Document:

Contract dated March 26, 2003, between PacifiCorp and Comverge Technologies, Inc

 Exhibit 10.2 
 *** Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission.

 Contract No. 46 00001018 
 CONTRACT 
 BETWEEN 
 PACIFICORP 
 AND 
 COMVERGE TECHNOLOGIES, INC. 
 FOR 
 UTAH AIR CONDITIONING LOAD CONTROL SERVICES 
 TABLE OF CONTENTS

  

					
	 	 	 	  	PAGE
	ARTICLES	  	
			
	1.	 	DESCRIPTION OF WORK	  	1
	2.	 	PERIOD OF PERFORMANCE	  	2
	3.	 	REGULATORY AND LEGISLATIVE ACTIONS	  	2
	4.	 	SUBCONTRACTOR AND FINANCING AGREEMENTS	  	2
	5.	 	CONSIDERATION AND PAYMENT	  	3
	6.	 	TAXES	  	4
	7.	 	ACCOUNTING AND AUDITING	  	4
	8.	 	WITHHOLDING PAYMENTS	  	5
	9.	 	ADDITIONAL DUTIES OF COMPANY	  	5
	10.	 	CONTRACTOR’S PERSONNEL/DRUGS, ALCOHOL, AND FIREARMS	  	5
	11.	 	LABOR	  	6
	12.	 	INSPECTION AND TESTING	  	6
	13.	 	SITE REGULATIONS	  	6
	14.	 	SAFETY AND HEALTH/ACCIDENT AND DAMAGE PREVENTION	  	7
	15.	 	PROTECTION OF EXISTING FACILITIES	  	7
	16.	 	EXAMINATION OF WORK AND PROGRESS REPORTS	  	7
	17.	 	PROGRESS MEETINGS	  	8
	18.	 	SUPERINTENDENCE BY CONTRACTOR	  	8
	19.	 	PROFESSIONAL RESPONSIBILITY	  	8
	20.	 	CLEANUP	  	8
	21.	 	ALLOCATION	  	8
	22.	 	WARRANTY	  	9
	23.	 	CORRECTION OF WORK	  	9

 Contract No. 46 00001018 
  

					
	24.	  	CHANGES	  	9
	25.	  	WORKERS’ COMPENSATION	  	10
	26.	  	INSURANCE	  	10
	27.	  	INDEMNIFICATION	  	11
	28.	  	CLAIM NOTICE AND RESOLUTION PROCEDURE	  	12
	29.	  	CREDIT REQUIREMENT	  	12
	30.	  	SECURITY REQUIREMENTS	  	12
	31.	  	TERMINATION FOR CONVENIENCE	  	13
	32.	  	DEFAULT AND REMEDIES	  	13
	33.	  	DELAYS	  	17
	34.	  	OWNERSHIP OF SOFTWARE	  	17
	35.	  	PATENT AND COPYRIGHT INDEMNITY	  	17
	36.	  	CONFIDENTIAL INFORMATION/NONDISCLOSURE	  	18
	37.	  	LAWS AND REGULATIONS	  	18
	38.	  	EXCLUSIVITITY	  	19
	39.	  	INDEPENDENT CONTRACTOR	  	19
	40.	  	ASSIGNMENT	  	20
	41.	  	SUBCONTRACTS	  	20
	42.	  	AUTHORITY	  	20
	43.	  	DESIGNATED REPRESENTATIVE AND NOTICE DESIGNATED	  	20
	44.	  	NONWAIVER	  	21
	45.	  	SEVERABILITY	  	21
	46.	  	APPLICABLE LAW AND VENUE	  	21
	47.	  	ENTIRE AGREEMENT/DOCUMENTS INCORPORATED BY REFERENCE	  	21
	48.	  	EXECUTION AND EFFECTIVE DATE	  	21

  

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 Contract No. 46 00001018 
 CONTRACT 
 BETWEEN 
 PACIFICORP 
 AND 
 COMVERGE TECHNOLOGIES, INC. 
 FOR 
 UTAH AIR CONDITIONING LOAD CONTROL SERVICES 
 PARTIES 
 The Parties to this Contract (the “Contract”) are PACIFICORP whose corporate headquarters address is 825 NE
Multnomah Street, Portland, Oregon 97232, (hereinafter “Company”) and COMVERGE TECHNOLOGIES, INC. (hereinafter “Contractor”) whose corporate headquarters address is 23 Vreeland Road, Suite 160, Florham Park, New Jersey 07932.

 DEFINITIONS 
 “Company” shall mean
PacifiCorp. “Contractor” shall mean Comverge Technologies, Inc. “Customer” shall mean any PacifiCorp customer that shall receive the services provided by Contractor under this Agreement. 
 ARTICLE 1. DESCRIPTION OF WORK. 
 Contractor shall provide Utah
Air Conditioning Load Control Services in strict accordance with Exhibit A, “Work Scope,” attached hereto and by this reference incorporated herein. Should any conflict arise between the Contract Exhibits, then the order of
precedence shall be: 1) this Contract, 2) Exhibit A, “Work Scope” including Attachment B, “A/C-DLC Schedule of Recursive Annual Processes & Deliverables”, 3) Exhibit B, “Price
Schedule”, 4) Exhibit C, “Technology Escrow Agreement”, 5) Exhibit D, “Software License Agreement”, and then 6) Attachment A, “PacifiCorp Proforma Model”. 
 Except as otherwise provided in this Contract, Contractor shall furnish all supervision, labor, equipment, and materials, and shall obtain all
licenses and permits required for the performance of such work. Contractor shall also be solely responsible for the means, methods, and procedures of performing the work. 
  

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 Contract No. 46 00001018 
 ARTICLE 2. PERIOD OF PERFORMANCE. 
 Time is of the essence. Contractor shall commence performance upon approval
of a program enabling tariff with terms reasonably satisfactory to Company by the Public Service Commission of Utah and shall continue performance until the tenth year anniversary date of the program enabling tariff approval, with optional
one (1) year extensions as may be agreed to in writing between the parties. 
 ARTICLE 3. REGULATORY AND LEGISLATIVE ACTION  

Contract is contingent upon the following regulatory and legislative action: 
  

	 	3.1	Approval of tariff by the Public Service Commission of Utah as filed or in a form satisfactory to Company. 

  

	 	3.2	Legislative and or regulatory action prohibiting program existence described in the Work Scope or impacting Company’s ability to obtain program cost recovery
will result in termination of this Contract under the terms of termination during the ’Installation Phase’ as defined in Section 31, TERMINATION FOR CONVENIENCE. . 

 ARTICLE 4. SUBCONTRACTOR AND FINANCING AGREEMENTS 
 Contractor’s ability to meet certain financial requirements is critically important. Therefore, 
  

	 	4.1	By April 7, 2003, Contractor shall provide satisfactory documentation to Company that the Series A Preferred Financing has been completed for an amount not less that ten
million dollars ($10,000,000) and terms and conditions of financing are not dependent on performance under this Contract. 

  

	 	4.2	By April 7, 2003, Contractor shall provide satisfactory documentation to Company that the Silicon Valley Bank debt financing discussed with Company during March 2003 is
completed. 

  

	 	4.3	By April 7, 2003, Contractor shall provide satisfactory documentation to Company that the Laurus Group and Bank Leumi are paid in full and loan obligations terminated
with no further obligation to Contractor. 

  

	 	4.4	By April 15, 2003, Contractor shall provide satisfactory documentation to Company of Subcontractor Agreements for any of the services described in

  

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 Contract No. 46 00001018 
  

	 	    	Exhibit A, “Work Scope” allowing Company rights of assignment and full “step in rights” satisfactory to Company at the same commercial terms and conditions
as Contractor. 

  

	 	4.5	By April 15, 2003, Contractor shall provide satisfactory documentation to Company that all of the Venture Capital Companies have reviewed and approved
the attached Attachment A, “PacifiCorp Proforma Model”, and that no additional conditions exist where funding would be withdrawn based on Contractor’s performance of these services.

  

	 	4.6	By April 15, 2003, Contractor shall provide Company a Letter of Credit from Silicon Valley Bank, the terms of which shall be satisfactory to Company and subject to
Company’s approval, in the amount of $150,000 for the first six month’s security as described in Article 30, SECURITY REQUIREMENTS. 

  

	 	4.7	By April 30, 2003, Company and Contractor shall complete Exhibit C, “Technology Escrow Agreement”. 

  

	 	4.8	By April 15, 2003, Company and Contractor shall by mutual agreement complete the final written version of Section II, Measurement & Valuation, of Exhibit A,
“Work Scope”. 

  

	 	4.9	By March 28, 2003, Company and Contractor shall by mutual agreement complete the final written version of Exhibit B, Price Schedule, incorporating the Capacity Charge
payment schedule in the Draft Exhibit B, Price Schedule and the pricing methodology and processes as mutually agreed on March 26, 2003. 

 ARTICLE 5. CONSIDERATION AND PAYMENT. 
 As full consideration for the satisfactory performance of Contractor’s obligations under
this Contract, Company will pay Contractor the consideration specified in Exhibit A, “_Work Scope”, and Exhibit B, “Price Schedule” attached hereto and by this reference incorporated herein. 
 Contractor shall submit to Company a quarterly invoice in a form acceptable to Company for the value of the work performed during the preceding
quarter. The undisputed invoice amounts will be paid by Company within thirty (30) days of Company’s receipt. Final payment, shall be paid upon receipt and approval of an invoice after completion of the
work by Contractor and acceptance thereof by Company. 
  

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 Contract No. 46 00001018 
 Payment shall be contingent upon Contractor’s satisfactory compliance with all provisions of this Contract. Payments made by Company shall not be deemed acceptance of Contractor’s work. All
invoices submitted for work performed under this Contract shall include the Contract Number, shall contain supporting documents as required by Company, and shall be submitted to: 
 PacifiCorp 
 Attn: Bill Marek 
 1457 West North Temple, Suite 270 
 Salt Lake City, Utah 84116 
 INVOICES WHICH DO NOT CONTAIN THE ABOVE INFORMATION, OR ARE NOT ADDRESSED AS ABOVE, MAY CAUSE PAYMENT DELAY. 
 Company may offset
any payment due Contractor, its subsidiaries or affiliates to reflect amounts owing from Contractor, its subsidiaries or affiliates to Company pursuant to this Contract, amounts Company has paid directly to subcontractors on behalf of Contractor for
work relating to this contract, customer incentive payments accrued for Company’s customers pursuant to the work performed pursuant to this Contract or any other agreement between the Parties or otherwise. 
 ARTICLE 6. TAXES. 
 The consideration as stated in ARTICLE 5.
CONSIDERATION AND PAYMENT, includes all taxes to be borne by Company arising out of Contractor’s performance hereunder, including without limitation sales, use, and value-added taxes. State and local sales and use taxes shall be
stated separately and shown on all invoices as a separate line item. Upon request of Company, Contractor shall promptly provide to Company evidence of payment of all state and local sales, use and value-added taxes. 
 ARTICLE 7. ACCOUNTING AND AUDITING. 
 Contractor shall keep
accurate and complete accounting records in support of all cost billings and claims to Company in accordance with generally recognized accounting principles and practices. Company, or its audit representatives, shall have the right at any reasonable
time or times to examine, audit and copy the records, vouchers and their source documents which serve as the basis for compensation other than pricing elements which are fixed in amount by this Contract. Such documents shall be available
for examination, audit and copying for three (3) years after the completion or termination of this Contract. 
 Contractor shall assist
Company with preparing necessary audit material and will allow Company to review any work papers prepared by independent auditors as allowed by professional standards. 
  

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 Contract No. 46 00001018 
 Audit findings by Company’s representative will be considered to be final and conclusive on Contractor for the period audited. Any overcollections shall be returned to Company within thirty (30) days from
date of notice of overcharge and any underpayments will be paid to Contractor by Company within thirty (30) days of discovery of such underpayments. 
 ARTICLE 8. WITHHOLDING PAYMENTS 
 Company may, without limiting any other rights or remedies Company may have, withhold from payments
sufficient amounts which, in the opinion of Company, reflect the reasonable cost to repair or replace unsatisfactory work or the value of any claim against Company which Contractor (after having received 5 business days notice from Company
to cure) has failed to cure or settle pursuant to its obligations contained herein. Company may also retain from payment sufficient funds to discharge any delinquent accounts of Contractor for which liens on Company’s property
have been or can be filed, and Company may at any time pay therefrom for Contractor’s account such amounts as are, in the opinion of Company, due thereon, including any sums due under any federal or state law. Company shall notify Contractor in
writing in advance prior to such withholdings of payments. 
 In addition to the right to offset payments pursuant to Section 4 of this Contract,
Company may withhold from payments and pay amounts due subcontractors of Contractor that have not been fully paid within 30 days of the payment due date. Company may also withhold from payments amounts which, in the reasonable judgment of Company,
are sufficient to discharge Company’s then current obligation to make payments to its customers pursuant to the Utah Air Conditioner Load Control program. 
 ARTICLE 9. ADDITIONAL DUTIES OF COMPANY. 
 Company shall use reasonable efforts to promote the use of the Program to customers of
Company as contemplated in Exhibit A, “Work Scope”. Such efforts shall include (i) providing current customer information, including names, addresses, and telephone numbers of target customers in readily useable electronic
format, and updating such information from time to time as reasonably requested by Contractor, (ii) responding within 10 business days to any request by Contractor for approval by Company of any script, letter of endorsement, joint letter, bill
stuffer or other marketing aid or media reasonably requested by Contractor and contemplated in Exhibit A, “Work Scope”. In addition, Company shall provide its portion of M & V metering equipment and services as specified in
Exhibit A, “Work Scope”. 
 ARTICLE 10. CONTRACTOR’S PERSONNEL/DRUGS, ALCOHOL AND FIREARMS. 
 Contractor shall employ in the performance of the work only persons qualified for the same. 
  

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 Contract No. 46 00001018 
 Contractor shall at all times enforce strict discipline and good order among its employees and the employees of any subcontractor of any tier. Contractor shall not permit or allow the introduction or use of any
firearms, illegal drugs or intoxicating liquor upon the work under this Contract, or 
 upon any of the grounds occupied, controlled, or used
by Contractor in the performance of the work. Contractor shall immediately remove from the work, whenever requested by Company, any person considered by Company to be incompetent, insubordinate, careless, disorderly, in violation of the
above restriction on firearms, illegal drugs or intoxicating liquor, or under the influence of illegal drugs or intoxicating liquor, and such person shall not again be employed in the performance of the work herein without the consent of
Company. 
 ARTICLE 11. LABOR. 
 Contractor shall
be aware of, and familiar with, all collective bargaining agreements that do or may pertain to or affect the work under this Contract or other work at the job site. Contractor shall plan and conduct its operations so that its employees and
subcontractors of any tier will work harmoniously with Company employees and other workers employed on the same or related projects to assure that there will be no delays, work stoppages, excessive labor costs, or other labor
difficulties. 
 ARTICLE 12. INSPECTION AND TESTING. 
 All work will be subject to inspection and testing at any reasonable time or times by Company, which shall have the right to reject unsatisfactory work. Neither inspection nor testing of work nor the lack of same nor acceptance of the
work by Company nor payment therefor shall relieve Contractor from any of its obligations under this Contract. 
 Any inspection and testing performed by
Company shall not relieve Contractor of the responsibility for providing quality control measures to assure that the work strictly complies with the Contract requirements. Contractor shall cooperate with any inspection and testing performed by
Company. 
 ARTICLE 13. SITE REGULATIONS. 
 Contractor, while performing work at the job site, shall make itself aware of and abide by the Company job site regulations, if any, including without limitation environmental protection, loss control, dust control, and security,

 Contractor assumes full responsibility for all state and local jurisdictions for permit requirements, including all activities associated with permit
filing including attempts to secure fee waivers. Company shall coordinate and shall work in concert with Contractor to secure such waviers. Company retains financial responsibility for payment of any such permitting fees. Contractor
shall maintain a fully licensed and registered electrical contractor with the State of Utah throughout the term of the Contract 
  

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 Contract No. 46 00001018 
 ARTICLE 14. SAFETY AND HEALTH/ACCIDENT AND DAMAGE PREVENTION.  
 Contractor shall be solely responsible for
being aware of and initiating, maintaining and supervising compliance with all safety laws, regulations, precautions, and programs in connection with the performance of the Contract. Prior to start of any work required by this Contract,
Contractor shall assure that each of its own employees, together with all employees of its subcontractors of any tier, are fully informed concerning all safety, health, and security regulations pertaining to their work. 
 Contractor shall conduct all operations under this Contract in such a manner as to avoid the risk of bodily harm to persons or risk of damage to any property. In the
event Contractor fails to promptly correct any violation of safety or health regulations, Company may suspend all or any part of the work. Contractor shall not be entitled to any extension of time or reimbursement for costs caused by any such
suspension order. Failure of Company to order discontinuance of any or all of Contractor’s operations shall not relieve Contractor of its responsibility for the safety of personnel and property. 
 Contractor shall maintain an accurate record of and shall promptly report to Company all cases of property damage in excess of $100 and of death, occupational diseases,
or injury to employees or any other third parties and incident to performance of work under this Contract. Contractor shall promptly notify Company and provide a copy of any safety citation issued by any governmental entity. 
 ARTICLE 15. PROTECTION OF EXISTING FACILITIES. 
 Contractor
shall protect Customer’s existing equipment and facilities, and avoid interference with Company and Customer’s operations. Except as set forth in Item 1 of Exhibit A “Work Scope”, Contractor shall not remove or alter
any part of the Customer’s existing structures, landscaping, fences, equipment or facilities without the prior knowledge and consent of Company and/or Customer. Contractor’s obligations set forth above in this Section 15 are in
addition to and not in lieu of obligations described in Article 20, Cleanup. 
 ARTICLE 16. EXAMINATION OF WORK AND PROGRESS REPORTS.

 Contractor shall submit periodic progress reports as reasonably requested by Company. Company, its agent or representatives, may visit
Contractor’s office at any reasonable time to determine status of ongoing activities required by this Contract. 
  

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 Contract No. 46 00001018 
 Contractor shall provide progress reports as detailed in the following sections of Exhibit A ‘Work Scope’: Section II - Item 7, Section VI -Item 3, Section VII -Item 4, Section VIII
-Item 4. 
 All work will be subject to examination at any reasonable time or times by Company, which shall have the right to reject
unsatisfactory work. Neither examination of work nor the lack of same nor acceptance of the work by Company nor payment therefor shall relieve Contractor from any of its obligations under this Contract. 
 ARTICLE 17. PROGRESS MEETINGS. 
 Progress meetings will be held
as deemed necessary by Company in its reasonable discretion. Progress meetings will be utilized to review the Contract schedule and to discuss any delays, unusual conditions, or critical items which have affected or could affect the progress of
the work. 
 ARTICLE 18. SUPERINTENDENCE BY CONTRACTOR  
 Contractor shall have competent supervisory personnel satisfactory to Company and with authority to act for Contractor. 
 ARTICLE 19.
PROFESSIONAL RESPONSIBILITY. 
 Contractor shall perform the work using the standards of care, skill and diligence normally provided by a
professional in the performance of similar services, and shall comply with all codes and standards applicable to the work In the event of Contractor’s failure to do so, Contractor shall, upon notice by Company, promptly reperform the
work and correct the defect at Contractor’s sole cost. Contractor’s obligation to correct and reperform its work shall be in addition to, and not in lieu of, any other right that Company may have 
 ARTICLE 20. CLEANUP. 
 Contractor shall keep the work area free
from accumulation of waste materials or rubbish arising out of the work, and prior to completion of the work shall remove and properly dispose of any such rubbish from and about the work area as well as remove all tools, equipment and
materials not property of Company or Customer’s. Upon completion of the work, Contractor shall leave the work area in a condition satisfactory to Company or Customer’s. In the event of Contractor’s failure within a
reasonable time to comply with any of the foregoing, Company may, after written notice to Contractor of such failure, perform the cleanup and removal at the expense of Contractor. 
 ARTICLE 21. ALLOCATION 
 In the event of a partial failure of Contractor’s sources of supply, Contractor
shall first meet all of Company’s requirements hereunder prior to any allocation among other customers. 
  

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 Contract No. 46 00001018 
 ARTICLE 22. WARRANTY 
 Contractor warrants that the Program installed equipment and other deliverables will be
free of material defects in material and workmanship and that it will promptly repair or replace any defective aspect of the Program. Company shall supply equipment that is currently considered “state-of-the-art” in the load management
industry in both features and technology. The equipment will include features such as individual addressability and Adaptive Algorithm. It also will include a cold load pick-up feature addressable over the air and a cold load delay (set at
the factory) to Company requirements of four (4) seconds. The software provided will be capable of controlling all load control devises provided during the Program. The foregoing warranties are not intended as a limitation, but,
are in addition to all other express warranties set forth in this Contract and such other warranties as are implied by law, custom, and usage of trade 
 ARTICLE 23. CORRECTION OF WORK. 
 Any time during the course of the work, Company may reject work which, in Company’s opinion,
fails to conform to this Contract. Contractor, at its sole expense, shall 1) at Company’s option, promptly replace or re-execute the work to conform with the requirements of this Contract, and 2) remove from the job site all work and
materials rejected by Company, whether incorporated in the work or not. To the extent the work of Contractor or others must be disturbed to allow such corrective action by Contractor, Contractor shall reimburse Company for all costs incurred by
Company to restore anything disturbed to its previous condition. 
 If Contractor fails to promptly remedy rejected work, Company may, without limiting or
waiving any other rights or remedies it may have, correct the work and remove and dispose of rejected materials at the expense of Contractor, and may deduct from amounts due Contractor any cost so incurred by Company. 
 If Contractor fails to promptly make or perform any repairs or replacement as required herein, Company may perform or cause to be performed the necessary work at
Contractor’s expense. This correction obligation is in addition to and not in lieu of whatever other rights or remedies Company may have. 
 Contractor’s obligations set forth above in this Section 23 are in addition to and not in lieu of whatever. other rights and remedies Company may have. 
 ARTICLE 24. CHANGES. 
 Company may at any time in writing require changes and/or additions within the general
scope of this Contract or any amendment hereto, direct the omission of or variation in work, or alter the schedule. If such direction results in a material change in the amount or character of the work, an equitable adjustment in the Contract price
and other such provisions of this Contract as may be 
  

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 Contract No. 46 00001018 
 affected shall be made and this Contract shall be modified in writing accordingly. Any claim by Contractor for an adjustment under this Article shall be processed in accordance with the provisions of Article 28
CLAIM NOTICE AND RESOLUTION PROCEDURE. 
 No change shall be binding upon Company until a Change Order is executed by an
authorized representative of Company which EXPRESSLY STATES THAT IT CONSTITUTES A CHANGE ORDER TO THIS CONTRACT. THE ISSUANCE OF INFORMATION, ADVICE, APPROVALS, OR INSTRUCTIONS BY ANYONE OTHER THAN THE AUTHORIZED REPRESENTATIVE SHALL NOT
CONSTITUTE AN AUTHORIZED CHANGE PURSUANT TO THIS ARTICLE. 
 ARTICLE 25. WORKERS’ COMPENSATION. 
 Contractor shall comply with all applicable Workers’ Compensation Acts and shall furnish proof thereof satisfactory to Company prior to commencing work. 

ARTICLE 26. INSURANCE. 
 Without limiting any liabilities or
any other obligations of Contractor, Contractor shall, prior to commencing work, secure and continuously carry with insurers acceptable to Company the following insurance coverage: 
 Commercial General Liability insurance with a minimum single limit of $5,000,000 to protect against and from all loss by reason of injury to
persons or damage to property, including Contractor employees and all third persons, and property of Company and all third parties based upon and arising out of Contractor’s operations hereunder, including the operations of its subcontractors
of any tier. The coverage shall include Contractual Liability. 
 Business Automobile Liability insurance with a minimum single limit
of $1,000,000 for bodily injury and property damage with respect to Contractor’s vehicles whether owned, hired or non-owned, assigned to or used in the performance of the work. 
 The policies required herein shall include provisions or endorsements naming Company, its directors, officers and employees as additional insureds.

 All policies required by this Contract shall include provisions that such insurance is primary insurance with respect to the interests of
Company and that any other insurance maintained by Company is excess and not contributory insurance with the insurance required hereunder, and provisions that such policies shall not be canceled or their limits of liability reduced without 1) ten
(10) days prior written notice to Company if canceled for nonpayment of premium, or 2) 
  

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 Contract No. 46 00001018 
 thirty (30) days prior written notice to Company if canceled for any other reason. A certificate in a form satisfactory to Company certifying to the
issuance of such insurance, shall be furnished to Company. Commercial general liability coverage written on a “claims-made” basis, if any, shall be specifically identified on the certificate. If requested by Company, a copy of each
insurance policy, certified as a true copy by an authorized representative of the issuing insurance company, shall be furnished to Company. 
 Insurance coverage provided on a “claims-made” basis shall be maintained by Contractor for a minimum period of five (5) years after the completion of this Contract and for such other length of time necessary to
cover liabilities arising out of the work. 
 It is understood that the cost of insurance provided by Contractor hereunder is reflected in
the consideration paid to Contractor under this Contract and Company in reliance thereon, will not otherwise secure insurance for the protection of indemnitor as may otherwise be required by statute to render enforceable Contractor’s
indemnity herein. 
 ARTICLE 27. INDEMNIFICATION. 
 Contractor specifically and expressly agrees to indemnify, defend, and hold harmless Company and its directors, officers, employees and agents (hereinafter collectively “Indemnitees”) against and from any and all claims,
demands, suits, losses, costs and damages of every kind and description, including attorneys’ fees and/or litigation expenses, brought or made against or incurred by any of the Indemnitees resulting from, arising out of, or in any way
connected with any act, omission, fault or negligence of Contractor, its employees, agents, representatives or subcontractors of any tier, their employees, agents or representatives in the performance or nonperformance of Contractor’s
obligations under this Contract or in any way related to this Contract. The indemnity obligations under this Article shall include without limitation: 
  

	 	a.	Loss of or damage to any property of Company, Contractor or any third party; 

  

	 	b.	Bodily or personal injury to, or death of any person(s), including without limitation employees of Company, or of Contractor or its subcontractors of any tier; and

  

	 	c.	Claims arising out of Workers’ Compensation, Unemployment Compensation, or similar such laws or obligations applicable to employees of Contractor or its subcontractors of any
tier. 

 Contractor’s indemnity obligation under this Article shall not extend to any liability caused by the sole
negligence of any of the Indemnitees. 
  

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 Contract No. 46 00001018 
 ARTICLE 28. CLAIM NOTICE AND RESOLUTION PROCEDURE. 
 a) In the event Contractor
has a claim or request for a time extension, additional compensation., any other adjustment of the Contract terms, or any dispute arising out of the work (hereinafter “Claim”), Contractor shall notify Company in writing within five
(5) working days following the occurrence of the event giving rise to the Claim. 
 b) As soon as practicable after Claim
notification, Contractor shall submit the Claim to Company with all supporting information and documentation. Contractor shall also respond promptly to all Company inquiries about the Claim and its basis. 
 c) Any Claim not disposed of by agreement shall be decided by Company, which shall provide a written decision to Contractor. Such decision
shall be final unless Contractor, within thirty (30) calendar days after such receipt of Company’s decision, provides to Company a written protest, stating clearly and in detail the basis thereof. It is agreed that Contractor’s
failure to protest 
 Company’s decision shall constitute a waiver by Contractor of its Claim. Even if a Claim arises, Contractor shall continue its
performance of this Contract. 
 ARTICLE 29. CREDIT REQUIREMENT 
 Contractor shall meet the requirements of any one or more of clause (i), clause (ii) or clause (iii) below: (i) Contractor maintains a senior unsecured debt rating from Standard &
Poor’s of BBB or better; (ii) if Contractor has no debt rating, Contractor meets ALL of the following credit standards: a) tangible net worth equal to the projected maximum exposure under this Contract and positive
earnings and working capital for the preceding 12 months, b) no change in the condition of its earnings, net worth, or working capital over the last 24 months which would reasonably be anticipated to impair the Contractor’s ability to meet
its obligations under this Contract, and c) Contractor is not in default under any of its other agreements and is current on all of its financial obligations, or (iii) Contractor posts security pursuant to Article 30 Security
Requirements below. 
 If requested by Company, Contractor shall within thirty (30) days of each request provide Company with copies of its most
recent annual and quarterly financial statements prepared in accordance with generally accepted accounting principles. 
 ARTICLE 30. SECURITY
REQUIREMENTS 
 From time to time, Contractor shall provide Company with security against defaults by Contractor under this Contract in such form
and amount as may be reasonably required by Company (“Default Security”), and pursuant to such additional agreements or instruments as 
  

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 Contract No. 46 00001018 
 may be reasonably required by Company, including, but not limited to letters of credit, escrow accounts, performance bonds, surety bonds, and step-in rights. 
 *** 
 ***

 ARTICLE 31. TERMINATION FOR CONVENIENCE. 
 After
April 1, 2005, Company may terminate this Contract at any time without cause prior to its completion by sending to Contractor 30 days’ written notice of such termination. Upon such termination during the ‘Installation’ phase as
detailed in Exhibit A, Work Scope, Company shall reimburse Contractor for *** for all installed and operationally ready A/C DLC units. In no event shall Company be liable for anticipated profits based upon work not yet performed

 ARTICLE 32. DEFAULT AND REMEDIES 
 Company shall
have the right to terminate this Contract for cause without incurring any further obligation should Contractor fail in any material respect to timely or properly perform the Work described herein or any part thereof in accordance with the terns of
this Contract. Company shall provide Contractor 48 hours written notice of its intent to terminate for cause. 
 If Company terminates this Contract for
cause in accordance with this article and it thereafter is determined that cause for such termination did not exist, and that such termination for cause was improper, the such termination shall be deemed to have been a Termination for Convenience
pursuant to Article 32. 
 Cause shall include, but not be limited to, the events of default described below: 
  

	32.1	The following events shall constitute defaults under this Contract: 

  

	 	32.1.1	A material breach or material default by Contractor of any of its material obligations under this Contract, if such breach continues uncured for a period of ten (10)
calendar days after receipt of written notice from Company, unless such breach cannot by its nature be remedied within such period in which event Contractor shall provide evidence reasonably satisfactory to Company within ten (10) calendar
days after receipt of such notice that such default shall be corrected or that Contractor is making reasonable progress to that end. For purposes of the Contract, a material breach by Contractor shall be deemed to include, without limitation,
Contractor’ refusal or neglect to supply sufficient and properly skilled 

  

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 Contract No. 46 00001018 
  

	 	    	workmen, materials of the proper quality or quantity or equipment necessary to perform the Work described in this Contract properly, or Contractor’s failure in any respect to
prosecute the Work described in this Contract or any part thereof with promptness, diligence and in accordance with all of the material provisions hereof; 

  

	 	32.1.2	A determination that any representation, statement or warranty made by Contractor in this Contract, the Contractor’s proposal or any other statement,
report or document which Contractor is required to furnish to Company was false or misleading in any material respect; 

  

	 	32.1.3	The filing by or against Contractor of a proceeding under any bankruptcy or similar law, unless such proceeding is dismissed within thirty (30) days from the date of
filing; the making by Contractor of any assignment for the benefit of creditors; the filing by or against Supplier for a proceeding for dissolution or liquidation, unless such proceeding is dismissed with thirty (30) days from the
date of filing; the appointment of or the application for the appointment of a receiver, trustee or custodian for any material part of Contractor’s assets unless such appointment is revoked or dismissed within thirty
(30) days from the date thereof; the attempt by Contractor to make any adjustment, settlement or extension of its debts with its creditors generally; the insolvency of Contractor; the filling or recording of a notice of lien or
the issuance or the obtaining of a levy of execution upon or against a material portion of Contractor’s assets, unless such lien or levy of execution is dissolved within thirty (30) days from the date thereof.

