Document:

Agreement for Supplemental Installed Capacity Southwest Connecticut

 Exhibit 10.4 
 *** 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.

 AGREEMENT 
 FOR

 SUPPLEMENTAL INSTALLED CAPACITY 
 SOUTHWEST CONNECTICUT 
 (LRP Resources) 
 Between 
 ISO New England Inc. 
 as agent for the Market Participants in the New England Control Area 
 And 
 Comverge, Inc. 

 Table of Contents 
  

							
	 	  	 	  	Page
	ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION	  	1
		  	1.1	  	Definitions	  	1
		  	1.2	  	Interpretation	  	3
		
	ARTICLE 2 PROVISION OF DEMAND RESPONSE RESOURCE	  	3
		  	2.1	  	Filing of Agreement for FERC Approval	  	3
		  	2.2	  	Permits and Authorizations	  	3
		  	2.3	  	Availability of LRP Resource	  	4
		  	2.4	  	Credit Requirement	  	4
		  	2.5	  	Failure to Make LRP Resource Available	  	4
		  	2.6	  	Interconnection Standards and Costs	  	5
		  	2.7	  	Metering and Verification	  	5
		  	2.8	  	Third Parties	  	5
		
	ARTICLE 3 DELIVERY OF COMMITTED RESOURCE CAPABILITY	  	5
		  	3.1	  	Delivery Requirements	  	5
		  	3.2	  	Supplier Initiated Audit of LRP Resource	  	6
		
	ARTICLE 4 PAYMENT AND SETTLEMENT	  	7
		  	4.1	  	ISO Billing Process	  	7
		  	4.2	  	Supplemental Capacity Payment	  	7
		
	ARTICLE 5 COVENANTS	  	8
		  	5.1	  	Operation and Maintenance	  	8
		  	5.2	  	Insurance	  	8
		
	ARTICLE 6 FORCE MAJEURE EVENTS	  	8
		  	6.1	  	Notice of Force Majeure Event	  	8
		  	6.2	  	Effect of Force Majeure Event	  	8
		  	6.3	  	Remedial Efforts	  	8
		
	ARTICLE 7 REPRESENTATIONS AND WARRANTIES	  	9
		  	7.1	  	Representations and Warranties	  	9
		
	ARTICLE 8 TERM AND TERMINATION	  	10
		  	8.1	  	Term	  	10
		  	8.2	  	Termination	  	10
		  	8.3	  	Effect of Termination or Expiration	  	10
		
	ARTICLE 9 REMEDIES	  	11
		  	9.1	  	Damages and Other Relief	  	11

  

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	ARTICLE 10 MISCELLANEOUS PROVISIONS	  	12
		 	10.1	 	Assignment	  	12
		 	10.2	 	Notices	  	12
		 	10.3	 	Party Representatives	  	13
		 	10.4	 	Effect of Invalidation, Modification, or Condition	  	13
		 	10.5	 	Amendments	  	13
		 	10.6	 	Governing Law	  	14
		 	10.7	 	Entire Agreement	  	14
		 	10.8	 	Independent Contractors	  	14
		 	10.9	 	Counterparts	  	14
		 	  10.10	 	Confidentiality	  	14
		 	   10.11.	 	Beneficiaries	  	14
		 	  10.12	 	Waiver	  	14

  

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 SUPPLEMENTAL INSTALLED CAPACITY AGREEMENT 
 This Supplemental Installed Capacity Agreement (“Agreement”) is entered into as of April 13, 2004, by and between ISO New England Inc. (the
“ISO”), on behalf of the market participants in the New England Control Area (the “Market Participants”), and Comverge, Inc. (the “Supplier”) and, except the Supplier’s obligation pursuant to
Section 2.1, shall become effective on the Effective Date. 
 RECITALS 
  

	A.	The ISO is seeking to improve system reliability within the Southwest Connecticut region (“SWCT”) at times of peak demand and has issued an RFP seeking proposals
for (i) the installation of incremental capacity capable of 10-minute or 30-minute dispatch response (“quick-start capacity”) through the installation of capacity at new sites or incremental quick-start capacity
installed at existing generating resources in SWCT, (ii) customer load reductions through firm load curtailments in SWCT capable of 10-minute or 30-minute dispatch response eligible to participate in the existing Load Response Program
(“LRP”), (iii) emergency generation in SWCT capable of 10-minute or 30-minute dispatch response eligible to participate in the LRP, and (iv) peak-load reducing Conservation and Load Management projects in SWCT.

  

	B.	The ISO is the independent entity responsible for the operation of the New England Control Area, consistent with proper standards of reliability, including administration of the
Open Access Transmission Tariff and the region’s wholesale electricity marketplace. 

  

	C.	The Supplier is a Market Participant or is a Demand Response Provider (as defined in Manual M-LRP Load Response Program Manual (“M-LRP”) (collectively referred to
as “Enrolling Participants”) and has submitted a proposal in response to the RFP that has been accepted by the ISO. 

 NOW THEREFORE, in consideration of the agreements and covenants set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and intending to be legally bound by this Agreement as
of the Effective Date, the Parties covenant and agree as follows: 
 ARTICLE 1 
 DEFINITIONS AND RULES OF INTERPRETATION 
 1.1 Definitions. Except for
terms defined herein, capitalized terms shall be as defined in NEPOOL Market Rule 1. 
 1.1.1 “Agreement” shall have the
meaning set forth in the Preamble. 
 1.1.2 “Committed Capacity Amount” shall mean the megawatt (“MW”) amount for
the LRP Resource shown in Schedule IV hereto. 
 1.1.3 “Contract ICAP Price” shall mean the price expressed in $/MW to be
paid for the Committed Capacity Amount for a month as set forth in Schedule IV. 
 1.1.4 “Customers” means the person or
entities with which the Supplier contracts (directly or indirectly) for the provision of load reduction or emergency generation capacity pursuant to this Agreement. 
  

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 1.1.5 “Effective Date” means the date on which this Agreement is allowed to become
effective without modification by FERC pursuant to the FERC’s February 27, 2004 order in Docket No. ER04-335-000, as such order is clarified or modified by FERC. 
 1.1.6 “Extension Term” shall have the meaning set forth in Section 8.1.2. 
 1.1.7 “FERC” means the Federal Energy Regulatory Commission. 
 1.1.8 “Force Majeure Event” means any act of God, labor disturbance (including a strike, walkout, lockout or other similar labor
dispute), act of the public enemy, war, insurrection, riot, storm or flood, fire or explosion (other than the LRP Resource or any Resource), curtailment of the transmission system (other than due to the LRP Resource, any Resource or Supplier’s
equipment), any order, regulation or restriction imposed by a Governmental Authority, or any other cause beyond a Party’s control. 
 1.1.9 “Governmental Authority” means the government of any nation, state or other political subdivision thereof, including any entity lawfully exercising executive, military, legislative, judicial, regulatory, or
administrative functions of or pertaining to a government. 
 1.1.10 “ICAP” means Installed Capacity. 
 1.1.11 “ICAP Credit Amount” shall be the ICAP amount actually demonstrated by the LRP Resource according to the ISO approved Measurement
and Verification Plan and as defined in Manual M-LRP before any gross-up for the reserve margin, and the MW value of which shall be calculated in accordance with Manual M-LRP and the Metering and Verification Plan. 
 1.1.12 “Initial Term” shall have the meaning set forth in Section 8.1.1. 
 1.1.13 “Law” means any law, treaty, code, rule, regulation, or order or determination of an arbitrator, court or other Governmental
Authority, or any license, permit, certificate authorization, qualification, or approval granted by a Governmental Authority to the extent binding on a Party or any of its property. 
 1.1.14 “LRP Resource” means the aggregate of the Resources (including Emergency Generators) that are able to reduce load as requested by
the ISO within 30 minutes or less in accordance with the LRP as defined in Manual M-LRP and identified in Schedule IV hereto. The LRP Resource must enroll in a LRP providing ICAP credit in order to provide the services contemplated in this
Agreement. 
 1.1.15 “Measurement and Verification Plan” shall mean the Measurement and Verification Plan attached
hereto as Schedule VI as may be amended or modified from time to time. 
 1.1.16 “Party” means either the ISO or Supplier,
as the context requires, and “Parties” means ISO and Supplier, as the context requires. 
 1.1.17 “Proposed Service
Date” shall have the meaning set forth in Schedule IV. 
 1.1.18 “Resource” shall mean Supplier’s
resources that make up the LRP Resource. 
 1.1.19 “Service Date” means the dates upon which the Resources actually become
available for dispatch by the ISO in accordance with Market Rule 1 and the NEPOOL Manuals. 
  

