ENERGY MANAGEMENT AGREEMENT Dated November 1, 2008 by and between MMC ENERGY NORTH AMERICA, LLC, MMC MID-SUN LLC, MMC CHULA VISTA LLC, and MMC ESCONDIDO LLC MACQUARIE COOK POWER INC. and MACQUARIE COOK ENERGY, LLC

CONFIDENTIAL TREATMENT

REQUESTED PURSUANT TO RULE 24b-2

Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934. The omitted materials have been filed separately with the Securities and Exchange Commission.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit A	Protocols
Exhibit B	Fuel Supply Pricing Schedule
Exhibit C	Facility Budget
Exhibit D	Contacts
Exhibit E	Form of Guaranty
Exhibit F	Form of Letter of Credit

 

 

 

This Energy Management Agreement (this “Agreement”), effective as of November 1, 2008, is between Macquarie Cook Power Inc., a corporation organized and existing under the laws of the State of Delaware, Macquarie Cook Energy, LLC, a limited liability company organized and existing under the laws of the State of Delaware (collectively, “Energy Manager”), MMC Energy North America, LLC, MMC Mid-sun LLC, MMC Chula Vista, LLC and MMC Escondido, LLC, each a limited liability company organized and existing under the laws of the State of Delaware (collectively “MMC”). MMC and Energy Manager may be referred to each individually as a “Party” and collectively as the “Parties.”

 

 

WHEREAS, MMC owns and operates, directly or indirectly MMC Mid-Sun , MMC Escondido, and MMC Chula Vista power generation facilities (each a “Facility” and collectively “the Facilities”); and

 

WHEREAS, Energy Manager is a marketer of wholesale power in North America and trades wholesale natural gas, power and other energy-related products, and provides energy management services; and

 

WHEREAS, MMC desires to engage Energy Manager to provide Services (as defined below) in respect of each Facility.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

 

Section 1.1 Rules of Interpretation and Construction. Except as otherwise expressly provided in this Agreement, the rules of interpretation and construction set forth below shall apply to this Agreement:

 

(a) All capitalized terms used in this Agreement that are not otherwise defined have the respective meanings set forth or referred to in Section 1.1. Defined terms in this Agreement include in the singular number the plural and in the plural number the singular. Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.

 

(b) Any reference in this Agreement to “Section,” “Article,” or “Annex” is a reference to this Agreement. Unless the context requires otherwise, any reference in this Agreement to any document or instrument is a reference to that document or instrument and all schedules, exhibits, and attachments thereto as amended and in effect from time to time. Unless otherwise stated, any reference in this Agreement to any person includes its permitted successors and assigns and, in the case of any governmental authority, any person succeeding to its functions and capacities. The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement, unless otherwise expressly specified, refer to this Agreement as a whole and not to any particular provision of this Agreement. Whenever the term “including” is used in connection with a listing of items included within a prior reference, such listing is to be interpreted as illustrative only, and is not to be interpreted as a limitation on or an exclusive listing of the items included within the prior reference. In the event that any index or publication referenced in this Agreement ceases to be published, each such reference is deemed to be a reference to a successor or alternate index or publication reasonably agreed to by the Parties.

 

 

(c) In the event of a conflict between the text of this Agreement and any annex or exhibit, the terms of this Agreement shall prevail.

 

Section 1.2 Defined Terms.

 

As used in this Agreement, the following capitalized terms have the meanings set forth below:

 

“Affected Party” has the meaning set forth in Section 9.2.

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, (a) controls or owns the first Person, (b) is controlled or owned by the first Person or (c) is under common control or ownership with the first Person, where “own” (including, with correlative meanings, the terms “owned by” and “under common ownership with”) means ownership of fifty percent (50%) or more of the equity interests or rights to distributions on account of equity of the Person, and “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the power to direct or cause the direction of the management or policies of the Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” has the meaning assigned to such term in the first paragraph of this Agreement.

 

“Ancillary Services” means those services defined by CAISO in its FERC Electric Tariff.

 

“Applicable Law” means any federal, state or local laws (including common law and criminal law), codes, statutes, directives, ordinances, by-laws, regulations, rules, judgments, consent orders and agreements with Governmental Authorities, proclamations or delegated or subordinated legislation of any Governmental Authority that are applicable to this Agreement, the Parties hereto, each Facility, the Services or the Transactions.

 

“Bankruptcy Code” means the United States Bankruptcy Code, as amended.

 

“Bankruptcy” means, with respect to any Person, that such Person (i) files a petition or otherwise commences, authorizes or acquiesces in the commencement of a proceeding or cause of action under any Bankruptcy, insolvency, reorganization or similar law, or has any such petition filed or commenced against it, (ii) has a liquidator, administrator, receiver, trustee, conservator or similar official appointed with respect to it or any substantial portion of its property or assets, (iii) takes any action for its winding up or liquidation or (vi) is generally unable to pay its debts as they fall due.

 

 

“Billing Period” means a month; provided, that in the event that this Agreement terminates or is terminated on a day other than the last day of a month, the last Billing Period shall run from the first day of the month in which such termination occurs through the date of such termination.

 

“Business Day” means any day on which Federal Reserve member banks in New York City are open for business.

 

“CAISO” means the California Independent System Operator, or any successor thereto.

 

“Capacity” means the capability of a Facility to produce Power, expressed in MW, and including regulatory capacity.

 

“Collateral Annex” means the EEI Collateral Annex attached to the Master Netting Agreement.

 

“Confidential Information” has the meaning set forth in Section 13.1.

 

“Contract Price” means the price of Power or Gas purchased or sold in a Power Transaction or Gas Transaction.

 

“Contract Quantity” means that quantity of Power or Gas purchased or sold in a Power Transaction or Gas Transaction.

 

“Corresponding Third Party Transaction” means a transaction or series of transactions between Energy Manager and a Third Party that correspond(s) to a Transaction or any part of a Transaction between Energy Manager and MMC. Corresponding Third Party Transactions should mirror the transactions between Energy Manager and MMC with similar terms and pricing, unless otherwise mutually agreed.

 

“Costs” means, with respect to any day, all actual costs incurred by or on behalf of MMC associated with the generation, sale or transmission of Power generated by each Facility, including, but not limited to and without duplication all (i) costs related to Third Party Transactions or to CAISO (including all costs associated with participation in markets administered by CAISO), (ii) transmission costs and transmission losses, (iii) costs related to Ancillary Services, (iv) costs related to the start-up and shut down of a Facility, (v) costs related to the purchase of Replacement Power, (vi) Gas costs, (vii) Gas transportation and storage costs and losses, and (viii) broker, clearing house and exchange costs, provided, that Costs do not include fixed costs that Energy Manager would incur in the absence of a particular Gas Transaction or Power Transaction (including those Power Transactions related to Ancillary Services) related to the Facilities.