  

	 	32.1.4	A Material Adverse Change has occurred with respect to Contractor and Contractor fails to provide such performance assurances as are reasonable requested by Company,
including without limitation the posting of additional “Security” pursuant to ARTICLE 30, SECURITY REQUIREMENTS. A Material Adverse Change shall mean, with respect to Contractor, if Contractor, in the reasonable opinion of Company,
has experienced a material adverse change in the ability to fulfill its obligation under this Contract, including, but not limited to, any such change that results in its inability to satisfy ARTICLE 29, CREDIT REQUIREMENTS.

  

	 	32.1.5	Contractor’s failure to fully meet the requirements of Section VIII of Exhibit A, Work Scope, 

  

	 	32.1.6	Contractor’s failure to perform any of its obligations pursuant to Article 4, FINANCING AGREEMENTS. 

  

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 Contract No. 46 00001018 
  

	 	32.1.7	Contractor’s failure to perform any of its obligations pursuant to Article 29, CREDIT REQUIREMENT. 

  

	 	32.1.8	Contractor’s failure to perform any of its obligations pursuant to Article 30, SECURITY REQUIREMENTS. 

  

	 	32.1.9	Contractor’s failure to perform any of its obligations as detailed in Section 33.7. 

  

	 	32.2	Upon the occurrence of any default specified in Contract ARTICLE 32 DEFAULT AND REMEDY hereof, whether or not a material default, Company shall have the right to
immediately terminate this Contract for cause. 

 32.3 Upon the occurrence of any material default, following the applicable
process described in Section 32.1 or 32.2, Company shall be entitled upon written notice to Contractor and without notice to Contractor’s sureties and without limiting any of Company’s other rights or remedies, to terminate this
Contract or to terminate Contractor’s right to proceed with that portion of the Work affected by any such material default. 
 32.4 Upon termination of this Contract or any portion of this Contract upon a material default by Contractor, Company shall be entitled to pursue any and all rights and remedies that it my have against Contractor under this
Contract or at law or in equity. 
 32.5 Upon receipt of any such written notice of termination of the entire Contract or of any
right to proceed with any portion of the Work following the applicable process described in Section 32.1 or 32.2, Contractor shall, at its expense, for that portion of the Work affected by any such termination: 
  

	 	a)	Assist Company in making an inventory of all materials and equipment in storage at Contractor’s facility, en route to Contractor’s facility, in storage or manufacture
elsewhere, en route to Company and on order from the suppliers; and 

  

	 	b)	To the extent that they are assignable, and as required by this Agreement, assign to Company any and all subcontracts and operating licenses and agreements as designated in
writing by Company. Certain subcontracts shall be assignable pursuant to terms satisfactory to Company and are listed in Exhibits A, C, and D attached hereto, and as amended from time to time by written agreement executed by the
Parties. The subcontracts in Exhibits A, C, and D shall provide for automatic assignment to Company in the event of a material default of Contractor under this Contract. 

  

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 Contract No. 46 00001018 
 32.6 In the event of such termination, Company may, for the purpose of completing the Work or enforcing these provisions, take possession of all
materials, equipment, tools, appliances, hardware, documentation, A/C- DLC network, dispatching control system, software source media, flow charts and listing in the Company’s plant belonging to or under the control of Contractor, and may
use them or may finish the Work by whatever method it may deem expedient including the hiring of another vendor or vendors under such form of agreement as Company may deem advisable while still maintaining their obligation to mitigate damages,
or Company may itself provide any labor or materials and perform any part of the Work. Notwithstanding anything to the contrary contained herein, Company may not take possession of or use trade secrets proprietary to any of Contractor’s
suppliers or subcontractors unless Contractor has the right pursuant to its agreement with such suppliers or subcontractors to grant such rights to Company. Contractor shall cooperate with and assist Company in attempting to acquire
from Contractor’s suppliers and subcontractors the right to take possession of and use any and all such trade secret materials in the event of such termination. All trade secrets proprietary to Contractor shall remain subject to the
provisions of ARTICLE 36 hereof, and Company shall not have any broader rights to use or disclose such trade secrets as a result of such termination. Any software embodying any of Contractor’s trade secrets shall also be subject to
the provisions of ARTICLE 36 hereof. In the event of such a termination, Contractor shall not be entitled to receive any further payment until the Work is completed. If the unpaid balance of Contractor compensation hereunder shall exceed the
sum of the expense of finishing the Work plus compensation for additional managerial and administrative services and such other costs and damages as Company may suffer as a result of Contractor’s breach, such excess shall be paid to
Contractor. If such expense, compensation, costs and damages shall exceed such unpaid balance, Contractor and its sureties, if any, shall be liable for and shall pay, the excess cost to cover Company to a maximum of ten percent (10%) of
the total Contract value. Failure of Company to exercise any of its rights hereunder shall not excuse Contractor from compliance with the provisions of the Contract nor prejudice rights of Company to recover damages for such material default.

 32.7 In the event Company terminates for cause Company shall have the right to “step in” to all agreements and ownership of
all equipment used in Contractor’s or Subcontractor’s performance of the Work hereunder. Company shall be entitled to all Contract elements as described in Exhibit A, Work Scope, to continue the Work without interruption
of Contract work and service to Customers. Company shall have all necessary facilities to retain Contract Work continuity. Contractor shall provide assurance satisfactory to Company of the necessary provisions in agreements to effect this
obligation prior to Contractor’s execution of the agreement. Contractor hereby agrees that all of its right, title and interest in the Work and the agreements related thereto shall, at Company’s sole option, transfer to Company in the
event of 
  

 16 

 Contract No. 46 00001018 
 Contractor’s termination for cause hereunder. In addition, Company shall be entitled to cause delivery of the contents of the escrow established under the Technology Escrow Agreement attached hereto as
Exhibit C (the “Escrow Agreement”) and give Contractor access to its PowerCAMP Software pursuant to the Limited Use Software License Agreement in the form of Exhibit D executed and delivered to the Escrow Agent in accordance with the
Escrow Agreement. 
 ARTICLE 33. DELAYS. 
 33.1 Force Majeure. Neither party shall be liable for delays due to strike, fire, unusual weather conditions, riot, act of God, act of the public enemy, or other similar unforeseeable cause beyond the control and without the
fault or negligence of the party incurring such delay; however, both parties agree to seek to mitigate the potential impact of any such delay. Any Force Majeure delay shall not be the basis for a request for additional compensation. In the event of
any such delay, the required completion date may be extended for a reasonable period not exceeding the time actually lost by reason of the delay. In circumstances and situations where the stability, integrity and/or safety of the Company’s
Utah Power electric gird is or has the potential of experiencing eminent damage or catastrophic threats to public safety and or operational compromise Company reserves any and all rights to, operate the A/C-DLC network in any manner it deems
appropriate to protect said grid, operational activities of the A/C-DLC network during this period of force majeure is exempt from all calculation metrics, definition of what constitutes force majure solely and exclusively rests with
Company, exercise of force majure to comply with the Public Service Commission of Utah requirements and standards. 
 33.2 Request For
Time Extension. Any request for time extension or additional compensation shall be made in accordance with ARTICLE 28, CLAIM NOTICE AND RESOLUTION PROCEDURE. 
 ARTICLE 34. OWNERSHIP OF SOFTWARE. 
 The use of all software and related proprietary rights of Contractor upon
termination of Contract by reason of a material default by Contractor, shall be governed exclusively by the terms of the Technology Escrow Agreement in the form of Exhibit C and Software License Agreement in the form of Exhibit D hereto. 

ARTICLE 35. PATENT AND COPYRIGHT INDEMNITY. 
 Contractor
shall indemnify, defend and hold harmless Company, its directors, officers, employees and agents against and from all claims, losses, costs, suits, judgments, damages and expenses, including attorneys’ fees, of any kind or nature whatsoever, on
account of infringement of any patent, copyrighted or uncopyrighted work, secret process, trade secret, unpatented invention, 
  

 17 

 Contract No. 46 00001018 
 article, appliance, or otherwise, including claims thereof pertaining to, or arising from Contractor’s performance under this Contract. Contractor shall have the right, in order to avoid such claims or
actions, to substitute at its own expense noninfringing equipment, material or processes, or Contractor may modify at its own expense such infringing equipment, material or process so that it becomes noninfringing, provided that such substitution
and modified equipment, material and processes shall meet the requirements of and be subject to the provisions of this Contract. 
 ARTICLE 36.
CONFIDENTIAL INFORMATION/NONDISCLOSURE. 
 a) Definition of Confidential Information. As used in this
Contract, the term “Confidential Information” means, 1) proprietary information of Company, 2) information marked or designated by Company as confidential, 3) information, whether or not in written form and whether or not designated as
confidential, which is known to Contractor as being treated by Company as confidential, 4) information provided to Company by third parties which Company is obligated to keep confidential, and 5) information developed by Contractor in connection
with the performance of this Contract. 
 b) Nondisclosure. Contractor agrees that it will not disclose
Confidential Information, directly or indirectly, under any circumstances or by any means, to any third person without the express written consent of Company. 
 c) Nonuse. Contractor further agrees that it will not use Confidential Information except as may be necessary to perform the
work called for by this Contract. 
 d) Protection. Confidential Information will be made available by
Contractor to its employees only on a “need to know” basis and only after notifying such employees of the confidential nature of the information and after having obligated them to the nonuse and nondisclosure obligations of this Contract.
Contractor agrees to take all reasonable precautions to protect the confidentiality of Confidential Information and, upon request by Company, to return to Company any documents which contain or reflect such Confidential Information. 
 ARTICLE 37. LAWS AND REGULATIONS. 
 Contractor shall at all
times comply with all applicable laws, statutes, regulations, rules, ordinances, codes, and standards, including without limitation those governing wages, hours, desegregation, employment discrimination, employment of minors, health and safety.
Contractor shall at all times comply with, and assist Company in its compliance with, all requirements, orders and regulations of the Public Utility Commission of Utah, and other regulatory bodies having jurisdiction over the subject
matter of this Agreement and such regulatory bodies oversight of Company. Contractor’s failure to do so shall be a material default. Contractor shall comply with equal opportunity laws and regulations to the extent that they are
applicable, including without limitation the following: 
 Executive Order No. 11246 and 41 CFR, Section 60-1.4

     (Employment Discrimination); 
  

 18 

 Contract No. 46 00001018 
 Executive Order No. 11701 and 41 CFR, Section 60-250.4 
     (Employment of Veterans, The Vietnam-Era Readjustment Assistance Act of 1974); 
 Executive Orders Nos. 11625 and 12138 and 48 CFR, 
     Subpart 19.7 (Utilization of Minority and Women-Owned Business); 
 Executive Order No. 11758, the Rehabilitation Act of 1973, 
     Section 503 and 41 CFR, Section 60-741.4 (Employment of Handicapped Individuals); and 
 Executive Order No. 11141 and 48 CFR, Section 22.901 
     (prohibiting discrimination based on age). 
 Contractor shall indemnify, defend and hold harmless Company, its officers, directors, agents and employees from all losses, costs and damages by
reason of any violation thereof and from any liability, including without limitation fines, penalties and other costs arising out of Contractor’s failure to so comply. 
 ARTICLE 38. EXCLUSIVITITY. 
 Except as may otherwise be required by law, Company agrees that during the term of
the Contract Contractor shall have the exclusive right to offer and provide to the customers of Company in the State of Utah electrical load control services of the type to be provided in Contract and Company will not encourage or
solicit other providers of electrical load control services to provide services to its customers in competition with Contractor. Company agrees that, to the extent permissible under applicable law, Company will not market or sell, or
contract with others to market or sell, a residential/small commercial load control program competitive with the Program in the State of Utah during the term of the Contract 
 ARTICLE 39. INDEPENDENT CONTRACTOR. 
 Contractor is an independent contractor and persons employed by
Contractor in connection herewith shall be employees of Contractor and not employees of Company in any respect. 
  

 19 

 Contract No. 46 00001018 
 ARTICLE 40. ASSIGNMENT. 
 Contractor shall not assign this Contract, or any part hereof, or any rights or
responsibilities hereunder without the prior written consent of Company, and any attempted assignment in violation hereof shall be void. 
 ARTICLE
41. SUBCONTRACTS. 
 Contractor shall neither subcontract nor permit any portion of the work to be subcontracted except to competent and
qualified subcontractors reasonably satisfactory to Company. Contractor shall not change the Installation subcontractor (Honeywell DMC), without the prior written consent of Company; and Contractor shall be fully responsible for the acts
or omissions of any subcontractors of any tier and of all persons employed by them, shall maintain complete control over all such subcontractors, and neither the consent by Company, nor anything contained herein, shall be deemed to-create any
contractual relation between the subcontractor of any tier and Company. 
 ARTICLE 42. AUTHORITY 
 Each party hereby represents and warrants that its obligations under Contract have been duly authorized by all required action on the part of its Board of Directors or is
otherwise duly authorized to enter into Contract and perform its obligations hereunder. Each of the parties represents and warrants that this Contract is the enforceable obligation of such party and that the entering into or performance of
Contract will not violate any material obligation or law or regulation to which it is subject. 
 ARTICLE 43. DESIGNATED REPRESENTATIVE AND
NOTICES DESIGNATED REPRESENTATIVE AND NOTICES. 
 Prior to commencement of the work, each party shall designate a representative authorized to act
in its behalf and shall advise the other party in writing of the name, address, and telephone number of such designated representative, and shall inform the other party of any subsequent change in such designation. All communications
relating to the day-to-day activities under this Contract shall be exchanged between such designated representatives. Either party may change the identity or address of its designated representative by giving the other party written notice of
such change. 
 Any notice by either party to the other shall be delivered to the office of the designated representative of the other party,
or, if deposited in the mail, properly stamped with the required postage and addressed to the office of such representative as set forth above, hand delivered with receipt acknowledged by the recipient or a recognized national delivery service to
such address, or sent by confirmed facsimile, or E-mailed with appropriate confirmation of delivery. The facsimile phone number and E-mail address of such representative of Contractor are 973-360-2227 
  

 20 

 Contract No. 46 00001018 
 and esteves@comverge.com respectively and of Company 801-220-3116 and Bill.Marek@PacifiCorp.com, respectively. Any of the foregoing contact
information may be changed by five day notice to the other party delivered in accordance with this Article. 
 ARTICLE 44. NONWAIVER.

 The failure of Company to insist upon or enforce strict performance by Contractor of any of the terms of this Contract or to exercise any rights herein
shall not be construed as a waiver or relinquishment to any extent of Company’s right to assert or rely upon such terms or rights on any future occasion. 
 ARTICLE 45. SEVERABILITY. 
 Any provisions of this Contract prohibited or rendered unenforceable by local, state or federal
law or Public Service Commission of Utah, shall be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Contract. 
 ARTICLE 46. APPLICABLE LAW AND VENUE. 
 This Contract shall be
governed by and construed in accordance with the laws of the State of Utah. Any litigation between the parties arising out of or relating to this Contract will be conducted exclusively in federal or state courts in the State of Oregon or
Utah, at the discretion of Company, and Contractor consents to jurisdiction by such courts. 
 ARTICLE 47. ENTIRE AGREEMENT/DOCUMENTS INCORPORATED
BY REFERENCE. 
 This Contract and any referenced attachments (including all Exhibits and Schedules) constitute the complete agreement between
the parties. Any scope of work, specifications, drawings, schedules, or other documents listed in this Contract are incorporated by reference into this Contract, along with such Exhibits and Schedules. 
 ARTICLE 48. EXECUTION AND EFFECTIVE DATE. 
 This Contract has
been executed by duly authorized representatives of the parties and shall be effective upon approval of a program enabling tariff with terms reasonably satisfactory to Company by the Public Service Commission of Utah. 
  

 21 

 Contract No. 46 00001018 
  

							
	 CONTRACTOR:
	 	COMPANY:
		
	 COMVERGE TECHNOLOGIES, INC.
	 	PACIFICORP
				
	By:	 	 /s/ Joseph Esteves
	 	By:	 	 /s/ A Richard Walje

		 	(Signature)	 		 	(Signature)
	Name:	 	Joseph Esteves	 	Name:	 	A Richard Walje
		 	(Type or Print)	 		 	(Type of Print)
	Title:	 	Executive VP	 	Title:	 	Sr. VP
				
		 	March 26, 2003	 		 	March 26, 2003
		 	(Date Executed)	 		 	(Date Executed)

  

 22 

 PacifiCorp 
 Utah Air Conditioning Load Control Services 
 PacifiCorp Contract 46-00001018 
 Exhibit A 
 Work Scope 

Table of Contents 
  

					
	Introduction: Program Description	  	2
			
	Section I	  	Installation	  	3
			
	Section II	  	Measurement & Valuation	  	6
			
	Section III	  	Dispatching	  	7
			
	Section IV	  	Participant Enlistment I Disconnects	  	9
			
	Section V	  	Customer Communications	  	13
			
	Section VI	  	Maintenance	  	15
			
	Section VII	  	Customer Service	  	17
			
	Section VIII	  	Customer Guarantees & Performance Standards	  	20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 PacifiCorp 
 Utah Air Conditioning Load Control Services 
 PacifiCorp Contract 46-00001018 
 Exhibit A 
 Work Scope 

Introduction: Program Description 
 The Utah Air Conditioning Load
Control Services Program (A/C-DLC–working brand name ‘Cool Keeper’) is a Contractor (“Comverge”) owned, installed and operated network. Company’s (“PacifiCorp’s”) payments are based on
connected and operable load relief based on metered data as part of an ongoing measurement and verification process. Contractor is responsible for all marketing, A/C-DLC network construction, maintenance, operations and customer service costs.
PacifiCorp direct costs shall be limited to payments for (1) actual load relief under contract, (2) incentive payments, (3) permitting fees (if any), (4) providing pulse initiation for limited whole-house demand metering and
(5) standard meter reading of those interval meters. This Program assures Company’s safety and customer satisfaction standards are maintained. 
 Under the Program, residential and small commercial customers have a radio controlled (pager network) switch installed to the exterior component of their Central Air Conditioning (CAC) or in close proximity to the CAC. Customer
participation is voluntary. There is an incentive offered by Company to customers who participate. The A/C-DLC system allows Company to cycle air conditioners off during peak load hours during the summer months along Utah’s ‘Wasatch
Front’. Under this “Pay-for-Performance” contract with the Contractor, Company pays a capacity charge for all units under control. The amount of capacity under control is determined based on inferential statistics
methodologies described in Exhibit B, Price Schedule. No energy charge is assessed for actual load curtailment. The term for the A/C-DLC Program is 10 years. The recursive activities performed under this contract are summarized in Attachment B.

 The first four years of the Program is characterized as a period of marketing, customer installations and establishment of system operations. During
this phase (labeled ‘Initial Installation Phase’) Company is seeking to connect 25-30% of the available CACs to the A/C-DLC network. The second phase is transitory (labeled ‘Transition Phase’). Efforts are dedicated to enhancing
system operations and customer retention and optimization of sub-contractor responsibilities. The third phase (‘Maintenance Phase’) lasts four years and focuses on monitoring system integrity and ensuring a state of dispatch
readiness. During this phase, Contractor shall maintain the system in a state of ‘operational readiness’ prepared to dispatch and meet load reduction objectives. 
 Company has determined and anticipates that the A/C- DLC project provides Company 90 MW of sustainable load relief during Utah’s summer peak periods. Customers experience 50% A/C cycling when the units are
under control no greater than four hours per day, ~25 days per summer cooling season (June, July, August). To maximize Program value, emphasis is placed on targeting installations to distribution system “congestion zones”. 

 

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 2 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section I Installation 
  

	Synopsis	The installation process ensures high quality placement of the Direct Control Units (DCU) on or near the exterior components of the customer’s Central Air Conditioner
(CAC). Detection and correction of non-responsive units is a key component of the installation process. Erratic or non-performing DCUs are accounted for through the M&V process (Section II). Neither the installation quality assurance nor the
verification process is failsafe but together appear to capture the principal items that may result in less-than-anticipated avoided demand. 

  

	1.	Contractor shall honor PacifiCorp’s ‘Customer Guarantees’ and ‘Performance Standards’ on file with the Public Service Commission of Utah as the standard
for performance 

  

	 	1.1.	Absolutely NO... 

  

	 	1.1.1.	Variances 

  

	 	1.1.2.	Exceptions 

  

	 	1.1.3.	Exclusions 

  

	 	1.2.	Applicable performance standard and ‘Customer Guarantees’ 

  

	 	1.2.1.	Reference Section VIII Customer Guarantees & Performance Standards 

  

	2.	Comverge retains statistics on applicable performance standards 

  

	 	2.1.	‘Appointments’ (as defined in PacifiCorp’s ‘Performance Standards’ document–Section VIll #2) 

  

	 	2.2.	Call center metrics (as defined in PacifiCorp’s ‘Customer Guarantees’ document–Section VIII #3) 

  

	3.	Comverge incurs all financial liabilities for non-performance relative to the ‘Appointment’ (Customer Guarantee) 

  

	 	3.1	Comverge installers log all appointment arrival / departure times 

  

	 	3.2.	Comverge maintains records of any / all financial remuneration payable to customers for failure to keep appointments 

  

	 	3.2.1.	Remuneration issued by PacifiCorp 

  

	 	3.2.1.1.	Comverge maintains records of remuneration amounts and customer payments 

  

	 	3.2.1.2.	These records are submitted to PacifiCorp as part of Comverge’s monthly report 

  

	 	3.2.2.	PacifiCorp receives separate payments for any and all failures to meet appointment schedules 

  

	 	3.2.2.1.	Comverge’s payments are delivered coincident with PacifiCorp’s quarterly Avoided Capacity payments 

  

	 	3.2.2.2.	Comverge delivers payments to PacifiCorp’s A/R organization 

  

	 	3.2.2.3.	Comverge issues a separate check payable to PacifiCorp for the total missed appointments, if any, for that quarter. 

  

	4.	Installation personnel qualifications 

  

	 	4.1.	Only ‘qualified installers’ are permitted to install and maintain DCU equipment and systems 

  

	 	4.1.1.	Comverge maintains and provides evidence of all ‘qualified installers’ (designated ‘field technician’ or ‘field tech’) 

  

	 	4.1.2.	Comverge has and provides qualified training to certify and designate ‘qualified installers’ (‘field technicians’) 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 3 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	5.	On-site physical installation procedure 

  

	 	5.1.	Comverge’s call center gives PacifiCorp’s customer the option of either (a) making an appointment for installation of the DCU or (b) simply have the field tech
come to the customer’s domicile / facility at their discretion (approximate time within a specific day) to install the DCU. 

  

	 	5.2.	Field technicians are outfitted in bright orange / yellow safety vests so others in the neighborhood don’t mistakenly report otherwise suspicious behavior.

  

	 	5.2.1.	Safety vests (bright orange meter-reading vests) are provided by PacifiCorp 

  

	 	5.2.2.	PacifiCorp provided safety cones are employed to waylay any apprehensions neighboring individuals may have. 

  

	 	5.3.	Schedule of installations established by Comverge 

  

	 	5.3.1.	Installation schedule constructed for each field technician 

  

	 	5.3.2.	Schedule of work orders (route) constructed for each ‘field tech’ by day for optimization purposes 

  

	 	5.3.3.	Note: Comverge will typically build a backlog, which includes two weeks of customer sign-ups. This backlog is designed to optimize field tech routing and appointment scheduling

  

	 	5.4.	Field tech introduces themselves to the resident, explains their role and installation processes 

  

	 	5.4.1.	Appropriate PacifiCorp ID’s are issued to the field techs 

  

	 	5.4.2.	A laminated letter is carried by the field techs 

  

	 	5.4.2.1.	Phone number of PacifiCorp Program Manager to contact 

  

	 	5.4.2.2.	Name of PacifiCorp Program Manager for contact 

  

	 	5.4.2.3.	As a courtesy to PacifiCorp, the Comverge field technician carries a cellular phone and is trained to assist the customer in answering or facilitating contact with
PacifiCorp’s call center to address related power issues / concerns (billing, outages, tree limbs, etc.) 

  

	 	5.5.	Physical installation and addressing process 

  

	 	5.5.1.	DCUs installed on or in close proximity to the exterior components of the CAC (affixed to the domicile / facility) 

  

	 	5.5.2.	On-site testing for paging signal reception 

  

	 	5.5.2.1.	Field tech confirms paging signal reception 

  

	 	5.5.3.	Field tech correlates DCU bar code with on-site work order 

  

	 	5.5.4.	Field tech Work Orders are batch processed (via scanning) into the ‘Comverge Customer database’ (CTCdb) 

  

	 	5.5.4.1.	The bar code associated with the customer account is scanned into the CTCdb 

  

	 	5.5.4.2.	Comverge maintains the customer information in the CTCdb for audit purposes 

  

	 	5.5.4.3.	Comverge retains physical copies of work orders for audit purposes 

  

	 	5.5.5.	DCU / Bar code # / customer is assigned a paging address (according to the paging schema) by the PowerCAMP control software 

  

	 	5.5.6.	DCU’s address is broadcast (via the paging system) to the DCU 

  

	 	5.5.7.	DCU is now ready to receive operational signals (‘Control Events’) for Program execution. 

  

	6.	Repairs during installation 

  

	 	6.1.	Minor repairs (related only to the CAC components exterior to the domicile / facility) 

  

	 	6.1.1.	If customer is present... 

  

	 	6.1.1.1.	Field tech meets and explains the required repairs to the customer 

  

	 	6.1.1.2.	If the customer agrees to have the repair completed by the field tech...Comverge completes repairs at Comverge’s expense. 

  

	 	6.1.1.3.	Repairs noted in the field tech’s Work Order and later transferred to the CTCdb 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 4 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	6.1.1.4.	If repairs are not authorized, the field tech removes the customer from the Program until such repairs are made 

  

	 	6.1.2.	If customer is NOT present... 

  

	 	6.1.2.1.	Field tech makes repairs 

  

	 	6.1.2.2.	Field tech notes repairs in the work order 

  

	 	6.1.2.2.1.	These data are later transferred to the CTCdb 

  

	 	6.1.2.3.	‘Field tech’ leaves description of repairs with door hanger for customer to review 

  

	 	6.1.2.3.1.	Door hanger provide phone number to call to review the repairs with a field tech 

  

	 	6.1.2.3.2.	Cali center training and scripts are prepared to assure that the customer does not become unduly concerned with the situation and/or repairs 

  

	 	6.1.2.4.	Minor repairs include but are not limited to 

  

	 	6.1.2.4.1.	Double pole breaker (all sizes) 

  

	 	6.1.2.4.2.	Single pole breaker (all sizes) 

  

	 	6.1.2.4.3.	Conduit (all sizes, all lengths) 

  

	 	6.1.2.4.4.	Connectors 

  

	 	6.1.2.4.5.	Fuse change (all sizes) 

  

	 	6.1.2.4.6.	Fuse reducer 

  

	 	6.1.3.	Major repairs (NEC code violations) 

  

	 	6.1.3.1.	Brought to the customer’s attention 

  

	 	6.1.3.1.1.	If customer is present, the nature of the code violation is explained 

  

	 	6.1.3.1.2.	If customer is NOT present the violation is described and together with the door hander left for the customer to review 

  

	 	6.1.3.1.3.	Installation activities are terminated 

  

	 	6.1.3.2.	No installation of DCU is made until repairs are completed 

  

	 	6.1.3.3.	Customer is urged to reschedule DCU installation when repairs are completed 

  

	 	6.1.3.4.	Customer appropriately tracked in the CTCdb 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 5 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section II Measurement & Valuation 
  

	Synopsis	The purpose of M&V is to derive an average measured value of avoided demand for each installed DCU. This measured value is then multiplied by the number of
installations to derive the total Program avoided kW. *** 

  

	1.	M&V procedures 

  

	 	1.1.	This section will be detailed and agreed upon by Contractor, Contractor’s sub-contractor )Quantum Consulting) and Company by April 15, 2003 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 6 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section III Dispatching 
  

	Synopsis	PacifiCorp is responsible for executing ‘Control Events’ (dispatching times and frequencies). PacifiCorp dispatches within the constraints of the Comverge customer
offer and value proposition. Comverge has full responsibility for providing infrastructure requirements and connectivity to PacifiCorp via a web browser. Access is secured via user name, password and PIN. 

