, between the Owner and First Solar Electric (California), Inc., which provides for the operation, maintenance and repair of the Project by First Solar Electric (California), Inc. by and for the benefit of the Owner.

 

“Operator” means First Solar Electric (California), Inc., a Delaware corporation.

 

“Owner” means NRG Solar Alpine LLC, a Delaware limited liability company.

 

“Owner Indemnified Party” is defined in Section 9.4(1).

 

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

 

“PPI” means the Producer Price Index for Finished Goods published by the Bureau of Labor Statistics of the U.S. Department of Labor.  If the publication of the Producer Price Index of the U.S. Bureau of Labor Statistics is discontinued, comparable statistics on the purchasing power of the dollar published by a responsible financial periodical reasonably agreed by Administrator and the Owner shall be used for making such computations.

 

“Project Documents” means those agreements listed on Exhibit B attached hereto as amended, modified or supplemented from time to time.

 

3

 

“Project” means the approximately 66 MW solar electric generating facility, and all accessories and ancillary facilities associated therewith, owned by the Owner, to be located near Lancaster, Arizona.

 

“Prudent Industry Practices” means these practices, methods, equipment, specifications and standards of safety and performance, as the same may change from time to time, as are commonly accepted in the utility-scale photovoltaic industry in the United States as good, safe and prudent practices in connection with the design, construction, operation, maintenance, repair and use of the Project.  “Prudent Industry Practice” as defined herein does not necessarily mean one particular practice, method, equipment specification or standard in all cases, but is, instead, intended to encompass a broad range of acceptance practices, methods, equipment specifications and standards.

 

“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 two percent (2%), but not in excess of the maximum lawful rate of interest permitted by any applicable laws.  Each change in the Reference Rate shall become effective on the date of such change in the prime rate.

 

“Renewal Term” is defined in Section 7.2.

 

“Service Providers” means the EPC Contractor, Operator and each independent third party hired by the Owner, or by the Administrator on behalf of the Owner, to perform services for the Owner or with respect to the Project, including other providers of maintenance, repair and warranty services, certified public accountants, tax return preparers, law firms, engineering firms, and other professional advisors and consultants.

 

“Subsidiaries” of the Owner means, collectively, each entity (i) of which the Owner (either alone or through or together with one or more other Subsidiaries) owns, directly or indirectly, more than 50% of the capital stock or other equity securities of such entity, the holders of which are generally entitled to vote for the election of the board of directors or other governing body of, or otherwise control the business and affairs of, such entity, or (ii) the operations of which are consolidated with the Owner for financial reporting purposes.

 

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

 

ARTICLE II

ADMINISTRATOR’S RESPONSIBILITIES

 

2.1          Engagement.  So long as this Agreement remains in effect, the Administrator shall be responsible for performing the Administrative Services in accordance with the terms and conditions of this Agreement.

 

2.2          Responsibilities On and After the Effective Date.  Commencing on the Effective Date and continuing through the remainder of the Term, the Administrator shall provide the following Administrative Services on behalf of the Owner and its Subsidiaries:

 

1.             Maintain bank accounts of Owner;

 

4

 

2.             Maintain complete and accurate financial books and records in accordance with GAAP for Owner;

 

3.             Perform all of the Owner’s reporting, notice and other administrative responsibilities required under and/or in connection with the Project Documents,  the Financing Documents, and all required governmental approvals and permits;

 

4.             Administer the Financing Documents on behalf of the Project;

 

5.             Maintain complete and accurate financial books and records of the operations of the Project in accordance with the Financing Documents, prudent business practices and GAAP and make such books and records available for inspection and copying during normal business hours on its premises by the Owner or any other Person authorized by the Owner to inspect or copy such books and records, subject to appropriate confidentiality safeguards;

 

6.             Provide to the Owner copies of monthly financial statements for the Owner and its Subsidiaries, but only if and to the extent such financial statements are prepared as required under the Financing Documents or are prepared and provided to Owner;

 