 

“Day-Ahead” has the meaning provided in the Western Electricity Coordinating Council Preschedule Calendar.

 

“Defaulting Party” means MMC in respect of MMC Events of Default, and Energy Manager, in respect of Energy Manager Events of Default.

 

 

“Default Termination Date” means the date that this Agreement terminates, pursuant to a Termination (Default) Notice.

 

“Delivery Point” means for the Chula Vista Facility, Otay Substation Radial Tie Line TL6929; and for the Escondido Facility, Radial Tie Line 6933; and for the Mid-Sun Facility, CAISO ZP 26.

 

“Disclosing Party” has the meaning assigned to such term in Section 13.2.

 

“EEI Master Agreement” means the Edison Electric Institute Master Power Purchase and Sale Agreement, including the Gas Annex, executed between Energy Manager and MMC Mid-Sun LLC, MMC Chula Vista, LLC and/or MMC Escondido, LLC, pursuant to Section 2.4.

 

“Effective Date” means the day beginning at 00:00:01 EPT on November 1, 2008.

 

“Energy Manager” has the meaning provided in the introductory paragraph hereof.

 

“Energy Manager Contacts” shall consist of those persons who may be designated by Energy Manager to communicate with MMC and with CAISO under the Service terms provided hereunder.

 

“Energy Manager Event of Default” has the meaning assigned to such term in Section 10.1.

 

“EPT” means Eastern Prevailing Time.

 

“Event of Default” means an MMC Event of Default or an Energy Manager Event of Default.

 

“Facility” has the meaning provided in the Preliminary Statement.

 

“Facility Budget” has the meaning provided in Exhibit C.

 

“FERC” means the Federal Energy Regulatory Commission.

 

“Final Monthly Settlement Statement” has the meaning assigned to such term in Section 8.5.

 

“First Settlement Date” has the meaning assigned to such term in Section 8.6(a).

 

“Force Majeure” has the meaning assigned to such term in Article 9.1.

 

“Forced Outage” means any outage or derating at a Facility caused by equipment failure, maintenance or repair (using commercially reasonable industry standards) that is not a Planned Outage.

 

“FPA” means the Federal Power Act, 16 U.S.C. §791a, et seq.

 

“Gas” means natural gas.

 

 

“Gas Management Services” has the meaning assigned to such term in Section 5.2.

 

“Gas Payments” means, for each Gas Transaction, an amount calculated in accordance with the terms of the applicable NAESB for such Gas Transaction.

 

“Gas Revenues” means, with respect to any day, the actual revenues received by Energy Manager in connection with any Gas Payments.

 

“Gas Transaction” means a purchase or sale of Gas between MMC and Energy Manager.

 

“Gas Transportation Agreement” means any agreement with a Transporter for the transportation of Gas to such Facility.

 

“Governmental Authority” means any federal, state, local or municipal government, governmental department, commission, board, bureau, agency or instrumentality, or any judicial, regulatory, administrative or quasi-governmental body, having or asserting jurisdiction over the matter in question.

 

“Heat Rate” means the fuel efficiency of a Facility expressed in Btu’s per net kWh (HHV).

 

“Indemnified Party” means, with respect to an indemnification by Energy Manager, MMC and with respect to an indemnification by MMC, Energy Manager.

 

“Indemnifying Party” means the Party providing an indemnification under Sections 11.1 or 11.2.

 

“Initial Term” has the meaning assigned to such term in Section 2.1.

 

“Interest Rate” means for any date, the per annum prime rate of interest as reported in the “Money Rates” column of The Wall Street Journal on the last business day of the preceding month, as the same may change from time to time, plus two percent (2%).

 

“Letter(s) of Credit” means one or more irrevocable, transferable standby letters of credit issued, advised or confirmed by a U.S. commercial bank or a foreign bank with a U.S. or U.K. branch with such bank having a credit rating of at least A- from S&P or A3 from Moody’s, in a form acceptable to the Party in whose favor the letter of credit is issued. Costs of a Letter of Credit shall be borne by the applicant for such Letter of Credit.

 

“Losses” means suits, actions, liabilities, legal proceedings, claims, demands of any Third Party for any and all penalties, fines, losses, costs and/or expenses of any kind or character including reasonable attorneys’ fees and expenses.

 

“Master Netting Agreement” means the Master Netting Agreement executed between Energy Manager and MMC pursuant to Section 2.4.

 

“MMC” has the meaning assigned to such term in the first paragraph of this Agreement.

 

“MMC Bilateral Transaction” has the meaning assigned to such term in Section 7.6(c).

 

 

“MMC Credit Support” has the meaning assigned to such term in Article 15.

 

“MMC Event of Default” has the meaning assigned to such term in Section 10.2.

 

“MMC Guarantor” means MMC Energy, Inc.

 

“Monthly Management Fee” means the amount payable to Energy Manager as set forth in Section 8.1.

 

“MW” means megawatt.

 

“MWh” means megawatt-hour.

 

“NAESB” means the North American Energy Standards Board Base Contract for Retail Sale and Purchase of Natural Gas.

 

“NERC” means the North American Electric Reliability Council.

 

“NERC-GADS Standards” means the Generating Availability Database standards developed by the North American Electric Reliability Council.

 

“Net Output” means all Power produced by a Facility and delivered to a Delivery Point.

 

“Non-Defaulting Party” means MMC, in respect of any Energy Manager Event of Default, and Energy Manager, in respect of MMC Event of Default.

 

“Non-Disclosing Party” has the meaning set forth in Section 13.2.

 

“Other Services” means all Services other than Power Management Services and Gas Management Services which Energy Manager may agree to provide to MMC from time-to-time under the terms and conditions separately agreed upon between the Parties. 

 

“Party” has the meaning assigned to such term in the first paragraph of this Agreement.

 

“Person” means any individual, partnership, corporation, association, business, trust, limited liability company, Governmental Authority or other legal entity.

 

“Planned Outage” means an outage scheduled in advance.

 

“Power” means electric energy as measured in MWh, and/or any other electricity related products or services available for sale from a Facility, including Ancillary Services, but does not include Resource Adequacy Capacity.

 

“Power Management Services” has the meaning assigned to such term in Section 5.1.

 

“Power Payment” means, for each Power Transaction, an amount equal to the Contract Price multiplied by the Contract Quantity pursuant to such Power Transaction.

 

 

“Power Revenues” means, with respect to any day, the actual revenues received by MMC in connection with any Power Payments, which for the avoidance of doubt, do not include revenues from the sale of Resource Adequacy Capacity.

 

“Power Transaction” means a specifically agreed to purchase or sale of Power between MMC and Energy Manager pursuant to CAISO tariff or Third Party Transaction.