  

	1.	Comverge provides and configures PowerCAMP technology and associated module(s) to remotely control DCU’s 

  

	 	1.1.	The price for PowerCAMP and associated modules are included within the contract price for avoided demand payments. 

  

	2.	Comverge’s field engineer shall: 

  

	 	2.1.	Set-up and configure the PowerCAMP system to the paging company with whom Comverge has secured a contract 

  

	 	2.2.	Train selected PacifiCorp personnel in the use of PowerCAMP 

  

	 	2.3.	Provide ‘leave-behind’ PowerCAMP user manuals for reference 

  

	 	2.3.1.	Including phone number of resources to contact for troubleshooting 

  

	 	2.3.1.1.	Pager and / or cell phone numbers are provided to ensure the field engineer can be contacted 7 x 24 x 365. 

  

	3.	Comverge tests the PowerCAMP technology to: 

  

	 	3.1.	Ensure and certify communication robustness with the paging company 

  

	 	3.1.1.	Web hosting vendor provides connection to paging vendor. 

  

	 	3.2.	DCU’s can properly receive the paging signal 

  

	 	3.2.1.	No greater than ***% non-responsive units 

  

	 	3.2.1.1.	one per *** installed DCUs or *** total units assuming *** DCU installations 

  

	 	3.3.	Propagation study conducted by Comverge 

  

	 	3.3.1.	Determines if paging signal is being received for dispatch purposes (dispatching robustness) 

  

	 	3.3.2.	Component of Comverge’s QA efforts 

  

	4.	PacifiCorp assumes responsibility for operational dispatching (‘Control Events’) 

  

	 	4.1.	Coordinate with Utah Power regarding optimal dispatching times and dates 

  

	 	4.2.	Dispatch frequencies for verification purposes logged by PowerCAMP 

  

	 	4.2.1.	PowerCAMP log files are available to Comverge and to PacifiCorp for review 

  

	 	4.2.2.	Comverge and PacifiCorp have equal access to dispatch capabilities 

  

	 	4.2.2.1.	Comverge’s Customer Service Representatives (CSRs) require access to assist customers in troubleshooting and permitting overrides. 

  

	5.	PacifiCorp provides and maintains the capability to connect to PowerCAMP via a web-browser 

  

	 	5.1.	No local ‘client’ to maintain 

  

	 	5.2.	Internet Explorer (IE) or Netscape Navigator (NN) are only client requirements 

  

	 	5.3.	Security provided by Comverge 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 7 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	5.3.1.	User name accessed 

  

	 	5.3.2.	Password required 

  

	 	5.3.3.	PIN protection 

  

	6.	Comverge establishes and maintains Internet accessibility 

  

	 	6.1.	Comverge secures a contract with a Hosting Service Provider that offers customary and industry standards related to but not exclusive of 

  

	 	6.1.1.	Security (including encryption and DOD C-2) 

  

	 	6.1.2.	Reliability 

  

	 	6.1.3.	Redundancy 

  

	 	6.2.	Secure a registered domain name 

  

	 	6.3.	Maintain web server in operational status 

  

	 	6.3.1.	The Hosting Service Provider contractor maintains web server support 

  

	 	6.3.1.1.	24 x 7 x 365 support throughout the A/C-DLC Program’s lifecycle 

  

	 	6.3.1.2.	Provide PacifiCorp with access rights and capabilities 

  

	7.	Override capabilities 

  

	 	7.1.	Once installed, PacifiCorp’s customers are unable to ‘override’ the DCU 

  

	 	7.2.	PacifiCorp’s customer may, however, contact Comverge’s call center and present a legitimate case for Comverge to dispatch an ‘override’ signal to the
customer’s DCU 

  

	 	7.2.1.	Comverge initiated overrides are logged 

  

	 	7.2.1.1.	The ‘Settlement’ algorithm factors overrides into calculations 

  

	 	7.2.1.2.	Appropriately reduces settlement payments 

  

	 	7.2.1.2.1.	Overrides calculated @ $*** per incident per customer 

  

	 	7.2.1.2.2.	Fee for overrides are designed to act as a dis-incentive yet sufficiently low as to not constrain appropriate customer service 

  

	 	7.2.13.	PowerCAMP logs overrides for verification / settlement purposes 

  

	 	7.2.2.	Dispatching is executed via a web-browser interfacing with the PowerCAMP application 

  

	 	7.2.2.1.	PacifiCorp maintains web-browser access to PowerCAMP 

  

	 	7.3.	Financial impacts of overrides are defined Exhibit B (settlement algorithm) 

  

	8.	Maximum dispatching allowed per customer during a calendar year 

  

	 	8.1.	The total maximum ‘Control Event’ dispatching of the A/C-DLC network: 

  

	 	8.1.1.	Not to exceed *** total hours during any summer peak season 

  

	 	8.1.2.	The value proposition crafted by Comverge and approved by PacifiCorp 

  

	 	8.2.	Maximum consecutive controllable hours (dispatch) in a *** is ***. 

  

	9.	No constraint on the number of consecutive days a unit can be dispatched 

  

	10.	The hours during the day ‘Control Events’ can be initiated coincide with Utah Power’s peak demand period *** 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 8 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section IV Participant Enlistment / Disconnects 
  

	Synopsis	Operational mechanisms, processes and techniques involved in securing and sustaining customer participation the A/C-DLC Program. 

  

	1.	Strategic ‘customer reach’ and eligibility 

  

	 	1.1.	Eligibility 

  

	 	1.1.1.	All customers within the Utah Power ‘Wasatch Front’ service territory and/or other areas identified within Utah Power’s Utah service territories are eligible

  

	 	1.1.1.1.	The technology is network-based 

  

	 	1.1.1.2.	Because ratepayer funds are used in constructing and maintaining the network it is incumbent that the network be built and expanded in a manner consistent with providing
benefits to the ratepayer 

  

	 	1.2.	Limitations on customer availability are, as a function of economic and operational prudence 

  

	 	1.2.1.	Restricted to network infrastructure and resource phased construction 

  

	 	1.3.	The A/C-DLC Program is limited to the ‘Wasatch Front’ 

  

	 	1.3.1.	The geographical region where there exists demand limitations to the Utah Power distribution system 

  

	 	1.3.1.1.	Geography between Orem (on the south) to Ogden (on the North) 

  

	 	1.3.2.	The network will be constructed to address circuits / substations in the greatest need of load relief 

  

	 	1.4.	Customer ‘reach’ tactics and strategies are limited to network availability defined by PacifiCorp 

  

	 	1.4.1.	Customer communications focus on targeted solutions 

  

	 	1.4.1.1.	Mass market efforts (e.g., billboards, newsprint TV, radio, etc.) are NOT the ‘customer reach’ mechanism of choice for the A/C-DLC Program 

  

	 	1.4.1.1.1.	Note: messaging may include some measure of mass media communication if it can be crafted to address targeted customer groups 

  

	 	1.4.1.1.2.	Caution: the intent and purpose of limiting mass market efforts is to avoid and/or minimize the creation of unrealistic or false expectations in the market or with key
constituencies 

  

	 	1.4.2.	Target communications (responsibility of Comverge with approval from PacifiCorp) include but are not limited to: 

  

	 	1.4.2.1.	Bill stuffers 

  

	 	1.4.2.2.	Direct mail / email 

  

	 	1.4.2.3.	Outbound telemarketing 

  

	 	1.5.	Marketing expectations / intentions 

  

	 	1.5.1.	It is in PacifiCorp interest and intent to aggressively install DCUs sooner rather than later. 

  

	 	1.5.2.	The A/C-DLC Program Team and the Community & Economic Development organization will exercise all efforts to receive the maximum budget consideration for installations

  

	2.	Customer initiated response to marcom contact 

  

	 	2.1.	Comverge provides and maintains different mechanisms for the customer to: 

  

	 	2.1.1.	Indicate their interest in the Program 

  

	 	2.1.2.	Gather additional Program information 

  

	 	2.1.3.	Nominate themselves for Program participation 

  

	 	2.1.3.1.	Alternative means for customer self-nomination include but are not limited to: 

  

	 	2.1.3.1.1.	Mail-in 3x5 informational card (US Mail) 

  

	 	2.1.3.1.2.	Telephone to toll-free number 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 9 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

  

	 	2.1.3.1.3.	Facsimile 

  

	 	2.1.3.1.4.	Electronic via the PacifiCorp web site 

  

	 	2.1.4.	Schedule installation / trouble shooting. 

  

	3.	Sign-up process 

  

	 	3.1.	Customer initiates interest by responding in one of the four self-nomination modalities described (immediately above) 

  

	 	3.2.	Comverge’s Customer Service Representative (CSR) makes phone contact with customer to answer questions /complete customer participation forms / enrollment materials

  

	 	3.2.1.	Program terms and conditions explained to customer 

  

	 	3.2.2.	Assuming customer desires to participate in the A/C-DLC Program... 

  

	 	3.2.2.1.	CSR logs appropriate customer information including unique installation requirements / constraints (e.g., dogs, locked fences, shrubbery, etc.) in the CTCdb

  

	 	3.2.2.2.	DCU installation scheduled as per customer’s desire 

  

	 	3.2.2.3.	Field tech Work Order schedule constructed 

  

	 	3.2.3.	The customer is NOT required to enter into a formal agreement with PacifiCorp 

  

	 	3.2.3.1.	Customers may enter and / or exit the Program at their discretion 

  

	 	3.2.4.	Installation work order generated 

  

	 	3.3.	DCU installed and operationally tested @ appropriate time and place 

  

	 	3.3.1.	According to customer requests and specifications 

  

	 	3.3.2.	Work Order completed 

  

	 	3.3.3.	Completed Work Order logged into the CTCdb 

  

	 	3.4.	Any and all contact information is logged in the CTCdb 

  

	 	3.4.1.	Customers who simply inquire but choose not to enlist in the A/C-DLC Program are logged into CTCdb 

  

	 	3.4.1.1.	These data become a component of call center statistics 

  

	 	3.4.1.2.	Data used by Comverge in preparing their annual market analyses survey 

  

	4.	Disconnects 

  

	 	4.1.	Customer calls the Comverge call center and requests removal from the Program 

  

	 	4.2.	CSR assesses reason(s) customer desires to discontinue Program participation 

  

	 	4.2.1.	Attempts are made to satisfy customer if there are issues and retain participation in the A/C-DLC Program 

  

	 	4.2.2.	Efforts may or may not include allowing the customer to be ‘overridden’ for a specific ‘Control Event(s)’ 

  

	 	4.2.2.1.	Override decisions are the sole and exclusive responsibility of Comverge 

  

	 	4.2.2.2.	Overrides are logged and treated financially according to parameters as defined in Exhibit B, Price Schedule 

  

	 	4.2.2.2.1.	Overrides are described in Section II (Measurement & Valuation) 

  

	 	4.3.	Customers exiting the Program are disconnected immediately 

  

	 	4.3.1.	Immediate (via the phone) discontinuation is possible because the participant’s DCU can be included / excluded electronically (via the DCU addressing scheme)

  

	 	4.3.1.1.	If the customer again desires to participate in the Program they can once-again be connected by the CSR 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 10 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	4.3.1.1.1.	Remote manipulation of connects / disconnects via the PowerCAMP control software 

  

	 	4.3.2.	For customers wanting the DCU to be physically removed from the Program, a work order is scheduled for a field tech to execute 

  

	 	4.3.2.1.	For customers desiring to be present when the removal takes place a schedule time and date is established for work to be performed 

  

	5.	The Program is marketed to circuits / substations on the Utah Power grid 

  

	 	5.1.	The decision as to the targeted circuits is made exclusively by PacifiCorp 

  

	 	5.1.1.	Definition of target market(s) shall be the exclusive responsibility of PacifiCorp 

  

	 	5.1.2.	Comverge does NOT market to other areas without the explicit authorization from PacifiCorp 

  

	 	5.2.	Targeted site selection includes the following broad criteria 

  

	 	5.2.1.	Units that are not high in the queue for project ‘Bright Future’ 

  

	 	5.2.2.	High probability of customer ‘early adoption’ (targets) 

  

	 	5.2.3.	Geographical areas deemed ‘high growth’ 

  

	 	5.2.4.	Geographical areas where circuits / substations are at, near, or over capacity 

  

	 	5.3.	PacifiCorp reserves the right to develop / add additional criteria depending on the Utah PSC requirements / needs to ensure beneficial impacts to the Utah Power distribution system

  

	6.	Residential markets (single family domiciles) is the target population 

  

	 	6.1.	Facilities with meters >400 amps are excluded from Program participation 

  

	 	6.2.	Target market may include apartments and condominiums 

  

	 	6.3.	The Program involves a diminutive group of small commercial units (as they exist on targeted residential circuits) 

  

	 	6.3.1.	Large commercial units are NOT, by design, targets of this Program 

  

	 	6.3.2.	Small commercial units ARE included in the Program in as much as they exist on the same circuits as residential units 

  

	 	6.4.	PacifiCorp in conjunction with and response to the Utah PSC reserves the right to further refine / define the ‘target population’ for the A/C-DLC Program

  

	7.	PacifiCorp’s Customer Communications organization approves all ‘customer touch’ activities proposed by Comverge 

  

	 	7.1.	PacifiCorp retains 100% approval responsibility for any and all ‘customer touch’ activity processes 

  

	 	7.1.1.	Scripts 

  

	 	7.1.2.	Collateral messaging, etc. 

  

	 	7.1.2.1.	For reasons of confidentiality, customer data may be forwarded directly to the organization performing the direct mailing 

  

	 	7.1.2.2.	Pursuant to Utah PSC requirements sharing of customer information is on a ‘need-to-know’ basis 

  

	 	7.1.3.	e-communications 

  

	8.	Comverge is responsible for customer service 

  

	 	8.1.	Comverge has full, complete and unfettered responsibility for all call center responsibilities including but not limited to 

  

	 	8.1.1.	Telephony contracts 

  

	 	8.1.2.	Physical plant and furniture 

  

	 	8.1.3.	Equipment 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 11 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	8.1.4.	Staffing 

  

	 	8.1.5.	Insurance 

  

	 	8.2.	Presentation of the value proposition to prospective A/C-DLC Program customers 

  

	 	8.3.	Maintaining call center resources to address customer service requirements 

  

	 	8.4.	Where appropriate and deemed essential to enhance Program effectiveness PacifiCorp Customer Communications make themselves available for consultation. 

  

	9.	Because Program is targeted to particular sub-segment, the ‘customer reach’ market strategy principally utilizes direct mail, bill stuffers, out-bound telemarketing and
related direct market efforts. 

  

	 	9.1.	An annual customer communication plan is prepared by Comverge 

  

	 	9.1.1.	The annual plan is due 15 November for each of the Program years 

  

	 	9.1.2.	The Program plan includes PERT Chart, strategies and tactics for review with PacifiCorp Customer Communications organization 

  

	 	9.1.3.	PacifiCorp provides all applicable guidelines and required markings for bill stuffer activities 

  

	10.	e-communications discretely publish Program signup on PacifiCorp web site 

  

	 	10.1.	Look and feel of existing PacifiCorp web site 

  

	 	10.1.1.	    Here, as elsewhere, PacifiCorp has final approval responsibility 

  

	 	10.2.	Server-side scripting is written to interface with Comverge’s db of choice 

  

	 	10.3.	Comverge’s IT personnel provide appropriate technical specifications 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 12 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section V Customer Communications 
  

	Synopsis	The A/C-DLC Program either ‘off-loads’ (delays or eliminates altogether) distribution system up-grades and/or new construction. Customer communication efforts
are targeted to those circuits on substations where ’relief’ is called for or may be called for in the near future (high growth areas). 

  

	 	  	The A/C-DLC Program targets substation circuits defined by PacifiCorp. Customer communication efforts achieve penetration in target markets to avoid either new infrastructure
construction or upgrade efforts, The A/C-DLC Program is, to the extent possible, ‘discretely marketed’ to meet efficient build-out requirements and provide rate-payer benefits. 

  

	1.	Incentives for the three month Summer cooling season is paid immediately following the Summer cooling season1 

  

	 	1.1.	Incentives are paid once per summer cooling season 

  

	 	1.1.1.	Incentive payments coincide with October’s cyclical customer invoicing throughout each of the Program years 

  

	 	1.1.2.	Incentive payments are a ‘credit’ to the customer’s invoice 

  

	 	1.1.3.	PacifiCorp’s Customer Communications leverages credit issuance for PR purposes 

  

	 	1.1.3.1.	Building brand 

  

	 	1.1.3.2.	Cross- and up-sell customer for additional DSM opportunities 

  

	 	1.1.3.3.	Press release (e.g., “Today PacifiCorp rebated $xxxx.xx for customer participation in the A/C- DLC...”) 

  

	 	1.1.3.4.	Provide the customer with a once-per-year news letter on the Program’s activities...other DSM Programs / alternatives 

  

	 	1.2.	Summer peak cooling season includes only June, July and August (1 June through 31 August) 

  

	 	1.3.	PacifiCorp implements credits on customers’ invoice. 

  

	 	1.3.1.	Comverge forwards e-files of participating customers in the manner and format determined by PacifiCorp 

  

	2.	Branding 

  

	 	2.1.	The A/C-DLC Program is promoted under the ‘Utah Power’ brand 

  

	 	2.1.1.	The working branded name of the A/C-DLC Program is ‘Cool Keeper’ 

  

	 	2.2.	‘Do the Bright Thing’ is the principle tag line for the Program 

  

	 	2.3.	‘The DCU device itself is branded with the Utah Power logo 

  

	 	2.4.	Other branding issues / considerations take into account 

  

	 	2.4.1.	PacifiCorp’s related DSM effort in the UT market (efficient CAC Program, Blue Sky and PowerForward) 

  

	 	2.4.2.	Company initiatives that cross all PacifiCorp customer efforts / Programs 

  

	3.	The value proposition is: 

  

	 	3.1.	A single ‘one-size-fits-all’ solution is the initial offering 

  

	1	For the purposes of the contract language, incentives are discussed in terms of dollars. In
reality, and yet to be determined, are whether or not incentives take a form other than cash. For instance, the possibility exists for the development of a 'points' or 'catalogue' system in which participants earn credits redeemable for school
supplies (such as computers, software, etc.) or other charitable causes. The decision as to the nature and type of incentive will be determined conjointly between Comverge and PacifiCorp’s Customer Communications. Regardless of the type of
incentive and under the terms of this contract Comverge shall earn NO return from customer incentive compensation. 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 13 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	3.2.	A multi-tier offering, if provided, is jointly developed / designed by Comverge and PacifiCorp for future Program years 

  

	 	3.3.	PacifiCorp reserves the right to consider and address multi-tier offerings in future years. 

  

	4.	Communications effectiveness assessment 

  

	 	4.1.	Adds to the general body of base customer knowledge 

  

	 	4.2.	Adds to specific Program knowledge...increases Program effectiveness 

  

	 	4.3.	Comverge provides a report each year throughout the Program’s life 

  

	 	4.3.1.	Report is due 30 November throughout each of the Program years 

  

	 	4.3.2.	Report provides assessment of relative effectiveness or alternative marcom strategies and recommendations for ensuing optimization of ‘customer reach’ activities and
processes 

  

	 	4.4.	Effectiveness survey components 

  

	 	4.4.1.	Comverge’s responsibilities 

  

	 	4.4.2.	Survey tasks 

  

	 	4.4.2.1.	Collects follow-up data from Program participants as to the effectiveness of competing customer reach strategies including 

  

	 	4.4.2.1.1.	Monitor and report response rates 

  

	 	4.4.2.1.2.	Correlate with specific marketing collateral, time of mailing, and other advertising 

  

	 	4.4.2.1.3.	Target effectiveness analyses 

  

	 	4.4.2.1.4.	Marketing material effectiveness survey 

  

	 	4.4.2.2.	Utilize paper ‘n pencil survey mechanisms, phone interview and, perhaps, focus group data in preparing follow-up assessments 

  

	 	4.4.2.3.	Cross tab results with customer socio- / psycho-graphics 

  

	 	4.4.2.4.	Gather data from customers who do not choose to participate and assess reasons for non- participation 

  

	 	4.4.3.	Intent 

  

	 	4.4.3.1.	Determine effectiveness of alternative marketing approaches / strategies 

  

	 	4.4.3.2.	Utilize effectiveness data in preparing adjustments for subsequent marketing campaigns 

  

	 	4.4.4.	Deliverables 

  

	 	4.4.4.1.	Report summarizing detailed demographics as well as narrative descriptions / discussion as to effective and ineffective marketing strategies and recommendations, if any, for future
customer communication campaigns. 

  

	 	4.4.4.1.1.	Due 30 November of each year throughout the Program’s life cycle 

  

	 	4.4.4.2.	Ensure customer’s anonymity 

  

	 	4.4.5.	PacifiCorp ensures marketing efforts are appropriate and fall within the constraints and requirements of the Utah PSC explicit and implicit requirements

  

	 	4.4.5.1.	Allows customers to make informed and unfettered decisions relative to Program participation 

  

	5.	Customer satisfaction assessment analysis (satisfaction survey) 

  

	 	5.1.	Paper and pencil activity 

  

	 	5.2.	Follow-up phone interviews 

  

	 	5.3.	Data from Program participants and non-participants (reasons for rejecting the offer) 

  

	 	5.4.	Report issued each year throughout the Program’s life 

  

	 	5.4.1.	Due 30 November of each year throughout the Program’s life cycle 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 14 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section VI Maintenance 
  

	Synopsis	Maintenance means to keep the DCUs in state of ‘operational readiness’ and the system (infrastructure) in place, connected and ready for dispatch. This
includes financially and operationally maintaining contracts with all sub-contractors and ensuring their systems and processes are appropriately readied to meet ‘Dispatch Events’. Maintenance also includes operational maintenance of
system hardware to deliver the avoided capacity as well as maintenance, servicing and regular testing of the PowerCAMP control software. 

  

	1.	Maintenance of avoided capacity 

  

	 	1.1.	The conclusion of the ‘Initial Installation Phase’ (end of Program year-4) marks the beginning of the ‘Transition Phase’ (Program year-5 and year-6 inclusive)

  

	 	1.1.1.	During the ‘Transition Phase’ systems and processes are, where necessary, modified to ensure: 

  

	 	1.1.1.1.	Optimal dispatch readiness 

  

	 	1.1.1.2.	Enhanced reliability 

  

	 	1.1.1.3.	Reduction in costs 

  

	 	1.1.1.4.	Improvements in productivity 

  

	 	1.1.2.	Retains the maximum avoided MW that was achieved at the conclusion of the ‘lnitiai Installation Phase’ (end of year-4) 

  

	 	1.1.2.1.	Maintenance of up to ***% of maximum installed and ‘operationally ready’ DCUs 

  

	 	1.1.2.1.1.	Note: vagaries in the weather, particularly in the winter months, may constrain the achievement of this maintenance figure. It is the intention that over the course of any
given year the ***% figure is realized 

  

	 	1.2.	The conclusion of the ‘Transition Phase’ (end of year-6) marks the beginning of the ‘Maintenance Phase’ (Program year-7 thru year-10 inclusive)

  

	 	1.2.1.	During the ‘Maintenance Phase’ Comverge 

  

	 	1.2.1.1.	Retains the maximum installed and ‘operationally ready’ DCUs that was achieved at the conclusion of the ‘lnitial Installation Phase’ (end of year-4)

  

	 	1.2.1.1.1.	Maintenance of up to ***% of maximum installed and ‘operationally ready’ DCUs 

  

	 	1.2.1.1.1.1.	Note: vagaries in the weather, particularly in the winter months, may constrain the achievement of this maintenance figure. It is the intention that over the course of any
given year the 80% figure is realized 

  

	 	1.2.1.2.	Maintains all operational components of the system and program requirements within defined parameters 

  

	 	1.2.2.	Physical system maintenance 

  

	 	1.2.2.1.	Comverge is responsible for the following maintenance components including but not limited to 

  

	 	1.2.2.1.1.	Hardware 

  

	 	1.2.2.1.2.	PowerCAMP software2 

  

	 	1.2.2.1.2.1.	All software maintenance fees for the PowerCAMP software are the exclusive and sole responsibility of Comverge 

  

	 	1.2.2.1.3.	Comverge provides software support services for the PowerCAMP software 

  

	2	As access to the PowerCAMP software is via web browser (IE or NN) and maintained by a hosting site, it may be best to think of the software component as an
Application Service Provider (ASP) rather than a standard software purchase agreement. Comverge installs and maintains the PowerCAMP application suite either themselves or through a third-party maintenance agreement with (a) the hosting
provider or (b) a separate IT service contractor. In any of these scenarios it remains Comverge’s obligation and responsibility to maintain and service the software such that it reliably and accurately communicates with the paging provider
and controls DCUs according to dispatch requirements. 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 15 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	1.2.2.1.3.1.	All software support service fees for the PowerCAMP software are the exclusive and sole responsibility of Comverge 

  

	 	1.2.2.1.4.	Integrity of contract infrastructure with the paging provider 

  

	 	1.2.2.1.5.	Hosting service 

  

	 	1.2.2.1.6.	Modem dial-up connection to paging provider for remote dispatching 

  

	 	1.3	All costs for system maintenance are incurred by Comverge 

  

	 	1.3.1.	Said costs are embedded in the avoided demand payments made to Comverge 

  

	 	1.3.2.	Maintenance costs that escalate are the sole and exclusive responsibility of Comverge 

  

	 	1.4.	Escalating costs to Comverge on the part of sub-contractors and suppliers are the sole and exclusive responsibility of Comverge 

  

	2.	Comverge is responsible for all customer recruitment and customer service in connection with the ‘Maintenance’ phase of this contract 

  

	 	2.1.	Customer maintenance includes but is not limited to the following: 

  

	 	2.1.1.	Customer Communications 

  

	 	2.1.2.	DCU manufacturing and shipping to meet availability schedule for customer installations 

  

	 	2.1.3.	DCU installation and servicing 

  

	 	2.1.4.	Customer service and support 

  

	 	2.2.	Customer service performance requirements defined in Section Vlll (Customer Guarantees & Performance Standards) 

  

	 	2.3.	Escalating costs to Comverge on part of subcontractors and suppliers are the sole and exclusive responsibility of Comverge 

  

	 	2.3.1.	PacifiCorp’s responsibility is limited to the payment of avoided demand as per Exhibit B- ‘Price Schedule’ 

  

	3.	Reporting 

  

	 	3.1	Comverge provides PacifiCorp a monthly management report detailing performance criteria including but not limited to 

  

	 	3.1.1.	Number of completed installations 

  

	 	3.1.2.	Tracking numbers for future installation time periods (backlogs) 

  

	 	3.1.3.	Number of installations audited for quality including number of failed units 

  

	 	3.1.4.	Equipment manufacturing and shipping schedules 

  

	 	3.1.5.	Exception reporting (warning) of any manufacturing issue(s) that could affect Program operations 

  

	 	3.1.6.	Documentation of customer inquiry information including complaint resolution 

  

	 	3.1.7.	Customer service and call center audits including technical problems resolved over the phone versus technician call out 

  

	 	3.2.	PacifiCorp and Comverge reserve the right and will jointly develop additional criteria or eliminate existing criteria as necessary to meet operational requirements

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 16 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section Vll Customer Service 
  

	Synopsis	Comverge maintains a call center for initial customer signups as well as for on-going customer service throughout the duration of the Program’s lifecycle.

  

	1.	Customer service operating times and hours 

  

	 	1.1.	June, July, August 

  

	 	1.1.1.	8:00am – 8:00pm (MDT) 

  

	 	1.2.	All other months 

  

	 	1.2.1.	8: 00am – 5:00pm (MDT / MST) 

  

	 	1.3.	Weekends, holidays and evenings 

  

	 	1.3.1.	On-call services 

  

	 	1.3.2.	On-call technician availability via pager 

  

	2.	Malfunctioning equipment 

  

	 	2.1.	Call center representative (CSR) follows prescribed procedures as defined by Comverge and approved by PacifiCorp 

  

	 	2.1.1.	Decision logic and associated scripting procedures approved by PacifiCorp 

  

	 	2.1.2.	Problem resolution via scripted dialogue 

  

	 	2.1.3.	Field tech dispatching (when and if necessary) 

  

	 	2.1.4.	Comverge maintains logs for all customer interactions 

  

	 	2.1.4.1.	Including descriptions of problem and duration of customer interaction 

  

	 	2.1.4.2.	Notation of solutions are so indicated by CSR 

  

	 	2.2.	Requests for permanent removal 

  

	 	2.2.1.	CSR is appropriately trained to deal diplomatically with disgruntled customers 

  

	 	2.2.1.1.	All customer calls are appropriately logged and CSR notes taken for complaint resolution / escalation problem resolution 

  

	 	2.2.2.	Customers are encouraged to remain active participants in the Program. 

  

	 	2.2.2.1.	If, however, it becomes apparent that the solution is not meeting expectations the end-use customer is removed from the Program. 

  

	 	2.3.	Customer sign-ups who are designated ‘operationally ready’ to receive ‘Control Events’ prior to 1 June of each Program year MUST remain an the Program
for the entire cooling season to receive the incentive payment 

  

	 	2.3.1.	For a DCU to be deemed ‘operationally ready’ means compliance to and successful completion of all aspects of Section I (Installation; item #5) as contained in Exhibit A,
Work Scope 

  

	 	2.3.2.	The customer is NOT required to execute a legally-binding contract 

  

	 	2.3.3.	The customer may exit the Program at any time of their choosing 

  

	 	2.4.	Customers joining the Program during the control period (June, July, August) 

  

	 	2.4.1.	Incentives are prorated based on the number of days the end-use customer actually participates in the Program and is available for control 

  

	 	2.4.1.1.	The accrual calculation for the incentive begins when the DCU is physically installed and deemed ’operationally ready’ for control 

  

	 	2.4.1.1.1.	Benefits do not begin accrual at the time of customer sign-up but rather at the time the DCU is deemed ‘operationally ready’ to receive dispatch control signals

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 17 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	 	2.4.1.1.2.	Customers who sign up for the during the Program’s control period (June, July, August) must remain on the program for the duration of the season in which they elected
participation to be eligible for incentive compensation 

  

	 	2.4.1.2.	Prorated calculations are made based on 60 potential control days per summer peak cooling season 

  

	 	2.4.1.2.1.	Weekdays are the only available control days 

  

	 	2.4.1.2.1.1.	Assumes 20 control days for each of the three summer peak months 

  

	 	2.4.1.2.2.	$*** / 60 = $*** per day 

  

	 	2.4.1.2.2.1.	Prorated customer incentives are not to exceed $*** per summer cooling season 

  

	3.	Database management 

  

	 	3.1.	All customers are tracked throughout the lifecycle of their participation in the Program on the CTCdb 

  

	 	3.2.	Tracking parameters include but are not limited to the following: 

  

	 	3.2.1.	Inquiries 

  

	 	3.2.2.	Enrollment 

  

	 	3.2.3.	Appointments 

  

	 	3.2.4.	Installation routing 

  

	 	3.2.5.	Work order tracking 

  

	 	3.2.6.	Quality control 

  

	 	3.2.7.	Service calls 

  

	 	3.2.8.	Reporting 

  

	 	3.2.9.	Tracking and verification of complaints 

  

	 	3.3.	PacifiCorp retains the right to have special queries prepared and executed by Comverge for the purposes of internal and/or regulatory reporting 

  

	 	3.3.1.	These queries will be written and executed at no additional cost to PacifiCorp 

  

	4.	Reporting 

  

	 	4.1.	Monthly reports (call center statistics) are provided by Comverge 

  

	 	4.2.	Report include ‘Industry Standard’3
call center reports 

  

	 	4.2.1.	Examples of typical metrics include 

  

	 	4.2.1.1.	Average Hold Time (AHT) 

  

	 	4.2.1.2.	Longest delay time by day 

  

	 	4.2.1.3.	Percentage of calls between +/- x seconds 

  

	 	4.2.1.4.	Percentage after call work (ACW) 

  

	 	4.2.1.5.	Number of calls offered by day 

  

	 	4.2.1.6.	Number of calls abandoned by day 

  

	 	4.2.1.7.	Percentage abandoned by day 

  

	 	4.2.1.8.	Daily abandonment rate 

  

	 	4.2.1.9.	Etc., etc., etc. 

  

	 	4.2.2.	Reporting coincides with PacifiCorp’s internal reporting system 

  

	 	4.2.2.1.	PacifiCorp reserves the right to determine the date and time for the delivery of reports 

  

	3	PacifiCorp’s Customer
Service organization will assist in determining the appropriate metrics for reporting purposes. The benchmark for required metrics include (a) requirements for regulatory reporting and (b) standard / customary PacifiCorp internal
reporting. 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 18 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

	5.	Maintenance of customer service for length of contract 

  

	 	5.1.	Compliance with PacifiCorp’s ‘Customer Guarantees’ (reference Section VIll) 

  

	 	5.2.	Compliance to PacifiCorp’s ‘Performance Standards’ (reference Section Vlll) 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 19 of 20

			
	 PacificCorp Contract 46-00001018
           Exhibit A, Work Scope
	 	Final Release

  

 Section VIII Customer Guarantees & Performance Standards 
  

	Synopsis	Comverge meets / exceeds any and all PacifiCorp’s Customer Guarantees & Performance Standards. Appropriate regulatory penalties are borne by Comverge although
administered and reported by PacifiCorp to regulatory organization(s). 

