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Home My WebLink AboutResolutions - No. 2022-269RESOLUTION NO. 2022-269 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY MANAGER TO EXECUTE A SITE USE AND SERVICES AGREEMENT BETWEEN THE CITY OF LODI, CALIFORNIA DEPARTMENT OF WATER RESOURCES, AND ENCHANTED ROCK ELECTRIC, LLC, A TEXAS LIMITED LIABILITY COMPANY, FOR THE LOCATION OF A 48 MEGAWATT NATURAL GAS POWER PLANT ON CITY -OWNED PROPERTY DESIGNATED AS APN 015-64-008 LOCATED ADJACENT TO THE SURFACE WATER TREATMENT PLANT (2001 WEST TURNER ROAD) WHEREAS, the California Department of Water Resources has contracted with Enchanted Rock Electric, LLC, to locate power generation resources in the State of California pursuant to Special Legislation (AB 205); and WHEREAS, the City of Lodi suffers from Power Importation Constraints on the PG&E Transmission Lines that import Lodi's Electric Supply; and WHEREAS, Lodi has available land to locate a portion of the power generation resources sought by the California Department of Water Resources; and WHEREAS, City staff has negotiated a Site Use and Services Agreement that encompasses the design, installation, testing, commission, operation, maintenance, and decommissioning of natural gas power generation resources in a form substantially similar to Exhibit A, attached hereto and made a part hereof. NOW, THEREFORE, BE IT RESOLVED that the Lodi City Council does hereby authorize that the City Manager to execute a Site Use and Services Agreement with the California Department of Water Resources and Enchanted Rock Electric, LLC, in a form substantially similar to Exhibit A. Prior to execution, the Agreement will be finalized to include a description of the interconnect facility (Section 3) and the legal description of the site and license area (Exhibit A). The Council further authorizes the City Manager to make such additional revisions or additions to the Agreement as may be necessary, excluding those impacting project term and revenue, subject to approval as to form by the City Attorney. Dated: November 2, 2022 ----------------------------------------------------------------------- ----------------------------------------------------------------------- I hereby certify that Resolution No. 2022-269 was passed and adopted by the City Council of the City of Lodi in a regular meeting held November 2, 2022 by the following votes: AYES: COUNCIL MEMBERS — Hothi, Khan, Kuehne, Nakanishi, and Mayor Chandler NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — None ABSTAIN: COUNCIL MEMBERS — None OLIVIA NASHED City Clerk 2022-269 EXHIBIT A Reflects Revisions to Section 'and Exhibit C Insurance SITE USE AND SERVICES AGREEMENT BETWEEN CITY OF LODI, a municipal corporation (OWNER) ENCHANTED ROCK ELECTRIC, LLC, a Texas limited liability company (LICENSEE) CALIFORNIA DEPARTMENT OF WATER RESOURCES (CDWR) Project Description: 48 Megawatt Natural Gas Power Plant 2001 W. Turner Road APN 015-64-008 Table of Contents 1. Definitions...............................................................................................................................1 2. Use of Site & Scheduling Services ..........................................................................................6 3. Installation of the Facility., 7 ....................................................................................................... 4. Term.......................................................................................................................................10 5. Purchase Option.....................................................................................................................10 6. Compensation: Billing............................................................................................................1 l 7. Force Maieure..........................................................................................................................12 8. 13vents of Default.....................................................................................................................13 9. Remedies: 'Termination Rights .................................................................................... .......14 10. Obligations Upon Termination..............................................................................................15 11. Indemnification.......................................................................................................................16 12. Insurance.................................................................................................................................17 13. Re rescritations gad Warranti............................................................................................18 14. Limitations of Liabilit...........................................................................................................18 15. Assi�........................................................................................................................19 16. Confidentiality ........................................................................................................................ 20 17. Notices....................................................................................................................................20 18. General...................................................................................................................................21 4889-1345-6954v.2 0114986-000003 1 SITE USE AND SERVICES AGREEMENT THIS SITE USE AND SERVICES AGREEMENT ("Agreement"), dated a$: of October 2022 ("Effective Date"), is made and entered into by and between the City I of Lodi, a municipal corporation ("Owner") and Enchanted Rock Electric, LLC, a Texas limited liability company qualified to do business in California ("Licensee"), and solely for purposes of Section 5, the California Department of Water Resources ("CDWR"). Each of Owner, Licensee; and CDWR are also referred to herein as a "Party" and collectively as the "Parties". RECITALS A. WHEREAS, pursuant to, inter alia, California Water Code section 80710; subdivision (b)(1)(B), CDWR is implementing the Electricity Supply Strategic Reliability Reserve Program created by California Assembly Bill 205, as amended by Assembly Bill 209 ("Program"), under which CDWR, to secure generation resources for summer electrical reliability, may construct, own and operate, or contract for the construction and operation of, contract for the purchase of electricity from, or finance through loans, reimbursement agreements, or other contracts new emergency and temporary power generators of five megawatts or more; and B. WHEREAS, Licensee has contracted with CDWR to design, install, test, commission, operate, maintain and decommission certain natural gas distributed generation projects and related equipment and facilities required in connection with ilrstalling, testing, commissioning, operating, maintaining and decommissioning such projects (each, a "Facility") on behalf of CDWR; and C. WHEREAS, Owner owns the Site (as defined below), which can site and support a Facility on a temporary basis to allow the Facility to be used to provide some of the additional energy supplies required by the State of California during the period of this Agreement; and D. WHEREAS, Owner intends to grant Licensee a license to use the Site on the terms and conditions set forth herein; and E. WHEREAS, the Parties understand that the Site is only available on a temporary basis as provided in this Agreement, and the Facility will, subject to the purchase option herein, be required to be decommissioned and removed from the Site on or before the expiration of the term of this Agreement. NOW, THEREFORE, for good and valuable consideration, the Parties agree as follows: Definitions. (a) When used herein, the following capitalized terms will have the mean ings set forth below: 4889-1345-6954v.2 0114986-000003 "Affiliate" means, with respect to any Person, each other Person that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlled by" and "under common control with"), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by contract or otherwise. "Balancing Authority Tariff' means the tariff and protocol provisions of the California Balancing Authority. For the avoidance of doubt, the CAISO Tariff is the Balancing Authority Tariff if referring to the CAISO as the applicable California Balancing Authority. "Bankrupt" means with respect to any entity, such entity (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it and such petition filed or commenced against it is not stayed or dismissed within ninety (90) days thereafter, (ii) makes an assignment or any general arrangement for the benefit of creditors, (iii) otherwise becomes bankrupt or insolvent (however evidenced), (iv) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, or (v) is generally unable to pay its debts as they become due. "Business Day" means any day other than Saturday, Sunday, and any day that is a holiday observed by Federal Reserve member banks in San Francisco, California. "CAISO" means the California Independent System Operator Corporation or any successor entity performing similar functions. "CAISO Tariff' means the California Independent System Operator Corporation Agreement and Tariff, Business Practice Manuals (BPMs), and Operating Procedures, as the same may be amended or modified from time -to -time and approved by FERC. "California Balancing Authority" means the responsible entity that integrates resource plans ahead of time, maintains