 

“PPT” means Pacific Prevailing Time.

 

“Preliminary Monthly Settlement Statement” has the meaning assigned to such term in Section 8.4.

 

“Proprietary Transaction” has the meaning assigned to such term in Section 7.6(d).

 

“Prudent Utility Practice” means the practices, methods, techniques, standards and acts that, at the time of the performance of the Parties’ obligations under this Agreement, are then commonly used by Persons performing similar tasks and services for natural gas-fired power plants in the United States, and that, at a particular time, in the exercise of reasonable judgment in light of the facts known at the time a decision was made, would have reasonably been expected to accomplish the desired results. Prudent Utility Practices are not intended to be limited to the optimum practices to the exclusion of all others, but rather reflect the practices then generally accepted, having due regard for, among other things, contractual obligations, costs, requirements of Governmental Authorities, operating rules or procedures of transmission operators, reliability councils or other market conditions.

 

“Real-Time” has the meaning provided in the Western Electricity Coordinating Council Preschedule Calendar.

 

“Renewal Term” has the meaning assigned to such term in Section 2.2.

 

“Resource Adequacy Capacity” means the quantity of capacity in MWs from a resource listed in a resource adequacy plan approved pursuant to Section 40 of the CAISO FERC Electric Tariff.

 

“Regulatory Approval” means all permits, licenses, consents, approvals, certifications and similar items issued by any Governmental Authority required in respect of or in relation to each Facility or performance of the Services.

 

“Replacement Power” means, in the event that a Forced Outage, interruption of Gas delivery or curtailment of Power transmission occurs, the amount of Power purchased or financially settled by Energy Manager that shall be equal to the positive difference obtained by subtracting the amount of Power actually delivered from each Facility from the amount of Power MMC has committed to sell Energy Manager in a particular Power Transaction.

 

“Required Gas Quantity” means the amount of Gas required, as determined by reference to the Heat Rate, to generate Power up to the Capacity of each Facility.

 

“Second Settlement Date” has the meaning assigned to such term in Section 8.6(b).

 

 

“Services” means, collectively, the Power Management Services (including those related to Ancillary Services) and Gas Management Services that Energy Manager has agreed to provide hereunder, all as more specifically described in Article V, and Other Services that Energy Manager may agree to provide from time to time.

 

“Settlement Fees” has the meaning assigned to such term in Section 8.2.

 

“Termination Date” means the date that this Agreement terminates, pursuant to a Termination Notice.

 

“Termination (Default) Notice” means a written notice of termination delivered by the Non-Defaulting Party pursuant to Section 10.3 of this Agreement.

 

“Termination Notice” means a written notice of termination delivered by one Party to the other Party, pursuant to Section 2.3 of this Agreement.

 

“Termination Settlement Statement” means a statement identifying the payment due from Energy Manager to MMC or from MMC to Energy Manager when this Agreement is terminated, calculated pursuant to Article VIII.

 

“Third Party” means any Person other than MMC or Energy Manager.

 

“Third Party Transaction” means any Power Transaction or Gas Transaction between Energy Manager and a Third Party.

 

“Total Gross Margin” means, with respect to MMC for any day and without duplication, (a) the sum of each Facility’s (i) Power Revenues plus (ii) Gas Revenues, less (b) the sum of the Facility’s (i) Power Costs plus (ii) Gas Costs. The calculation of Total Gross Margin shall not include revenues associated with RA Capacity.

 

“Transaction” means any Power Transaction or Gas Transaction between Energy Manager and MMC.

 

“Transporter” means any Person obligated to transport Gas pursuant to any Gas Transportation Agreement.

 

 

Section 2.1 Initial Term. This Agreement shall commence upon the Effective Date and, unless terminated earlier in accordance with the terms hereof, its initial term shall expire one (1) year from the Effective Date (such period, the “Initial Term”); provided, however, that Energy Manager’s authority to submit bids and offers to the CAISO on behalf of each Facility for the delivery of Ancillary Services on November 1, 2008 shall commence at 00:00:01 EPT on October 31, 2008.

 

 

Section 2.2 Renewal Term. This Agreement will automatically extend by successive sixty (60) day periods (each period a “Renewal Term”) unless terminated pursuant to Section 2.3.

 

Section 2.3 Termination. This Agreement shall terminate in the event that: (i) either Party terminates this Agreement upon giving thirty (30) days prior written notice to the other Party (a “Termination Notice”), with such thirtieth (30^th) day constituting the Termination Date; or (ii) an Event of Default has occurred and is continuing and the Non-Defaulting Party exercises its right to terminate under Article X. Provided, however, that (i) notice of Termination shall be given such that it is coincident with the time period required for MMC to designate a replacement gas supplier, and (ii) certain provisions of this Agreement shall continue in effect after the Termination Date or Default Termination Date, in accordance with the provisions of Section 16.14.

 

Section 2.4 Additional Undertakings. Promptly following the execution of this Agreement, the Parties shall use their best efforts to negotiate and execute an EEI Master Power Purchase and Sale Agreement and NAESB Agreements governing the terms of applicable Power Transactions and Gas Transactions as well as a Master Netting Agreement and the Collateral Annex attached thereto. Notwithstanding any provision in this Agreement: (i) Energy Manager shall have no obligation to procure and deliver Gas or to purchase Power from or for MMC unless the Parties execute the applicable EEI Agreement, NAESB Agreement, the Master Netting Agreement and the Collateral Annex thereto, and such applicable agreements remain in effect during the term of this Agreement and MMC provides associated credit support in a form acceptable to Energy Manager hereunder, under the Master Netting Agreement and under the Collateral Annex; and (ii) the EEI Agreement and NAESB Agreement, as applicable, shall govern the terms of applicable Power Transactions and Gas Transactions entered into pursuant to this Agreement.

 

 

Section 3.1 Appointment of Energy Manager. Subject to the terms of this Agreement, MMC appoints Energy Manager, and Energy Manager accepts the appointment, to be the exclusive provider of Services commencing as of the Effective Date.

 

Section 3.2 Independent Contractor. The relationship of Energy Manager to MMC as set forth in this Agreement is that of an independent contractor. Other than as expressly provided in this Agreement, this Agreement shall not make any Party an agent, or legal representative of any other Party for any purpose whatsoever and, notwithstanding anything in the contrary in this Agreement, this Agreement shall not make any Party a partner, a fiduciary or financial or investment advisor or a joint venturer of the other Party. Neither Party is authorized to assume or create any obligation, liability or responsibility on behalf of or in the name of any other Party or to bind any other Party to any Third Party except as expressly provided for under this Agreement.