  

	1.	Maintenance of customer service standards throughout length of contract 

  

	2.	Applicable PacifiCorp ‘Performance Standard’ 

  

	 	2.1.	Telephone phone answering performance standard 

  

	 	2.1.1.	***% of all phone calls are answered within 10 seconds 

  

	 	2.1.2.	No compensation penalties associated with this metric 

  

	3.	Consistent with Pacificorp’s ‘Customer Guarantees’ 

  

	 	3.1.	Commitment 

  

	 	3.1.1.	Keep mutually agreed appointments for a specific day 

  

	 	3.1.2.	Granularity- morning or afternoon 

  

	 	3.2.	Customer credit 

  

	 	3.2.1.	$*** if Comverge fails to keep the appointment 

  

	 	3.3.	Key assumptions 

  

	 	3.3.1.	Appointment - an occasion when Comverge agrees to meet with customer to discuss or to carry out work related to installation and/or maintenance of the DCU to an individual
property 

  

	 	3.1.4.	If an appointment is made for a specific time frame, it is kept 

  

	 	3.4.	Key Exemption 

  

	 	3.4.1.	Customer cancels the appointment 

  

	 	3.4.2.	Appointment rescheduled with at least 24-hour notice 

  

	4.	Reporting 

  

	 	4.1.	Comverge issues a monthly report on its compliance to requirements 

  

	 	4.2.	Comverge issues an annual report on its compliance to (a) ‘Performance Standards and (b) Customer Guarantees 

  

	 	4.2.1.	The format of the report is determined at the discretion of PacifiCorp 

  

	 	4.2.2.	Statistical reporting coincides with PacifiCorp’s requirements for regulatory reporting 

  

	 	4.2.2.1.	Comverge agrees to deliver said statistics in the format determined by PacifiCorp 

  

	 	4.2.2.2.	Comverge provides the report with sufficient lead time for merger into the PacifiCorp report 

  

	 	4.2.2.2.1.	Appropriate lead time TBD by PacifiCorp 

  

	 	4.2.3.	Exception reporting is indicated 

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 20 of 20

 Contract 4600001018 
           Page 1 of 1 
  

 PacifiCorp 
 CHANGE ORDER 
  

			
	Contractor: Comverge Technologies, Inc.	 	Change Order No: 1
		
	 Contract No: 4600001018
	 	Date: April 23, 2003
		
	Date of Contract: March 26, 2003	 	

 This Change Order is issued to modify the Contract as follows: 
  

	 	1.	Extend the initial term of Contract through August 31, 2013. 

 Except
as provided herein, all other terms of the Contract remains in full force and effect. 
  

									
	COMVERGE TECHNOLOGIES, INC.	    	PACIFICORP
				
	By	 	 /s/ Joseph Esteves
	    	By	 	 /s/ Doug Jensen

		 	Authorized Signature	    		 	Authorized Signature
				
		 	 Joseph Esteves
	    		 	 Doug Jensen

		 	Name	    		 	Name
				
		 	 Executive VP
	    		 	 Sourcing Manager

		 	Title	    		 	Title
				
		 	 5/7/03
	    		 	 5/9/07

		 	Date	    		 	Date

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 1 of 20

 Contract 4600001018 
           Page 1 of 1 
  

 PacifiCorp 
 CHANGE ORDER 
  

			
	Contractor: Comverge Technologies, Inc.	 	Change Order No: 2
		
	 Contract No: 4600001018
	 	Date: May 7, 2003
		
	Date of Contract: March 26, 2003	 	

 This Change Order is issued to modify the Contract as follows: 
  

	 	1.	Contractor’s name shall be changed from Comverge Technologies, Inc. to Comverge, Inc. 

 Except as provided herein, all other terms of the Contract remains in full force and effect. 
  

									
	COMVERGE, INC.	 	PACIFICORP
				
	By	 	 /s/ Joseph Esteves
	 	By	 	 /s/ Doug Jensen

		 	Authorized Signature	 		 	Authorized Signature
				
		 	 Joseph Esteves
	 		 	 Doug Jensen

		 	Name	 		 	Name
				
		 	 Executive VP
	 		 	 Sourcing Manager

		 	Title	 		 	Title
				
		 	 5/7/03
	 		 	 5/9/03

		 	Date	 		 	Date

  

					
	Exhibit A-Work Scope	 	Utah Power A/C-DLC Program	 	Page 2 of 20

 PacifiCorp CHANGE ORDER 
  

			
	Contractor: Comverge Technologies, Inc.	 	Change Order No: 3
		
	Contract No: 4600001018	 	Date: April 16, 2004
		
	Date of Contract: March 26, 2003	 	

 This Change Order is issued to modify the Contract as follows: 
  

	 	1.	Company developed a software system (working name “CalcEngine”) “System” for use in M&V evaluation and settlement calculations in conjunction with
Company’s ‘Cool Keeper’ Program. 

  

	 	2.	Company shall sell to Contractor full ownership in the System for fifty percent (50%) of the direct costs incurred in the System development as it relates to the Cool Keeper
initiative only. 

  

	 	3.	Both parties agree to keep the version of the System that both parties jointly use up to date. If either party modifies the Cool Keeper CalcEngine portion of the System, they shall
provide the other Party the updated version. 

  

	 	4.	Company retains the right to access the System for its own internal use, but shall not commercially resell or relicense the System to another party. Company shall have the ability
to use or modify the System for other Company programs (or their affiliates), but they do not expect reimbursement from Contractor for such modification. 

  

	 	5.	Contractor (or their affiliates) retains the right to use the System for other customers or projects, but Contractor shall not be obligated to reimburse Company for such
modifications. Contractor shall have the right to sell or license the System to other parties. 

  

	 	6.	Company shall keep the System program and its source codes confidential, except where necessary to use for other programs to explain settlement methodology. Company shall have the
right to share the System and software with appropriate third parties including applicable regulatory agencies. 

  

	 	7.	If required by both parties, costs for software documentation and validation by a third party shall be shared with each party responsible for fifty percent (50%) of the direct
costs. 

  

	Except	as provided herein, all other terms of the Contract remains in full force and effect. 

  

							
	COMVERGE TECHNOLOGIES, INC.	 	PACIFICORP
				
	By	 	 /s/ Frank J. Evans
	 	By	 	 /s/ Doug Jensen

		 	Authorized Signature	 		 	Authorized Signature
				
		 	 Frank J. Evans
	 		 	 Doug Jensen

		 	Name	 		 	Name
				
		 	 Director of Programs
	 		 	 Servicing Manager

		 	Title	 		 	Title
				
		 	 4-20-04
	 		 	 4-21-04

		 	Date	 		 	DateDemand Response Capacity Delivery Agreement

 Exhibit 10.3 
 *** Indicates material has been omitted pursuant to a Confidential Treatment Request filed with the Securities and Exchange Commission. A complete copy of this agreement has been filed separately with the Securities and Exchange Commission.

 DEMAND RESPONSE CAPACITY 
 DELIVERY AGREEMENT 
 BETWEEN 
 SAN DIEGO GAS & ELECTRIC COMPANY 
 AND 
 COMVERGE, INC. 
 DATED

 OCTOBER 6, 2003 

 DEMAND RESPONSE CAPACITY DELIVERY AGREEMENT 
 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	RECITALS	  	
		
	ARTICLE 1- DEFINITIONS	  	1
	1.1	  	Defined Terms	  	1
	1.2	  	Interpretation	  	5
	ARTICLE 2 - TERM AND TERMINATIONS	  	6
	ARTICLE 3- PROJECT DESCRIPTION	  	7
	3.1	  	Summary Description	  	7
	ARTICLE 4 - CONTRACT CAPACITY AND ENERGY; DISPATCH	  	7
	4.1	  	Contract Capacity	  	7
	4.2	  	Demand Reduction	  	7
	4.3	  	Energy Reduction	  	8
	4.4	  	Test Demand Reduction	  	8
	4.5	  	Dispatch	  	8
	ARTICLE 5 - PRICING/PAYMENT CALCULATIONS	  	8
	5.1	  	Capacity Payments	  	8
	5.2	  	Quarterly Capacity Payments	  	9
	5.3	  	True-Up Payments	  	9
	5.4	  	Target Contract Capacity	  	9
	5.5	  	Capacity Payment Adjustment	  	9
	5.6	  	Purchase Option	  	11
	5.7	  	CPA Payments Applied to Purchase Option	  	11
	5.8	  	Payment for Contract Energy	  	11
	5.9	  	Payment Terms	  	11
	5.10	  	Netting of Payments	  	12
	ARTICLE 6 - MARKETING, RECRUITMENT AND RETENTION	  	12
	6.1	  	Scope of Work	  	12
	ARTICLE 7 - EQUIPMENT INSTALLATION	  	12
	7.1	  	Scope of Work	  	12
	ARTICLE 8 - COMMERCIAL OPERATION	  	12
	8.1	  	Aggregate Commercial Operations	  	12
	8.2	  	Participating Facility Commercial Operation	  	12
	8.3	  	Substitution of Participating Facilities	  	12
	8.4	  	Dispatch	  	12
	ARTICLE 9 - MAINTENANCE	  	12
	9.1	  	Scope of Work	  	12
	9.2	  	Tracking	  	13
	9.3	  	Preventive, Routine, Non-Routine and Repairs	  	13
	9.4	  	Systems Quality Assurance	  	13
	9.5	  	Seller Monitoring and Testing	  	13
	9.6	  	SDG&E Monitoring and Testing	  	13
	9.7	  	Reporting	  	13

  

 -i- 

					
	ARTICLE 10 - PROJECT MEASUREMENT AND EVALUATION	  	13
	10.1	  	Impact Evaluation Study	  	13
	10.2	  	Process Evaluation Study	  	14
	10.3	  	Metering Requirements	  	14
	10.3.1	  	Participating Facilities Metering	  	14
	10.3.2	  	Metering If Participating Facilities Too Few	  	14
	10.3.3	  	Sample Group	  	15
	10.4	  	Sample Selection	  	15
	10.5	  	Calculation of PBE	  	15
	10.6	  	Responsibility of Each Party for Metering and Evaluation	  	15
	10.6.1	  	Seller Responsibility	  	15
	10.6.2	  	SDG&E Responsibility	  	15
		  	 A.    Metering
	  	16
		  	 B.    Data Validation
	  	16
		  	 C.    Calculation of PBE
	  	16
		  	 D.    Sharing of M&E Data with Seller
	  	16
		  	 E.    True up of previous Program Year’s PBE
	  	16
	ARTICLE 11 - BILLING AND PAYMENT	  	16
	11.1	  	Billing Statement, Payment and True-up	  	16
	11.1.1	  	Seller Responsibility	  	16
	11.1.2	  	SDG&E Responsibility	  	17
	11.2	  	Late Payments	  	17
	11.3	  	Billing Disputes	  	17
	ARTICLE 12 - DEFAULT AND TERMINATION	  	18
	12.1	  	Events of Default of Seller	  	18
	12.2	  	Events of Default of SDG&E	  	19
	12.3	  	Termination	  	20
	ARTICLE 1.3 - CONTRACT ADMINISTRATION AND NOTICES	  	20
	13.1.	  	Notices in Writing	  	20
	13.2	  	Representative for Notices	  	20
	13.3	  	Authority of Representatives	  	20
	13.4	  	Operating Records	  	20
	13.5	  	Billing and Payment Records	  	20
	13.6	  	Examination of Records	  	21
	13.7	  	Dispute Resolution	  	21
	ARTICLE 14 - FORCE MAJEURE	  	21
	14.1	  	Definition of Force Majeure	  	21
	14.2	  	The term Force Majeure does not include	  	22
	14.3	  	Applicability of Force Majeure	  	22
	14.4	  	Limitations on Effect of Force Majeure	  	22
	14.5	  	Effect of Force Majeure on Capacity Payments	  	23
	ARTICLE 15 - REPRESENTATIONS AND WARRANTIES	  	23
	15.1	  	Seller’s Representations and Warranties	  	23
	15.2	  	SDG&E’s Representations and Warranties	  	24
	ARTICLE 16 - INSURANCE	  	25
	16.1	  	Seller’s Insurance Requirements	  	25
	16.2	  	Changes to Insurance Minimum Limits	  	25

  

 -ii- 

					
	16.3	  	Notwithstanding any provision of the insurance policies	  	26
	16.4	  	Certificates of Insurance Required	  	26
	16.5	  	Application of Proceeds	  	26
	ARTICLE 17 - INDEMNITY	  	26
	17.1	  	General	  	26
	17.2	  	Environmental	  	27
	17.3	  	Procedures	  	27
	ARTICLE 18 - REGULATORY JURISDICTION AND COMPLIANCE	  	29
	18.1	  	Governmental Jurisdiction and Regulatory Compliance	  	29
	18.2	  	Provision of Support	  	29
	ARTICLE 19 - ASSIGNMENT AND OTHER TRANSFER RESTRICTIONS	  	29
	19.1	  	No Assignment Without Consent	  	29
	19.2	  	Transfer Without Consent is Null and Void	  	29
	ARTICLE 20 - JOINT INTEREST	  	29
	ARTICLE 21 - COLLATERAL REQUIREMENTS	  	30
	21.1	  	SDG&E Collateral Protection	  	30
	21.1.1	  	Financial Information	  	30
	21.1.2	  	Collateral Assurances	  	30
	21.1.3	  	Amount of Letter of Credit	  	30
	ARTICLE 22 - MISCELLANEOUS	  	30
	22.1	  	Waiver	  	30
	22.2	  	Taxes	  	31
	22.3	  	Disclaimer of Third Party Beneficiary Rights	  	31
	22.4	  	Relationship of the Parties	  	31
	22.5	  	Equal Employment Opportunity Compliance Certification	  	31
	22.6	  	Confidentiality	  	31
	22.6.1	  	Definition of Confidential Information	  	31
	22.6.2	  	Nondisclosure	  	31
	22.6.3	  	Permitted Disclosure	  	31
	22.7	  	Survival of Obligations	  	32
	22.8	  	Severability	  	32
	22.9	  	Complete Agreement; Amendments	  	32
	22.10	  	Binding Effect	  	32
	22.11	  	Headings	  	32
	22.12	  	Counterparts	  	32
	22.13	  	Governing Law	  	32
	APPENDIX A - MARKETING, RECRUITMENT AND RETENTION	  	A-1
	APPENDIX B - EQUIPMENT INSTALLATION AND MAINTENANCE	  	B-1
	APPENDIX C - NOTICES	  	C-1
	APPENDIX D - INSURANCE COVERAGE	  	D-1
	APPENDIX E - FORM OF LETTER OF CREDIT	  	E-1
	APPENDIX F - ESTIMATED COVER	  	F-1

  

 -iii- 

 DEMAND RESPONSE CAPACITY DELIVERY AGREEMENT 
 This DEMAND RESPONSE CAPACITY DELIVERY AGREEMENT (“Agreement”), dated as of October 6, 2003, 2003, is entered into, by and
between: 
 (1) SAN DIEGO GAS & ELECTRIC COMPANY (“SDG&E”), a Division of Sempra Energy, a Corporation, located at
8330 Century Park Court, San Diego, CA 92123; and 
 (2) Converge, Inc., located at 23 Vreeland Road, Suite 160, Florham Park, NJ
07932 (“Seller”). 
 RECITALS 
 WHEREAS, Seller desires to design, build, own and operate (but not dispatch) a commercial Direct Load Control System in SDG&E’s service territory, and to aggregate the individual customer load
which is controlled by this DLCS to form a demand response capacity targeted at 30.2 MW (but no more than 40 MW) deliverable to SDG&E, and
 WHEREAS, SDG&E and Seller desire to enter into an agreement whereby SDG&E will purchase from Seller and dispatch up to 40MW Contract Capacity and Energy Reduction arising from Demand
Reduction delivered pursuant to the operation of the Program,
 NOW, THEREFORE, in consideration of the mutual covenants set
forth herein, THE PARTIES AGREE as follows: 
 ARTICLE I - DEFINITIONS 
 1.1 Defined Terms. Unless otherwise defined herein or in any Exhibit, Schedule or Appendix hereto, the following terms, when used in this Agreement (including the
Recitals and any Exhibit, Schedule or Appendix hereto) shall have the meanings set forth below. The capitalized terms listed in this Article shall have the meanings set forth herein whenever the terms appear in this
Agreement, whether in the singular or the plural or in the present or past tense. Other terms used in this Agreement but not listed in this Article shall have meanings as commonly used in the English Language and, where
applicable, in Good Industry Practice and, where applicable, in SDG&E’s Electric Rule One.
 “Agreement” means this Demand
Response Capacity Delivery Agreement and the Exhibits, Schedules and Appendices hereto, which are hereby incorporated herein by reference.

 “Commercial Operation” means the period that a Facility is a Participating Facility operating pursuant to the
terms of this Agreement. 
 “Contract Capacity” shall have the meaning set forth in Section 4.1. 
 “Control Device” means a digital control unit installed at a Participating Facility and used to control a Participant’s End-use equipment.

 “Control Season” means May 1 through October 31 of each Program Year. 
 “Control Season Day” means the business days the Program is available during the Control Season (i.e. Monday through Friday, excluding Holidays). 
 “CPUC” means the Public Utilities Commission of California or any successor thereto. 
 “Day” means the period beginning midnight and ending on the following 11:59 p.m. (Pacific Prevailing Time). 
 “Defaulting Party” shall have the meaning set forth in Article 12. 
 “Demand Reduction” shall have the meaning set forth in
Section 4.2. 
 “Direct Load Control System” or “DLCS” means all equipment (except verification equipment) and components necessary
for the operation of the Program including Control Devices, a Head-end Control System, PowerCAMPTM software and third-party application software. 
 “End-use Equipment” means central air conditioning compressors, electric hot water heaters, irrigation pumps and other mutually agreeable curtailable loads located at a Participating Facility site. 
 “Energy Reduction.” shall have the meaning set forth in Section 4.3. 
 “Environmental Contamination” means the presence of hazardous wastes, hazardous substances, hazardous materials, toxic substances, hazardous air pollutants and other hazardous pollutants, and toxic pollutants, as those terms are
used in the Resource Conservation and. Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Hazardous Materials Transportation Act, the Toxic Substances Control Act, the Clean Air Act, the Clean Water Act, the
Safe Drinking Water Act, the Oil Pollution and Hazardous Substances Control Act, and all other applicable federal, state, and local laws and regulations as amended, at such levels or quantities or location, or of such form or character, to
be of regulatory concern under said federal, state, and local laws and regulations. 
 “Estimated Contract Capacity” shall have the meaning as set
forth in Section 5.2 
  

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 “Estimated Demand Reduction” shall have the meaning set forth in Section 5.2. 
 “Facility” means a physical site that is separately metered by SDG&E. 
 “Financing Documents” means the loan and credit agreements, notes, bonds, indentures, security agreements, lease financing agreements, mortgages, interest rate exchanges, or swap agreements and other documents relating
to the development, bridge and/or permanent financing for the Participating Facilities, 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 at the discretion of Seller. 
 “Good Industry Practice”
means the practices, methods, and acts (including but not limited to the practices, methods, and acts engaged in or approved by a significant portion of the electric utility industry) that, at a particular time, in
the exercise of reasonable judgment in light of the facts known or that should reasonably have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with
law, regulation, codes, standards, equipment manufacturer’s recommendations, reliability, safety, environmental protection, economy, and expedition. With respect to each: Participating Facility, Good Industry Practice(s) includes, but is
not limited to, taking reasonable steps to ensure that: 
  

	 	(1)	equipment, materials, resources, and supplies, including spare parts inventories, are available by Seller to meet the Participating Facilities’
needs;

  

	 	(2)	Seller has sufficient operating personnel available at all times and are adequately experienced and trained and licensed as necessary to operate the Participating
Facilities properly, efficiently, and in coordination with SDG&E and are capable of responding to reasonably foreseeable emergency conditions; 

  

	 	(3)	preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable long term and safe operation, and are performed
by knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; 

  

	 	(4)	appropriate monitoring and testing are performed to ensure equipment is functioning as designed; 

  

	 	(5)	equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in a manner unsafe to workers, the general public, or SDG&E’s
distribution grid or contrary to environmental laws or regulations or without regard to defined limitations; and 

  

	 	(6)	the equipment will function properly under normal conditions at the Participating Facilities. 

  

 -3- 

 “Holidays” shall comprise those holidays set forth in SDG&E’s
Electric Rule One. 
 “Master Station,” means all centralized hardware and software systems required for SDG&E representative(s) to manage
and control the dispatch of Participating Facilities within the SDG&E Service Territory. 
 “Measurement and
Evaluation Plan” or “M&E Plan” is defined in Article 10. 
 “Metering Device(s)” means all SDG&E-awned meters, metering
equipment, and data processing equipment used to measure, record, or transmit data relating to the electric power usage at a Participating Facility. 
 “Nameplate Capacity” means the rated capacity in terms of tons on each piece of End use Equipment where a Control Device is installed for this Program. 
 “Participant” means the SDG&E commercial customer name of record of a Participating Facility. 
 “Participating Facility” means a commercial SDG&E-metered site meeting the requirements of Section 3.1 that is participating in this Program.

 “Performance Based Estimate of Demand Reduction” or “PBE” means the statistical estimate of Demand Reduction actually achieved through
the operation of the DLCS and as measured by the measurement and evaluation impact evaluation study described in Article 10. 
 “Program” or “DLCS Program” means the Direct Load Control Systems Program as described in this Agreement. 
 “Program
Availability Hours” means all hours between 1200 to 2000 Pacific Prevailing Time (PPT) of any Control Season Day. 
 “Program Event” is any
event in the period from May 1st to October 31st of any Program Year when Participating Facilities are called upon for Demand Reduction by cycling their End-use Equipment on and off through operation of the
DLCS. A Program Event will be no less than 2 hours and no more than 4 hours in any single day, and will not be triggered more than 40 hours in any Program month or 120 hours in any Program Year. In addition, Program Events will not be
scheduled on weekends or Holidays nor more than three days in any calendar week. 
 “Program Month” means any
month falling within a Program Year. 
 “Program Peak Event” means that Program Event occurring on the System Peak Day where the actual peak
occurs during the control hours of the Program Event. 
  

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 “Program Run Time” means the number of hours that the Direct Load Control Program is run, as determined by
PowerCAMPTM reports which log every event by date and time. 
 “Program Test Event” is a single event in April of each Program Year when
Participating Facilities are called upon for Demand Reduction by cycling their End-use Equipment on and off in order to test the dispatch system and signal receipt by Participating Facilities. A Program Test Event will be no less than 1 hour
and no more than 2 hours. Program Test Event hours will not be included in Program Run Time. 
 “Program Year” means November 1 through
October 31. Program Year 1 means the period from the effective date of this Agreement through October 31, 2004. 
 “Senior Debt”
means the obligations of Seller to any lender pursuant to the Financing Documents, including without limitation, principal of, premium and interest on indebtedness, fees, expenses or penalties, amounts due upon acceleration, prepayment or
restructuring, swap or interest rate hedging breakage costs and any claims or interest due with respect to any of the foregoing. 
 “Senior Lender”
means, collectively, any lender(s) providing any Senior Debt and any successor(s) or assigns thereto. 
 “System Control Center,” or
“SCC,” means SDG&E’s representative(s) responsible for centralized dispatch of generating units within the SDG&E Control Area and control of tie-line power flows. 
 “System Peak” means any Control Season Day, when SDG&E’s electrical system is experiencing its annual maximum demand. 
 “Term” means the period of time during which this Agreement shall remain in full force and effect. 
 “Test Demand Reduction” means all Demand Reduction provided by a Participating Facility in order to perform testing of the Participating Facility. 
 1.2 Interpretation. In this Agreement, unless otherwise stated, 
 1.2.1. Any references to: 
 (a) any Section, Schedule, Appendix, Exhibit or other provision thereof, shall be construed, at any particular time, as including a reference to the
Section, Schedule, Appendix, Exhibit or the relevant provision thereof as it may have been amended, modified or supplemented; 
 (b) any
Agreement (including this Agreement or any Schedule, Appendix or Exhibit hereto) shall be construed, at any particular time, as including a reference to the relevant Agreement as it may have been amended, modified, supplemented or novated;

  

 -5- 

 (c) any Party or Governmental Body to this Agreement includes that Party’s successors and permitted
assigns and, in the case of any Governmental Body, any entity succeeding to its functions and capacities; 
 (d) a month shall be construed
as a reference to a calendar month; and 
 (e) a particular Section, Schedule, Exhibit or Appendix shall be a reference to the relevant
Section, Schedule, Exhibit or Appendix in or to this Agreement. 
 1.2.2 Words in the singular may be interpreted as referring to the plural
and vice versa, and words denoting natural persons may be interpreted as referring to corporations and any other legal entities and vice versa. 
 1.2.3. Whenever this Agreement refers to a number of days, such number shall refer to the number of calendar days unless Business Days are specified. A requirement that a payment be made on a day
that is not a Business Day shall be construed as a requirement that the payment be made on the next following Business Day. 
 1.2.4.
The words “include” and “including” are to be construed as being at all times followed by the words “without limitation”, unless the context otherwise requires. 
 1.2.5. Words not otherwise defined herein that have well-known and generally acceptable technical or trade meanings are used herein in accordance with
such well-recognized meanings. 
 ARTICLE 2 - TERM AND TERMINATIONS 
 2.1 Subject to SDG&E receiving all approvals set forth in Section 2.2 hereof, this Agreement shall become effective as of the date of its execution and, unless terminated pursuant to the operation of this
Article 2 or Article 12, shall remain in full force and effect through October 31, 2014 if CPUC approval is obtained prior to March 1, 2004, or if not then October 31, 2015. Applicable provisions of this Agreement shall continue
in effect after termination to the extent necessary to satisfy the terms and conditions of this Agreement and, as applicable, to provide for removal of Control Devices from Participating Facilities as may be requested by a Participant, final
billings and adjustments related to any period prior to termination, repayment of any money due and owing either Party pursuant to this Agreement, and the indemnifications specified in this Agreement. 
 2.2 On or before June 30, 2004, SDG&E shall have received a final, non-appealable order from the CPUC (i) approving the terms and conditions of this
Agreement without material alteration of the commercial aspects described herein in form and substance acceptable to SDG&E in its sole discretion, (ii) allowing SDG&E full rate recovery of the costs associated under this
Agreement through any existing or future cost recovery mechanism that may be developed or instituted by the CPUC, in form and substance acceptable to SDG&E in its sole discretion, and (iii) a finding by the CPUC that the
payments under this Agreement are just and reasonable. The Parties agree to cooperate 
  

 -6- 

 and use all reasonable efforts to obtain the CPUC order as soon as is practicable. Within fifteen (15) days after
receipt of the CPUC order, SDG&E shall give Seller written notice of whether it deems the terms and conditions of the CPUC order to be acceptable. If the CPUC order is not issued on or before June 30, 2004 or if SDG&E determines
that the order issued by the CPUC is not acceptable, the Parties shall negotiate in good faith to determine what actions should be undertaken. If the Parties are unable to reach agreement on such actions within sixty (60) days after
initiating such negotiations, then either Party shall have the right to terminate this Agreement upon ten (10) days’ written notice and, upon such termination, neither Party shall have any further liability or obligation to the other
Party. 
 2.3 If Seller has not aggregated one (1) MW of Contract Capacity from Participating Facilities into Commercial Operation by October 31, 2005, then
either Party may terminate the Agreement at any time by giving written notice to the other Party of such termination. Such termination shall be effective upon receipt of such written notice and neither Party shall have any further liability or
obligation to the other Party. 
 2.4 Seller may terminate the Agreement by giving written notice to SDG&E of such termination if Seller determines in
its sole discretion that local licensing and permit fees are prohibitively expensive and neither Party shall have any further liability or obligation to the other Party. 
 ARTICLE 3 - PROJECT DESCRIPTION 
 3.1 Summary Description. Seller shall in accordance with Good
Industry Practice design, build, own and operate (but not dispatch) a Direct Load Control System that will, on demand (as defined in the Agreement), provide SDG&E with the ability to achieve Contract Capacity and. Energy Reduction through
control of End-use Equipment at Participating Facilities within SDG&E’s retail service territory. Each Participating Facility shall have an annual maximum demand of no greater than 100kW. The aggregate Demand Reduction of
Participating Facilities made available to and purchased by SDG&E under this Agreement shall be no less than one (1) MW (and targeted at 30.2 MW) but not more than 40 MW. SDG&E will pay each Participant $25/kW of Estimated Demand Reduction
per Program Year pursuant to an enrollment agreement between SDG&E and each Participant. 
 ARTICLE 4 - CONTRACT CAPACITY AND ENERGY;
DISPATCH 
 4.1 Contract Capacity. The Contract Capacity provided and sold by Seller and purchased by SDG&E hereunder shall be the calculated
Performance Based Estimated (PBE) Demand Reduction multiplied by the total Nameplate Capacity of End-use Equipment controlled by a Control Device. 
 4.2
Demand Reduction. The Demand Reduction is the amount of kW/ton of Nameplate Capacity, which is reduced during the Control Season by Participating Facilities, as determined by the results of the Measurement and Evaluation Impact Study conducted in
January of each year during the term of this Agreement as described in detail in Article 10 (Project Measurement and Evaluation). For the first Program Year, 
  

 -7- 

 Estimated Demand Reduction will be determined by an engineering estimate of the expected load reduction per ton of
Nameplate Capacity. An engineering estimate will be developed by a method mutually agreed upon by both Seller and SDG&E, and could include a test at pre-determined Participating Facilities. Estimated Demand Reduction
will be utilized for the first Program Year’s Estimated Contract Capacity only, and will be trued up in an Impact Evaluation Study completed at the end of the first Program Year.
 4.3 Energy Reduction. The Energy Reduction provided and sold by Seller and purchased and received by SDG&E hereunder shall be the Contract Capacity multiplied
by the Program Run Time as measured each Control Season. 
 4.4 Test Demand Reduction. Seller shall coordinate delivery of test Demand
Reduction with SDG&E for each Participating Facility. SDG&E shall cooperate with Seller to facilitate Seller’s testing of each Participating Facility. SDG&E shall not be obligated to purchase any Test Demand
Reduction delivered to SDG&E. 
 4.5 Dispatch. SDG&E’s operators shall have the right to determine, within the operating parameters as set
forth in a Program Event, the dispatch control of the Participating Facilities through the SCC. Participating Facilities shall respond to SDG&E’s dispatch signal within ten (10) minutes. 
 ARTICLE 5 – PRICING/PAYMENT CALCULATIONS 
 5.1
Capacity Payments. SDG&E shall make Capacity Payments to Seller only when Seller has at least *** (***) MW of aggregated Contract Capacity from Participating Facilities in Commercial Operation. Capacity Payments due Seller will be
calculated quarterly pursuant to Section 5.2 and trued up annually after the Control Season pursuant to Article 10. The Total Annual Capacity Payment (TAP) in any Program Year will be equal to ***. In formula form, this would be:

 ***. 
  

 -8- 

 5.2 Quarterly Capacity Payments (QPn) shall be calculated at the end of Quartern, as follows:

*** 
 “Quarter” is defined as a
one of four, three-month periods of November-January, February-April, May-July, and August-October, for the purposes of this Agreement.
 “Estimated Contract Capacity” means the total of the Nameplate Capacity installed times the Estimated Demand Reduction in the first Program Year, and the total of the Nameplate Capacity installed times the PBE in
subsequent Program Years. 
 “Estimated Demand Reduction” means the engineering estimate *** on Participating Facilities,
provided by the Seller and approved by SDG&E. 
 5.3 True-Up Payments. True-Up Payments equals TAP (as of ***) less the sum of Quarterly Payments
for each Program Year ending ***. 
 5.4 Target Contract Capacity. Target Contract Capacity (TCC) shall mean: 
 *** MW by May 1, 2005 
 *** MW by
May 1, 2006 
 *** MW by May 1, 2007 and for duration of Agreement 
 5.5 Capacity Payment Adjustment (CPA): The CPA shall be determined as of *** (CPA Trigger Date). Both Seller and SDG&E agree that there is considerable uncertainty regarding the extent to which Seller will be able
to penetrate the target market. The CPA will be calculated so that SDG&E shares in the costs Seller has 
  

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 incurred if the penetration is significantly different than the Target Contract Capacity. Seller may at its sole
option invoke the CPA on the Trigger Date as follows: 
 5.5.1 Trigger Date for CPA to be invoked is ***. 
 5.5.2 If the Contract Capacity is equal to or greater than ***% of the TCC on the Trigger Date then the CPA shall be zero. 
 5.5.3 If Contract Capacity has reached a level below ***% of the agreed upon TCC of 30.2 MW by the Trigger Date, the Seller may trigger the CPA.