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 1.1.21 “SWCT” shall have the meaning set forth in the Recitals and shall further be
defined to include the region comprised of the 54 cities and towns identified on Schedule III. 
 1.1.22 “Term” shall mean
either the Initial Term or any Extension Term. 
 1.2 Interpretation. In this Agreement, unless otherwise indicated or otherwise
required by the context, the following rules of interpretation shall apply: 
 1.2.1 Reference to and the definition of any document
(including this Agreement, Market Rule 1 and the NEPOOL Manuals) shall be deemed a reference to such document as it may be amended, supplemented, revised, or modified from time to time and any document that is a successor thereto. 
 1.2.2 The article and section headings, and other captions in this Agreement are for the purpose of reference only and do not limit or affect its
meaning. 
 1.2.3 Defined terms in the singular shall include the plural and vice versa, and the masculine, feminine or neuter gender
shall include all genders. 
 1.2.4 Accounting terms used herein shall have the meanings given to them under generally accepted
accounting principles within the United States consistently applied. 
 1.2.5 The term “including” when used herein shall be
by the way of example only and shall not be considered in any way a limitation. 
 ARTICLE 2 
 PROVISION OF DEMAND RESPONSE RESOURCE 
 2.1 Filing of Agreement with FERC. The Supplier acknowledges and agrees that upon execution of this Agreement, Supplier shall file this Agreement with FERC pursuant to the FERC’s February 27, 2004 order in Docket No.
ER04-335-000. 
 2.2 Permits and Authorizations. Supplier must demonstrate that it has obtained all regulatory authorizations and
environmental permits (together, “Permits”) necessary for it to perform its obligations under this Agreement prior to the Service Date. The Supplier will use all commercially reasonable efforts to maintain such Permits through the
Term of the contract. Each Party shall act in good faith toward the other Party when dealing with any Governmental Authority and other third parties regarding matters arising under or in connection with this Agreement, including without limitation,
any informational or other filings submitted to FERC. 
 2.3 Availability of LRP Resource. Supplier will use commercially reasonable
efforts to make the LRP Resource available to respond to the ISO’s instructions in accordance with Market Rule 1 and the NEPOOL Manuals by the Proposed Service Date including obtaining all necessary regulatory authorizations and environmental
permits. 
 2.4 Credit Requirement. On the Effective Date of this Agreement and continuing until thirty (30) days following
Supplier’s last Service Date, Supplier shall provide the ISO with one or more letters of credit in a total amount equal to $***, calculated as one sixth (1/6) of the monthly Contract ICAP Price multiplied by the monthly Committed Capacity
Amount and summed over from the first twelve months after the first Proposed Service Date (the “Credit Amount”), which letter(s) of credit will be substantially in the form specified in the Financial Assurance Policy for NEPOOL Members set
forth in the NEPOOL Tariff issued by one or more domestic or foreign banks whose long term debt is rated at least A- or the equivalent by Standard and Poor’s or Moody’s Investor Services, Inc., modified as necessary to provide the ISO with
authority to draw against such letter(s) of credit for the amount of any liquidated damages assessed under this Agreement. When the LRP Resource demonstrates the level of its ICAP Credit Amount for purposes of Section 2.5.2, and any liquidated
damages for any failure of such LRP Resource to meet the Committed Capacity Amount have been assessed by the ISO and paid by the Supplier, the amount of the letter or letters of credit provided pursuant to this Section 2.4 shall be reduced by an
amount equal to the quotient of ***. 
 2.5 Failure to Make LRP Resource Available. This Agreement imposes liquidated damages on the
Supplier for failure to make the LRP Resource available as follows: 
  

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 2.5.1 Failure to Meet the Proposed Service Date. If the first Service Date fails to occur within
sixty (60) calendar days of the first Proposed Service Date, the ISO, in its sole discretion, may terminate this Agreement by providing five (5) business days notice to Supplier declaring the ISO’s intention to terminate this
Agreement; provided, however, that the ISO shall not have the right to terminate this Agreement for an additional sixty (60) calendar days if such failure is due to a Force Majeure Event. Notwithstanding anything to the contrary contained in
this Section or this Agreement (including, without limitation, a Force Majeure Event), the ISO, in its sole discretion, may terminate this Agreement if the Service Date fails to occur within one hundred twenty (120) calendar days of the
applicable Proposed Service Date by providing five (5) business days notice to Supplier declaring the ISO’s intention to terminate this Agreement. In the event that the ISO terminates this Agreement pursuant to this Section, Supplier shall
pay the ISO the Credit Amount, as liquidated damages. 
 2.5.2 Failure to Meet the August 2005 Committed Capacity Amount. If the
Supplier fails to achieve the Committed Capacity Amount proposed on Schedule IV for August 2005 on or before October 1, 2005, the Supplier shall pay the ISO an amount equal to the Credit 
  

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 Amount multiplied by the quotient of (A) (the Committed Capacity Amount proposed on Schedule IV for August 2005
minus the ICAP Credit Amount for August 2005) and (B) the Committed Capacity Amount proposed on Schedule IV for August 2005, as liquidated damages. 
 2.5.3 Failure to Meet the August 2006 Committed Capacity Amount. If the Supplier fails to achieve the Committed Capacity Amount proposed on Schedule IV for August 2006 on or before October 1, 2006, the
Supplier shall pay the ISO an amount equal to the Credit Amount multiplied by the quotient of (A) (the Committed Capacity Amount proposed on Schedule IV for August 2006 minus the ICAP Credit Amount for August 2006) and (B) (the Committed
Capacity Amount proposed on Schedule IV for August 2006 minus the greater of (i) the ICAP Credit Amount for August 2005 or (ii) the Committed Capacity Amount proposed on Schedule IV for August 2005), as liquidated damages. 
 2.5.4 Limitation on Liquidated Damages. Notwithstanding anything to the contrary set forth in this Section 2.5, Supplier shall not be liable
for liquidated damages pursuant to Sections 2.5.2 and 2.5.3 if (i) the ICAP Credit amount is 80% or more of the Committed Capacity Amount and (ii) the number of customer installations verified by the ISO equals or exceeds the number of
customer installations set forth on Schedule IV. 
 2.6 Interconnection Standards and Costs. Any costs incurred by the Supplier to
obtain Permits, constrict or install load control or load reducing equipment, install required metering equipment, implement ISO approved metering and verification plans including, but not limited to independent audits, engineering analysis and
sub-metering, and take all other steps necessary to provide ICAP by the Proposed Service Date shall be borne solely by the Supplier. 
 2.7 Measurement and Verification. Measurement and verification of the ICAP Credit Amount will be conducted in accordance with the Measurement and Verification Plan. Customer base-line consumption and load reductions will be verified
through the applicable measurement and verification provisions in the Measurement and Verification Plan. 
 2.8 Third Parties.
Supplier may enter into contracts with other entities for provision of all or a portion of the Committed Capacity Amount from the LRP Resource. Supplier acknowledges and agrees that it shall be fully responsible for the acts and omissions of
such third-parties. Nothing in this Agreement shall create any contractual agreement between a third-party and the ISO. The ISO shall have no obligation to make any direct payments to third-parties. 
 ARTICLE 3 
 DELIVERY OF COMMITTED
RESOURCE CAPABILITY 
 3.1 Delivery Requirements. This Agreement imposes requirements on Supplier with regard to the delivery of
the LRP Resource as provided below. 
 3.1.1 During the Term, the Supplier will comply with the ISO’s instructions and will
provide service from the LRP Resource in accordance with Market Rule 1 (including Appendix E) and the NEPOOL Manuals. 
  