load -interchange generation balance within a balancing authority area, and supports interconnection frequency in real time, with control over a balancing authority area primarily located in California and operating for retail sellers and local publicly owned electric utilities and includes the CAISO and a local publicly owned electric utility operating a transmission grid that is not under the operational control of the CAISO. "CEC" means the California Energy Commission, or any successor agency performing similar functions. "Claiming Party' has the meaning defined in Section 7(b). "Confidential Information" means any information disclosed in writing by one Party to the other Party that is or relates to (a) the terms and conditions of, and proposals and negotiations related to, this Agreement, (b) engineering specifications, pricing, trade secrets, technical data, methods, designs, software, inventions, techniques, strategies, product specifications, financial information, internal memoranda and correspondence, and third -party confidential information as 4889-1345-6954v.2 0114986-000003 2 well as all analyses, compilations, data, studies, notes, translations, memoranda or other documents prepared by the Receiving Party containing or based in whole or in part on any Confidential Information, or (c) information that the Disclosing Party stamps or otherwise identifies as "confidential" or "proprietary" before disclosing it to the Receiving Party; provided however, that Confidential Information shall not include (i) information that was publicly available at the time of the disclosure, other than as a result of a disclosure in breach of this Agreement; (ii) information that becomes publicly available through no fault of the Receiving Party after the time of the delivery; (iii) information that was rightfully in the possession of the Receiving Party (without confidential or proprietary restriction) at the time of delivery or that becomes available to the Receiving Party from a source not subject to any restriction against disclosing such information to the Receiving Party; and (iv) informa=ion that the Receiving Party independently developed without a violation of this Agreement. "Contract Year" means, as applicable, (i) the period from the Effective Date through December 31, 2022 and (ii) each subsequent calendar year thereafter. "Decommissioning Plan" has the meaning defined in Section 3(e). "Defaulting Party" has the meaning set forth in Section 8. "Early Termination Date" has the meaning set forth in Section 9(a)(i). "Effective Date" has the meaning set forth on the Preamble. "Energy Services Agreement" has the meaning defined in Section 2(f). "Event of Default" has the meaning defined in Section 8. "Facility Agreements" shall mean, for the Facility, as applicable, its (i) Participating Generator Agreement, (ii) Meter Service Agreement, (iii) the Local Utility Interconnection Agreement, and (iv) Energy Imbalance Market Participating Resource Agreement. "Force Majeure" has the meaning defined in Section 7(a). "Good Industry Practice" means those practices, methods and acts that would be implemented and followed by prudent builders and operators of electric generation facilities similar to the Facility in the western United States during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could reasonably have been expected to accomplish the desired result consistent with good business practices, reliability and safety, and shall include, at a minimum, those professionally responsible practices, methods and acts described in the preceding sentence that comply with manufacturers' warranties, restrictions in this Agreement, and the requirements of governmental authorities, WECC standards, the applicable California Balancing Authority and applicable Laws. Good Industry Practice is not intended to be the optimum practice, method or act to the exclusion of all others, but rather is intended to be any of the practices, methods and/or actions generally accepted in the region. 4889-1345-6954v.2 0114986-000003 3 "Governmental Authority" means any federal, state, local or municipal government, any political subdivision thereof or any other governmental, regulatory or judicial instrumentality, authority, body, agency, department, bureau, or entity with authority to bind a Party at law, including the applicable California Balancing Authority; provided, however, that "Governmental Authority" shall not in any event include any Party. "Hazardous Substances" means (a) any chemical, material or substance that is listed or regulated under applicable Laws as a "hazardous" or "toxic" substance or waste, or as a "contaminant" or "pollutant" or words of similar import, (b) any petro_eum or petroleum products, flammable materials, explosives, radioactive materials, asbestos, urea formaldehyde foam insulation, and transformers or other equipment that contain polychlorinated biphenyls, and (c) any other chemical or other material or substance, exposure to which is prohibited, limited or regulated by any Laws. "Indemnified Party' means (i) if Licensee is the Indemnifying Party, each Owner Indemnified Party, and (ii) if Owner is the Indemnifying Party, each Licensee Indemnified Party. "Indemnifying Party" means (i) with respect to the indemnification obligations under Section I I (a), Licensee, and (ii) with respect to the indemnification obligations under Section I I (b), Owner. "Law" means any law, statute, rule, regulation, decision, writ, order, decree or judgment, permit, license or authorization, or any interpretation thereof, promulgated, adopted or issued by a Governmental Authority. "Lender" means, individually and collectively, any bank, financial institution, insurance company or other lender, including its or their agents and trustees, providing Owner and/or its Affiliates with financing or other credit facilities. "License" has the meaning defined in Section 2(a). "License Area" means the area designated "License Area" or. Exhibit A "License Fee" has the meaning defined in Section 6(a). "Losses" has the meaning defined in Section I I(a). "Non -Defaulting Party" has the meaning defined in Section u(a). "Owner Indemnified Parties" has the meaning defined in Section I I (a). "Owner Supplied Facilities" has the meaning defined in Section 3(g). "Owner's Reimbursable Site Costs" has the meaning defined in Section 3(g). "Owner's Representative" has the meaning defined in Section 3(k). 4889-1345-6954v.2 0114986-000003 4 "Permit" means any permit, authorization, consent, approval, agreement, license, order, filing, waiver, exception, variance or exemption filed with or issued by any Governmental Authority and shall include those siting and operating permits and licenses required for the installation, testing, commissioning, operation, maintenance, decommissioning or removal of the Facility in compliance with all applicable Laws. "Person" means any individual, sole proprietorship, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, incorporated organization, institution, public benefit corporation, unincorporated organization, government entity or other entity. "Requested Confidential Information" has the meaning defined in Section 16(b). "Required Permits" are those listed in Exhibit F attached he -eto. "Site" means the real property described as the "Site" on Exhibit A attached hereto. "Site Plan" means Exhibit A attached hereto. "System Sale, Operation, Maintenance & Services Agreement" means the agreement between Licensee, Enchanted Rock Ops, LLC and CDWR dated October 15, 2022 for the design, installation, testing, commissioning, operation, maintenance and decommissioning of the Facility. "Transmission Owner" means Pacific Gas and Electric Company. "WECC" means Western Electricity Coordinating Council. (b) The following rules of interpretation shall apply to this Agreement, unless otherwise specified or required by the context: (i) Terms defined in the singular shall include the plural and vice versa; (ii) References to "Sections" and "Exhibits" shall be to sections or exhibits of this Agreement; (iii) All references to a particular entity shall include a reference to such entity's successors and permitted assigns; (iv) The words "herein," "hereof," and "hereunder" shall refer to this Agreement as a whole and not to any particular section or su3section hereof; (v) References to this Agreement shall include a reference to all exhibits hereto, as the same may be amended, modified, supplemented, or replaced from time to time; (vi) Terms used in the masculine shall include the feminine and vice versa; 4889-1345-6954v.2 0114986-000003 5 (vii) The terms "include" and "including," when used in this Agreement, shall mean to include without limitation; and (viii) The term "day" when used in this Agreement shall mean a calendar day unless specified otherwise. Capitalized terms, used but not otherwise defined herein, shat= have the meaning ascribed to them in the applicable California Balancing Authority Tariff. 