 5.5.4 If Seller triggers the CPA, Seller shall provide documentation to SDG&E in a form reasonably satisfactory to SDG&E of the
Seller’s Actual Costs as of the Trigger Date. Seller’s Actual Costs shall be the sum of (i) capital costs (including the manufacturing and installation cost of Control Devices) (ii) Marketing expenses and (iii) and annual
Program operating budgets approved by SDG&E; all burdened by an overhead factor of ***%. Additional supporting documentation of Seller’s Actual Costs shall be made available to SDG&E for audit upon request. Seller’s
Actual Costs shall be provided to SDG&E no later than 30 days after the Trigger Date. 
 5.5.5 If Seller triggers the CPA, the CPA shall
be calculated as follows: 
 A. Seller’s Sunk Cost Shortfall is equal to the Seller’s Actual Costs less Capacity Payments made
through April 30, 2007, as adjusted by any subsequent true-up payment. 
 B. The CPA shall be equal to ***% of the Seller’s
Sunk Cost Shortfall divided by *** if CPUC approval of the Agreement occurs prior to *** and by *** if CPUC approval occurs thereafter, as limited by paragraphs (D) and (E) below. 
 C. Current Year Unadjusted Capacity Payment shall be equal to WACC multiplied by CP. 
 D. CPA Cap: The CPA is limited as a function of the actual Capacity achieved as of the Trigger Date. The following table shows the CPA Cap
in relation to actual Capacity achieved as of the Trigger Date. (Straightline interpolation shall be used where indicated in the table): 
  

 -10- 

					
	 Capacity on Trigger Date (MW)
	 	 As a Percentage of Target Capacity
	 	 CPA Cap ($/kW-Yr)

	 3 ***
	 	3 ***%	 	0
	 3*** and <***
	 	3*** and <***%	 	 Linearly interpolate between ***
 (<***%%) and ***
(@***%)

	 3 *** and <***
	 	3*** and <***%	 	 Linearly interpolate between ***
 (@***%) and ***
(@***%)

	 3 *** and <***
	 	3*** and <***%	 	Linearly interpolate between ***
		 		 	(@***%) and *** (@***%)
	 < ***
	 	< ***%	 	***

 E. Limitations on CPA Payments: If the CPA is triggered by Seller then in each and every year the
CPA payment shall be limited, but not made negative, such that the total cost of delivered capacity to SDG&E from Seller (sum of CP and CPA, all divided by CC), does not exceed $*** per kW. To the extent that this limitation
causes a constraint on the amount of the CPA payment to Seller in any one Program Year, the constrained amount shall be carried forward to the next Program Year(s) and paid to Seller, provided that the total cost of delivered capacity
during each and every Program Year does not exceed $*** per kW. Any obligation for SDG&E to pay Seller any unpaid CPA shall terminate at the end of the Term of the Agreement, unless the Agreement has been terminated pursuant to an
SDG&E Event of Default. 
 5.6 Purchase Option. SDG&E will. have the option to purchase the Direct Load Control System for $*** at the end of
the *** Control Season (or at the end of the *** Control Season if CPUC approval is not obtained by March 1, 2004). 
 5.7 CPA Payments Applied to
Purchase Option. The total CPA payments made during the term of the Agreement under Section 5.4 above shall serve as an offset to the purchase option price described in Section 5.6. 
 5.8 Payment for Contract Energy. Contract Energy shall be delivered at no cost to SDG&E for the first *** Program Run Hours in each Program Year. SDG&E shall pay
Seller $*** per kWh for all Program Run Hours over *** in any single Program Year. 
  

	5.9	Payment Terms. 

 5.9.1 Quarterly Capacity Payments will be
made by SDG&E to Seller within 30 days from receipt by SDG&E of each Quarterly Capacity Payment calculation. 
 5.9.2 Energy Payments
will be made by SDG&E to Seller as one annual payment within 90 days after end of Control Season. 
  

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 5.9.3 True-up Payments will be made by SDG&E to Seller as one annual payment within 90 days after end
of Control Season. 
 5.10 Netting of Payments. The Parties hereby agree that they shall discharge mutual debts and payment obligations due and owing to each
other on the same date through netting, in which case all amounts owed. by each Party to the other Party for the purchase and sale of Contract Capacity and Contract Energy, shall be netted so that only the excess amount remaining due shall be paid
by the Party who owes it. 
 ARTICLE 6 - MARKETING, RECRUITMENT AND RETENTION 
 6.1 Scope of Work. Marketing, recruitment and retention will include all activities required to solicit and retain Participants for the DLCS Program. Activities include
but are not limited to the development of a Marketing Plan, enrollment and education materials and periodic communications to minimize Participant abandonment. SDG&E will have final approval of all marketing and recruitment activities
pursuant to Appendix A. 
 ARTICLE 7 - EQUIPMENT INSTALLATION 
 7.1 Scope of Work. Equipment installation includes all DLCS Program activities that interface with a Participating Facility from. the point of receipt of a signed customer enrollment fonn through verification of
the Commercial Operation of the Control Device, as set forth in Appendix B. 
 ARTICLE 8 - COMMERCIAL OPERATION 
 8.1 Aggregate Commercial Operations. Seller must have aggregated no less than one (1) MW of Demand Reduction capacity from Participating Facilities Commercial
Operations in order to declare aggregate Commercial Operations. 
 8.2 Participating Facility Commercial Operation. Each Participating Facility shall be
deemed to have achieved Commercial Operation when it has been demonstrated to SDG&E that it is fully capable of reliably delivering Demand Reduction to SDG&E within 10 minutes of dispatch. 
 8.3 Substitution of Participating Facilities. As Participating Facilities “drop out” for any reason, Seller will be permitted to solicit other customers to
join the Program. 
 8.4 Dispatch. SDG&E dispatch of Participating Facilities shall be pursuant to Section 4.5 hereof within the limitations of a
Program Event. 
 ARTICLE 9 - MAINTENANCE 
 9.1 Scope of Work. Maintenance will include all activities that interface with a Participating Facility to ensure continued operation of the Control Device and HECS throughout the term of this Agreement. 
  

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 9.2 Tracking, Verification and Resolution of Participant Complaints. Seller shall follow standard procedures for
resolving Participant complaints pursuant to Appendix B. 
 9.3 Preventive, Routine, Non-Routine and Repairs. Seller shall be responsible for preventive,
routine and non-routine maintenance and repairs (“Maintenance”). Maintenance will be performed on a basis that ensures reliable long-term and safe operation, and will be performed by knowledgeable, trained and experienced personnel
utilizing proper equipment and tools. 
 9.4 Systems Quality Assurance. Seller shall be responsible for inspecting each Control Device at least every
five (5) years. Inspections will be conducted at a rate of 20% per year. The inspection will ensure that each Control Device is operational and has the ability to control Participants’ End-use Equipment. If the inspection reveals that the
Control Device is not operating or is disconnected, Seller shall be responsible for restoring the Control Device to Commercial Operation immediately. 
 9.5 Seller Monitoring and Testing. Seller shall be responsible for conducting routine monitoring and testing to ensure equipment is functioning as designed. SDG&E will be notified of these routine system tests. 
 9.6 SDG&E Monitoring and Testing. SDG&E will, at its sole cost, conduct an annual test of the system to ensure the dispatch system is operating as designed, and
that dispatch signals are being received at Participating Facilities. This test will be conducted in April of each Program Year, to be assured the system is operating as designed in time for the beginning of the Control Season on May 1.
This test shall consist of initiating a single Program Test Event for a minimum of one hour and a maximum of two hours during the period of noon to six p.m. during the month of April. SDG&E will not pay for Energy Reduction during this test, nor
will these hours count as Program Run Hours for purposes of Energy Payments. 
 9.7 Reporting. Seller will be requested to provide weekly Customer Contact
Logs and Monthly Customer Participation Reports. Customer Participation Reports should include but not limited to: program enrollment activity, repairs, customer complaints and resolution, and ad hoc reports as requested. 
 ARTICLE 10 - PROJECT MEASUREMENT AND EVALUATION 
 10.1
Impact Evaluation Study. The purpose of the Impact Evaluation Study is to determine an aggregate Performance Based Estimate of Demand Reduction (“PBE”) achieved by Participating Facilities during each Control Season. The PBE will be
determined from a representative sample as described in this section. SDG&E will install metering to collect Participating Facility’s total energy and end-use load data for the representative sample. At the end of each Control Season,
SDG&E will evaluate the load meter data and determine the PBE, in terms of a kW per-ton demand reduction. This kW per ton reduction will be applied to the Nameplate Capacity at each facility to determine the aggregate PBE for all Participating
Facilities for the entire Program Year. During the month of January of each Program Year, SDG&E will provide the PBE based on the 
  

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 immediately preceding Control Season. Results from each year’s PBE determination will be used to determine
the Weighted Average Contract Capacity (“WACC”) used in determining both the Total Annual Capacity and Energy Payments, and to set the Estimated Contract Capacity for the next Program Year pursuant to Section 5.9. A new
PBE will be calculated each year in the same manner during the course of this Agreement.
 10.2 Process Evaluation Study. At the end of the first
Program Year, a Process Evaluation Study will be contracted out by SDG&E to a third party contractor to provide an objective evaluation of the Program from a process perspective. This study will include Participant and non-participant
interviews to evaluate the Marketing, Recruitment, and Installation processes, and will include a recommendation of process improvements that could be made in subsequent Program Years to increase participation in the Program, if necessary.
Upon completion of the Process Evaluation Study, SDG&E and Seller will meet and determine which, if any, of the recommendations to implement. Changes to incentives, as well as any other significant structural changes to the Program
will have to be approved by the CPUC prior to implementation. Elements of the Process Evaluation Study should include, but not be limited to: 1) appropriateness of the customer incentive, 2) identification of barriers to participation, and 3)
overall perception of the Program. Results of the Process Evaluation Study will be shared with the Seller upon completion. Seller will incorporate mutually agreed upon changes, following CPUC approval, if necessary. SDG&E is responsible for
paying for the Process Evaluation Study.
 10.3 Metering Requirements. 
 10.3.1. Participating Facilities Metering. In order to measure the PBE for each Program Year, Interval Data Recorders (“IDR”) will be installed by SDG&E at a minimum of 100 Participating Facilities to
serve as a statistical sample that is representative of the population of Participating Facilities. Participating Facilities will have IDR meters installed to measure both the electrical energy consumption of the whole facility, as well. as the
consumption of the End-use Equipment, e.g. the compressor/condensing unit). These recorders will provide 15 minute energy consumption. Whole facility data includes all loads at the Participating Facility, including without (imitation the AC
condenser. During the Installation Phase (up to three years or when the Program has reached the Capacity Cap of 40 MW), additional IDR meters may be installed as needed to accurately represent the current Participating Facilities in each
Program Year. The M&E Plan assumes a maximum of 300 meters installed at Participating Facilities (with two meters at each Facility). 
 10.3.2 Metering If Participating Facilities Too Few. If there are too few Participating Facilities to warrant sampling, as determined by SDG&E, the population will be metered, at the sole cost of SDG&E, for purposes of
determining PBE. 
  

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 10.3.3 Sample Group. In order to provide a baseline from which to measure the PBE, the sample will be
randomly assigned into two groups, Group A and Group B. During curtailments only one of these groups will receive the curtailment signal (the “Curtailed Group”) and the other group will not receive a curtailment signal (the
“Comparison Group”). The two groups will be alternated for each successive event. The Comparison Group will not be excluded for the purposes of determining capacity and energy payments pursuant to this Agreement. 
 10.4 Sample Selection. SDG&E shall be responsible for the selection of a representative sample for the Participating Facilities sample, based upon installation logs
of Participating Facilities as they are completed. The sample may be increased or changed from year to year to ensure an accurate profile for Participating Facilities characteristics. Seller shall provide SDG&E weekly installation logs, no later
than seven (7) days after the week’s installations are complete pursuant to Appendix B. 
 10.5 Calculation of PBE. The PBE will be derived from
estimates for both the Curtailed Group and the Comparison Group coincident to System Peak. For the coincident System Peak 15-minute interval during a Program Event, the average of the observed load for units in the Curtailed Group will provide a
preliminary, unadjusted estimate of savings for each potentially contributing unit and this estimate will be subtracted from the corresponding observed average load for the Comparison Group. The difference calculated pursuant to the immediately
preceding sentence is the controladjusted savings per potential contributor and when divided by the average Nameplate Capacity of both groups and then multiplied by four (4) is called the PBE ( or as may be adjusted for stratification as
appropriate). It is intended that the peak interval of Demand Reduction used for the calculation of PBE shall be based on the interval that is coincident with System Peak; provided, however, that interval shall not be the first full 15-minute
interval of the Program Event. It is understood, however, that this one-to-one correspondence may not occur. In the event that the Program Event for this calculation does not correspond with SDG&E’s System Peak or occurs in the first full
15-minute interval of the Program Event, then the associated peak Demand Reduction interval will be discarded and replaced with the greater of (i) the previous year’s PBE, if available or (ii) the data from the highest System Peak day when a
Program Event was called grossed up based on metered data from the highest System Peak day. 
 10.6 Responsibility of Each Party for Metering and Evaluation.

 10.6.1 Seller Responsibility. Seller is responsible to provide to SDG&E information on each Participating Facility during the
Installation Phase, including customer name, account number, if available, and the meter number, service address, billing address, contact name and the Nameplate Capacity of the End Use Equipment where the DCU is installed. The Seller will provide
this information to SDG&E on a weekly basis during the Installation Phase or until the 40MW Program Cap is achieved. 
 10.6.2
SDG&E Responsibility. SDG&E shall provide its sample design to Seller prior to the first Control Season, and actual data on a sample basis of demand 
  

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 reduction achieved by Participating Facilities after each Control Season in order to allow Seller an
opportunity to review and, as necessary, consult with SDG&E as to the methodology of data sample design prior to and during the first Control Season and the accuracy of the actual demand reduction data resulting from the sample that is
statistically representative of the performance of the Participating Facilities during each Control Season. 
  

	 	A.	Metering. SDG&E will design the metering sample for Participating Facilities, conduct site investigations, and install all equipment necessary to measure the PBE.

  

	 	B.	Data Validation. SDG&E will be responsible for validating both whole premise and end-use meter data. Validation will primarily consist of visual verification and
reasonableness of load data, including checking for missing values and zeros. Zeros in the data will be investigated to ensure validity. Zeros in end-use load may be valid, however, zeros in the whole premise load would require further investigation
and possible sample replacement. Meter load data shall be included at SDG&E’s sole discretion.

  

	 	C.	Calculation of PBE. SDG&E will utilize the metering data obtained from the sample of meters at Participating Facilities and conduct the study, which will provide the
PBE in kW per installed ton of End Use Equipment.

  

	 	D.	Sharing of measurement and evaluation data with Seller: SDG&E will share results of measurement and evaluation measured data with Seller upon verification that the
Customers whose data is being shared have consented in writing that their demand and consumption data may be shared with Seller. 

  

	 	E.	True up of previous Program Year’s PBE. SDG&E shall utilize annual PBE to provide a true-up Contract Capacity to the SDG&E Program Manager responsible for
Capacity and Energy Payments made to Seller, in order for the True — up Payment and Energy Payment to be made by January 31 of each year. True up data will be applied to the following Program Year’s Estimated Contract Capacity.

 ARTICLE 11 - BILLING AND PAYMENT 
 11.1 Billing Statement, Payment and True-Up. The Quarterly billing period shall be based on Program Year Quarters as defined for this Program in Article 5. 
 11.1.1 Seller Responsibility. Seller shall prepare and submit a quarterly bill to SDG&E showing (i) a verified list of units that were installed in the previous Quarter, and (ii) a list of units that
were installed prior to the beginning of the previous Quarter, each with their Nameplate Capacity, Estimated Demand Reduction per kW (in first Program Year) or PBE (in all subsequent Program Years) and the mutually agreed upon price. 
  

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 11.1.2 SDG&E Responsibility. 
 A. SDG&E shall pay the quarterly invoice within 30 days. 
 B. No later than thirty (30) days after the end of each Control Season, SDG&E shall prepare, and provide to Seller, by first-class mail, a statement showing purchases by SDG&E from Seller with
respect to the Participating Facilities, for the previous Program Year. The statement will list: (i) all Participating Facilities for that Program Year, (ii) all Program Events called, including the date, time and duration of each Program
Event, and (iii) the Total Program Run Hours, (iv) the Estimated Demand Reduction and/or PBE attributed to each Participating Facility for each quarter, (v) the total Contract Capacity and Demand Reduction used to determine the
Quarterly Capacity Payment, as set forth in Article 5, and any other data reasonably pertinent to the calculation of quarterly payments due to Seller. A True-Up of the difference between the quarterly payments made based on
estimates and what should have been paid according to the results of the M&E Impact Evaluation Study as described in Article 10 will be made by January 31 of each Program Year. 
 11.2 Late Payments. Unless otherwise specified herein, payments due under this Agreement shall be due and payable by check or by wire transfer, as designated by the owed Party, on or before the thirtieth
(30th) day following receipt of the billing invoice. Remittances received by mail will be considered to have
been paid when due if the postmark indicates the payment was mailed on or before the thirtieth (30) day following receipt of the billing invoice. If any amount due is not paid on or before the due date, a late payment charge shall be applied to
the unpaid balance and shall be added to the next billing statement. Such late payment charge shall be calculated based on one hundred twenty-five percent (125%) of the LIBOR three-month rate published on the date of the invoice in The Wall
Street Journal (or, if The Wall Street Journal is not published on that day, the next succeeding date of publication). If the due date occurs on a weekend or Holiday, the late payment charge shall begin to accrue on the next succeeding business day.

 11.3 Billing Disputes. To resolve any billing dispute, the Parties shall use the procedures set forth in Article 13. When the billing dispute is resolved,
the Party owing shall pay the amount owed within five (5) business days of the date of such resolution, with late payment interest charges calculated on the amount owed in accordance with the provisions of Section 11.2. SDG&E at any
time may offset against any and all amounts that may be due and owed to Seller under this Agreement, any and all undisputed amounts, including damages and other payments, that are owed by Seller to SDG&E pursuant to this Agreement or are
past due under other accounts Seller has with SDG&E for other services. Undisputed and non-offset portions of amounts invoiced under this Agreement shall be paid on or before the due date or shall be subject to the late payment interest charges
set forth in Section 11.2. 
  

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 ARTICLE 12 - DEFAULT AND TERMINATION 
 12.1 Events of Default of Seller. 
 12.1.1 Any of the following shall constitute an Event of Default of
Seller upon its occurrence and no cure period shall be applicable: 
 A. Seller’s dissolution or liquidation; 
 B. Seller’s assignment of this Agreement or any of its rights under it for the benefit of creditors; and/or 
 C. Seller’s filing of a petition in bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United
States or under any insolvency act of any state, or Seller voluntarily taking advantage of any such law or act by answer or otherwise. 
 12.1.2 Any of the following shall constitute an Event of Default of Seller upon its occurrence unless cured within thirty (30) days after the date of written notice from SDG&E to Seller as provided for in Section 13.1:

 A. Seller’s failure to maintain in effect any material Agreements required to deliver Contract Capacity and Demand Reduction of
any Participating Facility; or 
 B. Seller’s failure to comply with any other material obligation under this Agreement, which would
result in an adverse impact on SDG&E; and/or
 C. Seller’s failure to provide SDG&E a letter of credit pursuant to
Article 22. 
 12.1.3 Any of the following shall constitute an Event of Default of Seller upon its occurrence unless cured within sixty
(60) days after the date of written notice from SDG&E to Seller as provided in Section 13.1: 
 A. Seller’s failure to
make any payment required under this Agreement;
 B. Seller’s assignment of this Agreement, except as authorized herein, without Seller
first obtaining SDG&E’s prior written consent (which consent will not be unreasonably withheld); 
  

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 C. Any material misrepresentation by Seller related to this Agreement; and/or 
 D. The filing of a case in bankruptcy or any proceeding under any other insolvency law against Seller as debtor that could. materially impact
Seller’s ability to perform its obligations hereunder; provided, however, that Seller does not obtain a stay or dismissal of the filing within the cure period. 
 12.2 Events of Default of SDG&E. 
 12.2.1 Any of the following shall constitute an Event of Default of
SDG&E upon its occurrence and no cure period shall be applicable: 
 A. SDG&E’s dissolution or liquidation, provided that
division of SDG&E into multiple entities shall not constitute dissolution or liquidation; 
 B. SDG&E’s general assignment of
this Agreement or any of its rights under it for the benefit of creditors; and/or 
 C. SDG&E’s filing of a petition in
bankruptcy or insolvency or for reorganization or arrangement under the bankruptcy laws of the United States or under any insolvency act of any State, or SDG&E voluntarily taking advantage of any such law or act by answer or otherwise,

 12.2.2 Any of the following shall constitute an Event of Default of SDG&E upon its occurrence unless cured within thirty
(30) days after the date of written notice from Seller to SDG&E as provided for in Section 13.1. 
 A. SDG&E’s
failure to make any payment due hereunder (net of outstanding damages and any other rights of offset that SDG&E may have pursuant to this Agreement), other than in compliance with Article 12 above; 
 B. SDG&E’s failure to comply with any other material obligation under this Agreement, which failure would result in a material adverse impact on
Seller. 
 12.2.3 Any of the following shall constitute an Event of Default of SDG&E upon its occurrence unless cured within sixty
(60) days after the date of written notice from Seller to SDG&E as provided for in Section 13.1. 
 A. The filing of a case in
bankruptcy or any proceeding under any other insolvency law against SDG&E that could materially impact SDG&E’s ability to perform its obligations hereunder; provided, however, that SDG&E does not obtain a stay or dismissal
of the filing within the cure period; and/or 
  

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 B. Any material misrepresentation by SDG&E related to this Agreement. 
 12.3 Termination. In addition to any other right or remedy available at law or in equity, either Party may, upon written notice to the other Party, terminate this
Agreement if any one or more of the Events of Default of the other Party described in this Article occur and are not cured within the time periods set forth herein. Neither Party shall have the right to terminate this Agreement except
as provided for upon the occurrence of an Event of Default as described above or as otherwise may be explicitly provided for in this Agreement. Except as expressly provided in this Agreement, nothing in this Agreement shall be construed to
limit any right or remedy available at law or in equity to the Parties, including the right to any and all damages for any breach or other failure to perform hereunder. All remedies in this Agreement shall survive termination or cancellation of
this Agreement and are cumulative. 
 ARTICLE 13 - CONTRACT ADMINISTRATION AND NOTICES 
 13.1 Notices in Writing. Notices required by this Agreement shall be addressed to the other Party, including the other Party’s representative at the addresses noted
in Appendix C as either Party updates them from time to time by written notice to the other Party. Any notice, request, consent, or other communication required or authorized under this Agreement to be given by one Party to the other
Party shall be in writing. It shall either be personally delivered. or mailed, postage prepaid, to the representative of said other Party. In addition, the notice, request, consent or other communication shall be sent by facsimile or
other electronic means. Any such notice, request, consent, or other communication shall be deemed to be given when delivered or mailed. Real-time or routine communications concerning Participating Facility operations shall be exempt
from this Section. 
 13.2 Representative for Notices. Each Party shall maintain a designated representative to receive notices. Either Party
may, by written notice to the other Party, change the representative or the address to which such notices and communications are to be sent. 
 13.3
Authority of Representatives. The Parties’ representatives designated above shall have authority to act for its respective principals in all technical matters relating to performance of this Agreement and to attempt to resolve disputes or
potential disputes. However, they shall not have the authority to amend or modify any provision of this Agreement. 
 13.4 Operating Records. Seller and
SDG&E shall each keep complete and accurate records and all other data required by each of them for the purposes of proper administration of this Agreement, including such records as may be required by state or federal regulatory
authorities. 
 13.5 Billing and Payment Records. To facilitate payment and verification, Seller and SDG&E shall keep all books and records necessary for
billing and payments in accordance with the provisions of Article 5 and grant the other Party reasonable access to those records. 
  

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 13.6 Examination of Records. Seller and SDG&E may examine the financial and operating Records and data kept by the
other Party relating to transactions under and administration of this Agreement, at any time during the period the records are required to be maintained, upon request and during normal business hours. 
 13.7 Dispute Resolution. The Parties agree that it is in the best interest of both Parties to attempt to resolve disputes that arise under this Agreement in a quick
and inexpensive manner. To that end, the Parties commit to use their best efforts to resolve disputes informally. For all disputes that arise pursuant to the Agreement, the Parties immediately, through their designated representatives selected in
the sole discretion of each Party (individually, the “Party Representative”, together, the “Parties’ Representatives”), shall negotiate with one another in good faith in order to reach resolution of the dispute. Such
negotiation shall commence within fourteen (14) days of the date of the letter from one Party Representative to the other Party Representative notifying that Party of the nature of the dispute. In the event that the Parties’
Representatives cannot agree to a resolution of the dispute within thirty (30) days after the commencement of negotiations, written notice of the dispute (the “Dispute Notice”), together with a statement describing the issues or
claims, shall be delivered, within seventy-two (72) hours after the expiration of such thirty (30) day period, by each of the Parties’ Representatives to its respective senior officer or official (such senior officer or official to be
selected by each of the Party Representatives in his or her sole discretion, provided such senior officer or official has authority to bind the respective Party). Within three business days after receipt of the Dispute Notice, the senior officers or
officials for both Parties shall negotiate in good faith to resolve the dispute. If the Parties are unable to resolve the dispute within fourteen (14) days of receipt of the Dispute Notice by the senior officers or officials, either Party
may seek available legal remedies. 
 ARTICLE 14 - FORCE MAJEURE 
 14.1 Definition of Force Majeure. The term Force Majeure, as used in this Agreement, means causes or events beyond the reasonable control of, and without the fault or negligence of the Party claiming Force
Majeure, including, without limitation, acts of God, sudden actions of the elements such as floods, earthquakes, hurricanes, or tornadoes; sabotage; vandalism beyond that which. could reasonably be prevented by Seller; terrorism; war;
riots; fire; explosion; severe cold or hot weather or snow or other extreme or severe weather conditions; blockades; insurrection; strike; slow down or labor disruptions (even if such difficulties could be resolved by conceding to the demands
of a labor group); and actions by federal, state, municipal, or any other government or agency (including the adoption or change in any rule or regulation or environmental constraints lawfully imposed by federal, state, or local government
bodies) but only if such requirements, actions, or failures to act prevent or delay performance; and inability, despite due diligence, to obtain required licenses, permits, or approvals. 
  