7.             Administer the Project Documents; coordinate and liaise with each counterparty under the Project Documents and arrange for the performance of the Owner’s obligations thereunder; and administer and monitor the Owner’s and each counterparty’s compliance with the Project Documents, which shall include (i) monitoring each counterparty’s performance of its services for the Project (ii) enforcing compliance (or correcting failures to comply) with the Project Documents and (iii) informing Owner of non-compliance of which it becomes aware;

 

8.             Prepare and file or cause to be prepared and filed by certified public accountants acting on behalf of the Owner and the Project, on a timely basis, all federal, state and local tax returns and related information and filings required to be filed by the Owner and the Project; pay out of the Owner’s funds in accordance with the Financing Documents all taxes and other governmental charges shown to be due thereon before they become delinquent and, subject to the terms of the LLC Agreement, make all tax elections believed by the Administrator to be necessary or desirable for the Owner;

 

9.             Supervise and monitor the Service Providers with respect to their performance of services for the Project, and maintain detailed records and otherwise account for all expenditures made on behalf of the Project;

 

10.          On or prior to December 1 of each Fiscal Year, prepare, or cause to be prepared, and submit to the Owner an operating budget for the Project for the immediately following Fiscal Year and an operating budget forecast for the five (5) years thereafter, based on the form attached as Exhibit A hereto (each, an “Approved Budget” and collectively, the “Approved Budget”); it being understood that the Annual Operating Budget attached as Exhibit A shall comprise the Approved Budget for the initial Fiscal Year;

 

5

 

11.          Notify the Owner of any material variance from the applicable Approved Budget promptly after learning of such variance;

 

12.          (A) Assist Owner with procuring and maintaining all commercially available insurance required to be maintained by Owner and the Project in accordance with the Financing Documents and the Project Documents and (B) on an annual basis, assist the Owner with obtaining certificates from the insurance broker verifying the insurance maintained with respect to the Owner and the Project and setting forth the details of all active insurance policies in connection therewith;

 

13.          Administrator, at its sole cost and expense, agrees to provide the Owner with acceptable evidence (in form and substance reasonably satisfactory to the Owner) of the existence of the following insurance types, with the following policy limits: (a) commercial general liability insurance written on an occurrence based form, covering bodily injury and property damage, premises and operations, products and completed operations, contractual liability, independent contractors, cross liabilities/separation of insureds, and personal injury liability, with limits of not less than $1,000,000 per occurrence and a $2,000,000 annual aggregate; (b) if applicable, automobile liability insurance, including coverage for owned, non-owned and hired automobiles for both bodily injury and property damage in accordance with applicable state legal requirements, with combined single limits of no less than $1,000,000 with respect to bodily injury, property damage or death; (c) all forms and types of insurance required by applicable law with respect to employees, including statutory workers compensation and disability benefits insurance (where applicable) and employers liability insurance, with limits of $1,000,000 per accident/per employee; and (d) excess liability insurance or equivalent form with a minimum of $10,000,000 per occurrence limit for any occurrence following the terms of the primary insurance set forth in clauses (a), (b) and (c) (with respect to employer’s liability only) above.  Administrator’s commercial general liability, insurance shall be primary to, and shall not seek contribution from, any similar insurance being maintained by Owner and/or its affiliates;

 

14.          Ensure that each policy of insurance required by Section 2.2(13) shall: (a) be procured and maintained with responsible insurers rated “A- IX” or better by A.M. Best (provided that, if such coverage is not available from an insurer rated “A- IX” or better by A.M. Best on commercially reasonable terms, such insurance shall be procured and maintained with responsible and reputable insurers rated less than “A- IX” and as reasonably acceptable to the Owner) and that are authorized to do business in California; (b) if commercially available, provide that the coverage provided shall not lapse or be canceled or not renewed without at least thirty (30) days’ prior written notice (or ten (10) days’ prior notice if such cancellation is due to failure to pay premiums); (c) provide that none of the Owner, its Subsidiaries nor any of their assignees, shall have any liability for the payment of any premiums or commissions for the policies noted in Section 2.2(13); (d) upon Project Substantial Completion (as defined in the EPC Contract), include an endorsement to the commercial general liability, automobile liability and excess liability policies noted in Section 2.2(13) naming the Owner and its Subsidiaries, and their respective successors, assigns, partners, directors, officers, members, managers, and employees as additional insureds (blanket additional insured endorsements and policy language designating same are acceptable); and (e) with respect to general liability insurance, include a severability of interest clause and cross-liability clause;