2. Usti +jf-site -& Scheduling Servicch. (a) Subject to Section 2(e) below, Owner hereby grants to Licensee, on and subject to the terms of this Agreement, a license to use the License Area for the purposes of installing, testing, commissioning, operating, maintaining and decommissioning the Facility (the "License"). (b) Subject to Section 2(e) below, the License will be an exclusive license with respect to the area on which the Facility is physically located, but the use of the License Area pursuant to the License shall be strictly limited to the purposes described in Section 2(a) and must comply with the terms and conditions of this Agreement. Licensee shall be permitted to sublicense all of its rights and obligations under this Agreement wi&out the prior consent of Owner, including sublicensing the License to CDWR. (c) The License granted under this Agreement is a license only and does not convey any estate or interest in real property or any right or interest to use or occupy the Site or the License Area beyond the Term or other than as expressly provided in this Agreement. Owner does not pursuant to this Agreement undertake any obligations with respect to the operation or maintenance of the Facility. (d) All use of the License by Licensee, its agents, employees, representatives, contractors and consultants, shall comply with applicable Law and Permits, as well as with Owner's site safety and security rules as in effect from time to time. All Persons entering on to or using the License Area shall be required to sign an agreement acknowledging such site safety and security rules and agreeing to comply with them. (e) The Parties acknowledge and agree that the Site Plan that is attached to this Agreement as of the Effective Date is preliminary in nature and does not fully delineate the Site, or the License Area. In general, the Site and the License Area will be located within the boundary shown on Exhibit A. The Parties intend to finalize the Site Plan as they develop more detailed construction specifications for the installation of the Facility and agree that they will amend this Agreement to attach an updated Site Plan that fully delineates the Site or the License Area as soon as it is final and in all events before testing and commissioning of the Facility begins. (f) During the Term, if requested by Licensee (a "Scheduling Request"), Owner shall serve, or cause a third party to serve, as the Scheduling Coordinator for the Facility. Following a Scheduling Request, Owner shall execute, or cause to be executed, an energy services agreement with the Scheduling Coordinator, for the Scheduling Coordinator 4889-1345-6954v.2 0114986-000003 6 services contemplated herein ("Energy Services Agreement"). Owner shall coordinate with Licensee on negotiating the terns and conditions of the Energy Services Agreement and Licensee must approve the terms and conditions prior to the execution of the Energy Services Agreement. Following a Scheduling Request, Owner shall take all actions and execute and deliver to the California Balancing Authority all documents necessary to authorize, designate or maintain the applicable party as the Scheduling Coordinator for the Facility. Owner's obligations under this Section 2(f) are subject to (i) the receipt of all the Required Permits and confirmation that each Facility is capable of operating in accordance with such Required Permits and (ii) the Facility having obtained all necessary approvals and certifications to operate in the applicable California Balancing Authority. (g) Owner acknowledges and agrees that the Facility shall be dispatched in accordance with the Dispatch Protocols as set forth in and developed pursuant to the System Sale, Operation, Maintenance & Services Agreement between Licensee and CDWR. Following a Scheduling Request, Owner or its designated third party shall submit schedules for the Facility as dictated by the Dispatch Protocols or the California Balancing Authority; provided that, if there is a conflict between instructions given by the Dispatch Protocols and instructions given by a California Balancing Authority, the instructions given by the California Balancing Authority shall govern. Following a Scheduling Request, Owner or its designated third party shall also submit any updates to such schedules as instructed by the Dispatch Protocols or the applicable California Balancing Authority in accordance with the Balancing Authority Tariff, applicable Law and Required Permits and Good Industry Practices. (h) Owner acknowledges and agrees that Licensee shall receive all California Balancing Authority revenues and credits with respect to the Facility for the benefit of, and to be transferred to, CDWR. (i) Subject to timely receipt of all necessary informatior_ from Licensee, Owner will notify the California Balancing Authority, as and to the extent required by the Balancing Authority Tariff, including on a real time basis as necessary, with respect to the availability of the Facility and any outages affecting a Facility or its meteorological stations and monitoring systems, its SCADA system and any telemetry or communications links used to transmit the Facility's availability or operating status and the local meteorological conditions to the California Balancing Authority, in accordance with the Balancing Authority Tariff. 3. Installation of the Facili . (a) Except as expressly provided in Section 3 (g), Licensee and its contractors will be frilly responsible for the design, purchase, delivery, installation, testing, commissioning, operation, maintenance, decommissioning and removal of the Facility and for the acts and omissions of any other contractors or subcontractors engaged by Licensee. Except for Owner's obligation to provide the License for the License Area and to make the Owner Supplied Facilities available to Licensee, Licensee and its contractors will be responsible for all work necessary to design, install, test and commission the Facility. 4889-1345-6954v.2 0114986-000003 7 (b) Licensee will keep the Site and the License Area and all other property of Owner and its Affiliates free and clean of all mechanic's and materialmen's liens and other liens relating to payment or nonpayment of such costs and will pay or discharge any such liens within forty-five (45) days after notice thereof from Owner. If Licensee fails to do so, Owner may, without limiting its rights under Sections 8 or 9, pay or discharge any or all such liens, and Licensee shall promptly reimburse Owner for all amounts incurred in connection with the payment or discharge of such liens, including all amounts paid to the lienor, attorneys' fees, filing or recording fees and title insurance costs. Licensee and its contractors will also be responsible for site safety and security with respect to Ell work in or use of the License Area. All site safety and security plans by Licensee and its contractors shall be consistent with Owner's site safety and security rules and shall be subject to Owner's prior review and approval, which will not be unreasonably withheld, but any such approval shall not be an approval of any acts or omissions of Licensee or its contraztors or any assumption of any obligation or responsibility with respect to site safety or security with respect to work in or use of the License Area. (c) In connection with the installation of the Facility, Owner will provide the following (the "Owner Supplied Facilities"): (i) Owner will provide an interconnection to its [insert description of interconnect facility] in the location shown or to be shown on the Site Plan and/or Installation Plans and Specifications. (ii) Owner will provide an interconnection to telemetry and communication facilities for communicating with the applicable California Balancing Authority and the Transmission Owner in the location shown or to be shown on the Site Plan and/or Installation Plans and Specifications. Licensee will be responsible for all interconnections between the Facility and the Owner Supplied Facilities; provided that, Owner shall cooperate with Licensee and if applicable, execute, any necessary Facility Agreements. Licensee will reimburse Owner for all third party costs and expenses reasonably incurred by Owner and its Affiliates in making the Owner Supplied Facilities available to Licensee, including (A) electrical interconnection fees, costs and charges associated with establishing, confirming, upgrading or maintaining the interconnection of the Facility to the applicable California Balanc_ng Authority grid, (B) costs of preparing and, if necessary, modifying the [insert interconnection facility description], and (C) administrative and management costs incurred in connection with the foregoing prior (collectively, "Owner's Reimbursable Site Costs"), provided that Owner's Reimbursable Site Costs incurred through testing and commissioning of the Facility shall not in the aggregate exceed $4,300,000 without Licensee's written consent. The Parties recognize that certain Owner's Reimbursable Site Costs may be incurred or billed after the Facility is tested and commissioned and agree that such Owner's Reimbursable Site Costs will be billed periodically as provided in Section 6(c). Owner will use commercially reasonable efforts to make the Owner Supplied Facilities on or before May 30, 2023. The Parties acknowledge and agree that this Agreement may be terminated for various reasons provided for herein prior to the Facility having been installed, tested and commissioned, but agree that, so long as Owner uses commercially reasonable efforts to carry out its obligations 4889-1345-6954v.2 0114986-000003 8 under this Agreement and to make the Owner Supplied Facilities available to Licensee, Licensee will reimburse Owner and its Affiliates for all Owner's Reimbursable Site Costs incurred hereunder (but not in excess of the maximum amount set forth above), regardless of whether or not the Facility is ultimately installed, tested and comr_lissioned. (d) The Owner Supplied Facilities are supplied without warranty, and, while Owner will undertake the repair and maintenance of the Owner Supplied