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 14.2 The term Force Majeure does not include: 
 14.2.1 any full or partial curtailment in the operation of a Participating Facility that is caused. by or arises from the act or acts of any third
party, including, without limitation, any vendor, materialman, customer, or supplier of Seller, unless such act or acts is itself excused by reason of Force Majeure; 
 14.2.2 any full or partial curtailment in the operation of a Participating Facility that is caused by or arises from a mechanical or equipment
breakdown, or fires, explosions, or other mishap or events or conditions attributable to normal wear and tear or flaws, unless such mishap is caused by one of the following: catastrophic equipment failure; acts of God; sudden actions of
the elements such as floods, hurricanes, or tornadoes; sabotage; terrorism; war; riots; and actions by federal, state, municipal, or any other government or agency; 
 14.3 Applicability of Force Majeure. Neither Party shall be responsible or liable for any delay or failure in its performance under this Agreement due solely to conditions or events of Force Majeure, provided
that: 
 14.3.1 the non-performing Party gives the other Party prompt written notice describing the particulars of the occurrence of the Force
Majeure; 
 14.3.2 the suspension of performance is of no greater scope and of no longer duration than is required by the Force Majeure;

 14.3.3 the non-performing Party proceeds with reasonable diligence to remedy its inability to perform and provides weekly progress reports
to the other Party describing actions taken to end the Force Majeure; and 
 14.3.4 when the non-performing Party is able to resume
performance of its obligations under this Agreement, that Party shall give the other Party written notice to that effect. 
 14.4 Limitations on Effect
of Force Majeure. In no event will any delay or failure of performance caused by any conditions or events of Force Majeure extend this Agreement beyond its stated Term. In the event of any delay or failure of performance caused by conditions or
events of Force Majeure, which would otherwise constitute an Event of Default pursuant to Article 12, the cure provisions of Article 12 shall not apply and such delay or failure of performance, if not previously cured, shall become an Event of
Default on that date which is one (1) year from the date of notice provided for in Section 14.3.1. The Party not claiming Force Majeure may, at any time following the end of such one year period, terminate this Agreement upon
written notice to the affected Party, without further obligation by the terminating Party except as to costs and balances incurred prior to the effective date of such termination. The Party not claiming Force Majeure may, but shall not be
obligated to, extend such one year period, for such additional time as it, at its sole discretion, deems appropriate, if the affected Party is exercising due diligence in its efforts to cure the conditions or events of Force Majeure. 
  

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 14.5 Effect of Force Majeure on Capacity Payments. For purposes of, and pursuant to, the monthly Capacity Payment
calculation specified in. Article 5, a Participating Facility’s Contract Capacity shall be considered to be unavailable during all hours where Seller is unable to provide or deliver such Contract Capacity and the associated
energy due to an event of Force Majeure, provided, that such event is not caused by, and does not result from, SDG&E’s failure to perform in accordance with the provisions of this Agreement.
 ARTICLE 15 - REPRESENTATIONS AND WARRANTIES 
 15.1
Seller’s Representations and Warranties. Seller hereby represents and warrants as follows: 
 15.1.1 Seller is a Corporation duly
organized under the State of Delaware and validly existing under the laws of the State of California. Seller is qualified to do business in each jurisdiction where the failure to so qualify would have a material adverse effect on the
business or financial condition of Seller. Seller has all requisite power and authority to conduct its business, to own its properties, and to execute, deliver, and perform its obligations under this Agreement. 
 15.1.2 The execution, delivery, and performance of its obligations under this Agreement by Seller have been duly authorized by all necessary action,
and do not and will not: 
 A. require any consent or approval of Seller’s Board of Directors, general
partner, or shareholders, other than that which has been obtained and is in full force and effect (evidence of which shall be delivered to SDG&E upon its request);
 B. violate any provision of law, rule, regulation, order, writ, judgment, injunction, decree, determination, or award currently in effect having
applicability to Seller or violate any provision in any formation documents of Seller, the violation of which could have a material adverse effect on the ability of Seller to perform its obligations under this Agreement;

 C. result in a breach or constitute a default under Seller’s formation documents or bylaws, or under any Agreement relating
to the management or affairs of Seller or any indenture or loan or credit Agreement, or any other Agreement, lease, or instrument to which Seller is a party or by which Seller or its properties or assets may be bound or
affected, the breach or default of which could reasonably be expected to have a material adverse effect on the ability of Seller to perform its obligations under this Agreement; or 
 D. Other than results from Financing Documents involving the Senior Lender, result in, or require the creation or imposition of any mortgage, deed
of trust, pledge, lien, security interest, or other charge or encumbrance of any nature (other than as may be contemplated by this Agreement) upon or with 
  

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 respect to any of the assets or properties of Seller now owned or hereafter acquired, the creation or
imposition of which could reasonably be expected to have a material adverse effect on the ability of Seller to perform its obligations under this Agreement. 
 15.1.3 This Agreement is a valid and binding obligation of Seller. 
 15.1.4 The execution and performance of
this Agreement will not conflict with or constitute a breach or default under any contract or Agreement of any kind to which Seller is a party or any judgment, order, statute, or regulation that is applicable to Seller or any Participating Facility.

 15.1.5 All approvals, authorizations, consents, or other action required by any governmental authority to authorize Seller’s
execution, delivery, and performance under his Agreement have been duly obtained and are in full force and effect. 
 15.1.6 Seller shall
comply with all applicable local, state, and federal laws, regulations, and ordinances, including but not limited to equal opportunity and affirmative action requirements and all applicable federal, state, and local environmental laws and
regulations presently in effect or which may be enacted during the Term of this Agreement. 
 15.1.7 Seller shall disclose to SDG&E, to
the extent that, and as soon as it is known to Seller, any alleged violation of any environmental laws or regulations arising out of the construction or operation of any Participating Facility, or the alleged presence of Environmental Contamination
at any Participating Facility or on its site, or the existence of any past or present enforcement, legal, or regulatory action or proceeding relating to such alleged violation or alleged presence of Environmental Contamination. 
 15.1.8 Seller agrees that, upon request of SDG&E and at no cost to SDG&E, Seller shall deliver or cause to be delivered to SDG&E
certifications of its officers, accountants, engineers, or agents as to such matters as SDG&E may reasonably request. 
 15.2 SDG&E’s
Representations and Warranties. SDG&E hereby represents and warrants the following: 
 15.2.1. SDG&E is a corporation duly organized,
validly existing and in good standing under the laws of the State of California and is qualified in each other jurisdiction where the failure to so qualify would have a material adverse effect upon the business or financial condition of SDG&E.
SDG&E has all requisite power and authority to conduct its business, to own its properties, and to execute, deliver, and perform its obligations under this Agreement. 
  

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 15.2.2 The execution, delivery, and performance of its obligations under this Agreement by SDG&E have
been duly authorized by all necessary corporate action, and do not and will not: 
 A. violate any provision of law, rule, regulation, order,
writ, judgment, injunction, decree, determination, or award currently in effect having applicability to SDG&E or violate any provision in any corporate documents of SDG&E, the violation of which could have a material adverse effect on
the ability of SDG&E to perform its obligations under this Agreement; 
 B. result in a breach or constitute a default under
SDG&E’s corporate charter or bylaws, or under any Agreement relating to the management or affairs of SDG&E, or any indenture or loan or credit Agreement, or any other Agreement, lease, or instrument to which SDG&E is a party or by
which SDG&E or its properties or assets may be bound or affected, the breach or default of which could reasonably be expected to have a material adverse effect on the ability of SDG&E to perform its obligations under this Agreement; or

 C. result in, or require the creation or imposition of any mortgage, deed of trust, pledge, lien, security interest, or other charge or
encumbrance of any nature (other than as may be contemplated by this Agreement) upon or with respect to any of the assets or properties of SDG&E now owned or hereafter acquired, the creation or imposition of which could reasonably be expected to
have a material adverse effect on the ability of SDG&E to perform its obligations under this Agreement. 
 15.2.3 This Agreement is a
valid and binding obligation. of SDG&E. 
 15.2.4 The execution and performance of this Agreement will not conflict with or constitute a
breach or default under any contract or Agreement of any kind to which SDG&E is a party or any judgment, order, statute, or regulation that is applicable to SDG&E. 
 ARTICLE 16 - INSURANCE 
 16.1 Seller’s Insurance Requirements. Seller shall fully apprise SDG&E of the
insurance requirements it proposes and Seller shall use its reasonable efforts to implement recommendations with respect thereto reasonably made by SDG&E. Seller shall obtain and maintain, or cause to be obtained and maintained, in effect
throughout the term of this Agreement such insurance policies and coverage as is required by law, and Good Industry Practice, as outlined in Appendix D. 
 16.2 Changes to Insurance Minimum Limits. SDG&E shall have the right, at times deemed appropriate to SDG&E during the term of this Agreement, to request Seller to modify the insurance minimum limits specified in Appendix D in order
to maintain reasonable coverage amounts. Seller shall make all reasonable efforts to comply with such request. 
  

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 16.3 Notwithstanding any provision of the insurance policies, such policies may not be canceled, non-renewed or
materially changed without the insurer giving thirty (30) days’ prior written notice to SDG&E. All other terms and conditions of such policy shall remain unchanged. 
 16.4 Certificates of Insurance Required. If commercially reasonable, at least sixty (60) days prior to the date set for the commencement of construction and within five (5) business days before or after the
renewal date of each policy required to be maintained after the Commercial Operation Date during the Term, Seller shall provide SDG&E a certificate of insurance verifying the existence of insurance coverages and. endorsements required by
Appendix D. Failure of Seller to obtain the insurance coverages required by this Section, or to provide SDG&E with the certificates or copies of receipts, shall in no way relieve Seller of the insurance requirements of this Section or limit
Seller’s obligations and liabilities under any provision of this Agreement. 
 16.5 Application of Proceeds. For the Tenn, and subject to the
requirements of the Financing Documents and the rights or remedies of the Senior Lender thereunder, Seller shall apply any and all insurance proceeds received in connection with the damage or destruction of the Participating Facilities toward the
repair, reconstruction or replacement of the Participating Facilities except in the event of any termination of this Agreement pursuant to Article 12. 
 ARTICLE 17 - INDEMNITY 
 17.1 General. 
 EACH PARTY (THE “INDEMNIFYING PARTY”) SHALL FULLY INDEMNIFY AND DEFEND THE OTHER PARTY AND EACH OF THE OTHER PARTY’S SUBSIDIARIES AND AFFILIATES, AND THE PARTNERS, MEMBERS, PARTICIPANTS,
PRINCIPALS, REPRESENTATIVES, SHAREHOLDERS, DIRECTORS, TRUSTEES, OFFICERS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS OF EACH OF THEM (THE “INDEMNIFIED PARTY”) FROM AND AGAINST ANY AND ALL LOSSES, COSTS, DAMAGES, INJURIES, LIABILITIES,
CLAIMS, DEMANDS, PENALTIES AND INTEREST, INCLUDING REASONABLE ATTORNEYS’ FEES (“DAMAGES”), DIRECTLY OR INDIRECTLY RELATED TO THIS AGREEMENT, TO THE EXTENT CAUSED OR CONTRIBUTED TO BY (A) THE FAULT, INTENTIONAL ACT,
NEGLIGENCE OR STRICT LIABILITY OF THE INDEMNIFYING PARTY OR ITS SUBSIDIARIES, AFFILIATES, CONTRACTORS OR SUBCONTRACTORS OR ANY OF THE OFFICERS, PARTNERS, MEMBERS, PARTICIPANTS, SHAREHOLDERS, PRINCIPALS, DIRECTORS, TRUSTEES, EMPLOYEES, AGENTS,
REPRESENTATIVES, SUCCESSORS OR ASSIGNS OF ANY OF THEM OR (B) A BREACH BY THE INDEMNIFYING PARTY OF THIS AGREEMENT. IN ADDITION, OWNER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS SDG&E FROM AND AGAINST ANY (X) CLAIM ARISING

  

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 FROM OR OUT OF A CONTRACT BETWEEN SELLER AND ANY PARTICIPANT OTHER THAN THOSE DESCRIBED IN THE FIRST SENTENCE OF THIS
SECTION 17.1 AND (Y) ENVIRONMENTAL CLAIM TO THE EXTENT SUCH ENVIRONMENTAL CLAIM RELATING TO ENVIRONMENTAL CONTAMINATION (A) AROSE PRIOR TO THE EXPIRATION OF THE TERM OR (B) ARISES FROM OR IS RELATED TO FACTS OR CIRCUMSTANCES
CONCERNING THE PARTICIPATING FACILITY (INCLUDING THE USE, RELEASE, THREAT OF RELEASE, GENERATION, STORAGE, TREATMENT, TRANSPORTATION, DISCHARGE OR DISPOSAL OF HAZARDOUS MATERIALS, ON, UNDER, FROM OR ABOUT THE FACILITY) THAT AROSE PRIOR TO THE
EXPIRATION OF THE TERM. 
 17.2 Environmental. Seller shall indemnify, defend and hold SDG&E harmless from, and against all claims, demands, losses,
liabilities, penalties and expenses (including reasonable attorneys’ fees) for personal injury or death to persons, damage to or loss of property, and response costs relating to Environmental Contamination, arising out of, resulting from or
caused by the violation of any applicable environmental laws or the negligent or tortious acts, errors or omissions of Seller (or its respective officers, employees, agents and contractors) with respect to the release of Hazardous Materials at
or from any Participating Facility, except to the extent that such violation, injury, death, loss, liability or response costs are attributable to the negligent or tortious acts, errors or omissions of SDG&E (or its officers, employees,
agents or contractors). 
 17.3 Procedures. 
 17.3.1 Promptly after receipt by a Party of any claim or notice of the commencement of any action, administrative, or legal proceeding, or investigation as to which the indemnity provided for in this Article may apply, the Indemnified Party
shall notify the Indemnifying Party in writing of such fact, but the failure so to notify such Indemnifying Party of any such action shall not relieve such Indemnifying Party from any liability which it may have to the Indemnified Party except
to the extent that such failure to notify shall adversely affect the fights of the Indemnifying Party. The Indemnifying Party shall be entitled to participate at its own expense in the defense or, if it so elects, to assume the defense thereof with
counsel designated by such Party and satisfactory to the Indemnified Party, provided, however, that if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there may be legal defenses available to it which are different from or additional to, or inconsistent with, those available to the Indemnifying Party, the Indemnified Party shall have the right to select and be represented by
separate counsel, at the Indemnifying Party’s expense, unless a liability insurer is willing to pay such costs. 
 17.3.2 The
Indemnifying Party shall bear the reasonable fees and expenses of the counsel retained by the Indemnified Party if (i) the Indemnified Party shall have retained such counsel in accordance with the preceding paragraph (A), (ii) the
Indemnifying Party shall elect not to assume the defenses of such action, (iii) the 
  

 -27- 

 Indemnifying Party, within a reasonable time after notice of the commencement of the action, shall
not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party, or (iv) the Indemnifying Party shall. have authorized the employment of counsel for the Indemnified Party at the expense of the
Indemnifying Party. An Indemnified Party shall not enter into a settlement or other compromise with respect to any claim without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. If the Indemnifying Party fails to assume the defense of a claim meriting indemnification, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim, provided that settlement or full payment of
any such claim may be made only following consent of the Indemnifying Party or, absent such consent, written opinion of the Indemnified Party’s counsel that such claim is meritorious or warrants settlement. 
 17.3.3 LIMITATION ON DAMAGES. NEITHER PARTY NOR ITS SUBSIDIARIES OR AFFILIATES NOR THE OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, PARTICIPANTS,
PARTNERS, MEMBERS, SHAREHOLDERS, PRINCIPALS, DIRECTORS, TRUSTEES, SUCCESSORS OR ASSIGNS OF ANY OF THEM SHALL IN ANY EVENT BE LIABLE TO THE OTHER PARTY OR ITS SUBSIDIARIES OR AFFILIATES OR THE OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES,
PARTICIPANTS, PARTNERS, MEMBERS, SHAREHOLDERS, PRINCIPALS, DIRECTORS OR TRUSTEES OF ANY OF THEM FOR INCIDENTAL, PUNITIVE, CONSEQUENTIAL (EXCEPT AS PROVIDED FOR HEREIN), SPECIAL, OR INDIRECT DAMAGES OF ANY NATURE, ARISING AT ANY TIME, FROM ANY CAUSE
WHATSOEVER, WHETHER ARISING IN TORT, CONTRACT, WARRANTY, STRICT LIABILITY, BY OPERATION OF LAW OR OTHERWISE, CONNECTED WITH OR RESULTING FROM PERFORMANCE OR NON-PERFORMANCE UNDER THIS AGREEMENT. NOTHING IN THIS SECTION 17.3 SHALL BE DEEMED TO
AFFECT OR LIMIT THE RIGHT OF AN INDEMNIFIED PARTY TO CLAIM INDEMNIFICATION FROM THE INDEMNIFYING PARTY UNDER SECTION 17.1 IN RESPECT OF A THIRD PARTY CLAIM AGAINST THE INDEMNIFIED PARTY FOR PERSONAL INJURY OR PROPERTY DAMAGE RESULTING FROM
THE INDEMNIFYING PARTY’S NEGLIGENCE OR WILLFUL MISCONDUCT. 
 17.3.4 Except as otherwise provided in this Article, in the event that a
Party is obligated to indemnify and hold the other Party and its successors and assigns harmless under this Article 17, the amount owing to the Indemnified Party will be the amount of the Indemnified Party’s actual loss net of any insurance
proceeds received by the Indemnified Party following a reasonable effort by the Indemnified.
  

 -28- 

 ARTICLE 18 - REGULATORY JURISDICTION AND COMPLIANCE 
 18.1 Governmental Jurisdiction and Regulatory Compliance. Each Party shall at all times comply with all applicable laws, ordinances, rules, and regulations
applicable to it. As applicable, each Party shall give all required notices, shall procure and maintain all necessary governmental permits, licenses, and inspections necessary for performance of this Agreement, and shall pay its respective
charges and fees in connection therewith. 
 18.2 Provision of Support. Seller shall make available, upon SDG&E’s request, any personnel of Seller
and any records relating to the Facilities to the extent that SDG&E requires the same in order to fulfill any regulatory approval and reporting requirements, or to assist SDG&E in litigation, including, but not limited to,
administrative proceedings before SDG&E regulatory commissions. 
 ARTICLE 19 - ASSIGNMENT AND OTHER TRANSFER RESTRICTIONS

 19.1 No Assignment Without Consent. Except as permitted below, neither Party shall assign this Agreement or any portion hereof, without the prior
written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Prior notice of any such assignment shall be given to the other Party. Any assignee shall expressly assume the assignor’s obligations
hereunder, unless otherwise agreed to by the other Party. No assignment, whether or not consented to, shall relieve the assignor of its obligations hereunder in the event the assignee fails to perform, unless the other Party agrees in writing
to waive assignor’s continuing obligations pursuant to this Agreement. No assignment shall impair any security given by Seller hereunder. Before the Agreement is assigned by Seller, the assignee must first obtain such approvals
as may be required by all. applicable regulatory bodies. 
 19.2 Transfer Without Consent is Null and Void. Any sale, transfer, or assignment by Seller of
any interest in any Owner Contract or in this Agreement made without fulfilling the requirements of the Agreement shall be null and void and shall constitute an Event of Default pursuant to Article 12. 
 ARTICLE 20 - JOINT INTEREST 
 20.1 SDG&E and
Seller believe it to be in their joint interest that the Program achieve a high degree of success and reach the maximum possible number of customers. Accordingly, SDG&E and Seller intend that, during the term of the Agreement,
SDG&E shall, subject to all applicable regulatory requirements which may exist during the term of this Agreement, use its reasonable commercial efforts to affirmatively promote, support, and work with Seller to offer and provide
to the customers of SDG&E in SDG&E’s service territory the electrical load control services described in this Agreement. 
  

 -29- 

 ARTICLE 21 - COLLATERAL REQUIREMENTS 
 21.1 SDG&E Collateral Protection. 
 21.1.1 Financial Information. If requested by SDG&E prior to a
Program Year commencing with 2010 and each year thereafter through the remaining term of the Agreement during which the Estimated Contract Capacity is 1.8 MW or greater, Seller shall deliver to SDG&E by April 15th a copy of
Seller’s audited consolidated financial statements for such year. In all cases the statements shall be for the most recent accounting period and prepared in accordance with generally accepted accounting principles. 
 21.1.2 Collateral Assurances. If SDG&E determines in its sole discretion after review of the financial statements provided pursuant to
Section 21.1.1 above that performance assurance is nonetheless required for any Program Year commencing with 2010 and each year thereafter through the remaining term of the Agreement during which the Estimated Contract Capacity
is 18 MW or greater, SDG&E will provide Seller with written notice no later than April 22nd of each
Program Year requesting performance assurance in the form of a letter of credit in the form substantially as set forth in Appendix E. Upon receipt of such notice Seller shall provide to SDG&E a letter of credit no later than the last
business day prior to a Program Year. In the event that Seller fails to timely provide such performance assurance pursuant to the immediately preceding sentence, then an Event of Default under Section 12.1 will be deemed to have occurred
and SDG&E will be entitled to the remedies set forth in Article 12 of this Agreement. 
 21.1.3 Amount of Letter of Credit. The
amount of such letter of credit for any Program Year commencing with 2010 and each year thereafter through the remaining term of the Agreement shall be in an amount determined by SDG&E based upon the following formula: 
 LOC Amount = Estimated Contract Capacity x Estimated Cover 
 Where 
 “Estimated Cover” is equal to the amount shown in Column B set forth in
Appendix F that is associated with the Estimated Contract Capacity. 
 ARTICLE 22 - MISCELLANEOUS 
 22.1 Waiver. The failure of either Party to enforce or insist upon compliance with or strict performance of any of the terms or conditions of this Agreement, or to
take advantage of any of its rights thereunder, shall not constitute a waiver or relinquishment of any such terms, conditions, or rights, but the same shall be and remain at all times in full force and effect. 
  

 -30- 

 22.2 Taxes. Seller shall be responsible for any and all present or future federal, state, municipal, or other lawful
taxes applicable by reason of the ownership and operation of the DLCS and the sale of energy under this Agreement, and all ad valorem taxes relating to the DLCS. 
 22.3 Disclaimer of Third Party Beneficiary Rights. In executing this Agreement, SDG&E does not, nor should it be construed to, extend its credit or financial support for the benefit of any third parties
lending money to or having other transactions with Seller. Nothing in this Agreement shall be construed to create any duty to, or standard of care with reference to, or any liability to, any person not a party to this Agreement. 
 22.4 Relationship of the Parties. 
 22.4.1 This Agreement
shall not be interpreted to create an association, joint venture, or partnership between the Parties nor to impose any partnership obligation or liability upon either Party. Neither Party shall have any right, power, or authority to enter
into any Agreement or undertaking for, or act on behalf of, or to act as an agent or representative of, the other Party. 
 22.4.2 Seller
shall be solely liable for the payment of all wages, taxes, and other costs related to the employment of persons to perform such services, including all federal, state, and local income, social security, payroll, and employment taxes
and statutorily mandated workers’ compensation coverage. None of the persons employed by Seller shall be considered employees of SDG&E for any purpose; nor shall Seller represent to any person that he or she is or shall become a
SDG&E employee. 
 22.5 Equal Employment Opportunity Compliance Certification. Seller acknowledges that as a government contractor SDG&E is
subject to various federal laws, executive orders, and regulations regarding equal employment opportunity and affirmative action. These laws may also be applicable to Seller. All applicable equal opportunity and affirmative action clauses
shall be deemed to be incorporated herein as required by federal laws, executive orders, and regulations, including but not limited to 41 C.F.R. §601.4(a)(l -7). 
 22.6 Confidentiality. 
 22.6.1 Definition of Confidential Information. As used in this Agreement, the term
“Confidential Information” means all of the information contained in Articles 5 and 21 of the Agreement. 
 22.6.2 Nondisclosure.
SDG&E agrees that it will not disclose Confidential Information, directly or indirectly, under any circumstances or by any means, to any third person without the express written consent of Seller. 
 22.6.3 Permitted Disclosure. Notwithstanding the provisions of Section 22.6.2 above, SDG&E and its representatives may disclose any of the
Confidential Information 
  

 -31- 

 in the event, but only to the extent, that, based upon reasonable advice of counsel, it is required to do so by the
disclosure requirements of any law, rule, or regulation or any order, decree, subpoena or ruling or other similar process of any court, governmental agency, securities exchange or governmental or regulatory authority. Prior to making or permitting
any of its representatives to make such disclosure, SDG&E shall provide Seller with prompt written notice of any such requirement so that Seller (with SDG&E’s assistance, at the expense of Seller) may seek a protective order or
other appropriate remedy. 
 22.7 Survival of Obligations. Cancellation, expiration, or earlier termination of this Agreement shall not relieve the Parties
of obligations that by their nature should survive such cancellation, expiration, or termination, prior to the term of the applicable Statute of Limitations, including without limitation warranties, remedies, or indemnities which obligation shall
survive for the period of the applicable statute(s) of limitation. 
 22.8 Severability. In the event any of the terms, covenants, or conditions of this
Agreement, its Exhibits, or the application of any such terms, covenants, or conditions, shall be held invalid, illegal, or unenforceable by any court or administrative body having jurisdiction, all other terms, covenants, and conditions of the
Agreement and their application not adversely affected thereby shall remain in force and effect. 
 22.9 Complete Agreement; Amendments. The terms and
provisions contained in this Agreement constitute the entire Agreement between SDG&E and Seller with respect to the Facilities and shall supersede all previous communications, representations, or Agreements, either verbal or written,
between SDG&E and Seller with respect to the sale of electric capacity and energy from the Facilities. This Agreement may be amended, changed, modified, or altered, provided that such amendment, change, modification, or alteration shall be
in writing and signed by both Parties hereto. 
 22.10 Binding Effect. This Agreement, as it may be amended from time to time pursuant to this Article,
shall be binding upon and inure to the benefit of the Parties’ respective successors-in-interest, legal representatives, and assigns. 
 22.11 Headings.
Captions and headings used in the Agreement are for ease of reference only and do not constitute a part of this Agreement. 
 22.12 Counterparts. This
Agreement may be executed in any number of counterparts, and each executed counterpart shall have the same force and effect as an original instrument. 
 22.13 Governing Law. The interpretation and performance of this Agreement and each of its provisions shall be governed and construed in accordance exclusively with the laws of the State of California. The Parties hereby
submit to the exclusive jurisdiction in the courts of the State of California, and venue is hereby stipulated as San Diego, California. 
  

 -32- 

 The signatories hereto represent that they have been appropriately authorized to enter into this
Agreement on behalf of the Party for whom they sign. This Agreement is hereby executed in multiple originals or counterparts as of the 6th day of October, 2003. 
  

							
	CONTRACTOR:	  	COMPANY:
		
	 COMVERGE, INC.
	  	SAN DIEGO GAS & ELECTRIC COMPANY
				
	By:	  	 /s/ Frank A. Magnotti
	  	By:	  	 /s/ Edwin A. Guiles

	Name:	  	Frank A. Magnotti	  	Name:	  	Edward A. Guiles
	(Type or Print)	  	(Type or Print)
	Title:	  	President, Global Sales and Marketing	  	Title:	  	Chairman/CEO
			
		  		  	APPROVED as to legal form
  /s/                                     
               

  

 -33- 

 First Amendment 
 to 
 Demand Response Capacity 
 Delivery Agreement 
 1. PREAMBLE 
 This First Amendment (the “Amendment”) to that certain Demand Response Capacity Delivery Agreement (“Agreement”), dated as of
October 6, 2003, is by and between Comverge, Inc. (“Seller”) and San Diego Gas & Electric Company (“SDG&E”), hereinafter sometimes referred to individually as “Party” or collectively as
“Parties.” 
 2. RECITALS 
 WHEREAS, on May 16, 2003, SDG&E issued a Request for Proposals for grid reliability capacity (the “RFP”); 
 WHEREAS, in response to the RFP, Seller submitted a proposal to SDG&E under which Seller would design, build, own and operate (but not dispatch) a commercial Direct Load Control System in SDG&E’s service territory, and to
aggregate the individual customer load by this DLCS to form a demand response capacity targeted at 30.2 MW (but no more than 40 MW) deliverable to SDG&E; 
 WHEREAS, SDG&E selected Comverge’s proposal as a qualifying proposal; 
 WHEREAS, in Decision
No. 04-06-011 (“D.04-06-011”) the California Public Utilities Commission (“CPUC”) approved the Agreement between SDG&E and Seller subject to the Comverge proposal being modified to include a residential customer
airconditioning cycle segment in addition to the smaller commercial and irrigation customers component, and a revised 50/50 cost sharing mechanism between SDG&E and Comverge with a payment cap; 
 WHEREAS, D.04-06-011 requires SDG&E to submit the amended Agreement to the CPUC for approval; and 
 WHEREAS, the Parties desire to enter into this Amendment to comply with D.0406-011. 
 3. AGREEMENT 
 Now, therefore, in consideration of the mutual covenants herein set forth, the Parties
agree as follows: 
  

 -1- 

 4. DEFINITIONS 
 The definition of “End-use Equipment” in Section 1.1 is amended to include pool pumps.
 Unless otherwise set forth in this Amendment, all capitalized terms shall have the definition set forth in the Agreement. 
 5. EFFECTIVE DATE

 Subject to Section 2.2, this Amendment shall be effective upon the last date of execution shown below by both Parties. 

6. INCLUSION OF RESIDENTIAL CUSTOMER COMPONENT 
 The definitions of “Participant” and “Participating Facility” are deleted in their entirety and replaced with the following: 
 “Participant” means the SDG&E residential and commercial customer name of record of a Participating Facility. 
 “Participating Facility” means residential or commercial SDG&E metered site meeting the requirements of Section 3.1 that is participating in this Program. 
 “Participating Commercial Facility” means commercial SDG&E metered site meeting the requirements of Section 3.1 that is participating
in this Program. 
 “Participating Residential Facility” means residential SDG&E metered site meeting the requirements of
Section 3.1 that is participating in this Program. 
 7. CPUC APPROVAL 
 Subsection 2.2 is deleted in its entirety and replaced with the following: 
 “2.2 SDG&E shall submit this Amendment for approval from the CPUC of the terms and conditions of this Amendment as being in compliance with D.04-06011. The Parties agree to cooperate and use all
reasonable efforts to obtain the CPUC Approval (defined below) as soon as is practicable. No later than fifteen (15) days after receipt of the CPUC Approval, SDG&E shall give Seller written notice of whether it deems the terms and
conditions of the CPUC Approval to be acceptable after prompt review. If the CPUC Approval is not acceptable to SDG&E, the Parties shall negotiate in good faith to determine what actions should be undertaken. If the Parties are unable
to reach agreement on such actions within sixty (60) days after initiating such negotiations, then either Party shall have the right to terminate this Agreement upon ten (10) days’ written notice and, upon such termination, neither
Party shall have any further liability or obligation to the other Party. 
  

