Output Agreement

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					            POWER PURCHASE AGREEMENT
                           between
               ___________________________
                           as Seller,
                              and
Salt River Project Agricultural Improvement and Power District,
                           as Buyer
               Dated as of ___________, 2010




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                             POWER PURCHASE AGREEMENT
       This POWER PURCHASE AGREEMENT (“Agreement”) is entered into effective as of
July ___, 2010 (the “Effective Date”), between ________________ (“Seller”), and Salt River
Project Agricultural Improvement and Power District, a political subdivision of the State of
Arizona (“Buyer”). Seller and Buyer are sometimes referred to in this Agreement individually
as a “Party” and collectively as the “Parties.”

                                           RECITALS
       WHEREAS, Seller intends to develop, design, construct, own and operate a Photovoltaic
solar-powered electrical generation facility on a site located in ____________, Arizona, with an
expected total nameplate capacity of approximately _______ MW AC, and which is further
defined below as the “Project.”
       WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms set forth in
this Agreement, all Metered Output from the Project and the Environmental Attributes related to
the generation of such Metered Output.

                                         AGREEMENT
        NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and for other good and valuable consideration, the sufficiency and adequacy of which
are hereby acknowledged, the Parties agree to the following:

                                           ARTICLE I
                          DEFINITIONS AND INTERPRETATION
        1.1.    Definitions. As used in this Agreement, the following terms, when initially
capitalized, shall have the meanings specified in this Section 1.1.
       “AC” means alternating electric current.
         “Affiliate” means, with respect to any Person, each Person that directly or indirectly
controls, is controlled by, or is under common control with such designated Person. For
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, shall mean (a) the
direct or indirect right to cast at least 50% of the votes exercisable at an annual general meeting
(or its equivalent) of such Person or, if there are no such rights, ownership of at least 50% of the
equity or other ownership interest in such Person, or (b) the right to direct the policies or
operations of such Person.
       “Agreement” has the meaning set forth in the Preamble.
        “Ancillary Services” means operating reserves, regulation and automatic generator
control, black-start capability, reactive supply, voltage control, frequency response, other
products associated with electrical generation, capacity and energy that the Project is capable of


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providing and all other beneficial outputs of the Project not required for the operation of the
Project.
       “Applicable Law” means all federal, state, provincial, local or municipal laws, statutes,
codes, acts, treaties, ordinances, orders, judgments, writs, decrees, injunctions, rules, regulations,
governmental approvals, licenses, permits, directives, and requirements of all regulatory and
other Governmental Authorities.
      “Bankruptcy Law” means any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts.
        “Business Day” means any day except a Saturday, Sunday or a Federal Reserve Bank
holiday. A Business Day shall open at 8:00 a.m. MST and close at 5:00 p.m. MST.
Notwithstanding the foregoing, for scheduling purposes only, the term “Business Day” shall
have the meaning given to that term from time to time by NERC on its website
(http://www.nerc.com/~oc/offpeaks.html).
       “Buyer” has the meaning set forth in the Preamble.
        “Buyer’s Cost to Cover” means the positive difference, if any, between (a) reasonable
costs actually incurred by Buyer to purchase solar Photovoltaic electrical energy and
environmental attributes arising from the generation of solar Photovoltaic electrical energy
necessary to replace the Metered Output and Environmental Attributes (including any additional
reasonable transaction costs, including those related to transmission and scheduling, directly
associated with such purchase), stated in $/MWh, minus (b) the Metered Output Contract Price,
stated in $/MWh, multiplied by the quantity in MWh of Metered Output and Environmental
Attributes replaced for the applicable period. The amount of electrical energy and environmental
attributes purchased by Buyer in (a) and the quantity of MWh of Metered Output and
Environmental Attributes in (b) shall each be determined by reference to the Deemed Generated
Energy for the applicable period.
      “Buyer’s Electric System” means the SRP Distribution System, SRP Transmission
System and SRP‟s Interconnection Facilities as defined in the Interconnection Agreement.
       “Claiming Party” has the meaning set forth in Section 10.2.
        “Commercial Operation” means that the nameplate capacity of the Project has been
constructed, commissioned and tested (in accordance with the solar module manufacturer‟s
requirements), (b) Seller has obtained all necessary rights under the Interconnection Agreement
for the interconnection and delivery of the Metered Output to the Metered Output Delivery Point,
and (c) Seller is capable of making available Metered Output from the Project to the Metered
Output Delivery Point, all in accordance with Good Utility Practice.
       “Commercial Operation Date” means the date on which Commercial Operation is
achieved.
       “Confidential Information” has the meaning set forth in Section 15.1.




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        “Contract Price” means the price to be paid by Buyer to Seller for the Project Output, as
set forth in this Agreement.
       “Contract Year” means each calendar year during the Term, commencing on the
Commercial Operation Date, provided that if the first and last Contract Years are not full
calendar years, the first Contract Year shall mean the period from the Commercial Operation
Date to December 31 of such calendar year, and the last Contract Year shall mean the period
from January 1 of the last Contract Year through the last day of the Term.
       “Credit Requirements” means, with respect to any Person, that such person (a) meets or
exceeds the Ratings Limit, or (b) has issued or posted, or has caused to be issued or posted, the
applicable Credit Support.
       “Credit Support” means (i) a Letter of Credit in an amount of $6,000,000; or (ii) a
guarantee from a Qualified Guarantor in an amount capped at $6,000,000 substantially in the
form attached in Annex A.
        “Deemed Generated Energy” means the quantity of electric energy, expressed in MWh,
that the Parties reasonably calculate would have been produced by the Project and made
available at the Metered Output Delivery Point, and shall be determined by taking into account
during the relevant measurement period the radiometers or like devices at the Project, or if such
monitoring equipment is unavailable during a relevant interval, then using available data or
interpolated data determined in accordance with Good Utility Practices.
        “Defaulting Party” means the Party with respect to which an Event of Default under
Article VIII has occurred.
       “Delay Damages” has the meaning set forth in Section 3.6(b).
       “Delay Damages Cap” has the meaning set forth in Section 3.6(b).
       “Disclosing Party” has the meaning set forth in Section 15.1.
       “Early Termination Date” has the meaning set forth in Section 8.3.
       “Effective Date” has the meaning set forth in the Preamble.
        “Environmental Attestation and Bill of Sale” means an attestation and bill of sale with
respect to Environmental Attributes in the form attached hereto as Annex C.
        “Environmental Attributes” means any and all presently existing or future benefits,
emissions reductions, environmental air quality credits, emissions reduction credits, renewable
energy credits, offsets and allowances, attributable to the Project during the Term, or otherwise
attributable to the generation, purchase, sale or use of Metered Output from or by the Project
during the Term, howsoever entitled or named, resulting from the avoidance, reduction,
displacement or offset of the emission of any gas, chemical or other substance, including any of
the same arising out of presently existing or future legislation or regulation concerned with
oxides of nitrogen, sulfur or carbon, with particulate matter, soot or mercury, or implementing
the United Nations Framework Convention on Climate Change (“UNFCCC”) or the Kyoto
Protocol to the UNFCCC or crediting “early action” emissions reduction, or laws or regulations


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involving or administered by the Clean Air Markets Division of the Environmental Protection
Agency, or any successor state or federal agency given jurisdiction over a program involving
transferability of Environmental Attributes, and any Renewable Energy Certificate Reporting
Rights to such Environmental Attributes. Notwithstanding any other provision hereof,
Environmental Attributes do not include: (a) any investment tax credits and any other tax credits
associated with the Project, (b) state, federal or private grants or other benefits related to the
Project, or (c) Metered Output. For purposes of calculating the Environmental Attributes, the
Parties agree that, if Seller is delivering Environmental Attributes to Buyer through an
Environmental Attribute Attestation and Bill of Sale under Section 4.2(c), Seller shall round, on
a monthly basis, the number of MWhs of electrical energy from the Project and the
corresponding Environmental Attributes to the nearest whole MWh in accordance with Section
6.1.
       “Event of Default” means any event of default set forth in Section 8.1.
       “Expected Commercial Operation Date” means ______________.
       “Federal Power Act” means the Federal Power Act, as amended, 16 U.S.C. § 791a, et
seq.
       “Force Majeure Event” has the meanings set forth in Section 10.1.
        “Good Utility Practice” means any of the practices, methods, and acts engaged in or
approved by a significant portion of the electric utility industry during the relevant time period,
or any of the practices, methods, and acts which, in the exercise of reasonable judgment in light
of the facts known at the time the decision was made, could have been expected to accomplish
the desired result at a reasonable cost consistent with good business practices, reliability, safety,
and expedition. Good Utility Practice is not intended to be limited to the optimum practice,
method, or act, to the exclusion of all others, but rather is intended to include acceptable
practices, methods, and acts generally accepted in the industry.
       “Governmental Authority” means any national, state, provincial, local, tribal or
municipal government, any political subdivision thereof or any other governmental, regulatory,
quasi-governmental, judicial, public or statutory instrumentality, authority, body, agency,
department, bureau, or entity with authority to bind a Party at law; provided, however, that
“Governmental Authority” shall not in any event include any Party.
       “Governmental Charges” means any Taxes, charges or costs that are assessed or levied
by any Governmental Authority or other Person, including local, state or federal regulatory or
taxing authorities that would affect the sale and purchase of Metered Output or Environmental
Attributes contemplated by this Agreement, either directly or indirectly.
       “Guaranteed Party” means the Party in whose favor Credit Support is made or issued.
        “Interconnection Agreement” means the interconnection agreement entered into by
Seller pursuant to which the Project will be interconnected with Buyer‟s electric system.
        “Interconnection Customer’s Interconnection Facilities” has the meaning set forth in
the Interconnection Agreement.


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       “Interconnection Event” has the meaning set forth in Section 4.3.
      “Interconnection Facilities” has the meaning set forth in the Interconnection
Agreement.
       “Interest Rate” means a per annum rate of interest equal to the lesser of (a) the prime
lending rate published from time to time by the Federal Reserve Bank H.15 (519) Statistical
Release website on such day (or if not published on such day, on the most recently preceding day
published) plus 200 basis points or (b) the maximum rate permitted by Applicable Law.
        “Letter of Credit” means an irrevocable, unconditional, transferable standby letter of
credit in the form attached in Annex A for the benefit of the receiving Party, issued by a United
States bank or a foreign bank with a United States branch, with United States based assets of at
least $10,000,000,000 and a rating of “A-” or better from S&P or a rating of “A3” from
Moody‟s.
       “Losses” has the meaning set forth in Section 12.1.
       “Market Value” has the meaning set forth in Section 8.4(b).
        “Material Credit Event” means (a) with respect to Seller, any event that results in Seller
failing to meet the Credit Requirements applicable to Seller; and (b) with respect to Buyer, any
event that results in Buyer‟s failure to meet the Credit Requirements applicable to Buyer.
       “Metered Output” means the electrical energy output, intermittent and variable within
the hour, made available from the Project at the Metered Output Delivery Point, as measured by
the Meters installed at the Metered Output Delivery Point.
        “Metered Output Delivery Point” means the Point of Change of Ownership as defined
in the Interconnection Agreement.
       “Meter(s)” has the meaning set forth in Section 5.1.
      “Month” means a calendar month commencing at 00:00 MST on the first day of such
month and ending at 24:00 MST on the last day of such month.
       “Monthly Invoice” has the meaning set forth in Section 6.1.
       “Moody’s” means Moody‟s Investor Services, Inc. and any successor thereto.
       “MST” means Mountain Standard Time.
       “MW” means megawatt.
       “MWh” means megawatt hour.
        “NERC” means the North American Electric Reliability Corporation, and any successor
entity thereto.
        “Non-Defaulting Party” means, with respect to any Event of Default, the Party that is
not the Defaulting Party.


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       “Party” or “Parties” has the meaning set forth in the Preamble and includes any
permitted assignee of a Party.
        “Person” means an individual, partnership, corporation, limited liability company, joint
venture, association, trust, unincorporated organization, Governmental Authority, or other form
of entity.
       “Photovoltaic” means arrays of cells containing a solar photovoltaic material that
convert solar radiation into direct current electricity.
       “Project” means the ____ MW Photovoltaic solar electrical generation facility, located in
_______________, Arizona, which will produce the Project Output made available to Buyer
under this Agreement.
       “Project Output” means Metered Output, Environmental Attributes and Ancillary
Services.
        “Qualified Guarantor” means a Person who meets or exceeds the Ratings Limit and (1)
publishes or provides to both Parties audited financial statements on an annual basis; (2) has
substantial assets located in the United States; and (3) provides a guarantee that is substantially
in the form of the guarantee acceptable to SRP in its sole and absolute discretion.
         “Ratings Limit” means with respect to Seller, a long-term credit rating (corporate or
long-term senior unsecured debt) of (a)(1) “Baa2” or higher by Moody‟s or (2) “BBB” or higher
by S&P, or (b) if rated by Moody‟s and S&P, both (a)(1) and (a)(2). With respect to Buyer, a
revenue bond rating of (a)(1) “Baa2” or higher by Moody‟s or (2) “BBB” or higher by S&P, or
(b) if rated by Moody‟s and S&P, both (a)(1) and (a)(2).
       “Receiving Party” has the meaning set forth in Section 15.1.
       “Recording” has the meaning set forth in Section 17.19.
      “Renewable Energy Certificate” or “REC” is the certificate that evidences the
ownership of Environmental Attributes.
        “Renewable Energy Certificate Reporting Rights” means the right of a purchaser of
renewable energy to report ownership of accumulated RECs to any agency, authority or other
party in compliance with Applicable Law and include rights under Section 1605(b) of the Energy
Policy Act of 1992, and any present or future federal, state or local certification program or
emissions trading program (including, if applicable, pursuant to the WREGIS Operating Rules).
       “Representative” has the meaning set forth in Section 13.1(a).
       “S&P” means Standard & Poor‟s Corporation and any successor thereto.
        “Scheduled Maintenance Outages” means Seller‟s planned partial or complete
reduction of the generating capability of the Project, as scheduled pursuant to Section 4.5, for
routine maintenance purposes.
       “Seller” has the meaning set forth in the Preamble.