 

6

 

15.          Ensure that certificates of insurance for policies required by Section 2.2(13) shall be provided to the Owner on or prior to the Effective Date and thereafter annually, at each renewal, or upon request.  All insurance policies specified in Section 2.2(13) shall include a waiver of any right of subrogation of the insurers thereunder (where permitted by law in the case of the insurance specified in Section 2.2(13)(a), (b) and (c)) in favor of Owner and its affiliates;

 

16.          Engage Service Providers as reasonably believed by the Administrator to be necessary or desirable, or as instructed by the Owner, to represent or perform services for the Owner, provided that the Administrator shall be entitled to request and rely upon instructions from the Owner with respect to the engagement of any Service Provider and provided  further that, subject to the next following sentence, it is understood that to the extent the Administrator engages a Service Provider (other than the Operator or any Service Providers procured by the Operator pursuant to the O&M Agreement) 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 by such Service Provider.  Notwithstanding the foregoing provisions of this Section 2.2(16), any costs of Service Providers (whether providing a Core Duty or other services) anticipated as being provided by third parties other than Administrator under the Approved Budget, shall be excluded from the cost and expense to be borne by the Administrator;

 

17.          (A) Procure and maintain all required governmental approvals and permits and prepare and submit all filings of any nature which are required to be made thereunder, (B) prepare and submit all filings of any nature which are required to be made by the Owner under any laws, regulations, or ordinances applicable to the Owner or the Project, (C) upon becoming aware of any adverse change or possible adverse change to the Owner’s status as an “exempt wholesale generator” under the Public Utility Holding Company Act of 2005 and FERC’s current regulations and their successors, take all reasonable steps, in consultation with the Owner necessary to maintain or re-obtain, as applicable, such status;

 

18.          Not take any affirmative action as would cause the Owner 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 prospective violation take, or direct Service Providers to take, commercially reasonable actions, at the sole expense (but subject to Section 4.1(3)) of the Owner (unless such existing or prospective violation arises from breach of the Administrator’s duties hereunder), to redress or mitigate any such violation;

 

19.          (A) Give prompt written notice, but in no event more than 72 hours, to the Owner of any litigation, material disputes with governmental authorities, material defaults or material force  majeure events under the Project Documents and material losses suffered by the Project after learning of the same, and (B) furnish to the Owner, or direct a Service Provider to so furnish, copies of all material documents furnished to the Owner or the Administrator by any governmental authority or furnished to any governmental authority by the Owner;

 

7

 

20.          Subject to the Financing Documents, make distributions out of available cash as provided under the relevant provisions of the LLC Agreement; and

 

21.          Perform such other administrative tasks as the Owner may reasonably request from time to time in connection with or related to the Project, subject to appropriate exculpatory provisions as the Administrator may reasonably request, consistent with the terms of this Agreement.

 

ARTICLE III

STANDARD OF PERFORMANCE

 

Throughout the term of this Agreement, the Administrator shall perform the services and all other obligations hereunder in accordance with the Project Documents, the Financing Documents, Prudent Industry Practices, and all Laws, including all applicable governmental approvals and permits, regulations, and orders.

 

The Administrator shall have no liability under this Agreement (i) for failure to take actions which require Owner’s consent and as to which it has requested the consent of the Owner 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), (ii) for actions taken at the direction of the Owner, provided, that the liability is caused by such direction and the Administrator has notified the Owner reasonably in advance of taking such action that in the judgment of the Administrator the action to be taken at the direction of the Owner will breach the Financing Documents or violate applicable Laws, Prudent Industry Practices for the Project or other technical specifications or is otherwise incompatible with the Project and the Owner has directed the Administrator to take such action notwithstanding such notice or (iii) for actions requiring the expenditure of funds of the Owner if such funds are not available and the Owner after notice from the Administrator, fails to timely provide such funds.