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 3.1.2 The Supplier may satisfy its obligations to deliver the LRP Resource under this Agreement
through the use of one or more substitute Resources, subject to ISO approval in its sole discretion (which shall not be unreasonably withheld), if such substitute Resources are equivalent to those originally proposed in Schedule IV and are enrolled
consistent with the criteria set forth in the RFP. Such substitute Resources may be designated after the execution of this Agreement by submitting a revised Schedule IV to the ISO and submitting an appropriate NX-11C form to the ISO for the
substitute Resource. 
 3.1.3 The minimum activation time period guaranteed for the LRP Resource shall be two (2) hours,
provided, however, that the ISO may terminate an event before the end of the two-hour period, in which case, the Supplier may terminate service before the end of the two-hour period. Services are required or must be demonstrated at a minimum, during
on-peak hours defined as 7:00 am to 6:00 pm Monday through Friday on non-holidays from June 1 through September 30. 
 3.1.4
The LRP Resource must participate in those LRP programs for 30-minute notice that offer ICAP credit and will count towards meeting any ICAP requirements. 
 3.l.5 The LRP Resource (and each Resource) must be located within Connecticut Light & Power’s service territory within SWCT and must satisfy all of the eligibility criteria set forth in the RFP.

 3.1.6 Notwithstanding Section 3.1.3, Supplier may make the LRP Resource available from May 16 through September 15
in any calendar year, provided, however, that in such event, payment and settlement shall continue to be made in accordance with Article 4 as if Service has been provided between June 1 and September 30. 
 3.2 Supplier Initiated Audit of LRP Resource. Supplier may request (in writing) a Supplier initiated demonstration of the LRP Resource (the
“Audit”). The ISO will use commercially reasonable efforts to schedule the Audit within ten (10) business days following receipt of Supplier’s written request, or as soon as reasonably feasible thereafter, in light of the
circumstances and the availability of ISO personnel and resources; provided, however, that in the event of a subsequent load response event direction from ISO prior to the completion of the Audit, the LRP Resource will demonstrate its capability by
responding to such load response event direction in lieu of the Audit. The Audit shall be conducted within two (2) business days of the date the Audit is scheduled with the ISO. In the event, Supplier desires to reschedule an Audit, the
Supplier will provide the ISO with as much advance notice as possible. Prior to the scheduling of an Audit, Supplier, at its discretion, may postpone the Audit. After the Audit is scheduled (but before conducted), Supplier may postpone the Audit
only with the prior written consent of the ISO, at its sole discretion, which consent shall not be unreasonably denied (the intent being to schedule the Audit during a peak usage period). Supplier may only make one (1) Audit Request in any
twelve-month period during the Term. Such Audit will be conducted in accordance with Section 3.1 and will occur during the on peak hours of 7:00 am to 6:00 p.m. Monday through Friday on non-holidays for a duration of two (2) hours. To
cover ISO’s administrative costs in conducting the Audit, the Supplier shall be charged a fee for the Audit in an amount equal to $1,000 multiplied by the applicable monthly Committed Capacity Amount. 
  

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 ARTICLE 4 
 PAYMENT AND SETTLEMENT 
 4.1 ISO Billing Process. From and after the first day of the month
following the Service Date, the ISO, as agent for the Market Participants, shall apportion, bill and collect from the Market Participants payments and charges for delivery or non-delivery of services from the LRP Resource in the LRP Market in
accordance with this Agreement, Market Rule 1 and the NEPOOL Manuals. All payments will be made through the ISO billing process directly to the Enrolling Participant. ISO shall have the right to set-off any amounts owed by Supplier under this
Agreement against any payments otherwise payable to Supplier under this Agreement. 
 4.2 Supplemental Capacity Payment. The monthly
Supplemental Capacity Payment for the LRP Resource will commence on the first day of the month following the Service Date and will be equal to the Contract ICAP Price (for the preceding month) multiplied by the ICAP Credit Amount (for the preceding
month). The Supplemental Capacity Payment for each month will be reduced (but not to less than zero) by an amount equal to the ICAP Credit Amount multiplied by monthly UCAP Supply Auction clearing price, provided, that the Supplemental Capacity
Payment for the first full calendar month following the Service Date shall not be reduced if the LRP Resource was not eligible to participate in the Supply Auction; provided, however, that if a locational ICAP or other new capacity market is
implemented, the price component of the calculation shall be equal to the most recent clearing price at which load shifting is settled for the locational ICAP or other new capacity market for the area applicable to the LRP Resource’s location
determined in a manner consistent with such locational ICAP or other new capacity market. The Supplemental Capacity Payment will not be reduced for any other non-ICAP payments that the LRP Resource may earn. If any ICAP Credit Amount actually
demonstrated is less than the ICAP Credit Amount paid, the Supplemental Capacity Amount paid in all months prior to such demonstration will be trued-up and rebilled according to the demonstrated ICAP Credit Amount. The ICAP Credit Amount may change
from month to month based on load response events or audits as described in the M-LRP. The ISO in its sole discretion may initiate whatever audits, tests or other measures are necessary to determine the actual performance of the LRP Resource and its
ability to continue to perform and has the authority to adjust the ICAP Credit Amount to recognize the results of its investigation. Notwithstanding anything to the contrary contained in this Agreement, the Supplemental Capacity Payment for any
month shall not exceed one hundred twenty percent (120%) of the product of the Contract ICAP Price and the Committed Capacity Amount. Notwithstanding Sections 4.1 and 4.2 herein, prior to the first Service Date of the LRP Resource, the ISO
shall pay that portion of the Supplemental Capacity Payment attributable to the number of customer installations verified by the ISO, in accordance with the Measurement and Verification Plan. 
  

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 ARTICLE 5 
 COVENANTS 
 5.1 Operation and Maintenance. Supplier shall operate and maintain, or cause the
operation and maintenance of the LRP Resource to be in accordance with Market Rule 1 and the NEPOOL Manuals. 
 5.2 Insurance.
Supplier shall arrange for and maintain an appropriate minimum level of liability and property insurance coverage as follows: comprehensive general liability (including blanket contractual liability) and property damage insurance sufficient to
protect the ISO and the Supplier from claims for damages for personal injury (including bodily injury), sickness or disease, accidental death and damage to property, including loss of use resulting from any property damage, which may arise from or
in connection with Supplier’s obligations under this Agreement. The limits of such insurance shall be in an amount not less than $1,000,000 each person and $5,000,000 each occurrence, personal injury and property damage combined. The Supplier
shall also maintain workers’ compensation or other similar insurance offering statutory coverage and containing statutory limits. Such policies must (i) be occurrence rather than claims-made policies (ii) name the ISO as an additional
insured for covered incidents related to activities under this Agreement (other than workers’ compensation or similar insurance) and (iii) contain a provision stating that such policy or policies may not be cancelled or materially altered
except after thirty (30) days’ written notice to the ISO. Upon the Effective Date of this Agreement, the Supplier shall furnish to the ISO a certificate or certificates of such insurance, reflecting the ISO as an additional insured.

 ARTICLE 6 
 FORCE
MAJEURE EVENTS 
 6.1 Notice of Force Majeure Event. Neither Party will be liable or deemed to be in breach of this Agreement for
failure of performance under this Agreement due to a Force Majeure Event. If any Party is unable to perform its obligations under this Agreement due to a Force Majeure Event, the Party unable to perform shall promptly notify the other Party.

 6.2 Effect of Force Majeure Event. In the event that a Force Majeure Event prevents the LRP Resource from being available to the
ISO for a period in excess of sixty (60) consecutive days (the “Unavailability Period”), the ISO, in its sole discretion, may terminate this Agreement by providing five (5) days notice to Supplier declaring the ISO’s
intention to terminate this Agreement; provided, however, that for purposes of its right to terminate this Agreement, the ISO may extend the Unavailability Period in its sole discretion. Notwithstanding anything to the contrary contained in this
Agreement, in no event shall the ISO be obligated to make any payments under this Agreement for the LRP Resource during any period that the LRP Resource is unavailable due to a Force Majeure Event. 
 6.3 Remedial Efforts. The Party unable to perform by reason of a Force Majeure Event shall use reasonable efforts to remedy its inability to
perform and to mitigate the consequences of the Force Majeure Event as soon as reasonably practicable; provided that (i) no Party shall be required to settle any strike, walkout, lockout, or other labor dispute on terms which, in the
Party’s sole discretion, are contrary to its interests and (ii) the Party unable to 
  

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 perform shall, as soon as practicable, advise the other Party of the reason for its inability to perform, the nature of
any corrective action needed to resolve performance, and its efforts to remedy its inability to perform and to mitigate the consequences of its inability to perform and shall advise the other Party of when it estimates it will be able to resume
performance of its obligations under this Agreement. 
 ARTICLE 7 
 REPRESENTATIONS AND WARRANTIES 
 7.1 Representations and Warranties.