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        “Seller’s Cost to Cover” means the positive difference, if any, between (a) the Deemed
Generated Energy or actual Project generation, as applicable, multiplied by the Contract Price,
and (b) the net proceeds, stated in $/MWh, realized by Seller from (i) the sale, if any, to a third
Person of Project Output not taken or purchased by Buyer as required under this Agreement, plus
any proceeds from the sale of related Environmental Attributes less (ii) any additional reasonable
transaction costs, including those related to transmission and scheduling, directly associated with
such sale, if any.
       “Seller’s Guarantor” means Seller‟s Initial Guarantor or any Qualified Guarantor
providing a replacement Guarantee of Seller‟s obligations herein.
       “Seller’s Initial Guarantor” means __________________.
       “Settlement Data” means for the relevant period (i) the Metered Output in either kWh or
MWh to three decimal points format on an hourly basis, (ii) daily totals of all kWhs or MWhs to
three decimal points, (iii) monthly total of all kWhs or MWhs to three decimal points, and (iv)
the monthly total of all kWhs or MWhs to three decimal points, rounded to the nearest whole
MWh.
      “SRP’s Interconnection Facilities” has the meaning set forth in the Interconnection
Agreement.
       “Summer Months” means May, June, July, August and September.
        “System Emergency” means an Emergency Condition as defined and declared pursuant
to the Interconnection Agreement.
         “Taxes” means all foreign and domestic taxes, rates, levies, adders, assessments,
surcharges, duties and other fees and charges of any nature, whether currently in effect or
adopted during the Term, including ad valorem, consumption, excise, franchise, gross receipts,
import, export, license, property, sales, stamp, storage, transfer, turnover, use or value-added
taxes, payroll, unemployment, and any and all items of withholding, deficiency, penalty, addition
to tax, interest or assessment related thereto.
       “Term” has the meaning set forth in Section 3.1 of this Agreement.
       “Termination Payment” has the meaning set forth in Section 8.4(a).
     “Test Energy” means any and all Metered Output generated by the Project prior to the
Commercial Operation Date.
      “WECC” means those portions of the United States, Canada and Mexico that comprise
the Western Electricity Coordinating Council, or its successor organization.
       “WREGIS” means the Western Renewable Energy Generation Information System or
any successor renewable energy tracking program.
        1.2.    Rules of Interpretation. In this Agreement, except as expressly stated otherwise
or unless the context otherwise requires:



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               (a)   headings and the rendering of text in bold and italics are for convenience
and reference purposes only and do not affect the meaning or interpretation of this Agreement;
              (b)    words importing the singular include the plural and vice versa and the
masculine, feminine and neuter genders include all genders;
                 (c)    the words “hereof,” “herein,” and “hereunder” and words of similar import
shall refer to this Agreement as a whole and not to any particular provision of this Agreement;
               (d)     a reference to a Section, paragraph, clause, Party, Attachment or Annex is
a reference to that Section, paragraph, or clause of, or that Party, Attachment or Annex to, this
Agreement unless otherwise specified, and in the event of a conflict, the provisions of the main
body of this Agreement shall prevail over the provisions of any Attachment or Annex;
             (e)    a reference to a document or agreement, including this Agreement shall
mean such document, agreement or this Agreement including any amendment or supplement to,
               (f)   or replacement, novation or modification of this Agreement, but
disregarding any amendment, supplement, replacement, novation or modification made in breach
of such document, agreement or this Agreement;
               (g)    a reference to a Person includes that Person‟s successors and permitted
assigns;
               (h)     the term “including” means “including without limitation” and any list of
examples following such term shall in no way restrict or limit the generality of the work or
provision in respect of which such examples are provided;
                (i)   references to any statute, code or statutory provision are to be construed as
a reference to the same as it may have been, or may from time to time be, amended, modified or
reenacted, and include references to all bylaws, instruments, orders and regulations for the time
being made thereunder or deriving validity therefrom unless the context otherwise requires;
               (j)     in the event of a conflict, a mathematical formula describing a concept or
defining a term shall prevail over words describing a concept or defining a term;
               (k)    references to any amount of money shall mean a reference to the amount
in United States Dollars;
               (l)    the expression “and/or” when used as a conjunction shall connote “any or
all of”;
                (m)    words, phrases or expressions not otherwise defined herein that (i) have a
generally accepted meaning in Good Utility Practice shall have such meaning in this Agreement
or (ii) do not have well known and generally accepted meaning in Good Utility Practice but that
have well known and generally accepted technical or trade meanings, shall have such recognized
meanings; and
              (n)   each Party acknowledges that it was represented by counsel in connection
with this Agreement and that it or its counsel reviewed this Agreement and that any rule of


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construction to the effect that ambiguities are to be resolved against the drafting Party shall not
be employed in the interpretation of this Agreement.

                                          ARTICLE II
                                   PURCHASE AND SALE
       2.1.    Sale and Purchase of Project Output. In accordance with and subject to the terms
and conditions of this Agreement, commencing on the Commercial Operation Date and
continuing through the end of the Term, Seller shall sell and deliver to Buyer, and Buyer shall
purchase and receive from Seller, all right, title and interest in and to the Project Output made
available by Seller at the Metered Output Delivery Point in accordance with Article IV.
       2.2.   Contract Price for Project Output. From and after the Commercial Operation
Date, Buyer shall pay Seller for Project Output delivered, or caused to be delivered, to Buyer at
the Metered Output Delivery Point at the payment rate of $__________/MWh (the “Contract
Price”).
       2.3.    Test Energy. If and to the extent the Project generates Test Energy, Seller shall
make available to Buyer and Buyer shall take all Test Energy made available, including the
Environmental Attributes associated with such Test Energy. Buyer shall be obligated to
purchase all such Test Energy from Seller at the payment rate equal to 75% of the
Intercontinental Exchange Day Ahead Palo Verde Peak or Palo Verde Off-Peak Weighted
Average Index depending on the time of delivery, not to exceed the Contract Price for Project
Output prevailing during the first year of Commercial Operation.
        2.4.   Future Environmental Attributes. The Parties acknowledge and agree that
additional Environmental Attributes may be recognized by a Governmental Authority after the
Effective Date and further acknowledge and agree that in accordance with the terms of this
Agreement all right and title to such additional Environmental Attributes is included in the
Contract Price and pass to Buyer in accordance with Section 4.1 of this Agreement. If in order
for Buyer to receive the benefit of any additional Environmental Attributes Seller must incur any
third-party costs not otherwise provided for in this Agreement such costs shall, if Seller incurs
such costs at Buyer‟s request, be reimbursed to Seller by Buyer. Seller shall deliver a good faith
estimate of such additional costs to Buyer prior to incurring such costs, and following receipt of
such estimate, Buyer shall notify Seller of its continued election to have Seller incur such costs;
provided, that if the additional costs exceed Seller‟s good faith estimate by more than 10%,
Buyer shall have the right to notify Seller of its election to have Seller cease incurring the
additional costs. For the avoidance of doubt, Buyer shall remain liable to Seller for all costs
incurred prior to Seller‟s receipt of Buyer‟s notice. The Parties agree to negotiate in good faith
further agreements and documentation necessary to effectuate the transfer of such additional
Environmental Attributes.




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                                          ARTICLE III
                                 TERM AND TERMINATION
       3.1.   Term. This Agreement shall become effective on the Effective Date and, unless
terminated earlier as provided in this Agreement, shall remain in full force and effect until
midnight MST on the _____ anniversary of the Commercial Operation Date (the “Term”).
        3.2.    Condition Precedent. The obligation of Seller under this Agreement to make
available the Project Output and the obligation of Buyer to take such Project Output shall be
subject to the satisfaction Seller obtaining all material permits, consents, licenses, approvals, or
authorizations from any Governmental Authority, on terms and conditions reasonably acceptable
to Seller, required to own, construct, operate or maintain the Project or sell the Project Output.
        3.3.    Failure to Satisfy Condition Precedent. This Agreement may be terminated upon
30 days‟ notice of termination by either Party for Seller‟s failure to satisfy or waive the condition
precedent set forth in Section 3.2 on or before ____________; provided, that if no notice of
termination is delivered by either Party on or before _____________, the condition precedent for
Seller shall be deemed satisfied.
       3.4.    Notice of Satisfaction of Conditions Precedent. Seller shall provide notice to
Buyer of the satisfaction of Seller‟s condition precedent within 15 days after the condition
precedent has been satisfied.
        3.5.    Notice of Construction and Seller Status Reports. Seller shall provide Buyer with
an initial written status report on the progress of the design, construction and installation of the
Project, all work related to achieving or complying with the terms of the Interconnection
Agreement, and the status of the approvals necessary for the Project, within 15 days after
execution of this Agreement. Seller shall notify Buyer no less than 30 days prior to beginning
construction of the Project. After the Effective Date, Seller shall provide Buyer with monthly
status reports on the progress of construction of the Project and satisfaction of Seller‟s conditions
precedent until Commercial Operation is achieved pursuant to Section 3.6.
       3.6.    Commercial Operation.
                (a)    Extension of Expected Commercial Operation Date. Seller shall use good
faith efforts to cause the Project to achieve Commercial Operation on or before the Expected
Commercial Operation Date.
              (b)     Delay Damages and Seller Early Termination. If Commercial Operation
has not been achieved on or before the Expected Commercial Operation Date, Seller shall
continue construction of the Project and shall pay damages to Buyer of $5,500 per day (“Delay
Damages”). Delay Damages shall begin to accrue on the day following the Expected
Commercial Operation Date and continue daily until the earlier of (i) the date on which
Commercial Operation is achieved; or (ii) the date on which Seller owes Buyer a cumulative
amount of Delay Damages of $1,000,000 (“Delay Damages Cap”).
              (c)   Notice of Commercial Operation. Seller shall notify Buyer not less than
five Business Days in advance of the anticipated date of Commercial Operation and shall


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confirm to Buyer in writing when Commercial Operation has been achieved. Nothing herein
shall limit Seller‟s right or ability to declare Commercial Operation prior to the Expected
Commercial Operation Date if all requirements of Commercial Operation are satisfied prior to
the Expected Commercial Operation Date.
        3.7.    Right to Terminate. If the Project has not achieved Commercial Operation on or
before the date upon which Seller has paid to Buyer the Delay Damages Cap, either Party shall
have the right to terminate this Agreement within 60 days of such date upon 10 days‟ prior notice
to the other Party, provided that Seller may elect to cure and prevent Buyer‟s termination right
under this Section by providing notice to Buyer within 10 days of Buyer‟s notice to terminate
and continuing to pay daily Delay Damages beyond the Delay Damages Cap. Neither Party shall
have any liability to the other Party with respect to such termination, except for Seller‟s
obligation to pay to Buyer any unpaid Delay Damages through the date of termination, subject to
the Delay Damages Cap (or such additional amount due to Buyer if Seller has elected to continue
to pay daily Delay Damages beyond the Delay Damages Cap in accordance with this Section).
        3.8.   Extension Due to Force Majeure Event. The Expected Commercial Operation
Date, and related termination rights in Section 3.7, shall be extended by a number of days equal
to the duration of any Force Majeure Event that delays construction or the commencement of
operation of the Project. Seller shall give written notice to Buyer describing any such Force
Majeure Event within five Business Days after the occurrence of the Force Majeure Event. The
number of days of such extension shall be calculated from the date of the Force Majeure Event,
provided that if the Force Majeure Event will delay Commercial Operation for more than three
Months then either Party will have the right to terminate this Agreement without liability to the
other Party.
        3.9.    Site Visits. During the construction, installation and start up of the Project, and
continuing throughout the Term, Seller shall permit Buyer and its advisors and consultants, at
Buyer‟s sole expense and at reasonable times and upon reasonable notice to Seller, to visit the
Project. While at the Project site, Buyer and its advisors and consultants shall comply with all of
Seller‟s safety rules and other job site rules and regulations.