 -2- 

 “CPUC Approval shall mean a final, non-appealable order from the CPUC approving this Amendment”

 8. MAXIMUM ALLOWABLE DEMAND RESPONSE CAPACITY 
 Subsection 3.1 is deleted and replaced with the following: 
 “3.1 Summary Description. Seller shall in accordance with Good
Industry Practice design, build, own and operate (but not dispatch) a Direct Load Control System that will, on demand (as defined in the Agreement), provide SDG&E with the ability to achieve Contract Capacity and Energy Reduction through
control of End-use Equipment at Participating Facilities within SDG&E’s retail service territory. Each Participating Commercial Facility shall have an annual maximum demand of no greater than 100kW. The aggregate Demand Reduction of
Participating Facilities made available to and purchased by SDG&E under this Agreement shall be no less than one (1) MW (and targeted at 30.2MW) but no more than 70MW. SDG&E will pay each Participant of a Participating Commercial Facility or
a Participating Residential Facility $25/kW of Estimated Demand Reduction per Program Year pursuant to an enrollment agreement between SDG&E and each Participant. 
 9. PRICING\PAYMENT CALCULATIONS 
 a) Section 5.1 is amended to include the following phrase at
the beginning thereof: “Except for the monthly payment the beginning of this Agreement as described in Section 5.1.1,” 
 b)
Section 5.1 is amended to include a new subsection 5.1.1 at the end thereof as follows: 
 “5.1.1 Monthly Capacity Payment

 SDG&E agrees to replace the Quarterly Capacity Payments with Monthly Capacity Payments until October 31, 2005, as follows:

 1. Beginning the first month that Estimated Contract Capacity equals at least one (1) MW, Monthly Capacity Payments will be made in lieu of
Quarterly Capacity Payments, for installations beginning upon approval of this Amendment and terminating with installations in the month ending October 31, 2005. Quarterly Capacity Payments will resume for all installations (new and old)
beginning November 1, 2005. 
 2. TAP will still be calculated as per the Agreement Article 5.1. 
 3. The Monthly Capacity Payment (MPn) shall be calculated at the end of Monthn as follows: 
 MP1 _
(ECCM1 x CP x 16.67%) + (ECCM0 x CP x 8.33%) 
 MP2 = (ECCM2 x CP x 25.00%) +
(ECCM1 x CP x 16.67%) + (ECCM0 x CP x 8.33%) 
 MP3 = (ECCM3 X CP x 50.00%) +
(EECM2 X CP x 25.00%) + (ECCM1 x CP x 16.67%) + (ECCM0 x CP x 8.33%) 
 Where: 
  

			
		
	ECCM1	  	 = Estimated Contract Capacity of new installations completed in MP1 

		
	ECCM2	  	= Estimated Contract Capacity of new installations completed in MP2
		
	ECCM3	  	= Estimated Contract Capacity of new installations completed in MP3
		
	ECCM0	  	= Estimated Contract Capacity of all installations in place at the beginning of Quartern”
	MP1	  	= first month in Quartern
	MP2	  	= second month in Quartern
	MP3	  	= third month in Quartern

  

 -3- 

 10. COST SHARING MECHANISM AND PURCHASE OPTION 
  

	 	(a)	Subsection 5.5.5.B is deleted and replaced with the following: 

  

	 	“B.	The CPA shall be equal to 50% of the Seller’s Sunk Cost Shortfall divided by 8, as limited by paragraphs (D) and (E) below.” 

  

	 	(a)	Subsection 5.6 is deleted and replaced with the following: 

 “5.6 Purchase Option. SDG&E will have the option to purchase the Direct Load Control System (or any portion thereof) for $45,000/per MW of capacity at the end of the 2015 Control Season.” 
 11. EQUIPMENT INSTALLATION 
 Article 7 shall be
amended by inserting the following at the beginning thereof: “The Parties hereby agree to negotiate in good faith to finalize an Application Service Provider Agreement, pursuant to which Seller shall host an internet based software
application to be used by SDG&E to initiate demand response events. The initiation of an event via the software application must include the connectivity to activate End-use Equipment located in SDG&E’s service territory.”

  

 -4- 

 12. CONFIDENTIALITY 
 Section 22.6 shall be deleted in its entirety and replaced with the following: “The Mutual Non-Disclosure Agreement between the Parties dated September 15, 2003 (“NDA”) shall continue in full
force and effect for the Term of this Agreement and the obligations thereunder shall survive such Term for the additional periods described in Section 9 thereof. Moreover, the Parties agree to modify the NDA by eliminating SDG&E’s
obligation in Section 2 thereof to identify and clearly label information relating to its customers as being confidential. Such information shall be deemed confidential with or without such identification or label. 
 13. EQUIPMENT INSTALLATION AND MAINTENANCE SCOPE OF WORK 
 Appendix B shall be modified by deleting the following sentence “This equipment will be delivered to the San Diego area and installed at a location determined by SDG&E” and replacing it with “This equipment will be
installed at a facility chosen by Comverge.” 
 14. NOTICES 
 That portion of Appendix C setting forth Notices to Comverge is deleted and replaced with the following: 
 Comverge, Inc. 
 120 Eagle Rock Avenue, Suite 190 
 East Hanover, NJ 07936 
 Attention: Frank J. Evans 
 Fax: (973) 884-3504 
 15. INSURANCE COVERAGE

 The parties agree to modify Appendix D: Insurance Coverage as follows: 
 a) Paragraph 3 shall be deleted in its entirety and replaced with the following: “Workers Compensation: statutory requirements”. 
 b) All of the text of Paragraph 5 until the end of Appendix D shall be deleted in its entirety and replaced with the following: 
 “5. `Umbrella or Excess Liability’ insurance with a limit per occurrence and in the aggregate of Five Million ($5,000,000). 
 Seller shall ensure that the insurance policies required above provide: 
 (i) For sections (1), (2), (4) and (5) SDG&E, and its officers, directors, employees and agents shall be identified as an additional insureds. 
  

 -5- 

 (ii) For sections (1), (2), (3), (4) and (5) Such insurance as afforded by this policy for
the benefit of SDG&E shall be primary as respects any claims, losses, damages, expenses, or liabilities arising out of this Agreement, and insured hereunder, and any insurance or self insurance carried by SDG&E shall be excess
of and noncontributing with insurance afforded by this policy. 
 (iii) The commercial umbrella liability policy shall provide coverage
excess of, and shall drop down in the event the underlying CGL, Business Automobile Liability, and Employers Liability insurance policy limits are exhausted due to claims during the policy term.” 
 15. EXECUTION 
 The signatories hereto warrant and
represent that they have been appropriately authorized to enter into this Amendment on behalf of the Party for whom they sign. This Amendment may be executed in one or more counterparts at different times, each of which shall be regarded
as an original and all of which, taken together, shall constitute one and the same Amendment. 
 16. CONTINUING EFFECT 
 Except as modified by this Amendment, the Agreement shall continue in full force and effect in accordance with its terms. From and hereafter, references
to the Agreement shall mean the Agreement as amended by this Amendment. 
  

									
	SAN DIEGO GAS & ELECTRIC COMPANY	  	 	  	COMVERGE, INC.
					
	By:	  	 /s/ T C Farrelly
	  		  	By:	  	 /s/ Wayne Wren

	Title:	  	E&GP VP	  		  	Title:	  	EVP
	Date:	  	11-16-04	  		  	Date:	  	11.11.2004

 APPROVED as to legal form /s/ A.S. 
  

 -6- 

 APPLICATION SERVICE PROVIDER 
 AGREEMENT 
 BETWEEN 
 SAN DIEGO GAS & ELECTRIC COMPANY 
 and 
 COMVERGE, INC. 
  

 -1- 

 TABLE OF CONTENTS 
  

					
	ARTICLE	  	PAGE
	1.	  	SCOPE	  	1
	2.	  	COMMENCEMENT AND COMPLETION OF SERVICES	  	1
	3.	  	REPRESENTATIVES	  	1
	4.	  	SOFTWARE LICENSE GRANT AND TERMS	  	2
	5.	  	[RESERVED]	  	2
	6.	  	SOURCE CODE ACCESS	  	3
	7.	  	[RESERVED]	  	3
	8.	  	WARRANTY AND SERVICE	  	3
	9.	  	ACCEPTANCE	  	4
	10.	  	TRAINING	  	5
	11.	  	NO SEPARATE COMPENSATION	  	5
	12.	  	[RESERVED]	  	5
	13.	  	NOTICES	  	5
	14.	  	[RESERVED]	  	5
	15.	  	INSPECTION	  	5
	16.	  	COMPANY RULES	  	6
	17.	  	CHANGES	  	6
	18.	  	FORCEMAJEURE	  	7
	19.	  	[RESERVED]	  	7
	20.	  	OWNERSHIP OF INTELLECTUAL PROPERTY AND MATERIAL	  	7
	21.	  	REPORTS	  	7
	22.	  	SUBCONTRACTORS	  	7
	23.	  	[RESERVED]	  	7
	24.	  	AUDIT	  	7
	25.	  	[RESERVED]	  	7
	26.	  	INDEPENDENT CONTRACTOR	  	8
	27.	  	RESERVED	  	8
	28.	  	INSURANCE	  	8
	29.	  	INDEMNITY	  	8
	30.	  	GOVERNING LAW	  	9
	31.	  	COMPLIANCE WITH LAWS	  	9
	32.	  	DEFAULT AND TERMINATION	  	9
	33.	  	[RESERVED]	  	10
	34.	  	LIENS	  	10
	35.	  	ASSIGNMENT	  	10
	36.	  	[RESERVED]	  	10
	37.	  	NON-WAIVER	  	10
	38.	  	DISPUTES	  	10
	39.	  	CONFIDENTIALITY	  	10
	40.	  	[RESERVED]	  	11
	41.	  	TIME OF ESSENCE	  	12
	42.	  	VALIDITY	  	12
	43.	  	SURVIVAL	  	12
	44.	  	NO ORAL MODIFICATIONS	  	12
	45.	  	CAPTIONS	  	12
	46.	  	COUNTERPARTS	  	12
	47.	  	AUTHORITY	  	12
	48.	  	CONSTRUCTION OF AGREEMENT	  	13
	49.	  	ORDER OF PRECEDENCE	  	13
	50.	  	ANTI-CONDUIT RULES	  	13
	51.	  	COMPLETE AGREEMENT	  	13

  

 -1- 

 APPLICATION SERVICE PROVIDER AGREEMENT 
 This Application Service Provider Agreement (“ASP Agreement”) is made effective as of June 15, 2005 (“Effective Date”) among San
Diego Gas & Electric Company (“SDG&E” or “Company”) and Comverge, Inc. (“Contractor” or “Comverge”). 
 The Parties hereby agree as follows: 
 1. SCOPE 
 Contractor shall provide, in accordance with the terms of this ASP Agreement, the following generally described services (the “Services”).

 The Services, including the scope of work, specifications, schedule of milestones and deliverables, and performance standards, are more
fully described in SCHEDULE A - SCOPE OF WORK (hereinafter, the “Scope of Work”), attached hereto and incorporated herein by this reference. 
 This ASP Agreement is entered into pursuant to the Demand Response Capacity Delivery Agreement between SDG&E and Contractor dated October 6, 2003, as amended (the “Demand Agreement”) and the
Services are subject both to the terms hereof and thereof. In the event of any conflict between the Demand Agreement and this ASP Agreement, the former shall control. 
 2. COMMENCEMENT AND COMPLETION OF SERVICES 
 This Agreement shall commence as of June 15,
2005 and shall be in full force and effect so long as the Demand Agreement remains in effect (the “Term”). Contractor agrees to commence and perform the Services in accordance with the requests of Company Representative. The nature of the
Services is such that timely performance is critical to the orderly progress of related work and to the operating schedule of Company. 
 3. REPRESENTATIVES 
 3.1. Company Representative: Mickealia Wilson 
 Company designates, and Contractor accepts, the individual named above as Company Representative for all matters relating to Contractor’s performance
of Services under this Agreement. The actions taken by the Company Representative regarding such performance shall be deemed the acts of Company. Company may at any time, upon written notice to Contractor pursuant to Article 6 hereof, change the
designated Company Representative. 
  

 -1- 

 3.2. Contractor Representative: Fred Bartels 
 Contractor designates, and Company accepts, the individual named above as Contractor Representative for all matters relating to Contractor’s
performance of Services under this Agreement. The actions taken by Contractor Representative shall be deemed the acts of Contractor. 
 4.
SOFTWARE LICENSE AND TERMS 
 4.1 License Grant: It is generally contemplated that all Software, including without limitation field
applications, or other proprietary licensed products, utilized and/or necessary for the performance of and receipt of the Services (the “Software”) shall be used by and run on the hardware systems owned by Contractor. All descriptions
of the Software, reports generated by the Software, or additional Software related documents are collectively referred herein as “Software Documentation”. To the extent that Company is required to Use any of Contractor’s Software or
Software Documentation, subject to the conditions set forth herein and the attached Exhibits and Schedules, Contractor hereby grants to Company, and Company accepts from Contractor for the Term of this Agreement and the Demand Agreement (unless
terminated as stated herein and therein, respectively), a non-exclusive, non-transferable right to Use the Software and Software Documentation as specified herein, installed on the equipment as negotiated by Contractor and Company, solely in
connection with Contractor’s Direct Load Control System. Contractor shall retain ownership of all Software, equipment, and Software Documentation. Such license shall be assignable in connection with any assignment of this ASP Agreement and
pursuant to such assignee agreeing to the terms contained herein. 
 4.2 Use Restrictions: The term “Use” solely means restricted
internet access to the Software’s web based connection by specific SCC operators only for the purpose of instituting a Program Event as defined in the Demand Agreement. Company hereby understands and agrees that (i) Company shall have no
right to copy the Software or any software documentation, except as permitted under this ASP Agreement or Demand Agreement; (ii) in no event may Company physically duplicate the any Software Documentation, in whole or in part;
(iii) Company may not modify the Software or merge the same into software that is not provided by Contractor without the prior written consent of Contractor; (iv) Company shall prevent Unauthorized Use or Unauthorized Access to Software,
(v) Contractor will only use the Software as provided for in this ASP Agreement, and (vi) upon termination of this ASP Agreement or any license granted hereunder, with the exception of Section 6 below, Company shall promptly return
any access rights, pass codes, Software Documentation, any Software related applications or products, or any resulting merger software and Company shall have no right thereafter to Use the Software or any portion thereof. 
 4.3 Consultants: Company may not disclose the Software or related Software documentation to any third party, including consultants of Company, except
upon (i) the prior written consent of Contractor which will not be unreasonably withheld, and (ii) delivery to Contractor of a confidentiality agreement, in form and content acceptable to Contractor, executed by such third party.

 5. [RESERVED] 
  

 -2- 

 6. SOURCE CODE ACCESS 
 6.1. Only if Contractor enters into or petitions for any voluntary or involuntary receivership arrangement, bankruptcy, other insolvency proceeding, or
ceases to be in business„ then Contractor shall fully furnish Company, without charge, with the source code for the Software and related information and documentation available within five (5) business days of event. 
 6.2 Contractor agrees, within 30 days of a written request therefore by Company, to enter into a Source Code Escrow Agreement at Company’s
discretion whereby the Escrow Agent shall be directed by Contractor to promptly deliver, at no charge to Contractor, the source code if Contractor enters into any voluntarily or involuntary receivership, insolvency proceeding or otherwise ceases to
be in business. 
 7. [RESERVED] 
 8. WARRANTY AND SERVICE 
 8.0. Contractor expressly warrants to Company that the Software, Services and System shall
function and be performed in accordance with professional standards, shall be free from material defects in material, workmanship, and title, and shall function in accordance with (1) all requirements set forth in this ASP Agreement and in any
related technical specifications, and (2) current specifications and descriptions published or disseminated by Contractor as performance and/or operational practices commencing on the date of System Acceptance continuing for the entire term.
Notwithstanding the foregoing, Contractor’s breach of such warranty shall only result in Contractor’s obligation to correct such breach but shall not enable Company to exercise any further remedy except to the extent such breach causes a
breach of the Demand Agreement, with the exception that Section 12.1.2(A) of the Demand Agreement only applies in relation to this ASP Agreement if Company is unable to activate the System provided under the Demand Agreement. 
 8.1. Contractor shall maintain the System. Contractor shall provide such repair services and replacement parts as are necessary to keep the System
operating in accordance with the requirements of this ASP Agreement during the operational period as defined in the Demand Agreement, at no additional cost to Company. “System” shall mean the Software, information technology tools produced
by the integrated Software, hardware, and other deliverables furnished hereunder used by Contractor to perform the Services. 
 8.2. An
“Emergency” shall be deemed to exist when System problems materially interfere with (1) Company’s ability to utilize the System as contemplated herein or (2) the normal, reasonable conduct of Company’s business or
(3) when an authorized responsible Company representative declares an Emergency. The persons authorized to declare an Emergency shall be limited and their names or titles shall be mutually agreed on in writing and documented in an escalation
plan, which shall be signed by both Parties. Services requested pursuant to non-Emergency requests are defined as “Routine Service”. Services requested pursuant to emergency requests are defined as “Emergency Service”.

 8.3. When a request for Emergency Service is received from Company, Contractor agrees to cause qualified personnel, as required, to
respond in 
  

 -3- 

 real time and commence analysis of the Emergency within 4 hours of said request, Monday to Friday during business hours
during the control season, as defined by the Demand Agreement. 
 8.4. In the event of an Emergency, Contractor shall: (1) prioritize
Company’s Emergency; (2) escalate within Contractor’s technical and management organizations as necessary to resolve the Emergency; (3) use its best efforts to correct the Emergency within a time designated in the Escalation Plan
from receipt of notice of such Emergency; and (4) maintain continuous effort until the Emergency is corrected to Company’s reasonable satisfaction. 
 8.5. If, as a result of Service performed pursuant to this Section, Contractor concludes that the problem results from a Software or System failure, and that the System’s use is materially affected thereby; then
Contractor shall immediately commence correction procedures on such Software. 
 8.6. Contractor further warrants that (i) for the
entire term, the System and all Software will substantially conform to and operate in accordance with the documentation; (ii) all Software furnished hereunder is free of viruses, worms, or other disabling code; and (iii) Contractor will
not disable the System or Software, unless Company is in breach of the Demand Agreement or Sections 4.2 or 39. Notwithstanding the foregoing, Contractor’s breach of such warranty shall only result in Contractor’s obligation to correct such
breach but shall not enable Company to exercise any further remedy except to the extent such breach causes a breach of the Demand Agreement with the exception that Section 12.1.2(A) of the Demand Agreement only applies in relation to this ASP
Agreement if Company is unable to activate the System provided under the Demand Agreement. 
 8.7. WARRANTY DISCLAIMER. THE LIMITED
WARRANTY SET FORTH IN SECTION 8.0 AND 8.6 IS IN LIEU OF ALL OTHER WARRANTIES WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OTHER THAN THE
WARRANTY SET FORTH IN SECTION 8.0 THE SERVICES AND SOFTWARE ARE PROVIDED BY CONTRACTOR “AS IS” AND WITHOUT WARRANTY OF ANY KIND OR NATURE. THIS LIMITATION OF WARRANTY WAS A MATERIAL FACTOR IN THE ESTABLISHMENT OF THIS AGREEMENT.

 9. ACCEPTANCE 
 9.1. Company has a specified annual test as defined in the Demand Agreement to determine if the System performs substantially in accordance with its capability to perform load control. Company shall notify Contractor, in writing, of its
acceptance of the System or specify in reasonable detail those deficiencies which Company deems unacceptable within thirty (30) days of notice of System test completion. The System shall not be accepted until all such deficiencies are
corrected. Contractor shall notify Company in writing when the deficiencies have been corrected. Company shall have fifteen (15) days to respond otherwise System shall be deemed acceptable. System Acceptance shall not be unreasonably withheld.

 9.2. Contractor agrees that it will correct any nonconformities of the System to the requirements of this ASP Agreement or any related
technical specifications (“System Flaws”) or Bugs in the Software and any revisions to the 
  

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 Software which are reported to Contractor by Company. A “Bug” shall mean a reproducible failure in the Software
which the Company and Contractor reasonably determine is likely to adversely impact the timely and correct completion of the Services to be accomplished that is contemplated in this agreement. System Flaws or Bugs that prohibit the defined function
of tools must be corrected within five (5) business days. Additionally, System Flaws or Bugs that relate to incorrect construction of design specifications or a basic malfunction of existing defined functionality must be corrected within seven
(7) business days. Each of such time periods shall apply whether or not there is a defined workaround. 
 10. TRAINING

 10.1. Training sessions will be conducted and shall include hands-on training utilizing trainers describing and demonstrating function,
activation and application of the System. Up to three (3) training sessions may be conducted in April and May of each program year. 
 11. NO SEPARATE COMPENSATION 
 As there is no further financial obligation or additional risk accepted by Contractor
in this ASP Agreement, no separate compensation shall be payable to Contractor pursuant to this ASP Agreement. All compensation payable to Contractor is described in the Demand Agreement. The consideration for this Agreement is found in the Demand
Agreement payment and service structure. 
 12. [RESERVED] 
 13. NOTICES 
 All notices
hereunder shall be provided in accordance with Section 13.1 of the Demand Agreement. 
 14. [RESERVED] 
 15. INSPECTION 
 All Services
performed by Contractor, as well as the System and facilities in which it is housed, shall be subject to the inspection of Company at mutually agreeable times. Contractor shall allow Company to conduct inspection once a year at Company’s cost
in a manner that does not affect production operations. To ensure operational integrity during the crucial control months of May through October, inspection will not be permissible. Such right of inspection of the Services shall not relieve
Contractor of responsibility for the proper performance of the Services, Contractor shall provide to Company (or its designee) access to Contractors facility or facilities where the Services are being performed and sufficient, safe and proper work
conditions for such inspection. Contractor shall furnish to Company such information (subject to Article 39 where applicable) concerning its operations or the performance of the Services or System as Company shall reasonably request, and in a manner
that shall not compromise Contractor’s intellectual property. 
  

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 16. COMPANY RULES 
 16.1. Contractor, when on Company property, shall conduct its operations in strict observation of access routes, entrance gates or doors, parking and
temporary storage areas as designated by Company. Under no circumstances shall any of Contractor’s personnel, vehicles or equipment enter, move or be stored upon any area not authorized by Company. 
 16.2. Contractor shall abide by all Company Security procedures, rules and regulations, and cooperate with Company Security personnel whenever on Company
premises, as provided by Company prior to such visit to the premises. 
 17. CHANGES 
 17.1. Either Company or Contractor may propose an amendment (“Amendment”) in the Services (whether in the form of an amendment to this ASP
Agreement or to the Demand Agreement) by advising the other Party in writing. Within five (5) days of notice of such proposal, Contractor shall prepare and forward to Company in writing the proposed changes to the Scope of Work and/or
compensation payable as a result of the proposed Amendment. 
 17.2. Should the proposed Amendment be authorized by the Parties, Contractor
shall perform the Services as changed. All authorized changes in the Services and the compensation shall be confirmed and directed through a written Amendment. The compensation shall be negotiated by the Parties in good faith to achieve a
commercially reasonable result which include all costs associated with the deletion or performance of the additional or changed Services, including the impact on the original Scope of Work, inefficiencies created by the additional, deleted or
changed Services, and overhead associated with the additional, deleted or changed Services. 
 17.3. Company may request in writing from time
to time, minor changes or revisions within the existing Scope of Work as agreed to by both Parties, if the changes do not materially affect the cost of providing such Services, without Company having to process an Amendment and without such changes
altering the compensation payable under this Agreement. 
 17.4. As Contractor owns the application, Contractor shall implement a change in
the Services while performing emergency service or for any purpose that is non event impacting. Any change that materially affects the Service will be implemented only after Contractor has received a written Amendment to this Agreement executed by
an authorized representative of Company. All changes shall be performed under the terms and conditions of this Agreement. Contractor hereby expressly waives any compensation, reimbursement of expenses and any other right to receive payment with
respect to any proposed Amendment not authorized by a written Amendment to this Agreement. 
  

 -6- 

 18. FORCE MAJEURE 
 The Force Majeure provisions (Article 14) of the Demand Agreement shall apply hereunder as well. 
 19. [RESERVED] 
 20.
OWNERSHIP OF INTELLECTUAL PROPERTY AND MATERIAL 
 20.1. As the owner of the System, Contractor shall retain all rights to
intellectual property thereof. 
 20.2. If requested by Company, with reasonable cause, Contractor agrees to take all actions necessary, at
Company’s sole cost and expense, to obtain, maintain or enforce patents, copyrights, trade secrets and other proprietary rights in connection with any Invention, and Contractor agrees that its obligations under this Article 20 shall continue
beyond the termination or completion of this Agreement. 
 21. REPORTS 
 Contractor shall provide reports as requested by Company Representative in accordance with the Demand Agreement. 
 22. SUBCONTRACTORS 
 If Company
authorizes Contractor to utilize any subcontractors under this Agreement, Contractor shall at all times be responsible for the acts and omissions of subcontractors and agents employed directly or indirectly by Contractor. Contractor shall be
responsible for performance of all the Services, whether performed by Contractor or its subcontractors or agents. This Agreement shall not give rise to any contractual relationship between Company and any subcontractor or agent of Contractor.
Company shall not undertake any obligation to pay or to be responsible for the payment of any sums to any subcontractor or agent of Company. 
 23. [RESERVED] 
 24. AUDIT 
 Audit requirements are defined in the Demand Agreement and those audit requirements apply hereunder. 
 25. [RESERVED] 
  

 -7- 

 26. INDEPENDENT CONTRACTOR 
 26.1. It is agreed that Contractor shall perform the Services under this ASP Agreement as an independent contractor and no principal-agent or employer-
employee relationship or joint-venture or partnership shall be created with Company. 
 26.2. Contractor represents to Company that
Contractor and its subcontractors and agents are properly licensed, fully experienced and qualified to perform the class and type of the Services as specified in this Agreement, in addition to being properly insured, equipped, organized, staffed and
financed to handle such Services. 
 26.3. Contractor shall perform the Services in an orderly and professional manner in accordance with
industry standards. Contractor shall not employ on the Services any personnel or subcontractor unskilled in the work assigned. 
 26.4.
Contractor shall use prudent business practices in its relationships with subcontractors, suppliers and agents. 
 26.5. Contractor, its
subcontractors and agents shall not engage in any advertising, publicity or other promotional activities which in any way directly or indirectly refers to this ASP Agreement. 
 27. [RESERVED] 
 28.
INSURANCE 
 Insurance requirements are described in the Demand Agreement and those insurance requirements apply hereunder

 29. INDEMNITY 
 29.1. Indemnification obligations of each party are described in the Demand Agreement and those indemnification obligations apply hereunder. Without limiting the generality of the foregoing, Contractor shall, all subject to the procedures
in Article 17 of the Demand Agreement, indemnify, defend and hold Company, and its current and future Affiliates and their respective directors, officers, shareholders, employees, agents, representatives, successors and assigns harmless from and
against any and all claims, actions, suits, proceedings, losses, liabilities, penalties, fines, damages, costs or expenses including attorneys fees (including fees and disbursements of in-house and outside counsel) of any kind whatsoever arising
from (a) actual or alleged infringement or misappropriation by Contractor or any subcontractor of any patent, copyright, trade secret, trademark, service mark, trade name, or other intellectual property right in connection with the Services or
Software, including without limitation, any deliverable, and (b) Contractor’s violation of any third party license to use intellectual property in connection with the Services or Software, including, without limitation, any
deliverable(“IP Indemnification”). Any Indemnification under the Demand Agreement shall not extend to any claim based on any alleged infringement arising from any (a) additions, changes, or modifications to the Services or Software by
or on behalf of anyone other than Contractor, (b) incorporation of the Services or Software, or any component thereof into any other product or process not performed by Contractor except as contemplated by the Scope of Work; or (c) use of
the Services or Software other than as permitted by this Agreement. 
  

 -8- 

 29.2 Indemnification obligations of each party are described in the Demand Agreement and those
indemnification obligations apply hereunder. Without limiting the generality of the foregoing, Company shall, all subject to the procedures in Article 17 of the Demand Agreement, indemnify, defend and hold Contractor, and its current and future
Affiliates and their respective directors, officers, shareholders, employees, agents, representatives, successors and assigns harmless from and against any and all claims, actions, suits, proceedings, losses, liabilities, penalties, fines, damages,
costs or expenses including attorneys fees (including fees and disbursements of in-house and outside counsel) of any kind whatsoever arising from (a) breaches of Company’s confidentiality obligations hereunder; or (b) Company’s
use of any of the Software other than in accordance with the terms of this Agreement. 
 30. GOVERNING LAW 
 The formation, interpretation and performance of this Agreement shall be governed by and enforced under the laws of the State of California, without
reference to principles of conflicts of laws. 
 31. COMPLIANCE WITH LAWS 
 Company and Contractor and its subcontractors at all times during performance of the Services shall comply with and observe, all applicable federal,
state, regional, municipal and local laws, ordinances, rules, codes, regulations, executive orders, all applicable employment, safety and environmental orders and all orders or decrees of administrative agencies, courts or other legally constituted
authorities having jurisdiction or authority over Contractor, Company or the Services. 
 32. DEFAULT AND TERMINATION

 32.1 Default and termination provisions are described in the Demand Agreement and shall also apply and, if constituting an Event of Default
thereunder, result in a default hereunder. Moreover, if Contractor shall fail to comply with any material obligation under this ASP Agreement, which failure would result in a breach by Contractor of its obligations under the Demand Agreement, such
failure shall, unless cured within 30 days of written notice thereof, constitute a default hereunder and constitute an Event of Default under the Demand Agreement. 
 32.2 Default and termination provisions are described in the Demand Agreement and shall also apply and, if constituting an Event of Default thereunder, result in a default hereunder. Moreover, if Company shall fail to
comply with any material obligation under this ASP Agreement, which failure would result in a breach by Contractor of its obligations under the Demand Agreement, such failure shall, unless cured within 30 days of written notice thereof, constitute a
default hereunder and constitute an Event of Default under the Demand Agreement. Any breach by Company of Sections 4.2 or 39 of this ASP Agreement shall result in an automatic breach or automatic Event of Default under the Demand Agreement, subject
to, in the case of a breach of Section 4.2, a 30 day cure period from Contractor’s provision of notice of such breach. 
  

