Docs #
EXCLUSIVE NEGOTIATING AGREEMENT THIS EXCLUSIVE NEGOTIATING AGREEMENT (the “Agreement”) is entered into by and between Modesto Irrigation District (“MID”), an irrigation district formed under the law , [LLC], a [limited liability company] of the State of California, and (“Participant”). MID and Participant may each be referred to herein as “Party” or collectively referred to herein as the “Parties,” as the context requires. Recitals WHEREAS, MID, as part of its retail electric operations, purchases and sells electric power for the benefit of its customers; and WHEREAS, MID received an unsolicited Renewable Project Application (Project Offer) from Participant; WHEREAS, the Participant proposed the development of a MW (net) [technology] electric generating project located at of in County, ; MW (gross) / near the City
WHEREAS, Participant has delivered to MID a Security Deposit, as defined in the MID ; and Renewable Resource Project Proposal in the amount of WHEREAS, MID and Participant have engaged in preliminary non-binding discussions with respect to the Project Offer since Participant submitted the Project Offer; WHEREAS, MID and Participant presently desire to enter into negotiations that may result in a final agreement that would facilitate the purchase of renewable resources or the purchase of a renewable resource project pursuant to the MID Renewable Resource Project Proposal Process, including, where applicable, the identification of a proposed site for a renewable generation project and an adjustment of the energy price proposed in the Project Offer (“RPS Agreement”); WHEREAS, the Participant desires to offer and make exclusive its Project Offer, as such the Project Offer will be further developed in subsequent non-binding preliminary discussions with MID, with the intent that such offer will culminate in an RPS Agreement; and
-1-
WHEREAS, the Participant will work exclusively with MID as described below. MID AND PARTICIPANT HEREBY AGREE AS FOLLOWS: I. Negotiations A. Good Faith Negotiations
MID and Participant agree to negotiate diligently and in good faith regarding an RPS Agreement. Such negotiations may include the provision by Participant of a final Project Offer and, subject to approval of the MID Board of Directors, execution of an RPS Agreement. B. Cooperation Period
Upon notification by MID that MID will commence negotiations with the Participant regarding a Project Offer, Participant must immediately withdraw from any and all other solicitations any and all other offers Participant has made relating to the renewable resource products and/or projects that are the subject of the Project Offer, or as such Project Offer may have been modified pursuant to preliminary discussions between the Parties since the Project Offer was submitted, with any such modification(s) documented in writing between the Parties. The duration of this Agreement (the “Cooperation Period”) shall be twelve (12) months from the date this Agreement has been duly executed by all Parties. During the Cooperation Period, Participant agrees not to negotiate with any other person or entity regarding its Project Offer, or the renewable resource products or projects that are the subject of the Project Offer. If upon expiration of the Cooperation Period or any extension thereof, MID and Participant have not executed an RPS Agreement, this Agreement shall automatically terminate. This Agreement may be mutually extended in writing prior to expiration of the Cooperation Period by MID and Participant for up to two three (3) month periods, so long as progress is being made. MID shall have the right to terminate this Agreement with a written notice at any time should the Parties not reach agreement on the terms of the RPS Agreement. C. Letter of Credit Deposit
Prior to the execution of this Agreement by the Parties, Participant delivered the necessary Security Deposit in the form of cash or Letter of Credit acceptable to MID, which Letter of Credit constitutes the required Deposit under the MID Renewable Resource Project Proposal Process. The terms governing such Letter of Credit Deposit are set forth in such Letter of Credit and in the MID Renewable Resource Project Proposal Process. D. Proprietary and Confidential Information
A Project Offer may include proprietary and/or confidential information. Pursuant to section 6253 of the California Public Records Act (Act), any person may receive a copy of any identifiable public record that is not exempt from disclosure under other provisions of the Act. MID will disclose such documents unless (1) the data submitted in connection with a Project Offer is stamped “Proprietary/Confidential Materials;” or (2) the Participant provides a brief
-2-
explanation of the basis for confidentiality under the Act. MID reserves the right to release such information to its advisors for purposes of evaluating a Project Offer. In the event that such release to MID’s advisors is made, MID’s advisors will be bound to the same standard of care with respect to disclosure as MID. Neither MID nor its advisors will be liable for any damages resulting from any accidental disclosure before, during, or after the negotiation process, even if documents are marked as “Proprietary/Confidential Materials.” II. RPS Agreement Terms