                                          ARTICLE IV
                          TITLE; RISK OF LOSS AND DELIVERY
         4.1.   Title and Risk of Loss. Title to and risk of loss related to the Project Output shall
pass and transfer from Seller to Buyer at the Metered Output Delivery Point. Seller shall transfer
the Project Output to Buyer free and clear of all liens, security interests, claims and
encumbrances or any other interest therein or thereto by any Person. There shall be no
restriction on Buyer‟s use or sale of the Project Output after the transfer of title.
       4.2.    Delivery, Scheduling and Transmission.
               (a)     Delivery and Forecasting of Metered Output.
                     (i)   Delivery. Seller shall make available and Buyer shall take
Metered Output at the Metered Output Delivery Point on an as-generated, instantaneous basis.
Buyer acknowledges and agrees that variations in output will occur from time to time in the


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ordinary course of operation of the Project. Metered Output shall be deemed made available to
Buyer for invoicing purposes in the Month in which Metered Output is made available at the
Metered Output Delivery Point.
                       (ii) Day-Ahead Forecasting. On a day-ahead basis and no later than
4:00 a.m. MST Seller shall make available to Buyer a 24-hour forecast of the Metered Output to
be delivered to Buyer.
               (b)    Scheduling and Transmission. Buyer shall be responsible for all necessary
transmission service arrangements, including scheduling arrangements, if any, to take Metered
Output at the Metered Output Delivery Point and deliver it to points beyond.
                (c)     Delivery of Environmental Attributes. Upon mutual agreement of the
Parties, the Parties may elect to use WREGIS to track and transfer Environmental Attributes to
Buyer; provided that Buyer qualifies and has registered as a Qualified Reporting Entity under
WREGIS. Following such election, each Party will be responsible for maintaining active
WREGIS accounts and for their own costs associated with maintaining the accounts and Seller
shall use WREGIS Forward Certificate Transfers to transfer all Environmental Attributes;
provided that Seller may elect to assign its rights to register the Project with WREGIS directly to
Buyer after which Seller will not have to maintain a WREGIS account. Forward Certificate
Transfers will occur based on the certificate creation timeline established by the WREGIS
operating rules. Buyer shall be responsible for all WREGIS expenses associated with transfer of
the certificates to Buyer‟s WREGIS account. Seller shall be responsible for validating and
disputing data with WREGIS prior to certificate creation each Month. If the Parties do not elect
to use WREGIS or if WREGIS is discontinued, then the Environmental Attributes will be
delivered by Seller to Buyer, on a monthly basis, in an Environmental Attribute Attestation and
Bill of Sale or other legal form to be agreed on between the Parties.
        4.3.   Buyer Curtailment and Buyer‟s Unexcused Failure to Take. Buyer, in its capacity
as owner and operator of SRP‟s Interconnection Facilities and Buyer‟s Electric System, may
require Seller to reduce or curtail the output of the Project pursuant to the Interconnection
Agreement (an “Interconnection Event”). For avoidance of doubt, except as explicitly
provided for in the Interconnection Agreement, Buyer may not reduce or curtail the Project due
to economic conditions that render Buyer‟s performance of this Agreement uneconomic
(including Buyer‟s ability to purchase energy or environmental attributes at a lower price, or
Buyer‟s inability to use or resell Project Output). If Buyer fails to take Metered Output and such
failure to take is not excused by (a) Seller‟s default, (b) a Force Majeure Event, or (c) an
Interconnection Event, or Seller is not able to make available Metered Output due to Buyer‟s
breach of this Agreement, then Buyer shall pay to Seller Seller‟s Cost to Cover. During such
period that Buyer fails to take Metered Output, Seller shall not be required to make available,
and shall not make available, any Environmental Attributes or Ancillary Services corresponding
to such Metered Output and may sell such Project Output to a third party, provided that Seller
has obtained transmission service from Buyer.
       4.4.     Project Maintenance. Seller shall arrange for Scheduled Maintenance Outages at
the Project in accordance with Good Utility Practice and shall be permitted to reduce deliveries
of Project Output during any period of project maintenance. No later than November 1 of each
Contract Year, Seller shall provide Buyer with notice of the Scheduled Maintenance Outages for


                                                13
the following Contract Year. Buyer may, within 15 days after receipt of the schedule, request
reasonable modifications to the schedule. Seller shall not schedule Scheduled Maintenance
Outages between 8:00 and 20:00 MST during the Summer Months.
       4.5.   Availability Guarantee. Seller guarantees that the Project shall be available to
produce Project Output in accordance with the provisions of Annex B.
        4.6.    Sales to Third Parties. Seller shall not sell or divert Project Output to a third
Person (except as may be permitted under Sections 4.3, 8.2 or Section 10.4 or as otherwise
specifically provided for in this Agreement).

                                                   ARTICLE V
                          METERING, MEASUREMENT AND TESTING1
        5.1.    Metering Equipment. All metering and data processing equipment needed for the
registration, recording and transmission of information regarding Metered Output generated at
the Project (“Meters”) will be installed and owned, operated and maintained in accordance with
the terms of the Interconnection Agreement.
        5.2.  Measurements. Readings of the Meters shall be conclusive as to the amount of
Metered Output generated by the Project; provided, that if any of the Meters is out of service or
is determined, pursuant to Section 5.3 hereof, to be registering inaccurately, measurement of
Metered Output generated by the Project shall be determined in the following sequence:
              (a)     if any other meters have been installed and are functioning within the
accuracy standards of Section 5.3, measurement of Metered Output generated hereunder shall be
by such meters; or
               (b)     by Seller‟s estimating by reference to the measurements made during other
comparable time periods having similar solar-generating conditions when the Meters were
registering accurately, such estimate being subject to Buyer‟s approval, not to be unreasonably
withheld, conditioned or delayed;
provided, that if no reliable information exists as to the period over which such Meter was
registering inaccurately, it shall be assumed for correction purposes hereunder that such
inaccuracy was equal to (i) if the period of inaccuracy can be determined, the actual period
during which inaccurate measurements were made; or (ii) if the period of inaccuracy cannot be
determined, one-half of the period from the date of the last previous test of such Meter through
the date of the adjustments; provided, that, in the case of clause (ii), the period covered by the
correction shall not exceed six Months.
        5.3.   Standard of Meter Accuracy; Resolution of Disputes as to Accuracy. Each Meter
shall be accurate within a 0.3% variance. The following steps shall be taken to resolve disputes
regarding the accuracy of the Meters:



1
  The provisions in this Article V assume that the project is interconnected to SRP‟s distribution systems at a voltage
lower than 69kV.


                                                          14
               (a)     If either Seller or Buyer disputes a Meter‟s accuracy or condition, it shall
so advise the other Party in writing.
               (b)    If the Parties are unable to reach consensus as to the Meter‟s accuracy or
condition through reasonable negotiations, then any Party may request that Buyer test the Meter.
               (c)     Should the Meter be found to register within the permitted 0.3% variance,
the disputing Party shall bear the cost of inspection; otherwise, the cost shall be borne by Seller.
               (d)     Following testing, corrections shall be made as follows:
                      (i)    If any Meter is found to be accurate or to be in error by not more
than the permitted 0.3% variance, previous recordings of such Meter shall be considered accurate
in computing Metered Output hereunder;
                     (ii)     If any Meter is found to be in error by an amount exceeding the
0.3% variance, then Seller shall submit a request to Buyer that such Meter shall be promptly
adjusted to record correctly, and any previous recordings by such Meter shall be adjusted in
accordance with Section 5.2.

                                          ARTICLE VI
                                  BILLING AND PAYMENT
        6.1.    Monthly Billing. Seller shall provide Buyer with an invoice no later than the 10th
day of each Month for the amount due Seller for Project Output made available by Seller and
taken by Buyer under this Agreement during the previous Month (each, a “Monthly Invoice”),
or any other amounts due from Buyer under this Agreement. If the Commercial Operation Date
occurs on a day other than the first day of any Month, Seller shall include any amounts due for
the portion of such Month, plus the immediately following Month, in the initial Monthly Invoice
sent to Buyer. Seller shall transmit each Monthly Invoice by first class mail or electronic form
such as electronic mail, or as otherwise mutually agreed by the Parties in writing. Concurrently
with the Monthly Invoice, Seller will provide to Buyer an electronic copy of the Settlement Data
for the period being billed. The rounded monthly total of all MWhs included in the Settlement
Data will be used to calculate the total amount due to Seller for the Project Output and, if Seller
is delivering Environmental Attributes to Buyer through an Environmental Attribute Attestation
and Bill of Sale under Section 4.2(c), the number of Environmental Attributes produced during
the relevant period. If Seller does not correctly reflect on the Monthly Invoice the amount owed
by Buyer, or does not provide a Monthly Invoice in a Month in which Buyer owes amounts to
Seller hereunder, Seller may submit a Monthly Invoice to Buyer on any date for such amounts
for payment in accordance with the provisions of this Section 6.1, or may include such amounts
on the Monthly Invoice for the following Month.
        6.2.   Payments. Buyer will pay the amount specified in each Monthly Invoice by wire
transfer of immediately available funds or electronic funds transfer by the later of the 20th day of
the Month or the 10th day after receipt of such invoice. If the due date does not fall on a
Business Day, then the payment will be due on the next following Business Day. Payment will
be made in accordance with written wire transfer instructions provided to Buyer by Seller from
time to time; provided, however, that any changes to such wire transfer instructions will not be


                                                15
effective until two Business Days after the date of receipt of notice from Seller. The Parties
agree that any payments hereunder shall be deemed made in full when confirmation is received
from the financial institution holding the account into which payment is made that the payment
has been successfully received in immediately available funds. Such confirmation shall be
conclusive evidence of receipt.
       6.3.    Records; Auditing.
                (a)      Maintenance of Records. Each Party shall, and shall cause it Affiliates to,
maintain complete and accurate records as may be necessary for the purpose of ascertaining the
accuracy of all relevant data, estimates or statements of charges submitted hereunder until the
later of (i) a period of at least three years after the date the Monthly Invoice was received by
Buyer, or (ii) if there is a dispute relating to a Monthly Invoice, the date that is three years after
the date on which such dispute is resolved.
                  (b)   Audit Rights. Upon 30 days‟ prior written notice, each Party shall have
the right at all times during normal business hours to audit the accounts, books and records of the
other Party and its Affiliates to the extent reasonably necessary to verify the accuracy of any
statement, charge, computation, or demand made under or pursuant to this Agreement and
compliance with this Agreement. Any such audit(s) shall be undertaken by either party or its
representative(s) at reasonable times and appropriate locations and in conformance with
generally accepted auditing standards; provided that each Party shall be limited to one audit
under this Section 6.3 during each Contract Year. The Party being audited agrees to fully
cooperate with any such audit(s). This right to audit shall extend for a period of three years
following the date of each payment under this Agreement. The Parties agree to retain all
necessary records and documentation during this audit period or until any dispute in connection
with an audit is resolved, whichever is longer. The costs of any audit shall be paid by the Party
requesting the audit, unless the audit reveals a discrepancy or discrepancies in excess of 3% of
the amounts reported in favor of the Party requesting the audit, in which case, the other Party
shall pay the reasonable costs of the audit. Any error or discrepancy in charges or statements
furnished pursuant hereto shall be promptly reported by one Party to the other and proper
adjustment thereof shall be made within 30 days after final determination of the correct volumes
or amounts involved and any overpayment or underpayment shall be refunded or paid, as the
case may be, by the owing Party with interest at the Interest Rate from the date of overpayment
or underpayment, as the case may be, to the date on which payment is made; provided however,
if no such errors or discrepancies are reported by one Party to the other within three years from
the end of the year in which such error or discrepancy occurred, the same shall be conclusively
deemed to be correct absent fraud. Each Party shall cause its Affiliates to comply with the
requirements of this Section.
        6.4.   Billing Disputes. In the event of a billing dispute, the disputing Party shall note
the disputed amount but shall pay the entire amount on or before the due date; provided,
however, that such payment shall not be deemed to waive the disputing Party‟s right to dispute
such amount in the future. All billing disputes shall be resolved in accordance with Section 13.1.
Upon resolution of the billing dispute, the Party owing any amounts shall pay the amount owed
within five Business Days of the date of such resolution, plus interest calculated on the amount
owed at the Interest Rate. If a potential billing error is discovered after any Monthly Invoice or
other invoice has been paid, either Party will notify the other Party of the billing dispute as soon


                                                 16
as reasonably possible, but in any event within three years following the receipt of such Monthly
Invoice or other invoice. Any Monthly Invoice or other invoice that has not been disputed
within such three-year period will be conclusive, final and no longer subject to adjustment. If
either Party overpays any Monthly Invoice or other invoice through inadvertent errors or as a
result of a dispute, the overpayment will be returned by the owing Party upon determination of
the correct amount. If Seller under bills Buyer, Seller may adjust the error by adding the under
billed amount to a subsequent invoice and such amount will become due and owing within the
time allowed by Section 6.2.
       6.5.    Interest on Unpaid Amounts. If a Party fails to pay the full amount due on or
before the close of business on the due date, the owing Party shall pay interest on the unpaid
amount at the Interest Rate, which shall be added to the next Monthly Invoice. If a due date
occurs on a day that is not a Business Day, interest shall begin to accrue on the next succeeding
Business Day.