Facilities in accordance with Good Industry Practices, all costs and expenses of such repair and maintenance shall be included in Owner's Reimbursable Site Costs and reimbursed to Owner as provided herein. (e) Not later than the earlier of (i) July 1, 2027 if the Renewal Option has not been exercised, (ii) January 1, 2030 if the Renewal Option has been exercised or (ii) sixty (60) days after an Early Termination Date, Licensee will provide Owner a plan for decommissioning the Facility in accordance with applicable Laws and Permits (the "Decommissioning Plan"), for Owner's review and approval, which will not be unreasonably withheld. Owner will review the Decommissioning Plan and provide any proposed changes within five (5) days after receipt, and Licensee will make any changes to the Decommissioning Plan necessary to comply with applicable Law or Permits or this Agreement. Once agreed, the Decommissioning Plan will be attached to this Agreement as Exhibit E, but failure to attach the Decommissioning Plan as an exhibit or to agree on a Decommissioning Plan will not relieve Licensee of its obligation to decommission the Facility at the end of the Term in accordance with the requirements of applicable Law and Permit and this Agreement. (f) Owner will designate one or more individuals (collectively, "Owner's Representative") to act as the point of contact between Owner and Licensee and its contractors and will notify Licensee of the name and contact information of such Owner Representative. Licensee will also designate one or more individuals (collectively, "Licensee's Representative") to act as the point of contact for Licensee and will notify Owner of the name and contact information of Licensee's Representative. Owner's Representative will coordinate with Licensee in comlection with the installation, testing, commissioning, decommissioning and removal of the Facility, including coordination of the schedules for work to be done by Licensee and by Owner, respectively; provided that no such coordination or other activities by Owner's Representative shall be considered an approval of or assumption of liability with respect to any work done by Licensee or its contractors. (g) CDWR will be the owner of and have title to the Facility, including the equipment and facilities installed by Licensee to interconnect to the Owner Supplied Facilities, and Owner will not have title or any other ownership interest in either the Facility or such other equipment and facilities. The Facility will remain the personal property of CDWR and will not be deemed fixtures to the Site or License Area. CDWR will be responsible for and will timely pay all property taxes and other taxes assessed against or with respect to the Facility. The Parties acknowledge and agree that Owner or its Affiliates own the Owner Supplied Facilities, and the other electric and utility facilities outside of the boundaries of the Site, except for equipment and facilities installed by Licensee and its 4889-1345-6954v.2 0114986-000003 9 contractors in the License Area. Owner will be responsible for and will timely pay all property taxes and other taxes assessed against or with respect to its property, if applicable. (h) As requested by Licensee, Owner shall cooperate, support, and provide reasonable documentation to obtain the Required Permits, as set forth in Exhibit F. 4. Term. This Agreement will be effective as of the Effective Date and will continue in effect until December 31, 2027, unless sooner terminated as provided herein (the "Initial Term" and together with any renewal term, the "Term"). As long as no Event of Default shall have occurred and be continuing hereunder, Owner shall grant to Licensee the option to renew (the "Renewal Option") the term of the License through June 30, 2030 (the period from January 1, 2028 to June 30, 2030, the "Renewal Term"). Licensee sha_l exercise such Renewal Option by delivering written notice of such election to Owner at least eight (8) months prior to the expiration of the Initial Term. Licensee acknowledges and agrees that there are no rights to extend the Term beyond the expiration of the Renewal Term. 5. Purchase O ) i (a) Subject to Owner's timely payment of the Purchase Payment, CDWR hereby grants to Owner an exclusive and irrevocable option to purchase the Facility on the terms and conditions set out in this Section 5 (the "Purchase Option"). (b) The Purchase Option may be exercised by Owner during two time periods, conditioned on the Renewal Option by Licensee. The initial term (the "First Option Term") shall commence on January 1, 2027 and automatically expire at 1=;59 p.m. on March 15, 2027 (the "First Option Termination Date"). In the event the initial Purchase Option is not exercised by Owner and the Renewal Option is exercised by Licensee, the term of the final Purchase Option (the "Second Option Term") shall commence on the earlier of (i) November 1, 2029, or (ii) any Early Termination Date and automatically expire two months following the applicable foregoing date (the "Second Option Termination Date"). (c) At any time during either Option Term, if Owner is not then in default under this Agreement, Owner may exercise the Purchase Option by timely sending CDWR and Licensee a written notice of Owner's intention to exercise the Purchase Option (the "Exercise Notice") on the terms set forth in subparagraph (e) below. CDWR and Owner shall thereafter promptly and in good faith negotiate and execute a purchase agreement pursuant to which CDWR shall sell and Owner shall acquire the Facility for the Purchase Payment. If Owner does not timely exercise the Purchase Option i ---i the manner described herein on or before the Option Termination Date, the Purchase Option will automatically terminate. Notwithstanding the above, Licensee's termination right3 under this Agreement are not impacted by the Exercise Notice or the existence of ongoing negotiations between CDWR and Owner. (d) "Purchase Payment" shall mean Eleven Million Two Hundred Thousand dollars ($11,200,000). 4889-1345-6954v.2 0114986-000003 10 (e) Under the terms of any purchase agreement between Owner and CDWR, Owner will take title to the Facility and CDWR will retain a beneficial interest in a portion of the capacity of the Facility, as set forth in the table below ("CDWR's Capacity Interest"). CDWR's Capacity Interest will be for a period of thr--e (3) years beginning January 1, 2028 and ending December 31, 2030 if the Purchase Option is exercised during the First Option Term, or July 1, 2030 and ending on June 30, 2033 if the Purchase Option is exercised during the Second Option Term ("Capacity Interest Period"), at which time CDWR will no longer have any interest in the Facility. During the Capacity Interest Period, Owner will be solely responsible for the operation and maintenance of the Facility, serve as Scheduling Coordinator for the Facility, and oversee fuel procurement and management. During the Capacity Interest Period, CDWR will retain all revenue from the operation of CDWR's Capacity Interest in the Facility and will reimburse Owner for all fuel consumed by the generation units associated with CDWR's Capacity Interest in the Facility. Owner and Licensee agree to negotiate in good faith to enter into such operation and maintenance agreements as may be necessary for Owner to operate the Facility on economic terms and conditions consistent with those between CDWR and Licensee and taking into account any modifications in the scope of services required by Owner. Year CDWR Capacity Interest as a Owner Capacity Interest as a Percentage of the Total Percentage of the Total Output of the Facility in Output of the Facility in Megawatts, Net of Any Megawatts, Net of Any Derates Derates 1 1 75% 25% 2 50% 50% 3 25% 75% 4 0% 100% • 110 0 KW171 WIMS I zli i �I (a) In addition to the reimbursement of Owner's Re_mbursable Site Costs, Licensee will pay to Owner an annual site hosting fee for the Licenses granted herein ("License Fee"), as set forth in Exhibit B. The License Fee for 2023 shall be the first License Fee owed under this Agreement and will be due and payable on January 1, 2023, and the License Fee for each subsequent year during the Site License Term will be due and payable on February 15 of the respective year. In the event a Scheduling Request is made by Licensee, Licensee will pay to Owner $200,000 in respect of each full year that Owner serves as the Scheduling Coordinator or causes a third party to serve as the Scheduling Coordinator as a fee in consideration of the Scheduling Services (the "Services Fee"). (b) Payment of the Services Fee, if applicable, and the License Fee as and when required will be Owner's full compensation for the grant of the License and use of the License Area and for the costs of personnel supplied by Owner and As Affiliates in carrying out Owner's obligations under this Agreement, providing the Scheduling Services as required hereunder, and making the Owner Supplied Facilities available to Licensee. 