The negotiations hereunder shall reflect, but not be limited to, the following business points relating to the development of an RPS Agreement that includes the terms of the final Project Offer for (1) a power purchase agreement, (2) a power purchase agreement with an option to buy the power generating project, and/or (3) a turkey acquisition agreement: A. Product and Project:
The Participant and MID shall work together to reach a clear definition of the renewable resource product and/or project that is being offered to the MID and in accordance with subsequent preliminary discussions that have taken place with respect to the Project Offer prior to the execution of this Agreement. Such renewable resource product and/or project definition shall be included as a term of the RPS Agreement. B. Price:
The Parties will negotiate full and fair consideration related to the renewable resource product and/or project price. C. Point of Delivery and Point of Interconnection:
The Parties will engage in discussions regarding the Point of Delivery and/or the point at which a proposed project will interconnect to MID's electric system (“Point of Interconnection”). If an interconnection with MID's electric system is required, the Participant shall submit a generator interconnection request and upon subsequent engineering analysis by MID a Point or Points of Interconnection shall be identified. The costs associated with the engineering analysis shall be borne by the Participant. The Parties will memorialize the final terms associated with the Point of Delivery, and/or the Point of Interconnection, including costs, in the RPS Agreement. D. Scheduling:
Where necessary, the Parties will agree to terms associated with scheduling delivery of the renewable resource product and/or project output to MID. E. Billing:
The Parties will agree to terms associated with billing procedures and processes associated with the purchase of the renewable resource product and/or project output.
-3-
F.
Project Construction Timelines:
The Parties will agree to incorporate key milestones in the RPS Agreement, and Participant shall agree to adhere to such milestones as closely as possible. Monetary terms that relate to Participant's ability to meet such milestones may be developed and incorporated in the RPS Agreement. G. Credit and Collateral Requirement:
The Parties will agree to the appropriate security requirements in compliance with the Parties' risk management policies. H. Default and Remedies:
The Parties will agree on terms regarding events of default and remedies therefore. L. Other Business Considerations:
If issues relating to the RPS Agreement not mentioned herein arise, negotiations relating to such issues shall be covered by this Agreement. III. A. General Provisions Definitions
Terms will be defined herein. B. Assignment
Neither this Agreement nor any rights or obligations hereunder may be assigned by Participant to any other entity without MID's prior written consent, which MID may withhold in its sole and absolute discretion. C. Amendment
This Agreement may not be amended, modified, altered, or changed in any respect whatsoever except by a further agreement in writing executed by the Parties. D. Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the State of California. IV. Limitation of this Agreement
The sole purpose of this Agreement is to facilitate the timely negotiation of an RPS Agreement. This Agreement does not bind either MID or Participant to enter into an RPS Agreement.
-4-
V.
Delivery of Exclusive Negotiating Agreement
This Exclusive Negotiating Agreement may be executed in counterparts and may be executed and delivered by facsimile or electronic mail and the Parties agree that such facsimile or electronic mail execution and delivery shall have the same force and effect as delivery of an original document with original signatures, and that each party may use such facsimile or electronic mail signatures as evidence of the execution and delivery of this Exclusive Negotiation Agreement by the Parties to the same extent that an original signature could be used. VI. Date of this Agreement
The date of this Agreement shall be the last date it is executed by all the Parties hereto. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date set opposite their signatures. _____________________________, 2009 MODESTO IRRIGATION DISTRICT, an irrigation district formed under the law of the State of California By:_______________________________ Title:______________________________
_____________________________, 2009
On Behalf of Participant: By:_______________________________ Title:______________________________
Approved as to Form:
By:_________________________________ Legal Counsel for Modesto Irrigation District DAY CARTER & MURPHY LLP
-5-