 

ARTICLE IV

COMPENSATION AND PAYMENT

 

4.1          Management Fees and Expenses.  Following the Effective Date, the Owner shall pay to the Administrator the following fees for the Administrative Services and pay or reimburse the following expenses:

 

1.             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 [One Hundred Twenty Thousand Dollars ($120,000)] per annum (the “Management Fee”).  The Management Fee shall be payable in twelve (12) equal monthly increments, in arrears; provided that with respect to any partial month during the Term, such payment of the Management Fee shall be made pro rata based on the number of days in such month.  On January 1st of each Fiscal Year beginning with January 1, 2013 (each, an “Adjustment Date”), the Management Fee shall be increased by an amount to equal the product of (x) the amount of the Management Fee prior to such Adjustment Date and (y) 2.5%.

 

8

 

2.             Expenses.  It is understood by the Owner that the Management Fee is inclusive of the Administrative Services.  No additional fees for the performance of the Administrative Services will be charged to the Owner in addition to the Management Fee.  If the Administrator, at the request of the Owner, performs services not contemplated by the Administrative Services, the fee for such additional services shall be such amounts payable at such times as the Administrator and the Owner shall agree.

 

3.             Owner Consent for Expenses.  The Administrator shall have the authority to incur expenses on behalf of the Project, as the agent of the Owner, in the performance of the Administrative Services from independent third parties solely in accordance with the Approved Budget.  The Administrator shall not authorize or make any expenditures that are in excess of, and are not otherwise contemplated in any line item or category contained in, the Approved Budget, except upon the prior written consent of the Owner, subject to the Financing Documents.  The Owner shall directly pay the Services Provider or other counterparty to which any such expense shall be payable, and the Administrator shall have no liability or responsibility to pay any such Services Provider or counterparty out of its own funds.  Notwithstanding the foregoing, the consent of the Owner pursuant to this Section 4.1(3) shall not be required (i) as to any operating costs required in the event of an emergency (provided such costs are reasonable in light of such emergency), or (ii) for reimbursement of the Administrator for any expense of a Service Provider which, for the convenience of the Owner, performs services by contract with the Administrator rather than directly with the Owner, provided that the Owner has consented to such arrangement.

 

4.2          Billing and Payment.  At the end of each month during the Term, the Administrator shall invoice the Owner for the portion of the Management Fee due with respect to such month.  Within thirty (30) days following its receipt of such invoice, the Owner shall:

 

1.             Approve and make such payment to the Administrator of the portion of the Management Fee specified in such invoice, less any portion of such expenses that the Owner disputes in good faith; and

 

2.             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.

 

4.3          Default Interest.  Any amount owed hereunder which 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.

 

4.4          Records.  The Administrator shall retain copies of invoices submitted by it under Section 4.2, and of any third party invoices or similar documentation relating to expenses incurred by the Administrator in the performance of Administrative Services for a minimum period of three (3) years or such longer period to the extent required by law.

 

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ARTICLE V

DELAYS

 

If the Administrator becomes aware of any event or circumstance which could prevent its performance of any of its obligations under this Agreement, the Administrator shall give prompt notice thereof to the Owner.  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 which are prohibited by any Project Document, any Financing Document or any applicable law or that would expose the Administrator to any liability or to any expense which is not reasonably expected to be promptly reimbursed or indemnified hereunder.

 

ARTICLE VI

DISPUTE RESOLUTION

 

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

 

6.2          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 Owner may withhold any amount which 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 Owner 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

 

7.1          Term.  Except as may otherwise be provided herein, this Agreement shall commence on the Commencement Date and remain in full force and effect following the

 

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Commencement Date until and including the earlier of (A) the sale to a third party of the Project by the Owner or the sale of all of the membership interests in Owner and, in each case, the completion of all administrative duties necessary or desirable in connection with the winding up of the Owner’s and its Subsidiaries’ affairs and (B) the date falling ten (10) years after the Commercial Operation Date (as defined in the EPC Agreement) (the “Initial Term”).  In connection with the expiration of the Term or any termination pursuant to Section 7.3, the Administrator shall cooperate with all reasonable requests of the Owner in connection with the transition of administrative services performed by the Administrator to the entity selected by the Owner to undertake such services after such expiration or termination of the Term.