                                                ARTICLE VII
                                                   CREDIT
        7.1.     Credit.2
              (a)     Seller‟s Credit Support. On or before the Effective Date, Seller shall
provide a guarantee of its obligations under the Agreement from Seller‟s Guarantor, in the form
attached in Annex A.
                      (i)     If at any time during the Term, Seller‟s Guarantor does not satisfy
the Ratings Limit, Seller shall post or issue, or cause to be posted or issued in favor of Buyer,
alternate Credit Support to secure Seller‟s obligations hereunder, such Credit Support to be
provided within 10 Business Days after demand by Buyer.
                       (ii)    Seller shall notify Buyer in writing of the occurrence of any event
which, with notice or the passage of time or both, would constitute a Material Credit Event with
respect to Seller, including Seller‟s Guarantor no longer satisfying the Ratings Limit, which
notice shall be given within five Business Days of the occurrence of such event.
                      (iii)   Neither Seller nor Seller‟s Guarantor shall have any obligation to
replenish Credit Support that may be provided by Seller hereunder.
                (b)    Buyer‟s Credit Support. If at any time during the Term, Buyer does not
satisfy the Ratings Limit, Buyer shall post or issue, or cause to be posted or issued in favor of
Seller, Credit Support to secure Buyer‟s obligations hereunder for so long as Buyer fails to meet
the Ratings Limit, such Credit Support to be provided within 10 Business Days after demand by
Seller. Buyer shall notify Seller in writing of the occurrence of any event which, with notice or
the passage of time or both, would constitute a Material Credit Event with respect to Buyer,


2
  Salt River Project seeks credit support to cover its potential replacement costs in the event of a default by the
Seller. Contract prices are stressed to determine a potential exposure based on the difference between stressed
prices and contract prices. This difference multiplied by the number of daily MW hours for the remaining term of
the contract is the dollar amount of the credit support required by SRP.


                                                        17
including Buyer falling below the Ratings Limit, which notice shall be given within five
Business Days of the occurrence of such event.
               (c)     Letter of Credit. Any Letter of Credit provided shall be for a minimum
period of one year, shall be renewed or replaced by the applicant not less than 20 days prior to its
expiration, and shall provide that the Letter of Credit may be drawn in the event that it is not so
renewed or replaced. In the event that the Letter of Credit is drawn due to a failure of the
applicant to renew or replace the Letter of Credit not less than 20 days prior to its expiration, the
proceeds of any such draw shall constitute collateral provided to the beneficiary in the form of
cash. If the beneficiary draws on the Letter of Credit as provided in the preceding sentence, the
cash shall be maintained in a custodial account at a national bank reasonably acceptable to the
applicant. The beneficiary may withdraw funds from such account to pay any amount due and
owing by the applicant under this Agreement that has not been paid within the time provided
hereunder.

                                           ARTICLE VIII
                              EVENTS OF DEFAULT; REMEDIES
      8.1.   Events of Default. An “Event of Default” means with respect to a Party (the
“Defaulting Party”):
                (a)     A Party (i) applies for or consents to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of the Party or of all or a substantial
part of its property, (ii) admits in writing its inability, or is generally unable to pay its debts as
they become due, (iii) makes a general assignment for the benefit of its creditors, (iv)
commences a voluntary case under any Bankruptcy Law, (v) files a petition seeking to take
advantage of any other Bankruptcy Law, (vi) acquiesces in writing to, any petition filed against
the Party in an involuntary case under any Bankruptcy Law, or (vii) takes any action for the
purpose of effecting any of the foregoing;
                 (b)      A proceeding or case is commenced, without the application or consent of
a Party, in any court of competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding-up, or composition or adjustment of debts of the Party, (ii) the appointment
of a trustee, receiver, custodian, liquidator or the like, of the Party or of all or any substantial part
of its assets, or (iii) similar relief in respect of the Party under any Bankruptcy Law, and such
proceeding or case shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of
60 days from commencement of such proceeding or case or the date of such order, judgment or
decree;
                (c)     A Party‟s actual fraud or willful misconduct in connection with this
Agreement;
              (d)     A Party fails to make any payment when due under this Agreement (net of
outstanding damages and any other rights of offset that the Party may have pursuant to this
Agreement) and fails to cure within 10 days after notice thereof;




                                                   18
               (e)     A Party fails to comply with any other obligation under this Agreement,
other than for the failure of the Party to comply with an obligation under this Agreement for
which a specific remedy has been agreed and such failure is not cured with 30 days after notice
thereof;
              (f)    A Party assigns this Agreement or any of its rights hereunder, except as
may be permitted under Section 17.1;
              (g)    Any representation or warranty made by a Party in this Agreement proves
to have been false or misleading in any material respect when made or ceases to remain true
during the Term.
         8.2.   Remedies for an Event of Default.
                (a)     Subject to Article IX, upon the occurrence and notice to the Defaulting
Party, the other Party shall have the right (but not the obligation) to:
                       (i)    suspend performance of its obligations under this Agreement;
and/or
                       (ii)    call on and draw down upon the Credit Support provided by the
Defaulting Party, if any, to satisfy any and all payments due and amounts otherwise owing under
this Agreement; and/or
                       (iii)  receive from the Defaulting Party direct damages incurred by the
Non-Defaulting Party in connection with such Event of Default (including during any applicable
cure period, whether or not the Non-Defaulting Party has elected to suspend performance during
such cure period). Subject to Article IX, the Parties agree that the damages recoverable
hereunder on account of an Event of Default include Buyer‟s Cost to Cover and Seller‟s Cost to
Cover, as applicable, during the applicable cure period.
               (b)   If Buyer is the Defaulting Party, Seller may sell to a third Person, free and
clear of any claims by Buyer, all Project Output for such period during which Seller suspends
performance hereunder.
                (c)    If Seller is the Defaulting Party, and the applicable Event of Default arises
out of Seller selling the Project Output to a third party in violation of this Agreement, Seller
agrees that in addition to other remedies available to Buyer, Seller shall pay Buyer an amount
equal to the proceeds of any third-party sales.
        8.3.   Termination for an Event of Default. If an Event of Default has occurred and is
not cured within the applicable cure period, if any, set forth in Section 8.1, the Non-Defaulting
Party shall have the right, at any time when such Event of Default is continuing, and in addition
to the remedies set forth in Section 8.2, to
               (a)     designate by notice to the Defaulting Party a day, no earlier than the day
such notice becomes effective and no later than 20 days after the day such notice becomes
effective, on which this Agreement shall terminate (the “Early Termination Date”);
                (b)    recover in connection with such termination a Termination Payment, and


                                                19
               (c)    subject to the express limitations on remedies set forth in this Agreement,
pursue any other right or remedy available under this Agreement or Applicable Law. For the
avoidance of doubt, the Non-Defaulting Party shall not receive Buyer‟s Cost to Cover or Seller‟s
Cost to Cover, as the case may be, upon and following the Early Termination Date. If notice of
termination has not been received by the date that is 30 days following the last day of any
applicable cure period, the Event of Default is deemed to have been waived by the Non-
Defaulting Party and no further damages shall accrue with respect to such Event of Default.
       8.4.    Termination Payment.
                (a)     Upon termination of this Agreement as a result of an Event of Default, the
Non-Defaulting Party shall calculate an amount (the “Termination Payment”) equal to the
aggregate of (i) the present value, discounted at the rate of 5%, of the Market Value (as defined
below) of this Agreement to the Non-Defaulting Party, plus (ii) any costs incurred by the Non-
Defaulting Party as a result of the termination of this Agreement due to the Defaulting Party‟s
default, plus (iii) any unpaid amounts owing under this Agreement from the Defaulting Party to
the Non-Defaulting Party which arose prior to the Early Termination Date, minus (iv) any unpaid
amounts owing under this Agreement from the Non-Defaulting Party to the Defaulting Party,
minus (v) any amounts that the Non-Defaulting Party is able to recover pursuant to mitigation
under Section 8.7. If the Termination Payment is a positive amount, the Defaulting Party shall
pay the Termination Payment to the Non-Defaulting Party. If the Termination Payment is a
negative amount, the amount of the Termination Payment shall be deemed to be zero and no
payment shall be made to either Party.
               (b)     “Market Value” means:
                        (i)     where Seller is the Non-Defaulting Party, the excess, if any, of (1)
the amount that Buyer would have paid to Seller assuming the Project would have produced at a
three-year average production level, if available, or extrapolated based on historical data
available if less than three years are available, and corrected to reflect the degradation of the
Photovoltaic modules, for the lesser of (x) 60 Months or (y) the number of Months remaining in
the Term; minus (2) the fair market price of solar Photovoltaic electrical energy and
Environmental Attributes (of the type sold under this Agreement), whether sold separately or
bundled as a package, for the lesser of (x) 60 Months or (y) the number of Months remaining in
the Term, determined in a commercially reasonable manner by Seller, taking into account,
among other valuations, comparable solar Photovoltaic energy and environmental attributes of
the same vintage and quality as the Project‟s solar Photovoltaic energy and Environmental
Attributes, provided that if comparable solar Photovoltaic energy and environmental attributes
are not available the market price shall be determined by averaging the indicative proposals from
two nationally recognized market makers. If such proposals are unavailable, the market price
shall be determined by averaging prices for solar Photovoltaic energy plus environmental
attributes quoted by two independent third-party brokerage services reasonably selected by
Seller, and the settlement prices on established, actively traded power exchanges and other bona
fide third-party offers, and other relevant market information.
                     (ii)   where Buyer is the Non-Defaulting Party, an amount equal to (1)
$____, multiplied by (2) the number of MWhs that the Project would have been expected to
produce assuming the Project would have produced at a three-year average production level, if


                                                20
available, or extrapolated based on historical data available if less than three years are available,
and corrected to reflect the degradation of the Photovoltaic modules, for the lesser of (x) 60
Months or (y) the number of Months remaining in the Term.
                       (iii)  For purposes of this Section 8.4, if the market price cannot be
reasonably calculated in clause (i)(2), if applicable, above for the entire period of 60 Months or
the number of Months remaining in the Term, as the case may be, the market prices that are
determined by the Non-Defaulting Party shall be averaged, and such market price shall be used
for purposes of calculating Market Value.
        8.5.   Notice of Termination Payment. As soon as practicable after the designation of
an Early Termination Date, the Non-Defaulting Party shall notify the Defaulting Party of the
amount of the Termination Payment, if any, payable by the Defaulting Party to the Non-
Defaulting Party. The notice shall include a written statement setting forth in reasonable detail
the calculation of such amount, together with reasonable supporting documentation. If such
statement shows a Termination Payment due by the Defaulting Party, the Defaulting Party shall
pay the Termination Payment to the Non-Defaulting Party within 30 days after receipt of such
notice. If the Defaulting Party disputes the correctness of the notice or statement from the Non-
Defaulting Party, the provisions of Article XIII shall apply; provided, that it shall be a condition
of disputing the amount of the Termination Payment that the Defaulting Party post Credit
Support in the full amount thereof (or the disputed amount if it has paid the undisputed amount
to the Non-Defaulting Party) if it has not already done so and that such Credit Support remain in
effect until such dispute is finally resolved and the Non-Defaulting Party has received full
payment. The Parties‟ obligations under this Agreement shall remain in effect after termination
of this Agreement for purposes of complying with all of the provisions of this Section 8.5.
        8.6.     Other Remedies. The Termination Payment determined as set forth herein shall
be the Parties‟ sole and exclusive remedy under this Agreement for termination for an Event of
Default. Upon or at any time after the occurrence and during the continuation of an Event of
Default or an Early Termination Date affecting a Defaulting Party, the Non-Defaulting Party
may exercise any of the rights and remedies with respect to any Credit Support, including any
ancillary rights and remedies under Applicable Law then in effect. The Non-Defaulting Party
shall apply the proceeds of the Credit Support realized upon the exercise of any such rights or
remedies to reduce the Defaulting Party‟s obligations under this Agreement, subject to the Non-
Defaulting Party‟s obligation to return any surplus proceeds remaining after such obligations are
satisfied in full.
        8.7.    Duty/Right to Mitigate. Each Party agrees that it has a duty to mitigate damages,
and that it shall use commercially reasonable efforts to minimize any damages it may incur as a
result of the other Party‟s performance or non-performance of this Agreement, provided that in
no event shall the mitigating Party be required to pay any amounts to the nonperforming Party in
connection with such mitigation. The Parties shall exercise commercially reasonable efforts
when purchasing or selling, as the case may be, electrical energy or environmental attributes in
order to mitigate damages.
      8.8.    Remedies Cumulative. Subject to the express limitations set forth in Section 8.6
and Article IX, each right or remedy of the Parties provided for in this Agreement shall be
cumulative of and shall be in addition to every other right or remedy provided for in this


                                                 21
Agreement, and the exercise, or the beginning of the exercise, by a Party of any one or more of
the rights or remedies provided for herein shall not preclude the simultaneous or later exercise by
such Party of any or all other rights or remedies provided for herein.
        8.9.    Effect of Termination of This Agreement. The provisions of this Agreement shall
remain in effect only to the extent necessary (a) to provide for final billings and adjustments
related to the period before termination with respect to Project Output made available before the
termination date and (b) payment of any money due and owing any Party pursuant to this
Agreement; provided, however, that such termination shall not affect or excuse the performance
of any Party under any provision of this Agreement that by its terms survives any such
termination.