4889-1345-6954v.2 0114986-000003 11 (c) Owner shall use commercially reasonable efforts to invoice Owner's Reimbursable Site Costs due to Owner hereunder monthly on or before the twentieth (20th) day of the month following the month in which such costs we -e incurred. Subject to Licensee's rights under Section 6(d), payments for reimbursement of Owner's Reimbursable Site Costs under this Agreement shall be made on or before the forty-fifth (45th) day after receipt of the invoice. If the due date falls on a non -Business Day, then the payment shall be due on the following Business Day. Payment shall be deemed delivered on time if sent via electronic funds transfer, as set forth in Exhibit D, prior to 5 p.m. Pacific time on the due date. Licensee shall submit all payments under this Agreement to Owner at the payment address shown in Exhibit D. Any changes to the address designated for purposes of payment must be made by written notice to Licensee at the address listed in Exhibit D at least sixty (60) days prior to the first submittal of payment to the new address. (d) The Services Fee and the License Fee payable in each Contract Year pursuant to Section 6(a) is a fixed amount and is not subject to dispute. If Licensee wishes to dispute an invoice for Owner's Reimbursable Site Costs in whole or in part, it must give Owner written notice of the amount in dispute on or before the due date for the invoice, including a reasonably detailed statement of the basis for such dispute (including supporting documentation, but it shall nonetheless pay the amount billed, including any disputed portion, on the due date for the invoice. If it is determined that a disputed amount that was paid was not in fact due and owing, Owner shall refund such amount to Licensee within thirty (30) days after resolution of such dispute, together with interest on such amount from the date paid to, but not including, the date refunded at the interest rate set forth in Section 6(e). (e) Interest on delinquent amounts (including amounts determined to be owed as a result of the resolution of a billing dispute) shall be calculated at the interest rate specified in the California Prompt Payment Act (Government Code Section 927 et seq.) as may be amended: from the original due date (or, for amounts not properly invoiced, the date that would have been the due date if such amounts were properly invoiced) to the date of payment. (f) Owner and its Affiliates shall keep complete and accurate records of Owner's Reimbursable Site Costs hereunder and shall maintain records for a period of three (3) years from the due date of the applicable invoices. Within a three (3) year period from the original due date of an invoice, Licensee may request in writing copies of such records to the extent reasonably necessary to verify the accuracy of any invoice. 7. Force Majeure. (a) "Force Majeure" means: any cause or event beyond the reasonable control of the affected Party which causes the affected Party to fail to perform that (i) was not specifically foreseeable as of the Effective Date; (ii) was not due to the fault or negligence of the affected Party, and (iii) could not reasonably have been avoided, overcome, prevented, or mitigated, by the affected Party's exercise of due diligence and use of reasonable precautions and efforts. Subject to the foregoing requirements, events that could qualify as Force Majeure include (x) acts of God, such as droughts, floods, earthquakes, volcanic eruption, epidemics, pandemics or other natural disasters, (y) fires, explosions, or accidents 4889-1345-6954v,2 0114986-000003 12 that could not have been prevented by acting in accordance with Good Industry Practice, or (z) war (declared or undeclared), riots, insurrection, rebellion, acts of the public enemy, acts of vandalism, terrorism and/or sabotage, civil disturbance, public disorder, blockades, embargoes, sanctions, import-export controls, or industry -wide strikes. However, Force Majeure shall not include the following events except the portions of such events caused solely by an event of Force Majeure as enumerated in clauses (x), (y; and (z) of the preceding sentence: (1) general market conditions or the economic hardship of either Party, (2) events arising from the failure to design, install, test, commission, operate, maintain, decommission or remove the Facility in accordance with Good Industry Practice, (3) events that merely increase the cost of a Party's performance; (4) failure of third parties to provide goods or services essential to a Party's performance, (5) Owner's ability to license the use of the Site or the License Area for more than the License Fee, (6) Licensee's ability to license or obtain the use of an alternate site for less than the License Fee, (7) any de- ay in providing, failure to obtain, or cancellation of, interconnection service, or (8) the inability of Licensee to make payments when due under this Agreement. (b) To the extent either Party is prevented by Force Majeure from carrying out, in whole or part, its obligations under this Agreement, and such Party (the "Claiming Party") gives notice and details of the Force Majeure to the other Party as soon as practicable, then, unless as otherwise expressly provided herein, and as limit --d in Section 7(c), the Claiming Party shall be excused from the performance of its obligations (other than the obligation to make payments then due or becoming due with respect to performance prior to the Force Majeure) to the extent affected by the Force Majeure, and no Event of Default shall occur as a result of the failure to perform any excused obligation. The Claiming Party shall remedy the Force Majeure with all reasonable dispatch. The non -Claiming Party shall not be required to perform or resume performance of its obligations to the Claiming Party corresponding to the obligations of the Claiming Party excused by Force Majeure. (c) Any Party claiming Force Majeure shall advise the other Party as soon as possible of the occurrence of the Force Majeure event and shall provide the other Party with the basis of the claim, in writing, within ten (10) Business Days of the occurrence of the Force Majeure event. The Parties shall make reasonable efforts to avoid the adverse impacts of a Force Majeure and to resolve the event or occurrence once it has occurred to resume performance. 8. Evenh of Default. An "Event of Default" shall mean, with respect to a Party (a "Defaulting Party"), the occurrence of any of the following: (a) With respect to either Party: (i) the failure to make, when due, any payment required pursuant to this Agreement if such failure is not remedied within five (5) Business Days after written notice of the failure, (ii) any representation or warranty made by such Party herein is false or misleading in any material respect when made or when deemed made or repeated if 4889-1345-6954v.2 0114986-000003 13 the representation or warranty is continuing in nature, which misrepresentation or breach of warranty is not cured within thirty (30) days after written notice thereof, (iii) except for an obligation to make payment when due, the failure to perform any material covenant or obligation set forth in this Agreement (except to the extent constituting a separate Event of Default or to the extent excused by a Force Majeure) if such failure is not remedied within thirty (30) days after written notice, which written notice sets forth in reasonable detail the nature of the failure; provided, however, that if such failure is not reasonably capable of being remedied within the thirty (30) day cure period, such Party shall have such additional time (not exceeding an additional ninety (90) days unless the Parties agree on a longer period) as is reasonably necessary to remedy such failure, so long as such Party promptly commences and diligently pursues such remedy; (iv) Such Party becomes Bankrupt; (v) Such Party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all of its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer, the resulting surviving or transferee entity fails to assume all the obligations of that Party under this Agreement to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other Party; (vi) Such Party assigns this Agreement or any of its rights hereunder other than in compliance with Section 15; or (vii) Such Party breaches its obligations under Section 16 and such breach is not remedied within five (5) Business Days after written notice thereof. 9. Remedies; Tel-mination Ri hts. (a) If an Event of Default with respect to a Defaulting Party has occurred and is continuing, the other Party ("Non -Defaulting Party") shall have the right to do any one of more of the following, which rights shall be cumulative and in addition to the rights of the Parties otherwise provided in this Agreement: (i) Terminate this Agreement by sending a written notice, designating a day, no earlier than the fifth (5th) day after the day such notice is deemed to be received and no later than forty-five (45) days after such notice is deemed to be received, as an early termination date of this Agreement ("Early Termination Date"); (ii) Accelerate all amounts owing between the Parties as of the Early Termination Date; (iii) Withhold any payments due to the Defaulting Party under this Agreement pending resolution of amounts owed by or to each Party; 4889-1345-6954v.2 0114986-000003 14 (iv) Suspend performance of its obligations under this Agreement; (v) If the Defaulting Party is Owner, recover any License Fee paid by Licensee for the Contract Year in which the Event of Default occurred; (vi) Subject to Section 14(a), recover monetary damages as allowed by law; and (vii) Exercise any other rights or remedies available at law or in equity to the extent otherwise permitted under this Agreement; The Non -Defaulting Party's election to exercise or not exercise any of the above rights following an Event of Default shall not constitute a waiver by the Non -Defaulting Party of any remedy with respect to any subsequent Event of Default by the Defaulting Party. Amounts accelerated pursuant to Section 9(a)(ii) shall be netted, and the Party owing the net amount shall pay such amount to the other Party (or apply such amount against other amounts owed by the Defaulting Party, if the Non -Defaulting Party owes the net amount). (b) Reserved. (c) In addition to a Non -Defaulting Party's right to term -'nate as the result of an Event of Default with respect to the Defaulting Party, the Parties will have the following rights to terminate this Agreement by sending written notice designating an Early Termination Date in the same manner as provided in Section 9(a)(i) (although such termination is not due to an Event of Default). Any such termination shall be with no further liability on the part of either Party, except (x) Licensee will reimburse Owner and its Affiliates for all Owner's Reimbursable Site Costs incurred by Owner and its Affiliates through the effective date of termination, (y) no part of the License Fee previously paid shall be re=undable or refunded on account of such termination, and (z) all indemnification obligations in Section 10 shall survive such termination and shall continue in effect: (i) Licensee may terminate this Agreement if Licensee is unable to obtain the Required Permits; and (ii) Licensee may terminate this Agreement if the System Sale, Operation, Maintenance & Services Agreement between Licensee and CDWR is terminated for any reason. 