 7.1.1 As of the Effective Date, ISO represents and warrants to Supplier as follows: 
 (a) ISO is a validly existing corporation with full authority to enter into this Agreement. 
 (b) ISO has taken all necessary measures to have the execution and delivery of this Agreement authorized, and upon the execution and delivery of
this Agreement, this Agreement shall be a legally binding obligation of ISO. 
 (c) ISO has or will have all regulatory
authorizations necessary for it to perform its obligations under this Agreement. 
 (d) The execution, delivery, and performance of
this Agreement are within the ISO’s powers and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party, or any Law applicable to it. 
 7.1.2 As of the Effective Date, Supplier represents and warrants to ISO as follows: 
 (a) Supplier is a validly existing entity with full authority to enter into this Agreement. 
 (b) Supplier, or its affiliate, has or will have the legal authority and physical capability (either on its own behalf or as Agent for the
Supplier of the LRP Resource) to meet all of its obligations under this Agreement. 
 (c) Supplier has taken all necessary measures
to have the execution and delivery of this Agreement authorized, and upon the execution and delivery of this Agreement, this Agreement shall be a legally binding obligation of Supplier. 
 (d) The execution, delivery, and performance of this Agreement are within the Supplier’s powers and do not violate any of the terms and
conditions in its governing documents, any contracts to which it is a party, or any Law applicable to it. 
 (e) All of the
statements made in the Supplier’s RFP proposal are accurate in all material respects. 
 (f) The Supplier’s LRP Resource
(and each Resource) is located in SWCT and satisfies all of the eligibility criteria set forth in the RFP. 
  

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 ARTICLE 8 
 TERM AND TERMINATION 
 8.1 Term. 
 8.1.1 Initial Term. This Agreement shall be effective as of the Effective Date and shall continue in effect through September 30, 2007 (the
“Initial Term”), provided, however, that the applicable provisions of this Agreement shall continue in effect after any termination to the extent necessary to provide for final billing and payment, and the provisions of Article 9
shall survive termination. 
 8.1.2 Option to Extend. The ISO may extend this Agreement for an additional one-year term (an
“Extension Term”) by notice given no later than ninety (90) days prior to expiration of the Initial Term. 
 8.2
Termination. 
 8.2.1 Termination for Default. If (a) any Party shall fail to perform any material obligation imposed on it by
this Agreement and that obligation has not been waived or suspended, or payment has not been adjusted for such failure pursuant to this Agreement or (b) any representation or warranty made by either Party under this Agreement shall prove to
have been incorrect in any material respect, the other Party, at its option, may terminate this Agreement by giving the Party in default written notice setting out specifically the circumstances constituting the default and declaring its intention
to terminate this Agreement. If the Party receiving the notice does not, within ten (10) days after receiving the notice, remedy the default, the Party not in default shall be entitled by a further written notice to terminate this Agreement.
The Party not in default shall have a duty to mitigate damages. Termination of this Agreement by a Party pursuant to this Section 8.2.1 shall be without prejudice to the right of the other Party to collect any amounts due to it prior to the
time of termination. No default shall exist where a failure to perform any material obligation is the result of a Force Majeure Event or act or omission of the other Party. 
 8.2.2 Additional ISO Rights of Termination. This Agreement may also be terminated by the ISO in accordance with Sections 2.5, 6.2, and 10.4.

 8.3 Effect of Termination or Expiration. Termination or expiration of this Agreement shall not affect the accrued rights and
obligations of either Party, including either Party’s obligations to make all payments to the other Party pursuant to this Agreement. 
  

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 ARTICLE 9 
 REMEDIES 
 9.1 Damages and Other Relief. 
 9.1.1 Liability of ISO. Subject to receipt of payments from the Market Participants of amounts due under this Agreement, other than for failure to
make a payments as provided in Article 4, the ISO shall not be liable to Supplier for actions or omissions by the ISO in performing its obligations under this Agreement, provided it has not willfully breached this Agreement or engaged in willful
misconduct. To the extent Supplier has claims against the ISO, Supplier may only look to the assets of the ISO for the enforcement of such claims and may not seek to enforce any claims against the directors, members, officers, or employees of
the ISO who, Supplier acknowledge and agree, have no personal liability for obligations of the ISO by reason of their status as directors, members, officers, or employees of the ISO. 
 9.1.2 Liability of Supplier. Except as provided in Sections 2.5 and 8.2, Supplier shall not be liable to the ISO for actions or omissions by
Supplier in performing its obligations under this Agreement, provided that Supplier has not willfully breached this Agreement or engaged in willful misconduct. To the extend the ISO has claims against Supplier, the ISO may only look to the assets of
Supplier for the enforcement of such claims and may not seek to enforce any claims against the directors, members, officers, or employees of Supplier who, the ISO acknowledges and agrees, have no personal liability for obligations of Supplier by
reason of their status as directors, members, officers, or employees of Supplier. 
 9.1.3 Limitation of Liability. Except as provided
in Section 2.5 and 8.2, in no event shall Supplier be liable to the ISO or the ISO be liable to Supplier for any incidental, consequential, multiple or punitive damages, loss of revenues or profits, attorneys fees or costs arising out of, or
connected in any way with the performance or non-performance of this Agreement. 
 9.1.4 Indemnification. Supplier shall indemnify,
defend and save harmless the ISO and its directors, officers, members, employees and agents from any and all damages, losses, claims and liabilities by or to third parties arising out of or resulting from the performance by the ISO under this
Agreement or the actions or omissions of Supplier or any Customer in connection with this Agreement, the LRP Resource or any Resource, except in cases of gross negligence or willful misconduct by the ISO or its directors, officers, members,
employees or agents. 
 9.1.5 Liquidated Damages. The Parties agree that it will be impractical and extremely difficult to determine
the actual damages, which ISO will sustain in the event Supplier fails to make the LRP Resource available pursuant to Section 2.5. Accordingly, the Parties acknowledge and agree that the ISO shall be entitled, in addition to any other available
remedies, to liquidated damages set forth in Section 2.5 as a reasonable pre-estimate of the probable losses and damages to be sustained by the ISO in such circumstances. Such liquidated damages, although inadequate to compensate the ISO, are
intended to constitute compensatory damages. 
  

 26 

 ARTICLE 10 
 MISCELLANEOUS PROVISIONS 
 10.1 Assignment. 
 10.1.1 Except as otherwise provided in this Agreement, neither Party shall assign its rights or delegate its duties under this Agreement without
the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned, or delayed. Any such assignment or delegation made without such written consent shall be null and void. Upon any assignment made in
compliance with this Section 10.1, this Agreement shall inure to and be binding upon the successors and assigns for the assigning Parties. 
 10.1.2 Notwithstanding Section 10.1.1, each Party may, without the need for consent from the other Party (and without relieving itself from liability hereunder), transfer or assign this Agreement: (i) to an Affiliate, or
(ii) after the Service Date, where such transfer is incidental to a merger or consolidation with, or transfer of all, or substantially all, of the assets of the transferor to another person, business entity, or political subdivision or public
corporation created under the Laws governing the creation and existence of the transferor which shall as a part of such succession assume all of the obligations of the assignor or transferor under this Agreement. Any Party may collaterally assign
its rights in this Agreement to its lenders without the need for consent from the other Party. 
 10.2 Notices. Except as otherwise
expressly provided in this Agreement or required by Law, all notices, consents, requests, demands, approvals, authorizations and other communications provided for in this Agreement shall be in writing and shall be sent by personal delivery,
certified mail, return receipt requested, facsimile transmission, or by recognized overnight courier service, to the intended Party at such Party’s address set forth below. All such notices shall be deemed to have been duly given and to
have become effective: (a) upon receipt if delivered in person or by facsimile; (b) two days after having been delivered to an air courier for overnight delivery; or (c) seven days after having been deposited in the United States mail
as certified or registered mail, return receipt requested, all fees pre-paid, addressed to the applicable addresses set forth below. Each Party’s address for notices shall be as follows (subject to change by notice in accordance with the
provisions of this Section 10.2): 
  

 27 

			
	 SUPPLIER:
	  	                ISO:
		
	 Frank A. Magnotti
 Comverge, Inc.
 120 Eagle Rock Avenue
 Suite 190
 East Hanover, NJ
07936
 Telephone: (973) 884-5970 X204
 Fax: (973) 884 3503
	  	 Kevin A. Kirby
 VP, Market Operations
 ISO New England
 One Sullivan Road
 Holyoke, MA 01040
 Telephone: (413) 540-4490
 Fax: (413)
535-4156

		
		  	 Kathleen A. Carrigan
 Sr. VP, General Counsel and
 Corporate Secretary
 ISO New England
 One Sullivan
Road
 Holyoke, MA 01040
 Telephone: (413) 540-4260
 Fax: (413) 535-4379

 Each Party shall provide notice of any change in the above notice provisions to the other Party.