                                         ARTICLE IX
                                        LIMITATIONS
      9.1  Waiver and Exclusion of Other Damages. THE PARTIES CONFIRM THAT
THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS
AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. ALL LIMITATIONS OF
LIABILITY CONTAINED IN THIS AGREEMENT, INCLUDING THOSE PERTAINING TO
OVERALL LIMITATION OF LIABILITY AND THE WAIVER OF CONSEQUENTIAL
DAMAGES, SHALL APPLY EVEN IF THE REMEDIES FOR BREACH OF WARRANTY
PROVIDED IN THIS AGREEMENT ARE DEEMED TO “FAIL OF THEIR ESSENTIAL
PURPOSE” OR ARE OTHERWISE HELD TO BE INVALID OR UNENFORCEABLE.FOR
BREACH OF ANY PROVISION FOR WHICH AN EXPRESS AND EXCLUSIVE REMEDY
OR MEASURE OF DAMAGES IS PROVIDED, SUCH 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.
IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED HEREIN,
THE OBLIGOR‟S LIABILITY SHALL BE LIMITED TO DIRECT DAMAGES ONLY.
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR CONSEQUENTIAL,
INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, LOST PROFITS OR
OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR
CONTRACT.
TO THE EXTENT ANY DAMAGES REQUIRED TO BE PAID HEREUNDER ARE
LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES ARE DIFFICULT
OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE
REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE
A REASONABLE APPROXIMATION OF THE ANTICIPATED HARM OR LOSS. 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. THE PARTIES HEREBY WAIVE ANY RIGHT TO CONTEST
SUCH PAYMENTS AS AN UNREASONABLE PENALTY.


                                                22
THE PARTIES ACKNOWLEDGE AND AGREE THAT MONEY DAMAGES AND THE
EXPRESS REMEDIES PROVIDED FOR HEREIN ARE AN ADEQUATE REMEDY FOR
THE BREACH BY THE OTHER OF THE TERMS OF THIS AGREEMENT, AND EACH
PARTY WAIVES ANY RIGHT IT MAY HAVE TO SPECIFIC PERFORMANCE WITH
RESPECT TO ANY OBLIGATION OF THE OTHER PARTY UNDER THIS AGREEMENT.

                                           ARTICLE X
                                  FORCE MAJEURE EVENT
       10.1.   Definition.
               (a)    “Force Majeure Event” means any act or event that delays or prevents a
Party from timely performing all or a portion of its obligations under this Agreement or from
complying with all or a portion of the conditions under this Agreement if such act or event,
despite the exercise of reasonable efforts, cannot be avoided by and is beyond the reasonable
control of and without the fault or negligence of the Party relying thereon as justification for such
delay, nonperformance, or noncompliance.
                (b)   Without limiting the generality of the foregoing, so long as the following
events, despite the exercise of reasonable efforts, cannot be avoided by, and are beyond the
reasonable control of and without the fault or negligence of the Party relying thereon as
justification for such delay, nonperformance or noncompliance, Force Majeure Events may
include: acts of God; monsoon storms, floods, earthquakes, hurricanes, tornados, microbursts,
lightning, ice storms, landslides, mudslides; subsurface or other site conditions (including
archaeological or other protected cultural resources, and endangered species or protected
habitats); explosion; fire; epidemic; sabotage; vandalism; negligent acts of third parties;
terrorism; an act of public enemy; war; blockade; civil insurrection; riot; civil disturbance;
System Emergencies affecting the Project; or any restraint or restriction imposed by Applicable
Law or any directive from a Governmental Authority, which by exercise of due diligence and in
compliance with Applicable Law a Party could not reasonably have been expected to avoid and
to the extent which, by exercise of due diligence and in compliance with Applicable Law, has
been unable to overcome (so long as the affected Party has not applied for or assisted such act by
a Governmental Authority).
               (c)     Notwithstanding the foregoing, the term “Force Majeure Event” does not
include:
                       (i)     economic conditions that render a Party‟s performance of this
Agreement at the Contract Price unprofitable or otherwise uneconomic (including Buyer‟s ability
to buy Project Output at a lower price, or Seller‟s ability to sell the Project Output at a higher
price, than the Contract Price, or Buyer‟s inability, due to the Contract Price, to use or resell such
Project Output), or
                     (ii)    inability of a Party to make payment when due under this
Agreement, unless the cause of such inability is an event that would otherwise constitute a Force
Majeure Event as described above.




                                                 23
        10.2. Force Majeure Occurrence and Notice. To the extent either Party is prevented by
a Force Majeure Event from carrying out, in whole or in part, its obligations under this
Agreement or from complying with, in whole or in part, conditions under this Agreement, and
such Party (the “Claiming Party”) gives notice and details of the Force Majeure Event to the
other Party as soon as practicable, then, unless otherwise specified by the terms of this
Agreement, the Claiming Party shall be excused from the performance of its obligations and
complying with such conditions with respect to such transaction during the period that the Force
Majeure Event prevents performance by that Party. In addition, any completion milestones or
deadlines or time periods by which performance is due, including the achievement of
Commercial Operation, shall be extended for a period of time equal to the time period of such
suspension. The Claiming Party shall use commercially reasonable efforts to remedy the Force
Majeure Event with all reasonable dispatch. The suspension of performance and compliance
with such conditions due to the Force Majeure Event shall be of no longer duration and no
greater scope than is required by the Force Majeure Event. The Claiming Party shall promptly
notify the non-Claiming Party when it is able to resume performance of its obligations and
compliance with such conditions under this Agreement, if it is able to do so. Until the non-
Claiming Party is so notified, it 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 a Force Majeure Event. If deliveries of Project Output are prevented in whole or in part by a
Force Majeure Event, the deliveries in question shall not be made up and the Term shall not be
extended to permit any makeup or offset of the lost deliveries.
       10.3.   Force Majeure Termination.
               (a)      Either Party may terminate this Agreement, without liability to the other
Party, by giving written notice of such termination to the other Party, if a single Force Majeure
Event occurs and prevents a Party from making available, on the part of Seller, or taking, on the
part of Buyer, all of the Project Output, or its other material obligations or conditions under this
Agreement for a period of at least 12 consecutive Months, provided, that if the Claiming Party is
the Party electing to terminate this Agreement, the Claiming Party shall only be entitled to
terminate this Agreement under this Section 10.3 if it has met its obligations under Section 10.2.
Such termination shall be effective upon receipt of notice from the terminating Party by the non-
terminating Party.
               (b)    Notwithstanding the provisions of Section 10.3(a), if the Force Majeure
Event is one that has materially and adversely affected the production and sale of Project Output
as contemplated by this Agreement and if:
                      (i)      the Force Majeure Event is such that the suspension can be
corrected through repair or restoration work to the Project or other actions by Seller,
                        (ii)    Seller furnishes to Buyer as soon a practicable after such Force
Majeure Event, but in no event later than three consecutive Months after the occurrence of such
Force Majeure Event, the plans and, if applicable, the construction contract, for the restoration or
repair of the Project, together with evidence reasonably satisfactory to Buyer of the total cost of
restoration or repair of the Project and of Seller‟s ability to finance such total cost,




                                                24
                      (iii)   Buyer has the reasonable opportunity to review and comment on
such plans and financing, and
                       (iv)    Seller has undertaken and is diligently pursuing the repair work,
restoration or other actions, then neither Party shall have the right to terminate this Agreement
during such suspension so long as Seller is using Good Utility Practice to complete such repair
work, restoration or such other actions.
         10.4. Obligations. No Party shall be relieved by operation of this Article X of any
liability for breach of any obligations that were to be performed or that accrued prior to the Force
Majeure Event. In the event of a Force Majeure Event with respect to Buyer, Seller may sell all
or a portion of the Project Output to any Person; provided that no such sale shall be for a term of
more than six Months. Upon resumption of Buyer‟s ability to perform under this Agreement,
Seller shall continue to be excused for failure to make available Metered Output and
Environmental Attributes to Buyer to the extent resulting from Seller‟s obligations under third
party contracts that Seller entered into as permitted under this Section 10.4, until such third party
contracts are required to be terminated in accordance with the following:
                (a)     if the estimated duration of the Force Majeure Event, as stated in the
notice provided by Buyer pursuant to Section 10.2 (as may be updated from time to time), is less
than 180 days, Seller shall use commercially reasonable efforts, but shall not be required, to
terminate such sales prior to the end of the period stated in the notice (as updated from time to
time) if the actual period of such Force Majeure Event ends prior to such date, and
                (b)     in the event that the estimated duration of such Force Majeure Event, as
stated in the original notice provided by Buyer pursuant to Section 10.2, is greater than 180 days,
Seller shall terminate such sales no later than the date that is 30 days after Buyer delivers notice
to Seller that the period of such Force Majeure Event has ended; provided, however, that Seller
shall use commercially reasonable efforts, but shall not be required, to terminate such sales on
such lesser notice as Buyer may provide; provided, further, that notwithstanding anything to the
contrary in this Agreement, Seller shall not be required to terminate such sales prior to the date
that Buyer estimated as the date of the end of the period of the Force Majeure Event in its
original notice specifying the estimate of the period of such Force Majeure Event.
                                          ARTICLE XI
                         REPRESENTATIONS AND WARRANTIES
       11.1.   Seller‟s Representations and Warranties.        Seller represents and warrants as
follows:
               (a)     Seller is a ____________________, duly organized, validly existing and
in good standing under the laws of the State of ____________, and is qualified to conduct
business in each jurisdiction where the failure to so qualify would have a material adverse effect
on the business or financial condition of Seller.
               (b)   Seller has the power and authority to enter into and perform this
Agreement and is not prohibited from entering into this Agreement or discharging and
performing all covenants and obligations on its part to be performed under and pursuant to this


                                                 25
Agreement, except where such failure does not have a material adverse effect on Seller‟s
performance under this Agreement. The execution, delivery and performance of this Agreement
by Seller has been duly authorized by all necessary corporate action on the part of Seller and
does not and will not require the consent of any trustee or holder of any indebtedness or other
obligation of Seller or any other party to any other agreement with Seller.
                (c)     Seller has obtained or will obtain prior to the commencement of deliveries
of Metered Output hereunder, all regulatory approvals required by any Governmental Authority
in order to perform its obligations hereunder.
               (d)    The execution and delivery of this Agreement, consummation of the
transactions contemplated herein, and fulfillment of and compliance by Seller with the
provisions of this Agreement will not conflict with or constitute a breach of or a default under
any Applicable Law presently in effect having applicability to Seller, the documents of formation
of Seller or any outstanding trust indenture, deed of trust, mortgage, loan agreement or other
evidence of indebtedness or any other agreement or instrument to which Seller is a party or by
which any of its property is bound.
                (e)     This Agreement has been duly executed and delivered by Seller. This
Agreement is a legal, valid and binding obligation of Seller enforceable in accordance with its
terms, except as limited by laws of general applicability limiting the enforcement of creditors‟
rights or by the exercise of judicial discretion in accordance with general principles of equity.
       11.2.   Buyer‟s Representations and Warranties.        Buyer represents and warrants as
follows:
               (a)    Buyer is a political subdivision of the State of Arizona.
               (b)    Buyer has the power and authority to enter into and perform this
Agreement and is not prohibited from entering into this Agreement or discharging and
performing all covenants and obligations on its part to be performed under and pursuant to this
Agreement, except where such failure does not have a material adverse effect on Buyer‟s
performance under this Agreement. The execution, delivery and performance of this Agreement
by Buyer has been duly authorized by all necessary corporate action on the part of Buyer and
does not and will not require the consent of any trustee or holder of any indebtedness or other
obligation of Buyer or any other party to any other agreement with Buyer.
             (c)    Buyer has obtained or will obtain all regulatory approvals required by any
Governmental Authority to perform its obligations hereunder.
               (d)     The execution and delivery of this Agreement, consummation of the
transactions contemplated herein, and fulfillment of and compliance by Buyer with the
provisions of this Agreement will not conflict with or constitute a breach of or a default under
any Applicable Law presently in effect having applicability to Buyer, the documents of
formation of Buyer or any outstanding trust indenture, deed of trust, mortgage, loan agreement or
other evidence of indebtedness or any other agreement or instrument to which Buyer is a party or
by which any of its property is bound.