10. obligations rmination. In connection with the termination of this Agreement, whether as a result of the expiration of the Term of this Agreement, the declaration of an Early Termination Date, or otherwise, in addition to such obligations or liabilities as may arise due to an Event of Default, Licensee shall, subject to Owner not exercising the Purchase Option under Section 5, on or before the termination date, at its sole cost and expense, (i) decommission the Facility in accordance with the Decommissioning Plan, including obtaining all necessary consents and approvals from the applicable Governmental Authorities, (ii) instruct Owner to disconnect the Facility from the Owner Supplied Facilities, (iii) remove 4889-1345-6954v.2 0114986-000003 15 the Facility and all related equipment and facilities owned by CDWR from the License Area in accordance with all applicable Laws and Permits, (iv) remove, clean and dispose of all Hazardous Substances brought on to or used on the Site and the License Area or any adjacent property of Owner or its Affiliates by Licensee, its employees, agents, representatives, contractors or subcontractors, in compliance with all applicable Law and Permits, and (v) except as otherwise agreed by Owner and Licensee repair any damage to the License Area caused by Licensee or its employees, agents, representatives, contractors or subcontractors during the Term or in connection with the decommissioning and removal of the Facility. Upon Licensee's request, Owner shall disconnect the Facility from the Owner Supplied Facilities within five (5) Business Days. Licensee shall reimburse Owner for all Owner's Reimbursable Site Costs incurred by Owner and its Affiliates through the effective date of termination, and if the termination was not due to an Owner's Event of Default, no part of the License Fee previously paid shall be refundable or refunded on account of such termination. For purposes of sub clause (iv), the environmental condition of the Site and License Area shall be established by reports and other information previously prepared by or for Owner and its Affiliates, which will be provided by Owner to CDWR within thirty (30) days after the Effective Date, or as otherwise mutually agreed by the Parties. 11. Indemnification. (a) To the fullest extent allowed by law, Licensee shall indemnify and hold harmless Owner, its Affiliates and their respective officers, directors, employees, partners, lenders, agents and representatives, and their respective successors and assigns (the "Owner Indemnified Parties") from and against any and all losses, claims, demands, damages, liabilities, judgments, fines, penalties, costs and expenses, including reasonable attorneys' fees, expert fees and court costs ("Losses"), incurred by or asserted against any Owner Indemnified Party arising out of or resulting from (i) any injury or damage to persons or property as a result of any acts or omission of Licensee, its employees, agents, representative, contractors or subcontractors in, on or about the License Areas or in the performance of any work or activities related to this Agreement, (ii) the breach of any covenant or representation made by Licensee under this Agreement, (iii) any challenge to, attempt to invalidate or invalidation of any Required Permit, (iv) all Owner's Reimbursable Site Costs (subject to the maximum amount limitations set forth in this Agreement), (v) all costs and expenses that Licensee, its contractors and subcontractors are required to pay under this Agreement, (vi) all costs, claims, clean up and remediation costs, fines, penalties and other liabilities arising from or related to the cleanup or disposal of any Hazardous Substances brought on to the Site or the License Area or any adjacent property of Owner or its Affiliates by Licensee, its employees, agents, representatives, contractors or subcontractors, or used by Licensee, its employees, agents, representatives, contractors or subcontractors, in connection with the installation, testing, commissioning, operation, maintenance, decommissioning or removal of the Facility by Licensee, its employees, agents, representatives, contractors or subcontractors, except to the extent caused by Owner's gross negligence or willful misconduct or the gross negligence or willful misconduct of the Owner's Affiliates. 4889-1345-6954v.2 0114986-000003 16 (b) To the fullest extent allowed by law, Owner shall indemnify and hold harmless Licensee and CDWR and their respective its officers, directors, employees, agents and representatives, and their respective successors and assigns (the "Licensee Indemnified Parties") from and against any and all Losses incurred by or asserted against any Licensee Indemnified Party arising out of or resulting from (i) any injury or damage to persons or property as a result of any acts or omissions of Owner, its employees, agents, representative, contractors or subcontractors in, on or about the Site or the License Area or in the performance of any work or activities related to this Agreement, (ii) the breach of any covenant or representation made by Owner under this Agreement, or (iii) all costs, claims, clean up and remediation costs, fines, penalties and other liabilities arising from or related to the cleanup or disposal of any Hazardous Substances existing on to the Site or the License Area or any adjacent property of Owner or its Affiliates prior to the Effective Date or brought thereon following the Effective Date by Owner, its employees, agents, representatives, contractors or subcontractors, its employees, agents, represematives, contractors or subcontractors, or used by Licensee, its employees, agents, representatives, contractors or subcontractors, in connection with the installation, testing, commissioning, operation, maintenance, decommissioning or removal of the Facility by Licensee. (c) Promptly following receipt by an Indemnified Party of notice of a matter subject to indemnification under Section 11(a) or 11(b), as applicable, including the commencement of any action, administrative or legal proceeding, or investigation as to which an indemnity provided for in Section 11(a) or 11(b), as applicable, may apply the Indemnified Party shall give the Indemnifying Party written notice of such matter. The Indemnifying Party shall assume the defense of such matter with, if applicable, counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party, provided, if both the Indemnified Party and the Indemnifying Party are involved in such matter (including as co- defendants) 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 or that there is a conflict of interest between the interests of the Indemnified Party and the Indemnifying Party in such matter, the Indemnified Party shall have the right to select and be represented by separate counsel, at the Indemnifying Party's expense. If the Indemnifying Party fails to assume the defense of a claim or other matter properly indemnifiable under Section 11(a) or I I(b), as applicable, the Indemnified Party may at the expense of the Indemnifying Party contest, settle, or pay such claim as it considers appropriate. (d) The provisions of this Section 11 shall survive the termination of this Agreement. 12. insurance. Each Party will obtain and maintain in force the insurance described in Exhibit C. However, such insurance shall not be a limitation on a Party's liabilities or obligations hereunder, nor will failure to obtain or maintain any insurance relieve a Party of any such obligations or liabilities. Each Party shall be responsible for all deductible amounts under such insurance policies.. The policy language shall provide, or be endorsed to provide, that the self-insured retention may be satisfied by either the named insured or the other Party. Neither Owner nor Licensee shall be responsible for procuring insurance coverage with respect to the Facility during the term of this Agreement. 