 

 

 

Section 4.1 Standards of Performance. Energy Manager shall:

 

(a) perform the Services and enter into Transactions, the authority for which have been expressly delegated to Energy Manager pursuant to Article V and Section 7.6, in a good, workmanlike and commercially reasonable manner and in accordance with (i) Prudent Utility Practices, (ii) Applicable Law and Regulatory Approvals, and (iii) the applicable CAISO rules and procedures;

 

(b) exercise all commercially reasonable efforts to provide the Services to MMC with the goal of maximizing Total Gross Margin while complying with this Agreement, applicable law and regulation; and

 

(c) maintain, through itself or one or more service providers, sufficient infrastructure and related support in order to perform the Services.

 

Section 4.2 Limitations on Energy Manager’s Authority. In performing the Services under this Agreement, Energy Manager shall not, unless otherwise expressly authorized under this Agreement or by MMC:

 

(a) [***]

 

(b) [***]

 

(c) [***]

 

(d) [***]

 

(e) [***]

 

MMC shall not have any liability with respect to any Transaction undertaken by Energy Manager in breach of subsections (a) through (e) above, and, in addition to any other indemnity obligations in this Agreement, Energy Manager shall indemnify and hold harmless MMC from any claims arising in connection with such Transactions pursuant to the procedures in Article XI; provided, however, that Energy Manager’s liability under these subsections (a) through (e) above shall be subject to limitations stated in Section 11.2.

 

Section 4.3 Maintenance of Regulatory Approvals. Energy Manager shall have and maintain such Regulatory Approvals as may be necessary or required to perform its obligations hereunder, including but not limited to obtaining and maintaining (a) CAISO membership, and (b) any applicable FERC authorization to enter into market-based wholesale Power Transactions or Gas Transactions

 

Section 4.4 Additional Provisions.

 

 

(a) Notwithstanding anything in this Agreement to the contrary, Energy Manager does not represent or warrant that it will be able to enter into any particular Transaction contemplated herein or enter into any contract with any particular Third Party. MMC acknowledges that the markets for the purchase and sale of Power and Gas are often volatile and fluctuating, that the Contract Price for Power or Gas may be at a level that is either above or below the then-existing market prices for such Power or Gas and that Energy Manager has no obligation to purchase Power or Gas at the lowest existing market price or to sell Power or Gas at the highest existing market price.

 

(b) [***]

 

 

Section 5.1 Power Management Services. Subject to the terms of this Agreement and starting on the Effective Date, Energy Manager shall provide the following Power management services (“Power Management Services”) to MMC:

 

(a) submit to CAISO daily and hourly Ancillary Services bids of a Facility, including submitting Capacity bids for non-spinning reserves, into the CAISO Ancillary Services markets, up to the Capacity associated with such Facility, provided, that CAISO has authorized the Facility to submit bids for the specific Ancillary Service, and [***];

 

(b) maintain a 24-hour trading desk with Energy Manager Contacts for each Facility available twenty-four hours a day, seven days a week during the Agreement term to serve as a primary point of contact for communications from Facility staff and CAISO regarding: (i) Facility operations and dispatch; (ii) ring-down requirements; (iii) operating emergencies, (iv) out-of-merit calls; (v) CAISO congestion management instructions; (vi) Forced Outages and Planned Outages;

 

(c) submit to CAISO daily and hourly schedules for MMC Bilateral Transactions from each Facility, [***];

 

(d) coordinate the dispatch of Power with any designated representative of a Facility, purchasers of Power and CAISO, and adjust such dispatch characteristics or constraints for such designated Facility, upon instruction from MMC, provided, that dispatch information is provided by MMC or any representative of MMC on a timely basis;

 

(e) submit Power and Capacity bids and offers for each Facility to CAISO;

 

(f) upon the request of MMC, market available Power from any designated Facility to Third Parties by purchasing such Power from MMC and transacting with Third Parties via Corresponding Third Party Transactions);

 

(g) notify MMC of any Facility scheduling and Power production changes;

 

 

(h) use commercially reasonable efforts to manage Power imbalances for the Facility with the intent of reducing the adverse economic impact of such Power imbalances, [***];

 

(i) assist the Facility with the development of commercial strategies with respect to the sale of Power from the Facility;

 

(j) receive and validate CAISO invoices and dispute CAISO charges as necessary; and

 

(k) provide Other Services as may be agreed to in writing by the Parties from time to time.

 

Section 5.2 Gas Management Services. Subject to the terms of this Agreement and starting on the Effective Date, Energy Manager shall provide the following gas management services (“Gas Management Services”) to MMC:

 

(a) nominate and schedule the delivery of Gas to the Facility and adjust the schedule to reflect any changes in production at such Facility; [***];

 

(b) nominate, schedule and balance (including, without limitation daily and hourly) with suppliers and Transporters, including imbalances created in connection with nomination of Gas for the Facility through the use of an operational balancing agreement to be procured by the Facility and administered by Energy Manager; [***];

 

(c) use commercially reasonable efforts to market and sell any excess Gas by purchasing such Gas from MMC and transacting with Third Parties via Corresponding Third Party Transactions; and

 

(d) provide Other Services related to Gas as may be agreed to in writing by the Parties from time to time, including but not limited to, marketing excess transportation capacity.

 

Section 5.3 MMC Communications. In the provision of Services, Energy Manager may rely fully upon the communications from or on behalf of MMC not only as to their validity and effectiveness, but also as to the truth and accuracy of the information which Energy Manager shall in good faith believe to be genuine. MMC shall maintain sole and complete responsibility for ensuring that all information that MMC provides to Energy Manager remains current and accurate.

 

Section 5.4 No Implied Duties. Energy Manager shall have no implied duties or obligations and shall not be charged with knowledge or notice of any fact or circumstance not specifically set forth herein. Without limiting the generality of the foregoing, the duties of Energy Manager with respect to Services are limited to those expressly set forth in this Agreement.

 

 

 

 

Section 6.1 Reports. In addition to the information required to be provided pursuant to the Operating and Dispatch Procedures, Energy Manager shall provide the following information to MMC:

 

(a) Daily profit and loss reports based on preliminary data related to the Services, Ancillary Services prices, other Power prices and quantity generated, hourly Gas price and usage and estimated CAISO fees for sales and purchases on behalf of each Facility. Such profit and loss estimates shall be of the prior day and shall be summarized and presented in a form and in such detail as may be reasonably requested by MMC. The Parties shall cooperate with each other in the establishment of appropriate links and data access between the systems of each Facility and those of Energy Manager to facilitate reporting and communication to the extent practicable.

 

(b) To the extent that final data on Transactions are available from CAISO and/or Third Parties, monthly reports reconciling: (i) final Power Transactions (including for Ancillary Services) data (based on CAISO settlement statements and bilateral checkouts) with the daily preliminary recorded sales of Power data by MMC; and (ii) final Gas Transactions data (based on pipeline statements, transportation invoices and plant burn records) with the daily preliminary recorded Gas Purchases data by MMC.