 -9- 

 33. [RESERVED] 
 34. LIENS 
 Without limiting
the generality of Article 29, Contractor shall indemnify, defend, and hold Company, and its current and future Affiliates and their respective directors, officers, shareholders, employees, agents, representatives, successors and assigns harmless
from and against any mechanics lien or stop notice claim against Company by Contractor or its subcontractors, employees or agents pertaining to the Services specified in this ASP Agreement. 
 35. ASSIGNMENT 
 The assignment
provisions (Article 19) of the Demand Agreement shall apply hereunder as well. Assignments of this ASP Agreement to parties to whom assignment of the Demand Agreement may be made without consent shall not require Contractor’s consent.

 36. [RESERVED] 
 37. NON-WAIVER 
 The failure of Company or Contractor to insist upon or enforce, in any instance, strict performance
by the other party of any of the terms or conditions of this Agreement, or to exercise any rights herein conferred shall not be construed as a waiver or relinquishment to any extent of its right to assert, or rely upon any such terms or rights on
any future occasion. No waiver shall be valid unless stated in writing asset forth in Article 13. 
 38. DISPUTES 

The Dispute resolution and governing law provisions of the Demand Agreement (Sections 13.7 and 22.13) shall apply hereunder as well 
 39. CONFIDENTIALITY 
 The
Confidentiality provisions of the Demand Agreement (Section 22.6) shall apply hereunder as well. In addition, the Parties agree: 
 39.1
Ownership and Title: Company acknowledges and agrees that Contractor owns all proprietary rights, including patent, copyright, trade secret, trademark and other such proprietary rights, in and to the Software and Software documentation and
any corrections, remedial modifications, maintenance upgrades, updates or the other modifications, including custom modifications to the Software whether made by Contractor, Company or any third party. 
  

 -10- 

 39.2 Confidentiality/ Protection of Software: Except as permitted pursuant to this ASP Agreement,
Company hereby acknowledges and agrees that: (i) the Software, the Software Documentation, access rights to the Software, and all related documents and all copies thereof are Contractor’s exclusive property and constitute a valuable
TRADE SECRET of Contractor (“Proprietary Information”), Company may not disclose or make available to third parties (other than to (a) its audit, information security and information technology maintenance agents, contractors,
or advisors (b) its affiliates, for purposes of assisting it in receiving the Services or (c) third parties who have been previously approved in writing by Contractor (collectively, “Third Parties”) the Proprietary Information or
any portion thereof without Contractor’s prior written consent; (ii) Company shall hold the Proprietary Information, including, without limitation, any methods or concepts utilized therein, in strict confidence for the sole benefit of
Contractor; (iii) Company shall not provide or make the Proprietary Information available to any person except for its employees or Third Parties; (iv) Company shall only provide or make the Proprietary Information available to its
employees or Third Parties on a ‘need to know’ basis; (v) Company shall not reproduce, copy or modify the Proprietary Information in whole or in part, except as authorized by Contractor in writing; (vi) Company hereby agrees
that, during the Term of this ASP Agreement and at all times thereafter, Company and its employees and Third Parties shall maintain the confidentiality of the Proprietary Information, and Company shall not sell, license, publish, display,
distribute, disclose or otherwise make the Proprietary Information available to any third party or attempt to (or allow any third-party to attempt to) reverse engineer, decompile or disassemble or otherwise attempt to derive the source code for the
operation of the Proprietary Information, or to decode, de-encrypt, decrypt or engineer around any measures contained in the Proprietary Information; (vii) Company shall not alter in any way the database schema without the expressed written
consent of Contractor; (viii) Company shall issue adequate instructions to all persons, and take all actions reasonably necessary to satisfy Company’s obligations under this Section 39; (ix) any use or disclosure of the
Proprietary Information in violation of this Section 39 may seriously and irreparably impair and damage Contractor’s business; and (x) upon any termination or cancellation of the ASP Agreement, Company shall, if requested by
Contractor, forthwith return to Contractor, or with Contractor’s written consent destroy, any access rights, passwords, magnetic tape, disc, semiconductor device or other memory device or system and/or documentation or other material including,
but not limited to, all printed material furnished by Contractor to Company. 
 39.3 Restrictions on Transfer: Except in connection
with a permitted assignment under Article 35, in no event shall Company sell, assign, license, sublicense, and except as permitted under this Article 39, publish, display, distribute or otherwise transfer the Proprietary Information, in whole or in
part, to any third party (including, without limitation, Third Parties), or as part of the sale of any portion of its business or pursuant to any merger, sale of voting securities, consolidation or reorganization, without the Contractor’s prior
written approval. 
 39.4 Continuation: The terms and provisions of this Section 39 shall survive termination of this ASP
AGREEMENT. 
 40. [RESERVED] 
  

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 41. TIME OF ESSENCE 
 Time is expressly agreed to be of the essence of this ASP Agreement and each, every and all of the terms, conditions and provisions herein. 
 42. VALIDITY 
 The invalidity,
in whole or in part, of any provisions hereof shall not affect the validity of any other provisions hereof. 
 43. SURVIVAL 

 Without limiting the survival provisions of the Demand Agreement, the obligations imposed on Contractor and Contractor’s employees
by and pursuant to each Article which, by its terms contains subject matter which relates to time periods subsequent to the term of this Agreement shall survive termination of this Agreement. 
 44. NO ORAL MODIFICATIONS 
 No
modification of any provisions of this ASP Agreement shall be valid unless in writing and signed by duly authorized representatives of both Parties. Company Representative is not the duly authorized representative for Amendments to this ASP
Agreement. Representatives of both Parties internally authorized to execute such documents pursuant to its corporate policies shall sign any Amendments. 
 45. CAPTIONS 
 The captions in this ASP Agreement are for convenience and reference only and
the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. 
 46. COUNTERPARTS 
 This ASP Agreement may be executed in counterparts which, taken together,
shall constitute a single instrument. 
 47. AUTHORITY 
 Each individual executing this ASP Agreement on behalf of Company and Contractor represents and warrants that he or she is duly authorized to execute and
deliver this Agreement on behalf of said Party, and that this Agreement is binding upon said Party in accordance with its terms and conditions. 
  

 -12- 

 48. CONSTRUCTION OF AGREEMENT 
 Both Parties have participated in the negotiating and drafting of this Agreement. Therefore, the terms and conditions of this Agreement shall not be
construed against either Party as the drafting Party. 
 49. ORDER OF PRECEDENCE 
 In the event of conflicting provisions between any of the documents comprising this Agreement, the provisions shall govern in the following priority
order: 
  

	 	(1)	The Demand Agreement and any Duly Executed Amendments (most recent has priority) 

  

	 	(2)	The Terms and Conditions of this Agreement 

  

	 	(3)	Any Schedule or Exhibit referenced in this Agreement 

 50. ANTI-CONDUIT RULES 
 A copy of the Affiliate Transaction Rules including, without limitation, the anti-conduit
procedures contained therein (“Rules”) shall be provided to Contractor before execution of this Agreement to allow Contractor time to review such Rules. 
 51. COMPLETE AGREEMENT 
 This Agreement constitutes the complete and entire Agreement between
the Parties and supersedes any previous communications, representations or agreements, whether oral or written, with respect to the subject matter hereof. There are no additions to, or deletions from, or changes in, any of the provisions hereof, and
no understandings, representations or agreements concerning any of the same, which are not expressed herein, unless stated below. THE PARTIES HEREBY AGREE THAT NO TRADE USAGE, PRIOR COURSE OF DEALING OR COURSE OF PERFORMANCE UNDER THIS AGREEMENT
SHALL BE A PART OF THIS AGREEMENT OR SHALL BE USED IN THE INTERPRETATION OR CONSTRUCTION OF THIS AGREEMENT. 
 The following Schedules are attached
hereto and incorporated herein by this reference: 
 SCHEDULE A - SCOPE OF WORK 
  

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 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

  

							
	COMVERGE, INC.	 	SAN DIEGO GAS & ELECTRIC COMPANY
				
	By:	 	 /s/ Frank J. Evans
	 	By:	 	 /s/ Eric Thomason

	Name:	 	Frank J. Evans	 	Name:	 	Eric Thomason
	Title:	 	Sr Director of Operations	 	Title:	 	Portfolio Manager
	Date:	 	3-9-06	 	Date:	 	04/05/06
				
		 		 		 	Approved as to legal form:
				
		 		 		 	 /s/ GOP
  

  

 -14- 

 Schedule A - Scope of Work 
 1.0 Introduction 
 This Scope of Work describes Comverge’s Demand Response Load Management System (LMS) and the
practices and guidelines that both parties shall use to execute their respective responsibilities according to this Application Service Provider Agreement. 
 Services provided by Comverge are understood to be on a paid for performance basis whereby SDG&E has agreed to purchase from Comverge contract capacity and energy reduction as delivered by Comverge’s Load Management System.

 Comverge shall supply the Load Management System and provide access to SDG&E via the web using a standard web browser. Accessing the LMS does not
require the use of Comverge software or equipment. Comverge shall adhere to the guidelines defined herein in providing a secure environment for the hosting of SDG&E customer data. Comverge is providing a LMS with failover capability and with
back up to a third LMS. 
 As owner of the LMS, Comverge may, at its sole discretion, change the architecture to ensure a more robust, stable or secure
network environment, or create improvements to the website architecture to provide more enhanced services to SDG&E. 
 COMVERGE ASP RESPONSIBILITIES

 Comverge shall use good industry practices to design, deploy, operate, manage, and maintain this LMS. Comverge will supply all equipment and services
to ramp up to the load relief goal over a two to five year period, and then operate and maintain the system for the period specified by the terms of the program. 
  

	 	1.	Comverge will be responsible for configuring and programming the load management system to be able to cycle the air conditioners by system, by region, by substation or by circuit
according to the parameters established by SDG&E. 

  

	 	2.	Comverge will provide SDG&E access to the LMS through a web-based application interface over the Internet between SDG&E’s System Operations Center and the Comverge LMS
facility. Alternatively, Comverge will activate the system as directed by SDG&E though a telephone call, fax, or e-mail. 

  

	 	3.	Comverge shall provide the PowerCAMPTM LMS. 

  

	 	4.	Comverge will develop and provide a LMS Customer Operations Manual specific to the SDG&E demand response LMS. 

  

	 	5.	Comverge will create logon id’s and initial passwords for personnel designated by SDG&E to have access to the LMS. Comverge will send these to the appropriate SDGE
personnel via the mail. 

  

	 	6.	Comverge will provide password resets to authorized SDG&E personnel following a 2 step verification process. 

  

 -15- 

 SDG&E ASP RESPONSIBILITIES 
 This section defines the ASP responsibilities that SDG&E has regarding the design, implementation, and ongoing support of the LMS. 
  

	 	1.	SDG&E shall provide to Comverge the customer data necessary to set up and maintain current and accurate information used by the LMS. 

  

	 	2.	SDG&E shall determine the scheduling, groups, and activation of the LMS in dispatching LMS test and control event. SDG&E LMS operators shall have the right to determine the
dispatch control of the participating facilities according to the operating parameters defined by the Program Event set forth in the Demand Response Capacity Agreement. 

  

	 	3.	SDG&E shall dispatch control events. 

  

	 	4.	SDG&E shall provide PCs with internet connectivity and Microsoft Internet Explorer (v.5.5 or above) at their SCC to enable users to log into the PowerCAMPTM LMS via the web
interface. 

  

	 	5.	SDG&E will notify Comverge who should have access to the system. Any load control event, scheduled by SDG&E personnel with a valid logon id and password shall be considered
a valid event. 

  

	 	6.	SDG&E will promptly notify Comverge in writing of personnel who should no longer have access, and Comverge will work to promptly ensure that access is no longer allowed by that
users. 

  

	 	7.	SDG&E shall provide the metering design, as well as the equipment and installation for performing Measurement & Verification. SDG&E may at its option and cost
utilize Comverge M&V Sentry to perform Measurement & Verification services to enable near real time feedback for the load shed. 

 2.0 LMS System Function, Components & Interfaces 
 This section describes load cycling as the main function of the LMS and the major
functional components and high level system interfaces of the LMS. 
 2.1 LMS SYSTEM OVERVIEW 
 The LMS is a network consisting of devices which are remotely controlled over RF transmission equipment by the PowerCAMPTM LMS or equivalent. SDG&E shall have
access to the LMS via the web interface. Comverge shall have access to the LMS via the PowerCAMPTM LMS local control monitor and through the web interface. 
 Figure 1 
  

 -16- 

 

 
 2.2 CONTROL DEVICES. 
 Comverge shall supply and retain ownership of its DCU as the control device used to switch loads on and off remotely in response to commands from the PowerCAMPTM LMS for controlling the load of end use equipment
at participating facilities. 
 2.3 POWERCAMPTM LMS 
 The PowerCAMPTM LMS shall include the software and hardware necessary to manage the DCU installed at the end use equipment at participating facilities. 
 The PowerCAMPTM LMS includes Comverge’s PowerCAMPTM Server and PowerCAMPTM Suite, networking equipment, and third party software.

     Power CAMPTM LMS Hardware 
     PowerCAMPTM LMS Servers - Two (Primary and Secondary) 
  

	 	a.	Rack-mounted Dell PowerEdge servers for scalable expansion. 

  

	 	b.	Disks in RAID mode for fault tolerance and high availability 

  

	 	c.	One GB RAM 

  

	 	d.	Ethernet Interface 

  

	 	e.	Serial Port 

  

	 	f.	Windows 2003 Operating System 

     PowerCAMPTM LMS Software 
  

	 	a.	Comverge’s PowerCAMPTM LMS (LMS) Software - Visual Basic, Microsoft Jet DB Engine 

  

	 	b.	Comverge PowerCAMPTM LMS Web Interface - Apache/Tomcat on Microsoft SQL Server 

 2.4 TRANSMITTER SITE EQUIPMENT 
 The
PowerCAMPTM LMS shall use Radio Frequency (RF) paging transmission to communicate to the DCUs installed at participating facilities. Comverge shall contract with a local paging company to provide the primary transmitter network. Comverge
may also contract with a paging company to provide back up RF transmission capability. 
  

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 The PowerCAMPTM LMS shall connect through SNPP over TCP/IP to the Paging Partner. 
 2.5 OPERATIONS OVERVIEW 
 An operator at
SDG&E’s System Control Center (SCC) uses a computer at the SCC to interface via the internet with the LMS. Commands issued by the SDG&E Operator are then managed by the PowerCAMPTM LMS and issued to the radio transmitter network and
are then transmitted to the selected DCUs at the participating facility. 
 The graphical user interface, designed to organize the switches into logical
groups to simplify load management. Control strategies, control group addresses, and control parameters are user set within the PowerCAMPTM LMS 
 Based
on the specific load control strategy that is implemented, the PowerCAMPTM LMS will broadcast addressing and cycling information to the communications system. The communication system will then broadcast this information to the various control
switches. 
 2.6 POWERCAMPTM LMS WEB INTERFACE 
 Help Feature 
 Help may be accessed by clicking on the Customer Service button near the bottom of the main PowerCAMPTM
screen. This displays an email window addressed to Comverge Technical Services, where SDG&E can send comments or question. 
 Logging into Web Control
Application 
 Users log into the LMS via a secure Web interface. 
 *** 
  

	 	1.	In the welcome screen, type your username and password, and click the log-in button. 

 Note: Comverge initially creates usernames and pre-expired passwords for an authorized list of SDG&E users. Users will be forced to change their password upon first login. Passwords will have a 90-day
expiration cycle. 
 Creating a Load Control Schedule 
 SDG&E
will have the ability to create a load control schedule, using the PowerCAMPTM web interface. Events can be scheduled for the entire district, or by substation or by individual circuit. 
 After logging into the PowerCAMPTM LMS, the system displays the main screen, where load control periods may be scheduled. SDG&E shall define the coverage area
for the dispatch event. SDG&E will then specify the date, time and duration of the control event by using the calendar function in the LMS Web Interface. 
 The web interface will display confirmation of the subset of selected control targets and the selected time, date and duration. 
  

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 Scheduling Control Events 
 Once a schedule has been created, SDG&E may then submit that schedule to the LMS to be activated as a dispatch control event. Within two minutes the system will processes the schedule and updated system status will be available.

 Dispatching Control Events 
 Once a control event has been scheduled by SDG&E the PowerCAMPTM LMS will execute that control event by dispatching control commands via the RF network to the DCUs connected to the participating facility’s A/C unit. Once
PowerCAMPTM LMS issues the control event all participating facilities will be controlled within 10 minutes. 
 Monitoring System Status 
 PowerCAMPTM Web provides the ability for SDG&E to monitor the status of all currently submitted control schedules through the System Status tab on the main menu.
The status screen displays all current and future schedules that are in the system beginning at 00:00:00 hours (midnight) of the current day. 
 Once a
schedule begins to execute, PowerCAMPTM Web will report the time remaining for that control period. 
 The Status field shows the current status of each
scheduled event, which can be any of the following: 
  

			
	 Status
	  	 Description

	Inactive	  	No schedule submitted
		
	Pending	  	Schedule was submitted, but load control has not begun
		
	Executing	  	The system is under load control as specified in the schedule
		
	Done	  	The system finished executing the load control schedule
		
	Restoring	  	After executing the schedule, the system is updating the database
		
	Error	  	There was error in processing this schedule

 LMS Logging and Reporting Schedule Reports 
 PowerCAMPTM LMS includes extensive logging and PowerCAMPTM LMS Web provides SDG&E with ability to generate daily and monthly reports of the LMS control
schedules. 
 2.7 CONFIRMING COMMERCIAL OPERATIONAL CAPABILITY 
 Comverge shall use its Sentry M&V technology and methods as the standard in other Demand Response programs to confirm that the LMS is achieving commercial operations and reliable dispatch. 
 3.0 Data Requirements 
 Comverge will maintain data integrity and
security as established by this ASP Agreement. 
  

	 	1.	SDG&E provides the initial customer data to Comverge. A secure method of file transfer shall be provided by both SDG&E and Comverge. 

  

 -19- 

	 	2.	Comverge shall use this data to create the following databases: 

  

	 	a.	Marketing CRM. 

  

	 	b.	PowerCAMPTM LMS 

  

	 	c.	PowerCAMPTM Web Module 

  

	 	d.	Call Center 

  

	 	3.	The Comverge Call Center will be the focal point for all participant enrollments and for the dispatch of installation/removal of DCUs. During the program any customer activity that
is conducted by the Call Center for additions, changes, or removals will be documented in the Call Center database and provided as weekly updates to the PowerCAMPTM LMS and PowerCAMPTM Web Module databases. As well, these updated records
will be provided to SDG&E. 

 These updates will include: 
  

	 	a.	Adding new customer records as participants enroll. 

  

	 	b.	Recording the installation, activation, and/or removal of DCUs. 

  

	 	c.	Recording changes to existing customer records; including removal from program. 

 4.0 Exchanging SDG&E Customer Data with Comverge 
 SDG&E and Comverge shall exchange Demand Response participant information. All
data at every stage of this process is maintained in a secure state in compliance with SDG&E’s data encryption policy and secure transmission procedures for proprietary customer information: 
 Every week, SDG&E sends Comverge an encrypted version of each of the following files: 
  

	 	•	 	Customer records 

  

	 	•	 	Distribution network information regarding the customers’: 

  

	 	•	 	Sub-station 

  

	 	•	 	Circuit 

  

	 	•	 	Customer identification 

  

	 	•	 	Premise identification 

  

	 	•	 	Demand Response participants who are no longer SDG&E customers 

 Comverge re-encrypts the files and distributes them for internal use by various Comverge business units for marketing, installation and operational activities. 
 Comverge provides the updated customer data from the Installation file to the Comverge PowerCAMPTM server for daily operation and control activities.

 Comverge returns an updated file to SDG&E. 
 SDG&E uses the updated files it receives back from Comverge to update its customer database. 
 To ensure that customer
privacy and data security needs are not compromised throughout this process, Comverge has developed a robust encrypted data transfer procedure. 
  

 -20- 

 4.1 WHERE DATA IS STORED 
 Data is stored in the locations in the table below: 
  

			
	Comverge VPC CRM DB.	 	Comverge Network File Server
		
	PowerCAMPTM LMS Web Module DB	 	Comverge Network PowerCAMPTM LMS Web Server
		
	PowerCAMPTM LMS Suite DB	 	PowerCAMPTM LMS Server
		
	Call Center DB	 	Call Center Network File Server

 4.2 DATA FLOW 
 

 
  

 -21- 

 5.0 System Management 
 Comverge will adhere to the following policies, standards, guidelines, and procedures, as well as technical enforcement mechanisms. 
 Figure 2 
 

 
 5.1 GENERAL SECURITY AUDIT SERVICES 
  

	 	1.	Comverge will allow Sempra energy to conduct -security audits once a year at Sempra’s cost in a manner that does not affect production operations. To ensure operational
integrity during the crucial control months of May through October, audits will not be permissible. 

  

	 	2.	PowerCAMPTM (LMS) will be hosted out of a Class -1 Data Center. SDG&E will be provided access to a secure ftp server to which utility customer information can be transferred
Data will be uploaded to a CRM application in the Data Center. Comverge Marketing, Call Center partner as well Installation Groups will acquire data either through a secure on-line interface or through PGP encrypted files. 

 

	 	3.	As a security measure, Comverge will take every commercially reasonable effort to disable all or part of the functionality of the application when Comverge confirms that a security
breach has occurred, 

  

 -22- 

 5.2 PHYSICAL SECURITY AUDIT SERVICES 
 Comverge will have controls in place to provide reasonable assurance that physical security over computer and network files, programs, and data is restricted to authorized individuals 
  

	 	1.	Servers and network equipment hosting Sempra Energy data will be located in a locked cabinet in a class-1 data center. Key access to cabinet is restricted to Comverge approved
personnel. Data center uses badge scans AND biometric (fingerprint) identification to authorization / authentication. 

  

	 	2.	Comverge will use good judgment and be sensitive to Sempra Energy’s request to revoke or disapprove individuals’ access to environments hosting applications for Sempra
Energy. 

  

	 	3.	Comverge will disclose who amongst their personnel will have access to the environment hosting the application for Sempra Energy. A list of all persons having access shall be
forwarded to the Information Protection Manager prior to access being granted. Sempra reserves the right to require evidence of successful background investigations or other security checks prior to approving access. Comverge will assume, unless
specifically informed by SDG&E, that everyone that Comverge discloses has access and is approved by SDG&E to work on the SDG&E system. 

  

	 	4.	Comverge will perform standard employment verification and criminal background checks as part of its hiring process. Information can be provided to Sempra upon request

 5.3 NETWORK SECURITY INFORMATION PROTECTION 
 Comverge will work to ensure that incoming connections from Comverge will not compromise the overall security posture of the Sempra network perimeter. Steps include: 
  

	 	1.	Data transfer between Sempra Energy and Comverge Inc. will be at least 3DES 168 bit encryption using PGP. 

  

	 	2.	Comverge SFTP servers sit behind the Comverge firewall. Access is authenticated using a public/private key pair generated on the server by Comverge. 

  

	 	3.	Comverge will use dedicated application servers in the Data Center to process data from Sempra Energy. 

  

	 	4.	Comverge uses a Cisco PIX firewall with Intrusion Detection Monitoring and uses known best practices for firewall configuration. 

  

	 	5.	Comverge can demonstrate that it has taken prudent precautions to prevent attacks. 

  

	 	6.	Comverge will provide any Secret keys used for encryption and/or authentication to the Sempra Energy IP Manager or a trusted third party approved by Sempra. All encryption
algorithms used in the processing, transmission, or storage of Sempra data will be disclosed and approved by Sempra’s Information Protection Manager. 

 5.4 HOST SECURITY INFORMATION PROTECTION  
 Comverge will configure servers to minimize the chances that these assets
will become unavailable for use by Sempra Energy, and to minimize compromises to the integrity or confidentiality of Sempra data. Steps include: 
  

	 	1.	Directories on file servers located in the ASP will be password-protected. Passwords shall consist of eight characters or more containing at least two control characters or numbers.
When practicable, passwords will be changed at least every 90 days. 

  

 -23- 

	 	2.	PGP encryption before transmitting sensitive data. 

  

	 	3.	Backup servers using media dedicated to Sempra Energy. In the event that the contract between Sempra and Comverge is terminated, all tapes or media containing Sempra data will be
returned to Sempra immediately. All tapes or other media used to store backups or copies of Sempra data shall be electronically purged by degaussing and writing binary digits into the spaces once occupied by Sempra data. The IP Manager shall approve
media disposal techniques or any exceptions to this provision. 

  

	 	4.	Sempra customer information may be loaded into a highly available database infrastructure which uses redundant arrays. Sempra data will be kept logically separated in its own
database with unique access 

 5.5 DISASTER RECOVERY INFORMATION PROTECTION 
  

	 	1.	Comverge will perform daily backups. Weekly backups will be stored in an off-site secure facility and verifiable by a trusted third party. 

  

	 	2.	Comverge will have written disaster recovery and business continuity plans and procedures, which will be tested annually. These procedures can be submitted for approval and
validation by the Sempra Production Control Manager. 

  

	 	3.	Data Center has power backed up by UPS. Diesel generators are on stand-by in case of prolonged outage. This will ensure continuous and reliable access to data.

 5.6 CHANGE MANAGEMENT INFORMATION PROTECTION 
 Comverge has controls in place to provide reasonable assurance that changes, additions, or modifications to hardware, operating systems, and systems software are managed and controlled so that existing production
systems (hardware operating systems and systems software) are not adversely impacted. These include: 
  

	 	1.	Comverge will document system and process changes. These include detailed implementation plans, time of implementations, duration of outage (if applicable), test plans, back-out
plans, success measurement criteria, and overall risk assessment. 

  

 -24- 

	 	2.	Impacted Sempra entities will be notified of any changes and provide their approval prior to implementation. 

  

	 	3.	All changes involving planned outages to hardware, operating systems and/or systems software will be submitted for approval a minimum of two weeks in advance of the implementation
date. 

 5.7 EVENT MANAGEMENT AND PROBLEM RESOLUTION 
 Comverge has controls in place to provide reasonable assurance that operational problems are identified, followed-up, and resolved. 
  

	 	1.	All operation problems go through a root-cause analysis which will detail required corrective actions. Processes will be in place to make sure that corrective actions are
implemented in prescribed timeframes. Comverge will share relevant information with Sempra. 

  

 -25- 

 5.8 ENVIRONMENTAL CONTROLS 
 Comverge has controls in place to provide reasonable assurance that procedures are established to monitor the environmental equipment protecting Sempra’s Information Technology assets in the data center.

  

	 	1.	The Comverge hosting facility has redundant electrical power capability, adequate UPS service, an emergency power source, and fire protection. 

  

	 	2.	Changes will be coordinated to ensure Sempra’s Information Technology assets are environmentally secure. 

 5.9 NETWORK AND SYSTEM MONITORING 
 Comverge has
controls in place to provide reasonable assurance that networks and processing systems are monitored to provide for notification and escalation of outages or problems. 
 5.10 NETWORK CAPACITY MANAGEMENT AND REDUNDANCY 
 Comverge has or will have controls in place to provide reasonable
assurance that capacity thresholds are maintained above current network utilization and those operations can continue in the event of unplanned disruptions. 
  

	 	1.	Average utilization of network capacity will be maintained at a level which ensures good connectivity to the systems. If the threshold is exceeded on a regular basis, capacity will
be increased to support the requirement. 

  

	 	2.	Primary and back-up server will be hosted out of hosting facility. The data center has network redundancy built in through multiple carriers. Comverge can host a third cold-backup
server at a remote location which can be brought up in case of an emergency 

 5.11 BACK-UP OF SYSTEMS AND CUSTOMER DATA
CONTROL 
 Comverge will perform daily backups. Weekly backups will be stored in an off-site secure facility and verifiable by a trusted third party.

 5.12 IMPLEMENTATION AND MAINTENANCE OF CUSTOMER EQUIPMENT 
 Comverge has controls in place to provide reasonable assurance that equipment is properly implemented through standard system assurance practices and techniques. 
  

 -26- 

 5.13 SYSTEM BACK UP & RECOVERY 
 5.13.1 Server Operations 
  

	 	1.	System configurations backed up on a regular basis and stored off-site. 

  

	 	2.	Each VPC implementation has a primary and secondary server. 

  

	 	3.	Node configurations are kept consistent on both machines 

  

	 	4.	Secondary server is in warm-failover mode and can be brought up at any time. 

  

 -27- 

	 	5.	To provide an additional level of failover, a third server is kept in a warm failover mode at a different geographic location. Processes in place to keep system configuration and
paging terminal communication consistent across all servers. 

 5.13.2 Paging Service 
 Comverge will be using commercially available paging service. *** 
 6.0 Reliability, Availability, and Serviceability 
 6.1 RELIABILITY 
 LMS reliability is monitored and tested by both Comverge and SDG&E. 
 Comverge shall be responsible for conducting routine monitoring and testing of the LMS to ensure equipment is functioning as designed. Monitoring and testing will be performed by Comverge throughout the program year. During the control
season Comverge shall notify SDG&E of these routine system tests. 
 Prior to the start of the control season, SDG&E will conduct an annual test of
the system to ensure the dispatch system is operating as designed. This “Program Test Event” is a single event in April of each program year when participating facilities are called upon for demand reduction by cycling their end-use
equipment on and off in order to test the dispatch system and signal receipt by participating facilities. 
 6.2 AVAILABILITY

 The LMS shall be available to SDG&E for both control and test operations as specified in the Demand Response Capacity Delivery Agreement.

 6.3 SERVICEABILITY 
 Comverge maintains
a trained and knowledgeable technical staff at its technical centers in Newark, California, Norcross, Georgia, and East Hanover, New Jersey. 
 The LMS has
extensive logging and tracking capability. Comverge uses this to proactively monitor all aspects of the LMS to ensure full operability. An automated monitoring system continually monitors the network and issues email alerts as soon as a problem is
detected. 
 Comverge performs and coordinates any required repairs or replacements to any park of the LMS. 
 Comverge proactively repairs any system problems. If a problem affects LMS operations, Comverge will notify SDG&E to explain how long the service may be affected. As
the problem is resolved, Comverge will continue to update SDG&E to ensure that appropriate choices are made to control usage and power during this time period. 
  

 -28-

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