 10.3 Party Representatives. All Parties to this Agreement shall ensure that throughout the terns of this Agreement, duly appointed
representatives are available for communications between the Parties. The representatives shall have full authority to deal with all day-to-day matters arising under this Agreement. Acts and omissions of representatives shall be deemed to be acts
and omissions of the Party. Supplier and ISO shall be entitled to assume that the representatives of the other Party are at all times acting within the limits of the authority given by the representative’s Party. Representatives for each Party
shall be identified in Schedule II. The Parties may at any time replace their representatives by giving notice to the other Party. 
 10.4
Effect of Invalidation, Modification, or Condition. Each covenant, condition, restriction, and other term of this Agreement is intended to be, and shall be construed as, independent and severable from each other covenant, condition, restriction,
and other term. If any covenant, condition, restriction, or other term of this Agreement is held to be invalid or otherwise modified or conditioned by any Governmental Authority, the invalidity, modification, or condition of such covenant,
condition, restriction, or other term shall not affect the validity of the remaining covenants, conditions, restrictions, or other terms hereof. If an invalidity, modification, or condition has a material impact on the rights and obligations of the
Parties, the Parties shall make a good faith effort to renegotiate and restore the benefits and burdens of this Agreement as they existed prior to the determination of the invalidity, modification, or condition. If the Parties fail to reach
agreement, then the Party whose rights and obligations have been adversely affected may, in its sole discretion, terminate this Agreement. 
 10.5 Amendments. Any amendments or modifications of this Agreement shall be made only in writing and duly executed by all Parties to this Agreement. Such amendments or modifications shall become effective only after the Parties have
received any authorizations required under applicable Laws. 
  

 28 

 10.6 Governing Law. This Agreement shall be governed by and construed under the Laws of the State
of Delaware without regard to conflicts of laws principles. 
 10.7 Entire Agreement. This Agreement consists of the terms and
conditions set forth herein, as well as the Appendices hereto, which are incorporated by reference herein and made a part hereof. This Agreement contains the entire agreement between the Parties and supersedes all prior negotiations, undertakings,
agreements and business term sheets related to the subject matter hereof. 
 10.8 Independent Contractors. Supplier and ISO
acknowledge that as between Supplier and the ISO there is an independent contractor relationship, and that nothing in this Agreement shall create any joint venture, partnership, or principal/agent relationship between the Parties. Except as
otherwise provided herein, neither Supplier nor ISO shall have any right, power, or authority to enter into any agreement or commitment, act on behalf of, or otherwise bind the other Party in any way. 
 10.9 Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which shall be
deemed one and the same Agreement. 
 10.10 Confidentiality. Confidential information acquired by either Party pursuant to this
agreement shall be governed by the NEPOOL Information Policy. 
 10.11 Beneficiaries. Nothing in this Agreement, whether express or
implied, confers any rights or remedies under, or by reason of, this Agreement on any persons other than the Parties and their respective successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligations or
liability of any third party, nor give any third person any rights of subrogation or action against any Party. 
 10.12 Waiver. The
failure to exercise any remedy or to enforce any right provided in this Agreement or applicable Law shall not constitute a waiver of such remedy or right or of any other remedy or right. A Party shall be considered to have waived any remedies or
rights only if the waiver is in writing. 
  

 29 

 IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written. 
  

			
	COMVERGE, INC.
		
	By:	 	 /s/ Thomas W. Wren

	Name:	 	Thomas W. Wren
	Title:	 	Executive Vice President
	
	ISO NEW ENGLAND INC.
		
	By:	 	 /s/ Kevin A. Kirby

	Name:	 	Kevin A. Kirby
	Title:	 	VP Market Operations

  

 30 

 SCHEDULE I 
 Initial Term 
 The Initial Term of this Agreement shall be the Effective Date through
September 30, 2007. 
 Extension Term 
 This Agreement may be extended for an additional one year term, ending September 30, 2008. 
  

 16 

 SCHEDULE II 
 Parties’ Representatives 
 Subject to a revision made pursuant to Section 10.3, and for the purposes of
this Agreement, the individuals listed below will be deemed duly authorized representatives of the respective Parties. 
  

			
	ISO New England Inc.	 	
		
	Kevin A. Kirby	 	
		
	Comverge, Inc.	 	
		
	Frank A. Magnotti	 	

  

 17 

 SCHEDULE III 
 SWCT Cities and Towns 
 Preferred Towns 
  

	1.	Bridgeport 

  

	2.	Darien 

  

	3.	Easton 

  

	4.	Fairfield 

  

	5.	Greenwich 

  

	6.	New Canaan 

  

	7.	Norwalk 

  

	8.	Redding 

  

	9.	Ridgefield 

  

	10.	Shelton 

  

	11.	Stamford 

  

	12.	Stratford 

  

	13.	Trumbull 

  

	14.	Weston 

  

	15.	Westport 

  

	16.	Wilton 

 Other Towns in SWCT 
  

	1.	Ansonia 

  

	2.	Beacon Falls 

  

	3.	Bethany 

  

	4.	Bethel 

  

	5.	Branford 

  

	6.	Bridgewater 

  

	7.	Brookfield 

  

	8.	Cheshire 

  

	9.	Danbury 

  

	10.	Derby 

  

	11.	East Haven 

  

	12.	Hamden 

  

	13.	Meriden 

  

	14.	Middlebury 

  

	15.	Milford 

  

	16.	Monroe 

  

	17.	Naugatuck 

  

	18.	New Fairfield 

  

	19.	New Haven 

  

	20.	New Milford 

  

	21.	Newtown 

  

	22.	North Branford 

  

	23.	North Haven 

  

	24.	Orange 

  

	25.	Oxford 

  

	26.	Prospect 

  

	27.	Roxbury 

  

	28.	Seymour 

  

	29.	Sherman 

  

	30.	Southbury 

  

	31.	Southington 

  

	32.	Wallingford 

  

	33.	Waterbury 

  

	34.	Watertown 

  

	35.	West Haven 

  

	36.	Wolcott 

  

	37.	Woodbridge 

  

	38.	Woodbury 

  

 18 

 SCHEDULE IV 
 Customer Installations and Committed Capacity 
  

					
	 Proposed Service Dates
	  	Customer Installations	 	Committed Capacity (MW)
	 August 1, 2004*
	  	***	 	***
	 August 1, 2005**
	  	***	 	***
	 August 1, 2006***
	  	***	 	***

	*	If the Effective Date is on or before July 1, 2004, the Proposed Service Date is August 1, 2004; however, if the Effective Date occurs after July 1, 2004, the
Proposed Service Date is August 1, 2004 plus the number of days, after July 1, 2004, on which the Effective Date occurs. 

	**	If Effective Date is on or before July 1, 2004, the Proposed Service Date is August 1, 2005, however, if the Effective Date occurs after July 1, 2004, the Proposed
Service Date is August 1, 2005 plus the number of days, after July 1, 2004, on which the Effective Date occurs. 

	***	If Effective Date is on or before July 1, 2004, the Proposed Service Date is August 1, 2006, however, if the Effective Date occurs after July 1, 2004, the Proposed
Service Date is August 1, 2006 plus the number of days, after July 1, 2004, on which the Effective Date occurs divided by 2. 

  

 19 

																													
	 Program
 Yr 2004
 (EOM)
	  	 Committed
 Capacity
 (MW)
	 	 $ per MW-
 month
	 	 Program
 Yr 2005
 (EOM)
	 	 Committed
 Capacity
 (MW)
	 	 $ per MW-
 month
	 	 Program Yr
 2006
 (EOM)
	 	 Committed
 Capacity
 (MW)
	 	 $ per
 MW-
 month
	 	 Program
 Yr 2007
 (EOM)
	 	 Committed
 Capacity
 (MW)
	 	 $ per
 MW-
 month
	 	 Program
 Yr 2008
 (EOM)
	 	 Committed
 Capacity
 (MW)
	 	 $ per
 MW-
 month

	***	  	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
	***	  	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
	***	  	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
	***	  	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***
															
		  		 		 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***	 	***

  

 20 

 SCHEDULE V 
 Measurement and Verification Plan 
  

 21 

 ISO NEW ENGLAND REAL TIME PROFILE RESPONSE PROGRAM 
 MONITORING & VERIFICATION PLAN 
 REVIEW AND APPROVAL 
  

					
	Plan Number:	  	004
		
	 Company Name:
	  	 Comverge, Inc.