 

(c) prepare, submit, reconcile and settle CAISO invoices, provided, that all necessary information for such reporting has been provided by MMC on a timely basis; and

 

(d) Anything herein to the contrary notwithstanding, upon obtaining knowledge thereof, the Parties shall submit prompt written notice to one another of: (i) any litigation or material claims, disputes or actions, threatened or filed by any Person, concerning the Services or Transactions related to Gas or Power with respect to the Facility or to a Party’s ability to perform its obligations under this Agreement; and (ii) any other event or circumstance that could materially affect a Facility or a Party’s ability to perform its obligations under this Agreement or engage in Gas or Power Transactions.

 

(e) Energy Manager shall endeavor to provide to MMC data that Energy Manager in good faith believes to be accurate, relating to the Services or the Transactions as may be necessary for MMC to submit reports prescribed by Applicable Law, including but not limited to FERC electric quarterly reports and any requirements of NERC, WECC or CAISO; submit Resource Adequacy monthly and annual supply plans to CAISO; provided that MMC shall retain the obligation to submit any such reports to the applicable regulatory authorities as may be prescribed by Applicable Law; and provided, further, that Energy Manager can not and does not guarantee the accuracy of such data but shall use commercially reasonable efforts to provide accurate and complete data.

 

Section 6.2 Books and Records. Energy Manager shall maintain in good order all records relating to the Services and Transactions, and retain written records for a minimum period of five (5) years (and otherwise as required by Applicable Law and Regulatory Approvals). To the extent practical and in accordance with its then-standing internal practices, Energy Manager shall ensure that such books and records are kept separate from its own books and records. Where records relate to disputes, appeals, arbitration, litigation or the settlement of claims arising out of the performance of this Agreement, such records shall be maintained until the resolution of the matter giving rise to the dispute.

 

 

Section 6.3 Meetings. Energy Manager shall meet with MMC or other representative of MMC in person or by conference call at such reasonable times in any month as MMC may request and as provided for in the Protocols in Exhibit A.

 

Section 6.4 Audits.

 

(a) MMC shall be entitled, upon reasonable notice to Energy Manager, no more than twice per year and at MMC’s sole cost, to audit all books and records kept and maintained by Energy Manager specifically relating to the Transactions and Energy Manager’s obligations under this Agreement.

 

(b) If any audit conducted under subsection (a) above reveals any inaccuracy in any Monthly Settlement Statement pertaining to the Transactions or the calculations referenced in Article VIII, the necessary adjustments in such Monthly Settlement Statement and the payments thereof will be promptly made; provided, however, that no adjustment of any Monthly Settlement Statement or payment will be made unless objection to the accuracy thereof was made by either Party within twelve (12) months from the submission of such Monthly Settlement Statement or payment, as applicable. Energy Manager shall preserve all records held by it for the duration of the referenced audit periods.

 

Section 6.5 Availability of Parties. Each Party shall make itself available to the other Party through telephone, voicemail, e-mail and/or facsimile during normal business hours, and by telephone, instant messaging, mobile telephone and/or pager during non-business hours. Energy Manager shall also make itself available to MMC through its 24-hour power trading desk.

 

Section 6.6 Notice. MMC shall submit prompt written notice to Energy Manager upon obtaining knowledge of: (i) any material violation of any Applicable Law regarding a Facility; or (ii) any refusal or threatened refusal to grant, renew or extend, or any action pending or threatened that might affect the granting, renewal or extension of any Regulatory Approval, including, but not limited to, the Facility’s FERC-granted market-based rate authorization.

 

 

Section 7.1 Regulatory Approvals. MMC shall maintain all Regulatory Approvals as may be necessary to procure and sell Gas and to sell Power (including Ancillary Services) as contemplated herein, including obtaining and maintaining any required authorizations of CAISO, WECC, FERC authorization to enter into market-based transactions and compliance with all standards applicable to generation owners and/or operators as set forth by CAISO, WECC and/or NERC. 

 

 

Section 7.2 Control of Facility. MMC shall have sole and absolute control of the Facility and shall provide Energy Manager with a written letter documenting such control, as required by FERC. MMC shall also have sole and absolute discretion to determine the amount of Capacity available for sale by Energy Manager for its respective Facility, which discretion it may exercise using Prudent Utility Practice based on operational considerations of such Facility. MMC shall be solely responsible for the sale of Resource Adequacy Capacity (“RA Capacity”), which has been committed to a third party, and Energy Manager shall have no obligations with respect to such commitment provided, however, that Energy Manager shall comply with the terms of this Agreement with respect to bidding the Facility in to the CAISO. MMC shall be responsible for communicating the operating and dispatch procedures to Energy Manager. [***]

 

Section 7.3 Specification of Gas Characteristics. MMC shall have the sole right and responsibility to specify the characteristics of Gas to be supplied to its respective Facility and shall bear all consequences associated with such characteristics.

 

Section 7.4 Nominating, Scheduling and Balancing Information. MMC shall provide Energy Manager with the information necessary to enable Energy Manager to comply with the nominating, scheduling, balancing and other requirements of any supplier, Transporter, Power purchaser or transmission provider and to minimize scheduling, balancing, overrun and similar penalties and charges.

 

Section 7.5 Communications with CAISO. MMC shall communicate with CAISO or any other control areas and execute the necessary documentation to permit communications between CAISO and Energy Manager.

 

Section 7.6 Transactions.

 

(a) Day-Ahead and Real-Time Power Transactions. MMC and Energy Manager agree that, with respect to Day-Ahead and Real-Time Power Transactions (including transactions with CAISO), Energy Manager and MMC shall execute transactions as follows:

 

(1) [***]

 

(2) Energy Manager shall identify opportunities for Real-Time transactions and Energy Manager shall transact with a Third Party (which may include, without limitation, the CAISO) via a Corresponding Third Party Transaction.

 

(3) [***]

 

(b) Intermediate and Long-term Third Party Transactions. Energy Manager may from time to time submit to MMC a proposed Power or Capacity Transaction between Energy Manager and a Third Party (other than a Transaction with CAISO), having a term longer than Day-Ahead. Such a proposal shall state the expected term of the Third Party Transaction and shall identify whether the proposed transaction could result in fees associated with CRRs or any other penalties and fees that may be assessable by NERC, FERC, WECC, or CAISO for the account of MMC. Upon receipt, MMC shall promptly review the terms of the proposed transaction and may request additional information or suggest changes to the terms thereof. If MMC approves a proposed transaction, it shall provide written notice of such approval to Energy Manager and execute an equivalent back-to-back Transaction with Energy Manager pursuant to the terms of the EEI Agreement and Energy Manager shall pursue execution of a Corresponding Third Party Transaction with the Third Party. Energy Manager shall not execute a Third Party Transaction having a term longer than Day-Ahead without MMC’s prior written consent unless (i) Energy Manager anticipates that the term of said Third Party Transaction will be equal to or less than [***].