                                               26
                (e)     This Agreement has been duly executed and delivered by Buyer. This
Agreement is a legal, valid and binding obligation of Buyer enforceable in accordance with its
terms, except as limited by laws of general applicability limiting the enforcement of creditors‟
rights or by the exercise of judicial discretion in accordance with general principles of equity.
       11.3.   Disclaimers.
          (a) SELLER MAKES NO WRITTEN OR ORAL REPRESENTATION,
WARRANTY, OR COVENANT EITHER EXPRESS OR IMPLIED, REGARDING THE
CURRENT OR FUTURE EXISTENCE OF ANY ENVIRONMENTAL ATTRIBUTES OR
ANY LAW GOVERNING THE EXISTENCE OF ANY ENVIRONMENTAL ATTRIBUTES
UNDER THIS AGREEMENT OR OTHERWISE OR THEIR CHARACTERIZATION OR
TREATMENT UNDER APPLICABLE LAW OR OTHERWISE.
           (b)  OTHER THAN THOSE WARRANTIES AND GUARANTIES
EXPRESSLY SET FORTH IN THE TERMS OF THIS AGREEMENT, NEITHER PARTY
MAKES ANY WARRANTIES OR GUARANTIES OF ANY KIND WHATSOEVER,
EXPRESS, IMPLIED, ORAL, WRITTEN OR OTHERWISE, INCLUDING WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR
WARRANTIES ARISING BY CUSTOM, TRADE USAGE, PROMISE, EXAMPLE OR
DESCRIPTION, ALL OF WHICH WARRANTIES AND GUARANTIES ARE EXPRESSLY
DISCLAIMED.

                                           ARTICLE XII
                                   INDEMNITY; INSURANCE
       12.1. Indemnification. Subject to the provisions of Article IX, Seller shall defend, save
harmless and indemnify the Buyer and its, directors, officers, employees and agents from and
against all third-party claims, demands, losses, liabilities and expenses, including reasonable
attorneys‟ fees, for personal injury, death or damage to real property and tangible personal
property of any third party (collectively, “Losses”) to the extent arising out of, resulting from, or
caused by the negligence or willful misconduct of Seller, its Affiliates, directors, officers,
employees, or agents; provided, that the waiver of consequential damages set forth in the third
paragraph of Section 9.1 shall not apply with respect to claims made by third parties.
        12.2. Notice of Claims; Procedure. Buyer shall, with reasonable promptness after
obtaining knowledge thereof, provide the Seller with written notice of the proceedings, claims,
demands or assessments that may be subject to indemnification, which notice shall include a
statement of the basis of the claim for indemnification, including a summary of the facts or
circumstances that form the basis for the claim, a good faith estimate of the amount of Losses
and copies of any pleadings or demands from the third party. Seller shall have 30 days after its
receipt of the claim notice to notify Buyer in writing whether or not Seller agrees that the claim
is subject to this Article XII and, if so, whether Seller elects to undertake, conduct and control,
through counsel of its choosing and at its sole risk and expense, the settlement or defense of the
claim. If within 30 days after its receipt of the claim notice, Seller notifies Buyer that it elects to
undertake the settlement or defense of the claim, Buyer shall cooperate with Seller in connection
therewith including by making available to Seller all relevant information and the testimony of



                                                  27
employees and agents material to the defense of the claim. Seller shall reimburse Buyer for
reasonable out-of-pocket costs incurred in connection with such cooperation. So long as Seller is
contesting the claim in good faith and with diligence, Buyer shall not pay or settle the claim.
Notwithstanding the foregoing, Buyer shall have the right to pay or settle any claim at any time
without the consent of Seller, provided that in such event it waives any right to indemnification
therefor. If Seller does not provide a responsive notice within the 30-day period set forth in this
Section 12.2, Buyer shall thereafter have the right to contest, settle or compromise the claim at
its exclusive discretion, and Seller will be deemed to have waived any claim, defense or
argument that Buyer‟s settlement or defense of such claim is in any respect inadequate or
unreasonable.
        12.3. Survival; Limitations. The indemnity obligations and rights of the Parties set
forth in this Article XII shall survive the termination of this Agreement for two years after the
effective date of termination of this Agreement.
       12.4. Insurance Proceeds. In the event that Seller is obligated to indemnify Buyer
under this Article XII, the amount owing to Buyer will be the amount of Buyer‟s Loss net of any
insurance proceeds received by Buyer following a reasonable effort by Buyer to obtain such
insurance proceeds.

                                          ARTICLE XIII
                                    DISPUTE RESOLUTION
       13.1.   Dispute Resolution.
                  (a)    Each of Seller or Buyer shall appoint a representative to coordinate with
the other Party the implementation of this Agreement (each a “Representative” and collectively
the “Representatives”). If any dispute arises with respect to a Party‟s performance hereunder,
the Representatives shall meet to attempt to resolve such dispute, either in person or by
telephone, within five Business Days after the written request of either Representative. If the
Representatives are unable to resolve such dispute within 30 days after their initial meeting (in
person or by telephone), senior officers or executives of Buyer and senior officers or executives
of Seller shall meet, either in person or by telephone, within 10 Business Days after either
Representative provides written notice that the Representatives have been unable to resolve such
dispute. If such senior officers or executives are unable to resolve such dispute within 15 days
after their initial meeting (in person or by telephone), either Party may refer the dispute to a court
pursuant to Section 13.1(c), which shall be the sole legally binding forum available to the Parties
for resolution of a dispute hereunder.
                (b)     All disputes shall be adjudicated in a state or federal court of competent
civil jurisdiction. Each Party irrevocably submits to the exclusive jurisdiction and venue of
Maricopa County, Arizona Superior Court or in the United States District Court for the District
of Arizona for any dispute arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of such dispute shall be heard and determined in such Arizona or
federal court. Each Party hereby irrevocably waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum to the maintenance of such proceeding. The Parties
further agree, to the extent permitted by law, that any final and unappealable judgment against



                                                 28
either of them in any proceeding contemplated above shall be conclusive and may be enforced in
any other jurisdiction within or outside the United States by suit on the judgment, a certified
copy of which shall be conclusive evidence of the fact and amount of such judgment.
              (c)     Each Party waives, to the fullest extent permitted by Applicable Law, any
right it may have to a trial by jury in respect of any dispute arising out of or relating to this
Agreement. Each Party certifies that it has been induced to enter into this Agreement or
instrument by, among other things, the mutual waivers and certifications set forth above in this
Article XIII.
               (d)     While any dispute is pending, the Parties shall continue to perform their
obligations under this Agreement notwithstanding such dispute.

                                        ARTICLE XIV
                               GOVERNMENTAL CHARGES
        14.1 Allocation of Governmental Charges. Seller shall pay or cause to be paid all
Governmental Charges on or with respect to the Project or on or with respect to the sale and
making available to Buyer of Project Output that are imposed on the making available of Project
Output arising prior to the Metered Output Delivery Point or prior to the transfer of the
Environmental Attributes pursuant to Section 4.2(c). Buyer shall pay or cause to be paid all
Governmental Charges (other than any Governmental Charges for which Seller is liable under
this Section 14.1) on or with respect to the taking and purchase by Buyer of Project Output to
Buyer that are imposed at and from the taking of Project Output by Buyer at the Metered Output
Delivery Point or at and after the transfer of the Environmental Attributes pursuant to Section
4.2(c). If a Party is required to remit or pay Governmental Charges that are the other Party‟s
responsibility hereunder, such Party shall promptly reimburse the other for such Governmental
Charges. Both Parties shall use reasonable efforts to administer this Agreement and implement
the provisions in accordance with their intent to minimize Governmental Charges, so long as no
Party is materially adversely affected by such efforts. Nothing herein shall obligate or cause a
Party to pay or be liable to pay any Governmental Charge for which it is exempt under
Applicable Law. In the event any sale of Project Output hereunder is exempt from or not subject
to any particular Governmental Charge, Buyer shall provide Seller with all reasonably requested
documentation within 30 days after requested by Seller to evidence such exemption or exclusion.

                                        ARTICLE XV
                                    CONFIDENTIALITY
       15.1. Confidential Information. Upon a Party (the “Receiving Party”) receiving or
learning of Confidential Information from or of the other Party (the “Disclosing Party”), the
Receiving Party shall:
              (a)   keep such Confidential Information in strictest confidence and shall not
disclose any such Confidential Information to any other Person, except as may be provided
herein;




                                               29
              (b)     restrict access to such Confidential Information to employees (and others
who agree to be bound by this Agreement) who have a need to know such Confidential
Information for the purposes of developing the Project and for the purposes of this Agreement
and who have been notified that such information is Confidential Information;
               (c)     use such Confidential Information solely for the purpose of developing the
Project and for the purposes of this Agreement; and
               (d)     upon the termination of this Agreement and at the request of the
Disclosing Party, destroy any such Confidential Information in written or other tangible form and
any copies thereof.
               (e)    “Confidential Information” shall include:
                       (i)     any and all information prepared by or delivered to a Party by the
other Party or its Representatives (including information or data received by the other Party from
a third party and as to which the other Party has confidentiality obligations) in relation to this
Agreement, and
                       (ii)    information that is known to a Party, or should be known to a
reasonable person given the facts and circumstances of the disclosure, as being treated as
confidential or proprietary by the other Party.
               (f)    Notwithstanding anything to the contrary set forth in this Article XV, the
following information shall not be considered Confidential Information:
                        (i)    information that at the time of disclosure or acquisition was
publicly available or later became publicly available other than by breach of this Agreement; or
                      (ii)   information that at the time of disclosure or acquisition was
already known to the Receiving Party.
               (g)     Except as otherwise expressly provided herein, neither Party shall, unless
authorized in writing by the other Party to do so:
                      (i)      distribute or disclose to any person, firm, entity, or corporation
(other than those otherwise authorized pursuant to this Article XV) any of the Confidential
Information, or any facts related thereto; or
                      (ii)    permit any third Person to have access to such Confidential
Information.
       15.2. Disclosure to Affiliates and Representatives. Notwithstanding the foregoing, each
Party may disclose Confidential Information to such Party‟s Affiliates and any of such Party‟s or
such Party‟s Affiliates‟ employees, officers, board members, consultants and attorneys and other
Persons involved in assisting such Party or such Party‟s Affiliates in connection with this
Agreement, provided such Representatives are informed of the requirements of this Article XV
and agree to be bound by the provisions of this Article XV. The Receiving Party shall be
responsible for ensuring that all persons to whom it discloses Confidential Information under this
Agreement shall keep such information confidential and shall not disclose or divulge the same to


                                               30
any unauthorized Person pursuant to the requirements of this Agreement and shall be responsible
for any breach of this Section by person to whom it discloses Confidential Information.
        15.3. Disclosure Pursuant to Applicable Law. Notwithstanding anything to the contrary
in this Article XV, in the event a Receiving Party is requested pursuant to Applicable Law to
disclose Confidential Information, such Receiving Party shall, to the extent permitted by
Applicable Law, give the Disclosing Party prompt notice of such request so that the Disclosing
Party may seek an appropriate protective order. If, in the absence of a protective order, the
Receiving Party is nonetheless advised by counsel that disclosure of the Confidential Information
is finally required (after, if advance notice to the Disclosing Party is permitted by Applicable
Law, exhausting any appeal requested by the Disclosing Party at the Disclosing Party‟s expense),
the Receiving Party may disclose such Confidential Information. Seller understands that, as a
political subdivision of the State of Arizona, Buyer may be subject to certain disclosure
requirements under the Arizona public records law (A.R.S. § 39-101, et seq.).
        15.4. Injunctive Relief. Each of the Parties acknowledges and agrees that the other
Party would be irreparably harmed if any Confidential Information of the Disclosing Party were
to be disclosed to third Persons, or if any use were to be made of such Confidential Information
other than that permitted under this Agreement, and further agrees that the Disclosing Party shall
have the right to seek injunctive relief upon any violation or threatened violation of the terms of
this Article XV, in addition to all other rights and remedies available at law or in equity, without
having to post a bond or other security.
         15.5. Survival of Confidentiality Provisions. The terms and conditions set forth in this
Agreement shall be deemed to be Confidential Information subject to the confidentiality
provisions of this Article XV. The obligations of the Parties under this Article XV shall remain
in full force and effect for two years following the termination of this Agreement.
        15.6. Public Announcements.         Neither Party may issue or make any public
announcement, press release or statement regarding this Agreement unless such public
announcement, press release or statement is issued jointly by the Parties or, prior to the release of
the public announcement, press release or statement, such Party furnishes the other Party with a
copy of such announcement, press release or statement, and obtains the approval of the other
Party, such approval not to be unreasonably withheld, conditioned or delayed; provided that,
notwithstanding any failure to obtain such approval, no Party shall be prohibited from issuing or
making any such public announcement, press release or statement if it is necessary to do so in
order to comply with Applicable Laws, legal proceedings or rules and regulations of any stock
exchange having jurisdiction over such Party.

                                         ARTICLE XVI
                                            NOTICES
        16.1. Notices. Except as may be otherwise expressly provided for herein, all notices,
requests, statements and other communications to be given under this Agreement shall be made
to the addresses set forth below. All notices, requests, statements or payments shall be made in
writing except where this Agreement expressly provides that notice may be made orally. Notices
required to be in writing shall be delivered by hand delivery, U.S. Mail or express courier.