 

7.2          Renewals.  Upon the expiration of the Initial Term, the term of this Agreement shall automatically be extended in one (1) year increments (each, a “Renewal Term”) unless the Administrator delivers written notice of termination to Owner no later than 180 days prior to the expiration of the Initial Term or the applicable Renewal Term, as the case may be.

 

7.3          Early Termination.  Subject to Section 7.1 above, this Agreement may not be terminated in all or in part except:

 

1.             by mutual agreement of the parties;

 

2.             pursuant to the remedy provisions of Section 8.3;

 

3.             a termination in its entirety at the Owner’s option upon not less than sixty (60) days’ prior written notice to Administrator if the Owner is no longer an Affiliate of the Administrator;

 

4.             a termination in its entirety at the Administrator’s option if the Owner is no longer an Affiliate of the Administrator; or

 

5.             a termination in its entirety at the Owner’s option upon thirty (30) days’ prior written notice to the Administrator in the event of the destruction, condemnation or other loss of all or substantially all of the Project.

 

An early termination pursuant to Section 7.3(3) or Section 7.3(6) shall be effective on the date specified in the applicable written notice of termination delivered by the Owner to the Administrator or, if earlier, the date upon which the parties reasonably agree that the Owner and the Administrator have completed all activities necessary to enable the Owner to assume responsibility for the Administrative Services, including transition to a replacement administrator, if any acceptable to Owner in its sole discretion.  An early termination pursuant to Section 7.3(4), shall be effective on the earlier of (i) 180 days after the written notice of such termination is received by the Owner, or (ii) the date upon which the parties reasonably agree that the Owner and the Administrator have completed all activities necessary to enable the Owner to assume responsibility for the Administrative Services, including transition to a replacement administrator, if any acceptable to the Owner in its sole discretion.

 

7.4          Termination Payment.  In the event of a termination pursuant to Section 7.3, the Owner shall pay to the Administrator:

 

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1.             All Management Fees earned through the date of termination that have not been paid by the Owner through the effective date of termination; and

 

2.             Other than in the case of a termination by the Owner pursuant to Section 7.3(2) for an Event of Default of the Administrator or a termination pursuant to Section 7.3(3),  (4) or (6), the reasonable costs incurred by the Administrator arising out of or relating to such early termination of this Agreement.

 

ARTICLE VIII

DEFAULT

 

8.1          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 a party under this Agreement regardless of the pendency of any bankruptcy, reorganization, receivership, insolvency or other proceeding which has or might have the effect of preventing such party from complying with the terms of this Agreement:

 

1.             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 thirty (30) days after written notice thereof has been given to the non-paying party; or

 

2.             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, 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 ninety (90) days without the prior written mutual agreement of the parties.

 

8.2          Bankruptcy.  Subject to the rights or remedies it may have, the Administrator, on the one hand, and the Owner, on the other hand, shall have the right to terminate this Agreement, effective immediately, if, at any time, (i) the other party hereto 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 the other party hereto 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 or entry thereof, or any trustee, receiver, conservator or liquidator

 

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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.

 

8.3          Remedies.  If (i) an Event of Default occurs hereunder and such Event of Default is not cured in accordance with the requirements of Section 8.1, or (ii) an event described in Section 8.2 occurs and such event is not cured in accordance with Section 8.2, then subject to resolution pursuant to Section 6.1 of any dispute as to the existence of such event (in the case of Section 8.2) or Event of Default (in the case of Section 8.1), this Agreement may be terminated immediately by the non-defaulting party, without obligation to or recourse by the defaulting party.  Without limiting the provisions of Article IX, 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 the payments of the amounts required to be paid in accordance with Section 7.4 and, if applicable, Article IX.

 

ARTICLE IX

INDEMNIFICATION AND LIMITATION OF DAMAGES

 

9.1          Basis of Compensation.  The Administrator is willing to perform the Administrative Services for the Owner under this Agreement only if Administrator has no exposure to loss, risk or liability other than as set forth in this Article IX.  Notwithstanding any other provision of this Agreement, the Administrator’s total liability to Owner and its Affiliates for any reason whatsoever shall be strictly limited in accordance with Section 9.3.