		
	 Project Name:
	  	 SWCT Direct Load Control Program

		
	 Company Address:
	  	 120 Eagle Rock Avenue, Suite 190, East Hanover, NJ
 07936

		
	 Contact Name:
	  	 Frank Magnotti

		
	 Telephone/FAX
 Number
	  	 973-884-5970

		
	 E-Mail Address
	  	 magnotti@comverge.com

		
	 Submission Date:
	  	 April 6, 2004

		
	 Review Date:
	  	 April 7, 2004

		
	 Reviewed by:
	  	 Robert Burke, Robert Laurita

			
	 Review Results:
	  	 Approved
 Rejected
 Returned for Revisions
	  	  ̈
  ̈
  ̈

		
	 Approval Date:
	  	 April 13, 2004

		
	 Approval Letter Sent:
	  	 April 13, 2004

		
	 Copy Sent to CS&T:
	  	 April 13, 2004

 Notes/Comments: 
 This
approved M&V Plan is an attachment to SWCT Supplemental Installed Capacity Agreement between Comverge and ISO New England 
  

 22 

 ISO New England Conservation and Load Management Program 
 Monitoring and Verification Plan 
 1.0
PROJECT SUMMARY 
 Comverge is preparing to provide to the ISO New England (“ISO”) a “Virtual Peaking
CapacityTM” Direct Load Control Program in southwestern Connecticut (SWCT) under the terms of the Agreement for Supplemental Installed Capacity Southwest Connecticut between ISO New England and Comverge (the “Agreement”). This
program is expected to provide, on average, approximately *** kW of peak load reduction per installed switch when called upon by the ISO during emergency conditions under the ***-Minute Real-Time Demand Response Program (the “Program”).
Converge will be paid Capacity Payments as provided by Section 4.1.1 (Methodology for Calculating Capacity Payments). The purpose of the Measurement and Verification (M&V) program will be to determine the amount of load reduction delivered
during Program Events on an installed switch basis (“Unit Capacity”) and, when multiplied by the number of installed switches, will provide the ICAP Credit Amount. Program Events consist of ISO-NE initiated actual events, a mutually
agreeable annual audit event conducted between August 15 and August 31 (if necessary) and an annual Comverge initiated audit (if requested) as described in Section 3.2 of the Agreement. At the end of any particular period the ICAP
Credit Amount is the cumulative number of units installed at the end of the period multiplied by the Unit Capacity. 
 This document has been prepared to
detail the purpose and procedures of the M&V program. The best way of proving that the system can deliver the Unit Capacity will be with a M&V program. This M&V program will include the installation of an appropriate number of monitoring
devices (a valid sample) to ensure a 90/10 acceptable confidence level derived from observed measurements. These devices will monitor the usage and control of the air conditioning units being controlled. The results of the program, its conclusions
concerning the amount of load reduction per installed switch, and the number of switches installed will be the basis to determine the ICAP Credit Amount. Furthermore, as outlined in M-LRP, Comverge is required to deliver metering data to the IBCS
Open Solution on 5-minute intervals. A system overview of the Comverge metering system and its integration with the IBCS is shown below: 
  

 23 

 *** 
 As shown above, the Comverge solution is based on the following elements: 
  

	 	•	 	 M&V Data to be delivered to the IBCS Open Solution in near real-time (estimated to be within an hour) with 5 minute data using their defined .csv format and an
FTP file transfer process as outlined by the ISO (Please refer to: http://www.iso-ne.com/Load_Response/TBCS_Open_Solution_-File-Formats/5-Minute_Data_File_Format_DRAFT.pdf) 

  

	 	•	 	 Control event notification via the .csv process as outlined by the ISO. The file received from the IBCS Open Solution will be used to trigger the control of
the Comverge load management system according to the parameters in the document. (Please refer to: http:/www.iso-ne.com/Load_Response/IBCS_Open_Solution_-File-Formats/Event_Notification_File_Format__DRAFT.pd) 

  

	 	•	 	 LMP Data: Comverge will utilize the LMP data generated by the ISO for its internal processes and market responsiveness. 

 2.0 Demand Response Measure Description 
 With regard to specific
program activities, Comverge has developed an approach that will ensure installation of the statistically valid number of end-use metering points that will be installed in time to collect data for the summer of 2004. The M&V plan is similar to
ones that have been used on other Direct Load Control programs, such as Comverge’s Virtual Peaking Capacity programs at Utah Power and will be used at San Diego Gas & Electric. 
 Comverge’s plan includes establishing project objectives, a sample design and sample frame, timeline, desired recorder communication strategy, and desired results
format/segmentation. 
  

 24 

 Comverge will provide the ISO- with progress reports throughout the duration of this project and will maintain regular
communication with the ISO’s Demand Response department as needed. Comverge believes that the success of this project will be tied to the establishment of open and regular dialog and communication amongst the project team and the project
sponsors. 
 *** 
 Comverge
normally schedules initial appointments two weeks after recruiting begins so that the installers’ schedules are as full as possible. Under the direction of Comverge’s experienced field supervisor, a team of electricians will be hired to
install recorders. 
 3.0 Demand Response Equipment Specifications and Documentation: 
 All kW power measurements (End Use Meter Data) will be taken at the central air conditioner compressor unit and are power factor corrected using the correct elements as required by electrical metering theory. No
“short cut” techniques are employed, such as taking current measurements only and deriving an artificial kW. Accuracies of under ±2% are achieved with field-installed devices. 
 Dedicated phone lines and/or cellular communications will be used to maximize data quality and minimize missing data and recorder communication problems. Although shared
lines are a reduced-cost option, Comverge intends to use dedicated communications systems to ensure high quality data collection and minimize necessary repairs on recorders. 
 Comverge’s 6 lead field supervisor will lead the field portion of the installation process. We estimate two installations per day on average. Our experience has been that it is possible to conduct more than two
installations when the sites are in close proximity, while only one installation per day is possible in more remote locations. The field supervisor is very experienced in working to maximize installation efficiency while maintaining the integrity of
the sample design. 
 During the summer, data will be collected daily at each site. An analysis of the initial End Use Meter data immediately upon receipt at
our collection workstations will be made to ensure that the meters are working properly. Work orders are provided to the installers to correct any deficiencies. Any recorder problems will be fixed as soon as possible. 
 Comverge will record End Use Meter Data every 5-minutes from each metering point and during Program Events deliver the calculated interruption to the IBCS Open Solution.
Data records will be aggregated according to Comverge’s asset aggregation model in the response. 
 A comprehensive analysis will be done on or about
October 1 of each contract year to determine the actual amount available for load deferral that previous year. This will be done through a very well 
  

 25 

 defined, industry acceptable standard for sampling and deriving information gained in the sample and per the methodology
defined in Section 2.4.3 of the Agreement. All analysis will be done according to the AEIC Load Research Guide, which has become the industry standard for load research applications including sampling and experimental design, special metering
and analysis for evaluations. 
 4.0 Measurement and Monitoring Strategy: 
 The purpose of M&V is to derive an average measured value of Unit Capacity for installed Direct Load Control Units (DCUs) for each of the two focused segments of this Program - (1) residential and (2) small
commercial. These measured values are then multiplied by the number of installed DCUs during Program Events. 
 Reporting 
 Testing and data collection (as described above) continue for each contract year. All data, including log files, are made available to both parties upon request. Comverge
proposes that both Comverge and the ISO maintain an ‘open book’ policy on all data collection activities and raw data gathered. 
 An annual report
assessing system impacts will be delivered no later than 15 October (20xx) throughout each of the contract years. 
 4.1. ***

 *** 
  

 26 

 *** 
 4.1.1 Methodology for Calculating Capacity Payments 
 4.1.1.2 Capitalized Terms. Capitalized terms
shall have the same meaning as ascribed to them in the Agreement or the M&V Agreement as the case may be. 
 4.1.1.3
Monthly Capacity Payment. For each month in any Program Year (the “Current Month”), a monthly capacity payment (“Monthly Capacity Payment” or “MCP”) shall be calculated as follows (See Example 1): 
 *** 
  

 27 

 4.1.1.4 ***: 
 *** 
 4.1.1.5 Settlement and Payment 
 4.1.1.6 Monthly Capacity Payments 
 4.1.1.7 *** 
 4.1.1.8 Monthly Capacity Payments shall be payable in accordance
with the ISO’s standard monthly settlement billing practices. 
  