 

 

(c) MMC Bilateral Transactions. In the event that MMC receives an offer for a bilateral Power or Capacity transaction from a Third Party, it shall provide Energy Manager with sufficient information regarding such offer, including any and all written terms and prices, and shall provide Energy Manager with at least [***] to respond with an offer which is at least equivalent to such Third Party offer. If Energy Manager does not respond or rejects such right of first refusal from MMC, MMC may directly and independently enter into such bilateral Power or Capacity transaction (an “MMC Bilateral Transaction”), Energy Manager shall coordinate the dispatch of Power in connection with such bilateral transaction and may, at its discretion, elect to provide Gas Management Services in connection with such bilateral transaction and in the same manner and scope contemplated under this Agreement; provided, however, that promptly upon execution of a bilateral transaction with a Third Party, MMC shall furnish Energy Manager with: copies of documentation implementing such bilateral transaction; and provided, further, that (x) any Power Revenues and Gas Revenues shall be included in the calculation of Total Gross Margin for such month and (y) the Parties have reached agreement on the fee, if any, due to Energy Manager for the provision of such additional services.

 

(d) Scheduling for Energy Manager Proprietary Transactions. Energy Manager shall not submit a day-ahead transmission schedule to the CAISO which designates a Facility as Energy Manager’s supply source for a transaction in which Energy Manager, for its own account, has agreed to sell power to a Third Party at a delivery point in the CAISO service territory (a “Proprietary Transaction”) unless Energy Manager has received approval from MMC for such designation of a Facility.

 

(e) Absent the prior approval of Energy Manager, in no event shall MMC utilize Gas supplied by Energy Manager to MMC for any purpose other than to deliver Power under a Transaction, Third Party Transaction or a MMC Bilateral Transaction for which Energy Manager has agreed to provide Gas Management Services.

 

Section 7.7 Operation and Maintenance. MMC shall operate and maintain each Facility in a commercially reasonable manner so that it materially complies with Applicable Laws and Regulatory Approvals. MMC shall, at its expense, obtain all necessary Regulatory Approvals and allowances for the Facility’s operation and maintenance.

 

 

 

Section 8.1 Monthly Management Fee. MMC shall pay Energy Manager a fee (the “Monthly Management Fee”) with respect to each Billing Period during the term of this Agreement. The Monthly Management Fee for MMC shall consist of: [***]

 

Section 8.2 Settlement Fees. [***]

 

Section 8.3 Payment for Gas Transactions and Gas Settlements; Payment for Power Transactions Absent Third Party Corresponding Transactions. 

 

(a) Gas Payment and Settlements. Invoicing and payment for purchases and sales of Natural Gas shall be in accordance with the terms of the applicable NAESB Agreements and shall not be incorporated in the Monthly Settlement Statements referenced in this Agreement. In the event that payments due to or from either Party for actualized Gas Transactions with Energy Manager and/or a Third Party (based on pipeline statements, transportation invoices and plant burn records) differ from the payment amounts referenced in any invoice issued pursuant to the NAESB, the applicable settlement terms of the NAESB shall apply.

 

(b) Power Payment and Settlements for Power Transactions Absent Third Party Corresponding Transactions. Invoicing and payment for purchases and sales of Power executed between MMC and Energy Manager absent Corresponding Third Party Transactions shall be in accordance with the terms of the applicable EEI Agreements. [***] In the event that payments due to or from either Party differ from the payment amounts referenced in any invoice issued pursuant to the applicable EEI, the applicable settlement terms of the EEI shall apply.

 

Section 8.4 Preliminary Monthly Settlement Statement. Not later than the [***], Energy Manager shall render to MMC a preliminary statement (the “Preliminary Monthly Settlement Statement”) showing the estimates of and setting forth in total for such Billing Period on an aggregate basis and, as applicable, (i) the Total Gross Margin (ii) the Monthly Management Fee, (iii) Energy Manager’s variable incentive fee referenced in Section 8.1 above (iv) estimated Power Revenues realized by MMC for sales to Energy Manager pursuant to the EEI Master Agreements (subject to adjustment based on CAISO settlement statements), and (v)any other costs incurred by MMC.

 

Section 8.5 Final Monthly Settlement Statement. Not later than [***], Energy Manager shall render to MMC a final statement (the “Final Monthly Settlement Statement”) showing the calculation of and setting forth in total for such Billing Period on an aggregate basis and, as applicable, (i) the Total Gross Margin (ii) the Monthly Management Fee, (iii) Energy Manager’s variable incentive fee referenced in Section 8.1 above (iv) final Power Revenues realized by MMC for sales to Energy Manager pursuant to the EEI Master Agreements (as adjusted, if applicable, based on CAISO settlement statements), and (v) any other costs incurred by MMC.

 

 

Section 8.6 Payment of Amounts Owed.

 

(a) Each Party shall, on or before two (2) Business Days after receipt of payment or a payment demand from CAISO (subject to the terms and conditions of the CAISO tariff) (the “First Settlement Date”), render to the other Party by wire transfer payment in immediately available funds any net amounts due to the CAISO and/or the other Party including, without limitation, the positive difference due under the Preliminary Monthly Settlement Statement for the Billing Period in which the relevant Services were rendered. [***].

 

(b) Each Party shall, on or before the fifth (5^th) Business Day following the issuance of the Final Monthly Settlement Statement (the “Second Settlement Date”), render to the other Party by wire transfer payment in immediately available funds any net amounts due to the CAISO and/or the other Party including, without limitation, the positive difference due under the Final Monthly Settlement Statement for the Billing Period in which the relevant Services were rendered.  

 

(c) If a Party fails to pay the entire amount shown to be due on any Monthly Settlement Statement when this amount becomes due (other than amounts disputed in good faith by such Party), it shall pay a late charge on the unpaid balance that shall accrue on each calendar day from the due date at the Interest Rate. Energy Manager shall not be under any obligation to raise disputes with the CAISO if such disputes are raised by MMC after the allowable CAISO dispute timeline.

 

(d) If either Party, in good faith, disputes any part of any Monthly Settlement Statement, such Party shall provide a written explanation of the basis for the dispute and pay the portion of such Monthly Settlement Statement conceded to be correct no later than the due date as calculated pursuant to this Section. If any amount disputed by such Party is determined to be due to the other Party either by agreement between the Parties or as a result of litigation, such amount shall be paid on the next payment date for a Monthly Settlement Statement or if there is no next scheduled payment date for a Monthly Settlement Statement then within ten (10) days of such determination, along with interest calculated at the Interest Rate from the original due date until the date paid.