 

9.2          Disclaimers.  The Administrator agrees to perform the Administrative Services under this Agreement in accordance with the standards and requirements set forth in Article III and otherwise in accordance with the terms of this Agreement.  The Administrator’s liability for failure to comply with such standards and requirements shall be limited as set forth in this Article IX.  The Administrator makes no other guarantees or warranties of any kind in connection with the performance of the Administrative Services.  THE ADMINISTRATOR EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES OF ANY NATURE WHATSOEVER, WHETHER STATUTORY, ORAL, WRITTEN, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.  Except to the extent expressly provided otherwise in this Article IX (but subject to Section 9.3 hereof) and Owner’s right to terminate this Agreement under Section 7.3 and Section 8.3, the Administrator shall have no liability under this Agreement for any failure, breach or default of its obligations.

 

9.3          Total Limitation of Administrator’s Liability.  The maximum aggregate liability of the Administrator pursuant to Section 9.4(1) shall not exceed an amount, at any time, in excess of the aggregate amount of Management Fees to be paid to the Administrator over a three (3) year period ($360,000); provided, however, the foregoing limitation on liability shall not apply to (i) amounts owed to third parties for which the Administrator is obligated to indemnify

 

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an Owner Indemnified Party under this Agreement, or (ii) any amounts recoverable by the Administrator as an insurance payment.

 

9.4          Indemnifications.

 

1.             The Administrator shall defend and indemnify and hold harmless the Owner and its shareholders, members, directors, managers, officers and employees (each, an “Owner Indemnified Party”) from and against any and all Claims asserted by or against such Owner Indemnified Party (i) in respect of any taxes imposed on or attributable to the income or property of the Administrator, (ii) in respect of the employer/employee-related responsibilities with respect to any personnel of the Administrator, including specifically payroll taxes, workers’ compensation claims, any withholdings required by applicable law, and health and welfare benefits, including COBRA benefits, (iii) relating to the injury or death of any person, including employees of the Administrator, (iv) resulting from loss or damage to property or (v) relating to the failure of Administrator to comply with the terms of this Agreement; provided, however, that in the case of clauses (iii), (iv) and (v), only to the extent the Claim results from the Administrator’s willful misconduct or gross negligence or a breach by the Administrator of its obligations hereunder.

 

2.             The Owner shall defend and indemnify and hold harmless the Administrator and its shareholders, members, directors, managers, officers and employees (each, an “Administrator Indemnified Party”) from and against any and all Claims asserted by or against such Administrator Indemnified Party, (i) in respect of any taxes imposed on or attributable to the income or property of the Owner, (ii) relating to the injury or death of any person, including employees of the Owner, (iii) resulting from loss or damage to property, or (iv) relating to the failure of the Owner to comply with the terms of this Agreement, except, in the case of clauses (ii) and (iii), to the extent the Claim results from the Administrator’s willful misconduct or gross negligence or a breach by the Administrator of its obligations hereunder.

 

3.             When required to indemnify an indemnified Party (the “Indemnified Party”) in accordance with this Section 9.4, the Administrator or the Owner, as the applicable (in such capacity, the “Indemnifying Party”) shall assume on behalf of such Indemnified Party and conduct with due diligence and in good faith the defense of any Claim against such Indemnified Party and shall bear the expense thereof, whether or not the Indemnifying Party shall be joined therein, and the Indemnified Party shall cooperate with the Indemnifying Party in such defense.  The Indemnifying Party shall have charge and direction of the defense and settlement of such Claim, provided, however, that without relieving the Indemnifying Party of its obligations hereunder or impairing the Indemnifying Party’s right to control the defense or settlement thereof, the Indemnified Party may elect to participate through separate counsel in the defense of any such Claim, but the fees and expenses of such counsel by such Indemnified Party shall be at the expense of such Indemnified Party unless (a) the employment of counsel by such Indemnified Party has been authorized in writing by the Indemnifying Party, (b) the Indemnified Party shall have reasonably concluded that there exists a material conflict of interest between the Indemnifying Party and such Indemnified Party in the conduct of the defense of such Claim (in which case the Indemnifying Party shall not have the right to control the defense or settlement of such Claim on behalf of such Indemnified Party) or (c) the Indemnifying Party shall not have employed counsel reasonably acceptable to the Indemnified Party to assume the defense of such