 28 

 4.1.1.9 *** 
 *** 
  

 29 

 Calculation Worksheet 
 Program Year:
                                        
                 
 Current Month:
                                        
                 
 *** 

 

 30 

 *** 
 Calculation Worksheet 
 Program
Year:                                       
                    
 *** 
  

 31 

 *** 
  

 32 

 *** 
  

 33 

 4.2 Monitoring Interval and Period: 
 Data collection will occur annually over the period June 1—September 30, capturing usage during the summer peak period. Data will be downloaded from the recorders daily, and will be validated as it is
received. Validation will include an assessment of observed connected load and analysis of individual load shapes, in addition to spike and range checks. The data will be collected in 5 minute intervals. 
 4.3 Measurement Equipment Specifications: 
 Comverge
will draw upon an existing end-use meter inventory in this project. This inventory consists of a variety of end-use pulse recorders that can be used on this project. Manufacturers of pulse recorders used by Comverge include Process Systems, General
Electric, Sangamo, and Aptech. These recorders are MV-90 compatible. 
 4.4 Measurement Data Validation, Editing and Estimating Plan:

 Comverge will: 
  

	 	•	 	 Perform measurements on participating domiciles / facilities for each year the Program is operational 

  

	 	•	 	 Provide data from the M&V activities that will be used in the Settlement process 

 5.0 Statistical Sampling Plan: 
 5.1 Description of
Population(s) 
 The population that is targeted are the preferred townships within SWCT. 
 5.2 *** 
 *** 
  

 34 

 *** 
 5.3
*** 
 *** 
  

 35 

 6.0 *** 
 ***

  

 36Sixth Amendment to Loan and Security Agreement

 Exhibit 10.28 
 SIXTH AMENDMENT 
 TO 
 LOAN AND SECURITY AGREEMENT 
 This Sixth Amendment to Loan and Security
Agreement dated as of January 11, 2007 is entered into between Silicon Valley Bank ("Silicon") and Comverge, Inc. ("Borrower") as of the above-stated date. 
 RECITALS 
 A. Reference is made to that certain Loan and Security Agreement between Silicon and
Borrower dated April 7, 2003, as amended by that certain Amendment to Loan Agreement dated as of September 10, 2003, that certain Loan Modification Agreement dated as of May 10, 2004, that certain Loan Modification Agreement dated as
of September 24, 2004, that Fourth Amendment to Loan and Security Agreement dated October 25, 2005 (the "Fourth Amendment") and by that Fifth Amendment to Loan and Security Agreement dated January 9, 2006 (as so amended and otherwise
amended or modified from to time being referred to as the "Loan Agreement"). Capitalized terms used but not defined in this Amendment, shall have the meanings set forth in the Loan Agreement. 
 B. Borrower has advised Bank that it requires additional capital equipment financing in connection with its ongoing Alternative Energy Resources Group
business operations. In order to facilitate such a financing transaction, Borrower has created a new wholly-owned Subsidiary, AER, Inc. ("AER"). Borrower has proposed to transfer to AER ownership of all Borrower's assets of its Alternative Energy
Resources Group business unit (with such assets as identified on Exhibit A attached hereto being referred to as the "AER Assets"), thereby facilitating the new capital expenditure financing facility with a third party financier (such financing being
referred to as the "AER Financing" and together with the other related transactions set forth herein being collectively the above are referred to as the "AER Transactions"). 
 C. Borrower has requested that Bank consent to the creation of AER, the transfer of certain of Borrower's assets to AER (and the release of Bank's lien
and security interest therein), and AER entering into the proposed third party credit facility pursuant in which such third party financier will obtain a lien in the transferred AER assets, all to the extent such consent is otherwise required under
Loan Agreement. 
 D. Bank is agreeable to the foregoing requests of Borrower, subject to the terms and conditions of this Amendment.

 NOW, THEREFORE, the parties hereto hereby agree as follows, effective as of the date hereof. 

 AGREEMENT 
 1. Consent; Limited Release. Upon the effectiveness of this Amendment: 
 (A) Bank hereby consents
to Borrower entering into and performing its obligations under the AER Transactions and waives any provisions set forth in the Loan Documents that would otherwise restrict or impair Borrower from doing so for purposes of, and only for purposes of,
effecting the AER Transactions only; and 
 (B) concurrently with the closing the AER Financing, Bank hereby releases its lien and security
interest in the AER Assets (as defined below), and Bank agrees to execute and deliver to Borrower, at Borrower's expense, such UCC and other lien releases, in form reasonably acceptable to Bank, with respect thereto. 
 With respect to the foregoing agreements and acknowledgments of Bank, Borrower understands that Bank is relying on Borrower's representations, warranties
and covenants set forth herein and otherwise set forth in all written documentation and materials delivered to Bank in connection herewith. This consent and agreement do not constitute a waiver of any of the other terms or provisions of the Loan
Agreement, or any of the other Loan Documents, or any other agreement, document or instrument providing rights in favor of Bank, nor does it constitute a consent to any other transaction, whether or not similar to the foregoing, and whether or not
contemplated by any of the documents referred to herein. Without limiting the foregoing, all of Bank’s security interests in all of the assets of the Borrower, other than the AER Assets once released pursuant hereto, and, except as otherwise
set forth herein, all of the terms and provisions of the Loan Documents shall continue in full force and effect. 
 As used herein, the term
"AER Assets" shall mean the following items of property of Borrower on a collective basis: 
 (x) All of Borrower’s right, title
and interest in and to the agreements and the governmental approvals, as in existence as of the date hereof, that are necessary to the operation of the energy demand side management business of Borrower (the "Business"), which Business is to be
undertaken by AER, including without limitation the agreements and the governmental approvals described on Exhibit A-1 hereto, and all accounts receivable arising therefrom, as in existence as of the date hereof. and as identified on Exhibit A-2
attached hereto; and 
 (y) All of the Borrower's digital control units installed at end-consumer sites of Borrower and digital control units
that are otherwise held on consignment in the inventory stock of installers that Borrower uses or otherwise employs in connection with the Business, together with the other tangible personal property identified on Exhibit A-3 attached hereto (the
"Exhibit A-3 Assets"). 
 In connection with the foregoing, Borrower represents and warrants to Bank that: (i) the AER Assets
being released shall all be fully transferred to the title ownership of AER substantially concurrently herewith and none shall remain the property of Borrower whatsoever; and (ii) the Exhibit A-3 Assets are solely being used in connection with
the Business and upon 

  

 -2- 

 
and after the closing of the AER Transactions none of the Exhibit A-3 Assets shall be used in or otherwise relate to the remaining businesses or property of
Borrower. 
 2. Modification to Revolving Line Credit Amount. Those portions of the Credit Limit section set forth in Section 1
of Schedule 1 to the Loan Agreement regarding the Revolving Line Credit Amount (both when the Asset Based Terms are in effect as well as when the Asset Based Terms are not in effect) are hereby amended to modify the Revolving Line Credit
Amount to be "$4,000,000 at any time outstanding." 
 3. Modification to Eligible Accounts; Advance Rate. The definition of Eligible
Accounts as set forth in the Loan Agreement is hereby modified as follows: 
 3.1 Elimination of Unbilled Eligible Accounts. The Fourth
Amendment permitted the inclusion of certain unbilled accounts as Eligible Accounts for borrowing purposes under the Loan Agreement, i.e., Accounts that had otherwise constituted Eligible Accounts but were not yet invoiced by Borrower to account
debtor (referred to herein as the "Unbilled Accounts."). Henceforth, however, it is agreed that any such Unbilled Accounts shall no longer be deemed Eligible Accounts and the provisions to the contrary set forth in Section 2.1 of the Fourth
Amendment are hereby deemed of no further force or effect. 
 3.2 Certain Permitted Intercompany Accounts; Limited Applicable Increased
Advance Rate. Under clause (i) of the definition of Eligible Accounts "Accounts for which the account debtor is Borrower’s Affiliate, officer, employee, or agent" are deemed excluded from the scope of Eligible Accounts. It is
agreed, however, that those Accounts owing to Borrower from AER that are otherwise Eligible Accounts other than for the account debtor thereon being an affiliate of Borrower, shall nevertheless be considered Eligible Accounts up to an aggregate
Revolving Loan amount of $250,000 only. Further, in connection with the foregoing Eligible Accounts owing from AER the otherwise applicable percentage advance rate of 80% set forth in the Revolving Loans portion of the Credit Limit section of
Schedule 1 to the Loan Agreement (in effect when the Asset Based Terms are effective and when the Assert Based Terms are not effective) shall be deemed 90% for such Eligible Accounts and such Eligible Accounts only. 
 4. Modification to Financial Covenant. Section 5.1 of Schedule 1 to the Loan Agreement is hereby amended to read as follows: 
 "5.1 Asset Based Terms Not In Effect 
  

 -3- 

 During all periods in which the Asset Based Terms are not in effect, Borrower shall comply with the following financial
covenant at all times during the term of this Agreement and, at the request of Bank from time to time, Borrower shall provide evidence of compliance therewith. Unless otherwise set forth herein or as may be determined by Bank, measurement of
compliance with the following will take place on a month-end basis. 
  