 

Section 8.7 Payment Netting. In the event that Macquarie Cook Power Inc. and MMC are required to pay an amount on the same date pursuant to this Agreement or any Transaction, then such amounts shall be aggregated and the Parties shall discharge their obligations to pay through netting, in which case such Party owing the greater aggregate amount shall pay to the other Party the difference between the amounts owed.

 

Section 8.8 Payment of a Termination Settlement Statement.

 

(a) As soon as reasonably practicable following delivery of the Termination Notice, each Party shall prepare and deliver a Termination Settlement Statement to the other Party, showing in reasonable detail the amounts owing to the submitting Party. Each Party shall render to the other Party by wire transfer payment in immediately available funds, the amount due under the Termination Settlement Statement within two (2) Business Days following delivery of the Termination Settlement Statement by the second Party to provide the settlement statement.  In no event shall calculation and payment of the Termination Settlement Statement delay the Termination Date.

 

 

(b) As soon as reasonably practicable following the Default Termination Date, the Non-Defaulting Party will calculate and deliver the Termination Settlement Statement to the Defaulting Party, reflecting the unpaid amounts owing to the Non-Defaulting Party and the unpaid amounts owing to the Defaulting Party. Unless otherwise provided in the Master Netting Agreement, the Party owing the greater aggregate amount shall pay the difference between the amounts owed to the other Party by wire transfer in immediately available funds within two (2) Business Days of delivery of the Termination Settlement Statement.

 

Section 8.9 MMC Energy North America LLC as Billing, Payment and Collection Agent. For purposes of this Article VIII, MMC Energy North America, LLC shall act as billing, payment and collection agent for itself or for or on behalf of MMC Mid-Sun LLC, MMC Chula Vista, LLC, and MMC Escondido, LLC, and any and all amounts due to be paid to MMC from Energy Manager, and any and all amounts due to be paid to Energy Manager from MMC, pursuant to this Agreement, the NAESB Agreement and/or the EEI Master Agreement shall be paid to or from, as applicable, MMC Energy North America LLC; provided, however, that MMC Energy North America, LLC, MMC Mid-Sun LLC, MMC Chula Vista, LLC, and MMC Escondido, LLC shall each be jointly and severally liable as principals for any and all payment obligations due to Energy Manager arising under this Agreement, all EEI Master Agreements, the Master Netting Agreement and the Collateral Annex. Notwithstanding the foregoing, MMC Energy North America, LLC’s actions as billing, payment and collection agent for MMC Mid-Sun LLC, MMC Chula Vista, LLC, and MMC Escondido, LLC, hereunder do not and shall not result in MMC Energy North America, LLC at any time taking title to any Power or Gas, or entering into any Transaction with Energy Manager under this Agreement, the NAESB Agreement or the EEI Master Agreement.

 

 

Section 9.1 Applicable Definition and Procedures of Force Majeure. Force Majeure shall be defined as, with respect to the Party claiming Force Majeure under this Agreement, any event or a combination of events that such Party could not reasonably control, foresee or prevent, and the occurrence of which neither the claiming Party nor its respective agents or employees, have contributed to, which events materially impede a Party from performing its obligations under this Agreement. Such Force Majeure events shall include, without being limited to, the following:

 

(a) acts of a public enemy, war or threat of war (declared or undeclared) occurring in or involving the United States, revolution, riot, rebellion, insurrection, military or usurped power, state of siege, declaration of a state of emergency or martial law (or any of the events or circumstances that will or may result in the declaration of a state of emergency or martial law), civil commotion, act of terrorism, vandalism or sabotage (in each case occurring in or involving the United States), embargo or blockade, declaration of public calamity (or any of the events or circumstances that will or may result in the declaration of public calamity);

 

 

(b) politically motivated or otherwise widespread strikes, suspensions, interruptions, work slow-downs or other labor disruptions;

 

(c) explosions, chemical or radioactive contamination or ionizing radiation;

 

(d) air crashes, objects falling from aircraft, pressure waves caused by aircraft or aerial devices traveling at supersonic speed;

 

(e) any exercise of sovereign or executive prerogative or similar action by a Governmental Authority, or

 

(f) epidemics, meteorites, fire, lightning, earthquake, cyclone, whirlwind, hurricane, earthquake, tempest, storm, drought, flood, or other unusual or extreme adverse weather or environmental condition or action of the elements;

 

provided, that Force Majeure shall not include (i) lack of a market or unfavorable market conditions for Gas or Power, (ii) economic hardship, (iii) failure to timely apply for or obtain, or comply with, Applicable Law or Regulatory Approval(s), (iv) the ability to sell Gas or Power to another Person at a higher price, or buy Gas or Power from another Person at a lower price, or on more favorable terms than those afforded by this Agreement, (v) full or partial reduction in the electric output of a Facility caused by equipment failure, or (vi) the Bankruptcy of a Third Party (including CAISO) or such Third Party’s inability to make payments pursuant to the terms of a Power Transaction (including for Ancillary Services) or a Gas Transaction.

 

Section 9.2 Procedure For Calling Force Majeure. If one Party wishes to claim relief from the performance of its obligations arising under this Agreement on account of any event or circumstance of Force Majeure (hereinafter, the “Affected Party”), then the Affected Party shall provide initial notice orally to the other party, then give written notice to the other Party of such event or circumstance as soon as reasonably practicable after becoming aware of such event or circumstance. Each notice served by an Affected Party to the other Party pursuant to this Article IX shall specify the event or circumstance of Force Majeure in respect of which the Affected Party is claiming relief and the steps being taken to mitigate and overcome the effects of such event or circumstances. Noncompliance by the Affected Party with the procedure specified herein shall relieve the other Party from accepting the Affected Party’s claim until notice is so provided. The Affected Party shall, by reason of any event or circumstance of Force Majeure in respect of which it has claimed relief under this Section 9.2:

 

(a) use its commercially reasonable efforts to mitigate the effects of such Force Majeure and to remedy any inability to perform its obligations hereunder due to such events as promptly as reasonably practicable; provided, that: (i) the Affected Party shall not be obliged to take any steps that would not be in accordance with Prudent Utility Practice or Applicable Laws or that would be beyond its control; and (ii) the Affected Party shall not be required to settle any strikes or other labor disputes on terms that are adverse to the Affected Party and not commercially reasonable;

 

 

(b) furnish periodic reports to the other Party regarding the progress in overcoming the adverse effects of such event of Force Majeure and setting forth its best, good faith estimate concerning when it will be able to resume the performance of its obligations under this Agreement; and

 

(c) resume the performance of its obligations under this Agreement as soon as is reasonably practicable after the events of Force Majeure are remedied or cease to exist.