4889-1345-6954v.2 0114986-000003 17 13. Renresentations and Warranties'. (a) As of the Effective Date, each Party represents and warrants to the other Party that: (i) it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; (ii) except for the Required Permits and Facility Agreements, it has received all regulatory authorizations necessary for it to legally perform its obligations under this Agreement, (iii) it is registered with the California Secretary of State to do business in California; (iv) the execution, delivery and performance of this Agreement are within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any applicable Law; (v) this Agreement, and any other document executed and delivered in accordance with this Agreement, constitutes its legally valid and binding obligation enforceable against it in accordance with its terms, subject to Laws of general applicability limiting the enforcement of creditors' rights and to any equitable defenses; (vi) it is not Bankrupt and there are no proceedings pending or being contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming Bankrupt; and (vii) there is not pending or, to its knowledge, threatened against it any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement. (b) As of the Effective Date, Owner represents and warrants that the Site is located in a previously disturbed land, and is not within the jurisdiction of the California Coastal Commission or San Francisco Bay Conservation and Development Commission. 14. Limit3 inns of Liahifity. (a) Notwithstanding anything herein to the contrary, except for liability resulting from its gross negligence or willful misconduct, each Party's liability under this Agreement in any Contract Year shall not exceed the License Fee paid in that Contract Year. (b) THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH 4889-1345-6954v.2 0114986-000003 18 EXPRESS REMEDY OR MEASURE OF DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY, THE OBLIGOR'S LIABILITY SHALL BE LIMITED AS SET FORTH IN SUCH PROVISION AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT WITH RESPECT TO LIABILITIES TO THIRD PARTIES, NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, OR OTHERWISE OBTAINING AN ADEQUATE REMEDY IS INCONVENIENT AND THE DAMAGES CALCULATED HEREUNDER CONSTITUTE A REASONABLE APPROXIMATION OF THE HARM OR LOSS. THE PARTIES FURTHER AGREE THAT PAYMENT OF SUCH AMOUNT SHALL BE LIQUIDATED DAMAGES AND NOT AS A PENALTY, AND IS THEREFORE NOT SUBJECT TO AVOIDANCE UNDER CALIFORNIA CIVIL CODE SECTION 1671. 15. Assignment. (a) Except as specifically provided herein, neither Party shall transfer or assign this Agreement or its rights hereunder, without the prior written consent of the other Party, which consent may not be unreasonably withheld, conditioned or delayed. Either Party may, without the consent of the other Party (and without relieving itself from any liabilities hereunder that arose prior to the date of such transfer unless assumed by the assignee) transfer or assign this Agreement or its rights hereunder: (i) to an Affiliate of such Party, or (ii) to any Person succeeding to all or substantially all of the assets of such Party; provided that the assignee assumes all of assignor's obligations; provided that such assignee assumes in writing all of assignor's obligations hereunder at least from and after the dat-. of such assignment or transfer, and agrees to be bound by this Agreement. (b) Notwithstanding anything herein to the contrary, each Party may, without the consent of other Party (and without relieving itself from any liabilities hereunder that arose prior to the date of such transfer), assign this Agreement to one or more Lenders as collateral for any financing or refinancing by such Party and/or its Affiliates. In connection with any such assignment of this Agreement, or any transfer, sale, pledge, encumbrance or assignment of this Agreement or the accounts, revenues or proceeds hereof in connection with any financing or other financial arrangements, if requested by a Party, the other Party (acting reasonably) shall enter into a mutually agreeable consent to collate-ral assignment with the Lender(s) on market terms and conditions and containing market notice and cure provisions, rights to payment and performance limitations of liability and other provisions; provided that the requesting Party shall be responsible at the other Party's request for the other Party's 4889-1345-6954v.2 0114986-000003 19 reasonable costs associated with the review, negotiation and execution of such consent to collateral assignment, including without limitation reasonable attorneys' fees. (c) Subject to the foregoing, this Agreement shall benefit and be binding on the permitted successors and assigns of the Parties hereto. Any assignment or transfer not made in compliance with these provisions shall be null and void and of no force or effect. 16. Confidentiality. (a) The Party receiving Confidential Information (the "Receiving Party") from the other Party (the "Disclosing Party") shall not disclose Confidential Information to a third party (other than the Party's officers, employees, directors, Lenders (including potential Lenders), counsel, accountants, directors or advisors, or any such representatives of a Party's Affiliates, who have a need to know such information and have agreed to keep such terms confidential as provided herein) except in order to comply with any applicable Law, regulation, or any exchange, control area or independent system operator rule or in connection with any court or regulatory proceeding applicable to such Party or any of its Affiliates; provided, each Party shall use commercially reasonable efforts to prevent or limit the disclosure. The Parties shall be entitled to all remedies available at law or in equity to enforce, or seek relief in connection with, this confidentiality obligation. (b) Each Party acknowledges that its obligations hereunder as Receiving Party are necessary and reasonable in order to protect Disclosing Party and Disclosing Party's business, and expressly acknowledges that monetary damages would be inadequate to compensate Disclosing Party for any breach or threatened breach by Receiving Party of any covenants and agreements set forth herein. Accordingly, each Party acknowledges that any such breach or threatened breach by it as Receiving Party will cause irreparable injury to Disclosing Party and that, in addition to any other remedies that may be available, in law, in equity or otherwise, Disclosing Party will be entitled to obtain injunctive relief against the threatened breach of this Agreement or the continuation of any such breach, without the necessity of proving actual damages. (c) Neither Party shall issue (or cause or permit its Affiliates to issue) a press release regarding the transactions contemplated by this Agreement unless both Parties have agreed upon the contents of any such public statement. 17. hiotices. All notices required to be given under this Agreement shall, except as otherwise provided herein, be in writing and shall be sent by prepaid mail, overnight courier or e- mail addressed to the respective Party at the addresses listed in Exhibit D or to such other address as may designated hereafter by a Party in writing by like notice from time to time. The Business Day the e-mail was sent shall be the date notice was deemed given if there is an electronic record on the date of transmission. Any notice delivered after 5:00 p.m. Pacific Time on a Business Day shall be deemed to have been delivered on the following Business Day. 4889-1345-6954v.2 0114986-000003 20 18. General. (a) This Agreement shall be governed by, construed under and enforced in accordance with the laws of the State of California without regard to principles of conflicts of law. The venue for any court action brought pursuant to this Agreement shall be Sacramento, California. (b) This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one Agreement after each Party has signed at least one counterpart, and the Parties have exchanged signed counterparts. The exchange of copies of this Agreement and of signature pages by facsimile transmission, in portable document format (pdf) or by other electronic means shall constitute effective execution and delivery of this Agreement and may be used in lieu of the original Agreement for all purposes. (c) This Agreement and the Exhibits attached hereto constitute the entire agreement and understanding between CDWR, Owner and Licensee with respect to the subject matter hereof and supersedes all prior agreements relating to the subject matter hereof, which shall be of no further force or effect. The Exhibits attazhed hereto are integral parts of this Agreement and are made a part of this Agreement by reference. (d) This Agreement may only be amended by an instrument in writing duly executed by Licensee and Owner, and with respect to Section 5, CDWR. (e) No waiver of either Party of an Event of Default by the other Party, nor any election to exercise or not exercise any rights following an Event of Default, shall constitute a waiver by such Party of any subsequent Event of Default by the other Party, whether similar or dissimilar, or of any remedy with respect thereto. (f) Nothing herein is intended to create or is to be construed as creating a joint venture, partnership, agency or other similar relationship between the Parties other than that of contracting parties as set forth in this Agreement. The rights and obligations of the Parties hereunder shall be independent of one another and shall be limited to those expressly set forth herein. (g) This Agreement is for the benefit of the Parties hereto and is not intended to be for the benefit of any third party except their respective Affiliates and Lenders of the Parties to the extent expressly set forth herein. (h) The Parties acknowledge and agree that each Party and its counsel have read this Agreement in its entirety, fully understand it and accept its terms and conditions. This Agreement shall be considered for all purposes as prepared through the joint efforts of the Parties and shall not be construed against one Party or the other as a result of the preparation, substitution, submission or other event of negotiation, drafting or execution hereof. (i) Upon the receipt of a written request from the other Party, each Party shall execute such additional documents, instruments and assurances and take such additional 4889-1345-6954v.2 0114986-000003 21 actions as may be reasonably requested by the other Party which are consistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement. [The next page is the signature page. The balance of this page is intentionally left blank.] 