 

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Claim within a reasonable time after notice of the commencement thereof.  In each of such cases set forth in the second sentence of this paragraph, the reasonable fees and expenses of counsel shall be at the expense of the Indemnifying Party except where the Indemnifying Party is ultimately deemed not to have been required to provide the indemnity sought by the Indemnified Party.

 

9.5          Exclusion of Consequential Damages.  Neither party (nor its officers, members, directors or employees) 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 (provided that the foregoing shall not include liabilities to third parties) connected with or resulting from performance or non-performance of any obligations under this Agreement.  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, provided, however, that this waiver and disclaimer of liability shall not apply to claims of, or causes of action arising from, intentional fraud of any party hereto.

 

9.6          Availability of Insurance.  Notwithstanding anything to the contrary set in this Article IX, the obligation of either party to indemnify any other party for any Claims will be reduced to the extent of any insurance proceeds received by the Indemnified Party with respect to indemnified Claims.

 

9.7          Survival.  Notwithstanding any other provision of this Agreement, the provisions of this Article IX are intended to and shall survive the termination of this Agreement so as to cover all Claims instituted within the period set forth in the applicable statute of limitations.

 

ARTICLE X

REGULATORY

 

10.1        Foreign Asset Control.

 

1.             To the extent applicable, Administrator and its Affiliates are, and shall at all times be, 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”).

 

2.             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.

 

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ARTICLE XI

MISCELLANEOUS

 

11.1        Assignment.

 

1.             By the Administrator:  The Administrator may not assign this Agreement without the prior written consent of the Owner, which consent may not be unreasonably withheld, except that the Administrator may, without such consent, assign or delegate any of its rights or obligations under this Agreement to any of its Affiliates (subject to any applicable requirements under the Financing Documents or Project Documents).

 

2.             By the Owner:  Subject to Section 11.1(3), the Owner may not assign this Agreement without the prior written consent of the Administrator, which consent may not be unreasonably withheld or delayed.

 

11.2        Authorization.  Except as expressly authorized in writing by the Owner, or 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 Owner.

 

11.3        Governing Law; Jurisdiction.  This Agreement, and the rights and obligations of the parties thereunder and any dispute arising under or relating thereto (whether in contract, tort or otherwise) shall be governed by and interpreted in accordance with the laws of the State of New York, without giving effect to the conflict of law rules thereof (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law) or any other statute or doctrine that might call for the application of the laws of any other jurisdiction.  Each of the Administrator and Owner (a) hereby irrevocably consents to the exclusive jurisdiction of the courts of the State of New York and of any federal court located in the Southern District of New York in connection with any suit, action or other proceeding arising out of or relating to this Agreement or the transactions contemplated hereby, (b) hereby agrees to waive any objection to venue in the State and County of New York and (c) agrees that, to the extent permitted by Law, service of process in connection with any such proceeding may be effected by mailing in the same manner provided in Section 11.5.

 

11.4        Independent Contractor.  Nothing contained in this Agreement and no action taken by a party to this Agreement shall be (A) deemed to constitute a 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 the parties; or (C) except as contemplated under the Administrative Services, deemed to confer on a party any express 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 the other party or on behalf of the Owner, except as expressly authorized in writing.

 

11.5        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 the other party at its address or fax number set forth in this Section 11.5 or at such other address or fax number as such party may hereafter specify for the purpose of notice to the other party and shall be either delivered

 

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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 Solar Asset Management LLC

5790 Fleet Street, Suite 200

Carlsbad, CA 92008

Attention:  John Karam

Phone: 760-710-2147

Fax 760-710-2158

Email:  john.karam@nrgenergy.com

 

With copies to:

 

NRG Energy, Inc.