			
	 Quick Ratio:
	  	Borrower shall maintain, as of the end of each month, a ratio of (with a breach of the following covenant addressed by the provisions of Section 6.3 of this Schedule):
		
		  	 (i) Quick Assets,

		
		  	     TO

		
		  	(ii) the total of current liabilities, less deferred revenue, less accrued legal costs and expenses regarding the proposed initial public offering transaction of Borrower's
common stock plus long term Bank Obligations,
		
		  	of not less than the Required Minimum Ratio (as defined below).
		
		  	As used herein the term "Required Minimum Ratio" shall mean 0.75 to 1.00 from the date of the Sixth Amendment to Loan Agreement between Bank and Borrower through
(a) April 15, 2007 or (b) the date of the consummation of the Borrower's underwritten public offering of Borrower's common stock, whichever is earlier to occur; and, thereafter, Required Minimum Ratio shall mean 1.25 to
1.00."

 5. Modification to Maturity Date. The Maturity Date as set forth in Section 4 of
Schedule 1 to the Loan Agreement is hereby amended to be "March 15, 2008." 
 6. Amendment/Variance Fee. Borrower shall pay to Bank a
fee of $15,000 in connection herewith, which shall be in addition to interest and to all other amounts payable hereunder and under the other Loan Documents, and which fee shall not be refundable. 
 7. Limitation of Amendments. 
 A. The
amendments set forth herein are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to any amendment, waiver or modification of any other term or condition of any
Loan Document, or (b) otherwise prejudice any right or remedy which Bank may now have or may have in the future under or in connection with any Loan Document. 
 B. This Amendment shall be construed in connection with and as part of the Loan Documents and all terms, conditions, representations, warranties, covenants and agreements set 

  

 -4- 

 
forth in the Loan Documents, except as herein amended, are hereby ratified and confirmed and shall remain in full force and effect. 
 8. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower hereby represents and warrants to Bank as follows:

 A. Immediately after giving effect to this Amendment (a) the representations and warranties contained in the Loan Documents are true,
accurate and complete in all material respects as of the date hereof (except to the extent such representations and warranties relate to an earlier date, in which case they are true and correct as of such date), and (b) no Default or Event of
Default has occurred and is continuing; 
 B. Borrower has the power and authority to execute and deliver this Amendment and to perform its
obligations under the Loan Agreement, as amended by this Amendment; 
 C. The organizational documents of Borrower delivered to Bank in
connection with the original execution of the Loan Agreement remain true, accurate and complete and have not been amended, supplemented or restated and are and continue to be in full force and effect; 
 D. The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by
this Amendment, have been duly authorized; 
 E. The execution and delivery by Borrower of this Amendment and the performance by Borrower of
its obligations under the Loan Agreement, as amended by this Amendment, do not and will not contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual restriction with a Person binding on Borrower,
(c) any order, judgment or decree of any court or other governmental or public body or authority, or subdivision thereof, binding on Borrower, or (d) the organizational documents of Borrower; 
 F. The execution and delivery by Borrower of this Amendment and the performance by Borrower of its obligations under the Loan Agreement, as amended by
this Amendment, do not require any order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by any governmental or public body or authority, or subdivision thereof, binding on either
Borrower, except as already has been obtained or made; and 
 G. This Amendment has been duly executed and delivered by Borrower and is the
binding obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such enforceability may be limited under law by bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors' rights. 
 9. Other General Provisions. This Amendment, the
Loan Agreement, any prior written amendments thereto signed by Bank and the Borrower, and the other written documents and agreements between Bank and the Borrower set forth in full all of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof. 
  

 -5- 

 10. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument. 
 11. Effectiveness. This Amendment shall be
deemed effective upon (a) the due execution and delivery to Bank of this Amendment by each party hereto; and (b) Borrower's payment of the fee set forth herein plus all expenses of Bank incurred in connection herewith and as otherwise
payable under the Loan Agreement. 
 [Signature Page Follows] 
  

 -6- 

									
	 Borrower:
	 		 	 Silicon:

			
	 COMVERGE, INC.
	 		 	 SILICON VALLEY BANK

					
	By	 	 /s/ Michael D. Picchi
	 		 	 By
	 	 /s/ Sheila Colson

		 	 President or Vice President
	 		 	 Title
	 	 Vice President

  

									
					
	By	 	 /s/ Thomas W. Wren, Jr.
	 		 		 	
		 	 Secretary or Ass't Secretary
	 		 		 	

 [Signature Page to Sixth Amendment to Loan and Security Agreement dated January 11, 2007
between 
 Silicon Valley Bank and Comverge, Inc.] 
  

 CONSENT 
 The undersigned acknowledge that the their consent to the foregoing Amendment is not required, but the undersigned nevertheless do hereby consent to the foregoing Amendment and to the documents and agreements referred
to therein and to all future modifications and amendments thereto, and any termination thereof, and to any and all other present and future documents and agreements between or among the foregoing parties. Nothing herein shall in any way limit any of
the terms or provisions of any guaranty or other agreements and documents executed by the undersigned, all of which are hereby ratified and affirmed. This consent may be executed in any number of counterparts, which when taken together shall
constitute one and the same consent. 
  

			
	Comverge Energy Management, Inc.
		
	By	 	 /s/ Michael D. Picchi

	 Title
	 	 EVP – CFO

  

			
	Comverge Energy Partners, Ltd.
		
	By	 	 /s/ Michael D. Picchi

	 Title
	 	 EVP – CFO

  

			
	6D Comverge, Inc.
		
	By	 	 /s/ Michael D. Picchi

	 Title
	 	 EVP – CFO

 Exhibit A-1 
 Page 1 
 Agreements 
 1. Demand Response Capacity Delivery Agreement dated October 6, 2003, between San Diego Gas & Electric Company and Comverge, Inc., as
amended by that certain First Amendment to Demand Response Capacity Delivery Agreement dated November 15, 2004. 
 2. Contract dated
March 26, 2003, between Pacificorp and Comverge, Inc?. 
 3. Agreement for Supplemental Installed Capacity Southwest Connecticut (LRP
Resources) dated April 13, 2004, between ISO New England Inc, as agent for the market participants described therein, and Comverge, Inc. 
 4. Agreement for Supplemental Installed Capacity Southwest Connecticut dated April 15, 2004 and amended May 14, 2004, between ISO New England, Inc. and Pinpoint Power LLC, as assigned to Comverge, Inc. pursuant to that certain
Assignment and Assumption Agreement dated May 31, 2004 by and between Pinpoint Power, LLC and Comverge, Inc. 
 5. Contract dated
June 24, 2005 between Bonneville Power Administration and Comverge, Inc. 
 6. Contract dated April 15, 2005 between Tampa Electric
Company and Comverge, Inc. 
 7. Contract dated August 2, 2005 and amended December 2, 2005 between PGEG Services Corporation and
Comverge, Inc. 
  

 Exhibit A-1 
 Page 2 
 Governmental Approvals 
 None 
  

 Exhibit A-2 
 [Accounts Receivable Listing] 
  

 Exhibit A-3 
 Other Tangible Personal Property 
 1. Office equipment located at 120 Eagle Rock Road, Suite 190, East Hanover, New
Jersey 07936. 
 2. Data processing equipment located at 250 Williams Street Northwest, Atlanta Ga. 30303 and 4650 Old Ironside Drive, Santa Clara 95040

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