4889-1345-6954v,2 0114986-000003 22 IN WITNESS WHEREOF, the parties hereto hereby warrant that they have the requisite authority to execute this Agreement, and have executed this Agreement as of the date set forth in the first paragraph of this Agreement. OWNER: City of the Lodi, a municipal corporation By Printed Name: Stephen Schwabauer Title: City Manager Date Signed LICENSEE: Enchanted Rock Electric, LLC By Printed Name Title Date Signed ACKNOWLEDGED AND AGREED TO SOLELY FOR SECTION 5: California Department of Water Resources 911 Printed Name Title Date Signed Approved as to form: ATTEST By By Janice D. Magdich, City Attorney Olivia Nashed, City Clerk 4889-1345-6954v.2 0114986-000003 23 EXHIBIT A DESCRIPTION OF SITE AND LICENSE AREA Site: Assessor's Parcel No. 015-64-008, as identified in the Records of the Office of the Assessor, County of San Joaquin, California, and more particularly described as: [INSERT LEGAL DESCRIPTION] License Area: EXHIBIT B LICENSE FEE Year Annual Site License Fee 2023 $2,800,000 2024 $2,800,000 2025 $2,800,000 2026 $2,800,000 2027 $2,800,000 2028 (Renewal Option) $2,800,000, plus 5% or CPI1, whichever is less 2029 (Renewal Option) $2,800,000, plus 5% or CPI2, whichever is less 2030 (6 -month Renewal Option, ending June 30t") $1,400,000, plus 5% or CPI3, whichever is less San Francisco -Oakland -Hayward, CA Consumer Price Index effective Jaruary 1, 2028. 2 San Francisco -Oakland -Hayward, CA Consumer Price Index effective January 1, 2029, 3 San Francisco -Oakland -Hayward, CA Consumer Price Index effective January 1, 2030. EXHIBIT C INSURANCE Licensee Insurance. Licensee warrants that it will, at all times relevant to this Agreement, carry coverage for itself and on behalf of its Affiliates with responsible insurance providers (as evidenced by an AM Best rating of A- / VIII or better), that are licensed to do business in California. All policies that are written on a claims form must be maintained by the Licensee for at least three (3) years following the termination of this Agreement. Without limiting the foregoing, the insurance coverage shall include, but not be limited by, the following: Commercial general liability insurance, on an occurrence form, in an amount of not less than One Million Dollars ($1,000,000) per occurrence, and Two Million Dollars ($2,000,000) annual aggregate, including broad form property damage, products and completed operations, independent contractors, and personal and advertising injury. Excess/Umbrella liability coverage shall be provided on a broad form basis, with a limit not less than Five Million Dollars ($5,000,000) per occurrence, with the commercial general liability, auto liability and employers liability policies scheduled as underlying. Auto Liability covering owned, non -owned, leased and hired automobiles in an amount of not less than One Million Dollars ($1,000,000) each accident. Worker's Compensation Insurance and Disability Benefits Insurance, in compliance with state statutory limits and Employer's Liability in an amount of not less than One Million Dollars ($1,000,000). Licensee shall cause their Subcontractors to maintain at their own expense Worker's Compensation Insurance and Employers' Liability Insurance in the same amounts to cover employees hired by contractors that are not employed by Licensee. Pollution Liability: Pollution Liability with a limit of One Million Dollar ($1,000,000) per incident to cover any exposure related to hazardous materials stored, generated, handled, transported or disposed of by Licensee. Coverage shall apply to sudden and accidental pollution conditions. Owner and its respective affiliates, officers, directors, employees, agents and assigns shall be named as an additional insured under all insurance required hereunder, except workers compensation, and the Licensee shall, at the Effective Date of this Agreement and upon each anniversary date of each policy, deliver to Owner true and valid certificates attesting to the foregoing. (a) All policies must provide the following: (A) contractual liability covering the indemnification provisions of the Agreement; (B) a severability of interests provision; (C) separation of insureds clause; (D) a provision that coverage is primary as respects any insurance maintained by additional insureds; (E) a provision that coverage is non- contributory with other coverage or self-insurance maintain --d by Owner and any other additional insured party; and (F) if the policy is a claims-mado policy, then the retroactive date must be on or before the first date when any services were provided to Owner, whichever is earlier. All Licensee policies shall include a waiver of subrogation against Owner and other additional insured parties. Licensee agrees to obtain any endorsement that may be necessary to affect this waiver of subrogation, but this provision applies regardless of whether or not the Owner has received a waiver of subrogation endorsement from the insurer The Licensee, or its insurers, shall provide Owner not less than 30 days prior notice ahead of any policy cancellation or non -renewal, except 10 days' notice shall be given for non-payment of premium. Owner's Insurance. Owner warrants that it will, at all times relevant to this Agreement, carry coverage for itself and on behalf of its Affiliates with responsible insurance providers (as evidenced by an AM Best rating of A- / VIII or better), that are licensed to do business in California. All policies that are written on a claims form must be maintained by Owner for at least three (3) years following the termination of this Agreement. Without limiting the foregoing, the insurance coverage shall include, but not be limited by, the following: Commercial general liability insurance, on an occurrence form, in an amount of not less than One Million Dollars ($1,000,000) per occurrence, and Two Million Dollars ($2,000,000) annual aggregate, including broad form property damage, products and completed operations, independent contractors, and personal and advertising injury. Excess/Umbrella liability coverage shall be provided on a broad form basis, with a limit not less than Five Million Dollars ($5,000,000) per occurrence, with the commercial general liability, auto liability and employers liability policies scheduled as underlying. Property Insurance. Owner shall obtain and maintain in full force and effect during the term of this Agreement, all-risk property insurance in an amount equal to the full replacement cost value with respect to any equipment, parts, materials or other property owned by Owner with sub -limits as appropriate for facilities similar to the such property. All policies must provide the following: (A) contractual liability covering the indemnification provisions of the Agreement; (B) a severability of interests provision; (C) separation of insureds clause; (D) a provision that coverage is primary as respects any insurance maintained by additional insureds; (E) a provision that coverage is non-contributory with other coverage or self-insurance maintained by Owner and any other additional insured party; and (F) if the policy is a claims -made policy, then the retroactive date must be on or before the first date when any services were provided to Owner, whichever is earlier. All Owner policies shall include a waiver of subrogation against Licensee and other additional insured parties. Owner, or its insurers, shall provide Licensee not less than 30 days prior notice ahead of any policy cancellation or non -renewal, except 10 days' notice shall be given for non-payment of premium. EXHIBIT D NOTICES AND PAYMENTS Notice to Licensee: Enchanted Rock Electric, LLC Houston, TX 77002 Attn: Thais Gross, President Email: tgrossi@enchantedrock.com With a copy to: Enchanted Rock Electric, LLC Houston, TX 77002 Attn: Bobak Fatemizadeh, General Counsel Email: bfatemizadeh@enchantedrock.com Notice to Owner: Stephen Schwabauer, City Manager City of Lodi 221 W. Pine Street Lodi, CA 95240 email: sschwabauer lodi. ov & citymanager@lodi.gov With copies to: Jeff Berkheimer, Electric Utility Director City of Lodi 1331 S. Ham Lane Lodi, CA 95242 email: iberkheimer@lodi.gov Janice D. Magdich, City Attorney City of Lodi 221 W. Pine Street Lodi, CA 95240 email: jmagdich@lodi.gov Payment to Owner by ACH or Wire Transfer: Farmers and Merchants Bank of Central California 121 W. Pine Street Lodi, CA 95240 ABA: 121108441 Acct. 0010001301 EXHIBIT E DECOMMISSIONING PLAN [To be attached when agreed] EXHIBIT F REQUIRED PERMITS Authority to Construct Air Permit Authority to Operate Air Permit Stormwater Detention Permit Building, Electrical, Plumbing Permits CDWR Self -Certification Railroad crossing permit