                                                 31
Except as may otherwise be specified in this Agreement, all notices, requests, statements and
other communications shall be deemed to have been duly given on (a) the date of delivery if
delivered by hand or by express courier, or (b) five days after deposit in the U.S. Mail. Either
Party may change its respective notice information upon giving the other Party at least 10 days‟
prior notice thereof. If to Buyer, addressed to it at:
               Physical Address:

                       1600 N. Priest
                       Tempe, Arizona 85281-8100

               Mailing Address:

                       P.O. Box 52025, ISB250
                       Phoenix, Arizona 85072-2025
                       Attention: Power Marketing, Supply and Trading

               With a copy to:

               Physical Address:

                       1521 N. Project Drive
                       Tempe, Arizona 85281

               Mailing Address:

                       P.O. Box 52025
                       Phoenix, Arizona 85072-2025
                       Attention: Corporate Secretary

               If to Seller, addressed to it at:




                                          ARTICLE XVII
                                        MISCELLANEOUS
       17.1. Assignment. Neither Party may assign this Agreement (including the benefits of
any Credit Support) without the other Party‟s prior written consent, such consent not to be
unreasonably delayed, conditioned or withheld. The non-assigning Party may withhold its
consent if the other Party proposes to assign its rights or delegate its duties under this Agreement
to any Person that does not meet the Credit Requirements. Any assignment in violation of this
provision shall be void. For purposes of this Agreement, any direct or indirect change in control
of a Party shall constitute an assignment. Any permitted assignee or transferee of a Party‟s


                                                   32
interest in this Agreement shall assume all existing and future obligations of such Party to be
performed under this Agreement.
       17.2. Governing Law. This Agreement and the rights and duties of the Parties
hereunder shall be governed by and construed, enforced and performed in accordance with the
laws of the State of Arizona, without regard to its principles of conflicts of law.
        17.3. Entire Agreement. This Agreement constitutes the entire agreement between the
Parties with respect to the subject matter hereof and supersedes all prior discussions and
agreements between the Parties with respect to the subject matter hereof. There are no prior or
contemporaneous agreements or representations affecting the same subject matter other than
those expressed herein.
        17.4. Amendment of Tariffs. Each Party agrees that if it seeks to amend any applicable
wholesale power sales tariff during the term of this Agreement, such amendment shall not in any
way affect this Agreement or any remaining transactions under this Agreement without the prior
written consent of the other Party. Each Party further agrees that it shall not assert or defend
itself on the basis that any applicable tariff of such Party is inconsistent with this Agreement.
       17.5. Amendment. No amendment, modification or change to this Agreement shall be
enforceable unless set forth in writing and executed by both Parties.
       17.6. Non-Waiver. No waiver by any Party hereto of any one or more defaults by the
other Parties in the performance of any of the provisions of this Agreement shall be construed as
a waiver of any other default or defaults whether of a like kind or different nature. No failure or
delay by any Party hereto in exercising any right, power, privilege, or remedy hereunder shall
operate as a waiver thereof.
         17.7. Severability. Any provision of this Agreement declared or rendered invalid,
unlawful, or unenforceable by any applicable Governmental Authority or deemed unlawful
because of a change in Applicable Law shall not otherwise affect the remaining lawful
obligations that arise under this Agreement, provided that the Parties shall use commercially
reasonable efforts to reform this Agreement in order to give effect to the original intention of the
Parties.
       17.8. Survival. All indemnity rights, audit rights and confidentiality obligations shall
survive the termination of this Agreement (with respect to indemnity rights, to the extent
provided in Section 12.2 and with respect to confidentiality, to the extent provided in Article XV,
and with respect to audit rights for the period ending three years following termination of this
Agreement).
        17.9. Forward Contract. The Parties acknowledge and agree that this Agreement and
the transactions contemplated by this Agreement constitute a “forward contract” and that each
Party is a “forward contract merchant” within the meaning of the United States Bankruptcy
Code.
        17.10. No Third-Party Beneficiaries. Nothing in this Agreement shall provide any
benefit to any third Person or entitle any third Person to any claim, cause of action, remedy or



                                                33
right of any kind, it being the intent of the Parties that this Agreement shall not be construed as a
third-party beneficiary contract.
        17.11. Relationships of Parties. The Parties shall not be deemed to be in a relationship of
partners or joint venturers by virtue of this Agreement, nor shall any Party be an agent,
representative, trustee or fiduciary of any other Party. Neither Seller nor Buyer shall have any
authority to bind the other to any agreement. This Agreement is intended to secure and provide
for the services of each Party as an independent contractor.
       17.12. Attachments and Annexes. Any and all Attachments and Annexes referred to in
this Agreement are, by such reference, incorporated herein and made a part hereof for all
purposes.
        17.13. Attorneys‟ Fees. If a Party commences a legal proceeding against the other Party
because of an alleged breach of such Party‟s obligations under this Agreement, each Party shall
bear its own expenses, including reasonable attorneys‟ fees, incurred in connection with the legal
proceeding and any appeal thereof.
        17.14. Binding Effect. This Agreement shall inure to the benefit of and be binding upon
the Parties and their respective successors and permitted assigns.
        17.15. Non-Recourse Obligations.       Notwithstanding any other provision of this
Agreement, no Person (nor any officer, employee, executive, director, agent or authorized
representative of any such Person) other than Seller and Buyer and, to the limited extent
explicitly set forth in any Credit Support documentation, the Person obligated to provide such
Credit Support, shall be liable for any payments due hereunder or for the performance of any
obligation hereunder.
        17.16. Rates and Terms Binding. The rates, terms and conditions of service specified in
this Agreement shall remain in effect from the Effective Date until the expiration of the Term.
Notwithstanding any provision in this Agreement, neither Party shall seek, nor shall support any
third party in seeking, to prospectively or retroactively revise the rates, terms or conditions of
service of this Agreement through application or complaint to the Federal Energy Regulatory
Commission pursuant to the provisions of Sections 205, 206 or 306 of the Federal Power Act, or
any other provisions of the Federal Power Act, absent the prior written agreement of the Parties.
Further, absent the prior agreement in writing by both Parties, the standard of review for changes
to the rates, terms or conditions of service of this Agreement proposed by a Party, a non-Party or
the Federal Energy Regulatory Commission acting sua sponte shall be the “public interest”
standard of review set forth in United Gas Pipe Line Co. v. Mobile Gas Service Corp., 350 U.S.
332 (1956), and Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348 (1956).
        17.17. Counterparts. This Agreement may be executed in counterparts, including in
facsimile and electronic formats (including portable document format (.pdf)), each of which is an
original and all of which constitute one and the same instrument.
       17.18. Compliance with Law. Each Party shall at all times comply in all respects with
all Applicable Laws applicable to it. As applicable, each Party shall give all required notices,
and shall procure and maintain all necessary governmental permits, licenses, and inspections



                                                 34
necessary for performance of this Agreement, and shall pay its respective charges and fees in
connection therewith.
        17.19. Telephone Recording. Each Party to this Agreement acknowledges and agrees to
the taping or electronic recording (“Recording”) of conversations between the Parties with
respect to all scheduling and dispatch issues, whether by one or the other or both Parties, and that
the Recordings will be retained in confidence, secured from improper access, and may be
submitted in evidence in any suit, action or proceedings relating to this Agreement. Each Party
waives any further notice of that monitoring or Recording, and agrees to notify its personnel of
the monitoring or recording and to obtain any necessary consent of those personnel.

                              [SIGNATURE PAGE FOLLOWS]




                                                35
        IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
as of the date first above written. This Agreement shall not become effective as to either Party
unless and until executed by both Parties.
Salt River Project Agricultural Improvement and Power District



By:
Name:
Title:



______________________



By:
Name:
Title:




                                              36
     ANNEX A
FORM OF GUARANTEE




       37
                               FORM OF LETTER OF CREDIT
IRREVOCABLE STANDBY LETTER OF CREDIT
No.
APPLICANT:




BENEFICIARY:




Ladies and Gentlemen:
       [                                            ] (the “Bank”) hereby establishes this
Irrevocable Standby Letter of Credit (“Letter of Credit”) in favor of _________________ (the
“Beneficiary”), for the account of ______________________(the “Applicant”), for the amount
of XXX AND XX/100 Dollars ($                ) (the “Available Amount”), effective immediately
and expiring at 5:00 p.m., prevailing Eastern Time, on the Expiration Date (as hereinafter
defined).
        This Letter of Credit shall be of no further force or effect upon the close of business on
______________ or, if such day is not a Business Day (as hereinafter defined), on the next
Business Day (the “Expiration Date”). Notwithstanding the foregoing, this Letter of Credit
shall be automatically extended without amendment for one year from the expiry date hereof, or
any future expiration date, unless at least 60 days prior to any Expiration Date we notify you in
writing by registered mail or courier that we elect not to renew this Letter of Credit for any such
additional period. In the event such notice is provided by us to you, and you are not in receipt of
a replacement letter of credit which is acceptable to you at least 30 days prior to the then current
Expiration Date, you may draw upon this Letter of Credit as outlined below.
        For the purposes hereof, “Business Day” shall mean any day on which commercial banks
are not authorized or required to close in New York, NY.
        Subject to the terms and conditions herein, funds under this Letter of Credit are available
to Beneficiary by presentation in compliance on or prior to 5:00 p.m. prevailing Eastern Time, on
or prior to the Expiration Date of the following:
        1.      The original of this Letter of Credit and all amendments (or photocopy of the
original for partial drawings); and



                                                38
       2.      The Drawing Certificate issued in the form of Attachment A attached hereto and
which forms an integral part hereof, duly completed and purportedly bearing the signature of an
authorized representative of the Beneficiary.
       Notwithstanding the foregoing, any drawing hereunder may be requested by transmitting
the requisite documents as described above to the Bank by facsimile at ______________ or such
other number as specified from time to time by the Bank. The facsimile transmittal shall be
deemed delivered when received. Drawings made by facsimile transmittal are deemed to be the
operative instrument without the need of originally signed documents.
        Partial drawing of funds shall be permitted under this Letter of Credit, and this Letter of
Credit shall remain in full force and effect with respect to any continuing balance; provided that,
the Available Amount shall be reduced by the amount of each such drawing. Provided that a
drawing and the documents presented in connection therewith conform to the terms and
conditions hereof, payment shall be made to you of the amount specified up to then prevailing
Available Amount, in immediately available funds, on or before the first Business Day after
presentation of the required documents. Payment shall be made by wire transfer to an account
you specify. Drawings made in accordance with the terms of the Letter of Credit shall be duly
honored no later than 5:00 p.m. prevailing Eastern Time on the next Business Day, regardless of
any notice, demand or claim of Applicant or any person or entity acting on Applicant‟s behalf.
       All banking charges shall be the sole responsibility of the Applicant.
       This Letter of Credit sets forth in full our obligations and such obligations shall not in any
way be modified, amended, amplified or limited by reference to any documents, instruments or
agreements referred to herein, except only the attachment referred to herein; and any such
reference shall not be deemed to incorporate by reference any document, instrument or
agreement except for such attachment. No modification to this Letter of Credit shall be
permitted without prior approval of the Beneficiary.
       The Bank engages with the Beneficiary that Beneficiary‟s drafts drawn under and in
compliance with the terms of this Letter of Credit will be duly honored if presented to the Bank
on or before the Expiration Date.
        Except so far as otherwise stated, this Letter of Credit is subject to the International
Standby Practices ISP98 (also known as ICC Publication No. 590), or revision currently in effect
(the “ISP”). As to matters not covered by the ISP, the laws of the State of New York, without
regard to the principles of conflicts of laws thereunder, shall govern all matters with respect to
this Letter of Credit.




                                      Name:
                                      Title:




                                                 39
                                     ATTACHMENT A
                                DRAWING CERTIFICATE
TO [ISSUING BANK NAME]
IRREVOCABLE STANDBY LETTER OF CREDIT
No.

DRAWING CERTIFICATE
Bank
Bank Address

Subject:      Irrevocable Standby Letter of Credit No.

        The undersigned,                              , an authorized representative of [PPA
offtaker, or counterparty as beneficiary of IRE letter of credit] (the “Beneficiary”), hereby
certifies to [Issuing Bank Name] (the “Bank”), with reference to Irrevocable Standby Letter of
Credit No. {           }, dated                (the “Letter of Credit”), issued by the Bank in
favor of the Beneficiary, as follows as of the date hereof:

       1.     The Beneficiary is entitled to draw under the Letter of Credit an amount equal to
$                   , for the following reason(s) [check applicable provision]:

                [ ]A. An Event of Default, as defined in that certain Power Purchase Agreement
between Applicant and Beneficiary, dated as of [Date of Execution] (the “Agreement”), with
respect to the Applicant has occurred and is continuing.

               [ ]B. An Early Termination Date (as defined in the Agreement) has occurred or
been designated as a result of an Event of Default (as defined in the Agreement) with respect to
the Applicant for which there exists any unsatisfied payment obligations.

               [ ]C. The Letter of Credit will expire in fewer than 30 Business Days from the
date hereof, and Applicant has not provided Beneficiary a replacement letter of credit which is
acceptable to Beneficiary.

              [ ]D. [Any other obligations that may be supported by the PPA that are not
covered above].

       2.       Based upon the foregoing, the Beneficiary hereby makes demand under the Letter
of Credit for payment of _____________U.S. DOLLARS AND ____/100ths (U.S.$
       ), which amount does not exceed (i) the amount set forth in paragraph 1 above, and (ii)
the Available Amount under the Letter of Credit as of the date hereof.