211 Carnegie Center

Princeton, NJ 08540

Attention:  General Counsel

Facsimile No.:  609-524-4589

 

To the Owner:

 

NRG Solar Alpine LLC

5790 Fleet Street, Suite 200

Carlsbad, CA 92008

Attention:  Randall Hickok

VP Asset Management — NRG Solar

Phone: 760-710-2210

Fax 760-710-2158

Email:  randall.hickok@nrgenergy.com

 

With copies to:

 

NRG Energy, Inc.

211 Carnegie Center

Princeton, NJ 08540

Attention:  General Counsel

Facsimile No.:  609-524-4589

 

11.6        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 permitted successors and assignees; (ii) a reference in this Agreement to a law, license,

 

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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.

 

11.7        Entire Agreement.  This Agreement (including all appendices and exhibits thereto) 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.

 

11.8        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.

 

11.9        Confidential Information.  Each party agrees that it shall not disclose (and shall cause its directors, officers, attorneys, employees and agents not to disclose), without the prior consent of the other party, any information with respect to such other party that is furnished pursuant to this Agreement or learned during the course of performance of the Administrative Services, including any information that would constitute confidential information under the terms of any Project Document (“Confidential Information”), provided that any party may disclose, or allow the disclosure of, any Confidential Information (a) to its directors, officers, attorneys, employees, agents, auditors, professional advisors, consultants and lenders as necessary to perform a party’s obligations under this Agreement, (b) as has become generally available to the public other than as a result of breach of this Section 11.9, (c) as may be required or appropriate in any report, statement or testimony submitted to any governmental authority having or claiming to have jurisdiction over such disclosing party; provided, however, that to the extent such Confidential Information may be excluded from any such report, statement or testimony, or may be submitted subject to administrative confidentiality protection, in each case without prejudicing in any manner the position of the potentially disclosing party, such party shall exclude the information or submit it subject to confidentiality protection, (d) which was otherwise known by the receiving party prior to disclosure or is disclosed to the receiving party by a third party not in violation of any duty of confidentiality, other than, in each case, from a source other than an Affiliate of the Owner, (e) as may be required or appropriate in response to any summons or subpoena from a governmental authority or in connection with any litigation, or (f) to comply with any permit or applicable law.  The parties’ obligations under this Section 11.9

 

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shall expire two years after the expiration or termination of this Agreement.  Upon expiration or termination of this Agreement, all written or other tangible Confidential Information held by a party shall, if requested by the party who owns such Confidential Information, be returned to such owning party.  Notwithstanding anything to the contrary set forth in this Agreement, the Administrator agrees to abide by the terms and conditions of the confidentiality undertakings of the Owner set forth in any of the Project Documents.

 

11.10      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.

 

11.11      Third Party Beneficiaries.  Except with respect to the indemnities set forth in Article IX, 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.

 

11.12      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.

 

11.13      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.

 

11.14      Representations and Warranties.  Each party hereby represents and warrants to the other party as of the date of this Agreement that:

 

1.             Such party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation and has all requisite power and authority to execute, deliver and perform its obligations under this Agreement;

 

2.             The execution, delivery and performance by such party of this Agreement have been duly authorized by all necessary limited liability company action, and do not and will not require any further consents or approvals which have not been obtained, or violate any provision of any law, regulation, order, judgment, injunction or similar matters or breach any agreement presently in effect with respect to or binding on such party;

 

3.             All government approvals necessary for the execution, delivery and performance by such party of its obligations under this Agreement have been obtained and are in full force and effect, except for those governmental approvals to be obtained by such party in the course of performance of its obligations under this Agreement; and

 

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4.             This Agreement is the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms except as enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium and other laws affecting creditors’ rights in general and except to the extent that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefor may be brought.

 

11.15      Counterparts.  This Agreement may be executed by the parties hereto electronically and 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 Owner and the Administrator have caused this Agreement to be executed as of the date first above written.

 

 

	
 
    	
 
    	
NRG   SOLAR ALPINE LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
Name:   [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
Title:   [ILLEGIBLE]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
NRG   SOLAR ASSET MANAGEMENT LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
Name:   [ILLEGIBLE]
    
	
 
    	
 
    	
 
    	
Title:  [ILLEGIBLE]

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