        3.      Funds paid pursuant to the provisions of the Letter of Credit shall be wire
transferred to the Beneficiary in accordance with the following instructions:


                                              40
Unless otherwise provided herein, capitalized terms which are used and not defined herein shall
have the meaning given each such term in the Letter of Credit.

IN WITNESS WHEREOF, this Drawing Certificate has been duly executed and delivered on
behalf of the Beneficiary by its authorized representative as of this ____ day of _______, _____.

Beneficiary:   [                          ]

By:
Name:
Title:




                                               41
                                           ANNEX B
                                AVAILABILITY GUARANTEE
Section 1. Definitions.
Capitalized terms used in this Annex B and not defined herein shall have the meaning assigned
in Article I of the Agreement.
        “Actual Project Output” means the energy (in MWh) generated by the Project and
delivered to the Metered Output Delivery Point.
         “Aggregate Availability Damages Cap” has the meaning set forth in Section 2(3) of this
Annex.
         “Annual Availability Damages Cap” has the meaning set forth in Section 2(3) of this
Annex.
         “Annual Report” has the meaning set forth in Section 2(5) of this Annex.
         “Availability Damages” has the meaning set forth in Section 2(2) of this Annex.
        “Availability Factor” means a percentage calculated as (i) 100, multiplied by (ii) the
result of (a) the sum of all Available Hours for all Inverters that were part of the Project at the
beginning of the relevant Contract Year, divided by (b) the sum of all Period Hours in the
relevant Contract Year for all Inverters that were part of the Project at the beginning of the
Contract Year.
        “Available Hours” means the number of Period Hours in which an Inverter was
electrically connected to the Interconnection Facilities. Available Hours are counted by an
Inverter‟s programmable logic controller. Available Hours include all hours during which an
Inverter was not electrically connected to the system due to: (i) System Emergency (other than a
System Emergency caused by Seller‟s breach of the Interconnection Agreement); (ii) Force
Majeure Event; (iii) Buyer‟s electrical system outage; (iv) Buyer Event of Default; (v) Buyer
curtailment under Section 4.3; (vi) Buyer‟s inability for any reason (other than due to a breach by
Seller of its obligations under this Agreement) to accept delivery of any power that the Project is
otherwise capable of producing. Available hours will also include the time during which an
Inverter is deliberately de-energized to optimize output from the Project and the time required to
return Inverters to service after a System Emergency, Force Majeure Event or Buyer‟s electrical
system outage.
       “Capacity Factor” means the ratio determined by dividing the actual Metered Output, in
MWh, over the previous consecutive 36-Month period by the number of MWhs that the Project
would have produced if operated at the Project Installed Capacity every hour during such
consecutive 36-Month period, provided that if fewer than 36 Months are available, then for the
time period available.
         “Cost to Cover” is $60.00/MWh.


                                                42
         “Cure Year” has the meaning set forth in Section 2(3) of this Annex.
       “Expected Project Output” means an aggregate amount (expressed in whole MWh per
Contract Year) determined by multiplying Project Installed Capacity times 8,760 hours times the
Capacity Factor.
         “Guaranteed Availability Factor” has the meaning set forth in Section 2(1) of this
Annex.
        “Inverter” means electrical equipment to convert direct electric current, as received from
the solar field, to three phase AC power to be conveyed to the Interconnection Facilities.
         “Period Hours” means 4,593 hours for any given Contract Year.

Section 2. Availability Guarantee.
       1.     Availability Guarantee. At the beginning of the third Contract Year and at the
beginning of each Contract Year thereafter, Seller guarantees that the Project shall have achieved
an Availability Factor for the prior Contract Year equal to or greater than 75% (each, a
“Guaranteed Availability Factor”).
       2.       Availability Damages. For any Contract Year during which Seller fails to meet
the Guaranteed Availability Factor, Seller shall pay Buyer damages in the amount equal to (x)
the Cost to Cover multiplied by (y) the Guaranteed Availability Factor minus the Actual
Availability Factor for such Contract Year (both expressed as a decimal), multiplied by (z) the
Expected Project Output for such Contract Year (the “Availability Damages”), but in no event
in excess of the Annual Availability Damages Cap and the Aggregate Availability Damages Cap;
provided that if the Actual Project Output exceeds Expected Project Output, then Availability
Damages for that Contract Year are zero. A sample calculation of the Availability Damages that
would be owed by Seller under certain stated assumptions is provided as Attachment 1 to this
Annex B.
        3.      Damages Cap, Termination and Cure Rights. The total Availability Damages
payable by Seller for failure to meet the Guaranteed Availability Factor in any Contract Year
shall be capped annually at $_________ (“Annual Availability Damages Cap”) and in the
aggregate at $__________ (“Aggregate Availability Damages Cap”) over the life of the
Agreement. If the Aggregate Availability Damages Cap is reached, either Party may terminate
the Agreement without any further liability to the other Party by providing notice within 30 days
of delivery of the Annual Report stating that the Aggregate Availability Damages Cap has been
reached, provided that if Buyer exercises its right to terminate under this Section, Seller may, at
its sole discretion, elect to cure and prevent Buyer‟s termination right by paying Availability
Damages, if any, subject to the Annual Availability Damages Cap, for the Contract Year in
which the damages would exceed the Aggregate Availability Damages Cap (“Cure Year”); and
provided further that if Seller exercises its right to terminate under this Section, Buyer may, at its
sole discretion, elect to prevent Seller‟s termination right by waiving Availability Damages for
the current or such future Contract Years as the Buyer may in its discretion determine. Seller
shall provide notice of its election to cure within 30 days of receipt of Buyer‟s termination
notice. Buyer shall provide notice of its election to waive Availability Damages within 30 days
of receipt of Seller‟s termination notice. If Seller fails to meet the Guaranteed Availability


                                                 43
Factor in any Contract Year after the Cure Year, the Parties‟ termination rights shall revive,
provided that Buyer‟s termination right again shall be subject to cure by Seller upon payment of
Availability Damages pursuant to this Section or delivery or Replacement Power, which shall
again be subject to the Annual Availability Damages Cap, and Seller‟s termination right again
shall be subject to cure by Buyer‟s waiver of Availability Damages.
        4.     Sole Remedy. The Parties agree that Buyer‟s sole and exclusive remedy and
Seller‟s sole and exclusive liability for any deficiency in the performance of the Project
(including any failure to meet the Guaranteed Availability Factor) shall be the payment of
damages up to the Annual Availability Damages Cap and Aggregate Availability Damages Cap,
and the right of termination under this Annex B, and shall not be subject to the collection of any
other damages or any other remedies, including specific performance, and shall not be an Event
of Default giving rise to a termination payment obligation under Article VIII of the Agreement.
Notwithstanding the foregoing, Seller‟s material breach of its obligation to operate and maintain
the project in accordance with Good Utility Practice, or Seller‟s failure to deliver Replacement
Power or to pay Availability Damages when due could be an Event of Default for which Buyer
may terminate the Agreement and seek damages in accordance with Section 8.2.
        5.     Annual Report. At the beginning of the third Contract Year and at the beginning
of each Contract Year thereafter, no later than the 30th day of such Contract Year (or 30 days
after the end of the last Contract Year), Seller shall deliver to Buyer a calculation showing
Seller‟s computation of the Project Availability Factor for the previous Contract Year and the
Availability Damages, if any, due to Buyer (the “Annual Report”). Such Annual Report shall
include the total amount of Availability Damages paid to Buyer under the Agreement and shall
provide notice that the Aggregate Availability Damages Cap has been reached, if applicable. If
Availability Damages are due from Seller, Seller shall pay such damages no later than 10 days
after providing the Annual Report.
       6.      Disputes. Disputes as to any calculations under this Annex B shall be addressed
as provided in Section 13.1 of the Agreement.




                                               44
                               ATTACHMENT 1 TO ANNEX B
              EXAMPLE CALCULATION OF AVAILABILITY DAMAGES
I.     Example of Availability Factor Calculation
The sample calculation set forth below is based on the following assumed facts:
During the Contract Year in question, 40 500-kW Inverters had been completed and were part of
the Project, bringing the Final Project Installed Capacity to 20 MW.
The Inverters had the following operating characteristics:

                                                     Hours    Inverters     Inverter
                                                              Affected      Hours
      Period Hours (TT)                              4,593    40            183,720
      Downtime (D)                                   3,200                  3,200
      Excused Downtime (ED)                          20       40            800
      Unexcused Downtime (UD)                                               2,400


Downtime (D) includes all hours for which the Inverters were unavailable.
Excused Downtime (ED) includes, for example, force Majeure Events, and System Emergencies
that were not the result of Seller‟s breach of the Interconnection Agreement.
Given these assumed facts, the Available Hours for the Inverters during the Contract Year would
be calculated as follows:
Unexcused Downtime (UD) = D – ED
3,200 – 800 = 2,400
Sum of Available Hours = TT – UD =
183,720 – 2,400 = 181,320

Project Availability Factor
Given these assumed facts, the Availability Factor for the Project during the Availability Year in
question would be calculated as follows:
(1)    Available Hours: 181,320 hours
(2)    Sum of Period Hours: (4,593 x 40) = 183,720 hours
(3)    Availability Factor: (Sum of Available Hours/Sum of Period Hours) x 100
               = (181,320/183,720) x 100 = 99%



                                                45
II.    Example of Availability Damages
Example of Availability Damages based on the following assumed facts:
       (a)     Seller‟s Guaranteed Availability in Year 4 is 75%.
       (b)     Seller‟s Actual Availability in Year 4 is 70%.
       (c)     Cost to Cover is $60/MWh.
       (d)     Capacity Factor is 25%.
Given these assumed facts, Seller calculates the Availability Damages due to Buyer as follows:
(1)    Expected Project Output =
Final Project Installed Capacity x 8,760 hrs x Capacity Factor =
20 MW x 8,760 hrs x 25% = 43,800 MWh.
(2)    Availability Damages =
Cost to Cover x ((Guaranteed Availability Factor for Year 4 – Actual Availability Factor for
Year 4) x Expected Project Output) =




                                               46
                                             ANNEX C
              Renewable Attestation from Wholesale Provider of Electricity or RECs
I. Wholesale Provider Information

Name of Wholesale Provider:
______________________________________________________________

Address of Provider:
_______________________________________________________________________

Contact Person: __________________________________ Title:
___________________________________

Telephone: _______________ Fax: _________________ Email
Address:__________________________

II. Declaration

I, (print name and title) __________________________________ declare that the electricity
bundled with renewable attributes listed below were sold exclusively from
_________________________________ (“Provider”) to Salt River Project Agricultural
Improvement and Power District (“Purchaser”).

I further declare that:

        1)      all the renewable attributes (including CO2 benefits), including any emissions
offsets, reductions or claims, represented by the renewable electricity generation listed below
were transferred to Purchaser;

         2)      the renewable attributes were not sold, marketed or otherwise claimed by a third
party;

         3)      Provider sold the renewable attributes only once;

       4)      the renewable attributes or the electricity that was generated with the attributes
was not used to meet any federal, state or local renewable energy requirement, renewable energy
procurement, renewable portfolio standard, or other renewable energy mandate by Provider, nor,
by any other entity;

        5)     the electrical energy that was generated with the attributes was not separately
sold, separately marketed or otherwise separately represented as renewable energy by Provider,
or, by any other entity; and

        6)     the facilities that generated all of the renewable electricity / renewable attributes
(as indicated above) sold to Purchaser are listed below by fuel type.


                                                 47
  List the renewable MWhs sold or transferred to Purchaser identified below by quarter of
  generation as a separate line item.

Generator      Generator Nameplate Fuel                     #      First Date           Period of        Selling as
Name           ID        Capacity  Type                     MWhs   of                   Generation       Green-e
               Number    (MW)                               RECs / Generator            (quarter#/yy     Energy
               (EIA or                                      Elec.  Operation            or mm/yy)        Certified
               QF)                                          Sold   (mm/yy)3                              Wholesale?4
                                                                                                         (Yes/No)




  III. Additional Statement required of Provider selling electricity to Purchaser

  I declare that the electricity listed above was delivered into the NERC region(s) or ISO(s) in
  which the Generator(s) listed above are located.

  IV. Additional Statement required if Provider is selling only RECs to Purchaser and selling
  the associated electricity to a utility or load-serving entity

  Please  write   the   name   of   the                     utility     or     load-serving        entity      here:
  _____________________________________

            As an authorized agent of Provider, I attest that the above statements are true and correct.

  _________________________________________
  Signature                                                             Date

  ________________________________________
  Place of Execution




  3
    For facilities that have added new renewable capacity, please indicate the amount and operational date of the new
  capacity and the existing capacity.
  4
    Provider may only indicate „Yes‟ if Provider has a contract with Green-e Energy to sell RECs/renewable energy
  wholesale as Green-e Energy certified, the MWh listed in each row of this table are sold to Purchaser as Green-e
  Energy certified, and the MWh listed will undergo Green-e Energy Annual Verification.


                                                          48

				
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Description: Output Agreement document sample