 

Section 9.3 Performance Suspended. During the continuance of any Force Majeure, the obligations of an Affected Party under this Agreement, other than any obligation of either Party to pay money when due under the terms of this Agreement, shall be suspended to the extent such condition results in the Affected Party’s inability to perform its obligations.

 

Section 9.4 End of Force Majeure Event. When the Affected Party is able, or would have been able if it had complied with its obligations under Section 9.2, to resume the performance of all of its obligations under this Agreement affected by the occurrence of an event or circumstance of Force Majeure, then the period of Force Majeure relating to such event or circumstance shall be deemed to have ended.

 

 

Section 10.1 Energy Manager Events of Default. The occurrence of any one or more of the following events shall constitute an Energy Manager Event of Default (“Energy Manager Event of Default”) under this Agreement:

 

(a) the failure by Energy Manager to make, when due, any payment required under this Agreement if such failure is not remedied within three (3) Business Days after written notice of such failure is received by Energy Manager; or

 

(b) the failure by Energy Manager to perform any material covenant or agreement set forth in this Agreement (other than as described in Sections 10.1(c), 10.1(d) or 10.1(e) herein or Section 3 of the NAESB) and such failure is not cured within three (3) Business Days after written notice is received by Energy Manager; or

 

(c) Energy Manager’s Bankruptcy; or

 

(d) Energy Manager shall either: (i) fail to maintain in full force and effect any Regulatory Approval necessary for the performance of the Services hereunder or for the purchase and sale of Gas or Power (including but not limited to Ancillary Services); or (ii) become subject to an order by any Governmental Authority whereby such Governmental Authority revokes or suspends any Regulatory Approval necessary for the performance of the Services hereunder or for the purchase and sale of Gas or Power (including but not limited to Ancillary Services); or

 

 

(e) any representation or warranty of Energy Manager proves to have been incorrect in any material respect as of the Effective Date.

 

Section 10.2 MMC Events of Default. The occurrence of any one or more of the following events shall constitute a MMC Event of Default (“MMC Event of Default”) under this Agreement:

 

(a) the failure by MMC to make, when due, any payment required under this Agreement if such failure is not remedied within three (3) Business Days after written notice of such failure is received by MMC; or

 

(b) the failure by MMC to perform any material covenant or agreement set forth in this Agreement (other than as described in Sections 10.2(c), 10.2(d), 10.2(f), or 10.2(g)) and such failure is not cured within three (3) Business Days after written notice is received by MMC or the Facility; or

 

(c) MMC’s or MMC Guarantor’s Bankruptcy; or

 

(d) MMC shall either (i) fail to maintain in full force and effect any material Regulatory Approval necessary to operate each Facility, or (ii) become subject to an order by any Governmental Authority whereby such Governmental Authority revokes or suspends any Regulatory Approval necessary for the operation of each Facility; or

 

(e) MMC shall either: (i) fail to maintain in full force and effect any Regulatory Approval necessary for the purchase and sale of Gas or Power (including, but not limited to Ancillary Services); or (ii) become subject to an order by any Governmental Authority whereby such Governmental Authority revokes or suspends any Regulatory Approval necessary for the purchase and sale of Gas or Power (including, but not limited to Ancillary Services); or

 

(f) any representation or warranty of MMC proves to have been incorrect in any material respect as of the Effective Date; or

 

(g) MMC or MMC Guarantor fails to provide, maintain in full force and effect, or comply with the MMC Credit Support obligations provided in Article XV.

 

Section 10.3 Rights of Non-Defaulting Party.

 

(a) When an Event of Default exists, the Non-Defaulting Party shall have the right to: (i) cause termination, liquidation, or acceleration of this Agreement, in whole or with respect to MMC, effective five (5) Business Days after receipt by the Defaulting Party of a Termination (Default) Notice by the Non-Defaulting Party (the “Default Termination Date”); (ii) suspend performance under this Agreement; (iii) withhold any payments due to the Defaulting Party under this Agreement; (iv) net, setoff, or recoup termination values, payment amounts or other transfer obligations arising under or in connection with this Agreement, including with respect to any Transaction; and/or (v) pursue any other remedy at law, in equity, or as provided under this Agreement. The Termination (Default) Notice shall specify in reasonable detail the circumstances giving rise to the Termination (Default) Notice.

 

 

(b) Notwithstanding the foregoing: (i) MMC has the right to terminate this Agreement, in whole or with respect any Facility, immediately in the case of the default under Section 10.1(c) or 10.1(d), pursuant to a Termination (Default) Notice; and (ii) Energy Manager has the right to terminate this Agreement, in whole or with respect to any Facility, immediately in the case of default under Section 10.2(c) or 10.1(d) pursuant to a Termination (Default) Notice. Such Termination (Default) Notice shall not delay the Default Termination Date.

 

 

Section 11.1 Indemnification by Energy Manager. Energy Manager shall indemnify, defend and hold harmless MMC from and against any and all Losses to the extent directly caused by: (a) the breach of any representation or warranty made by Energy Manager under this Agreement; (b) any breach by, or failure of, Energy Manager to perform any of its obligations under this Agreement and (c) the gross negligence or willful misconduct of Energy Manager, its subcontractors or their respective agents or employees.

 

Section 11.2 Indemnification By MMC. MMC shall indemnify, defend and hold harmless Energy Manager from and against any and all Losses to the extent directly caused by: (a) the Services provided by Energy Manager under this Agreement; (b) the breach of any representation or warranty made by MMC under this Agreement; (c) any breach by, or failure of, MMC to perform its obligations under this Agreement; (d) the gross negligence or willful misconduct of MMC, its subcontractors (other than Energy Manager and its subcontractors or their respective agents or employees) or their respective agents or employees; (d) any claims, fees, costs or penalties with respect to MMC’s third party sale of RA Capacity, and . (e) any claims, fees, costs or penalties incurred or assessed with respect to Facility ownership and operation, including as described in Section 7.2 herein

Section 11.3  Cooperation Regarding Claims. If either Party receives notice or has knowledge of any claim that may result in a claim for indemnification of Energy Manager by MMC or indemnification of MMC by Energy Manager pursuant to this Agreement, the Party in receipt of such notice shall, as promptly as possible, give the other Party notice of such claim, including a reasonably detailed description of the facts and circumstances relating to such claim, and a complete copy of all notices, pleadings and other papers related thereto.

 

Section 11.4 Defense of Third-Party Claims.

 

(a) An Indemnified Party shall promptly provide the Indemnifying Party reasonably detailed written notification of any claims for Losses that might reasonably be expected to be subject to indemnification under this Agreement; provided, however, that failure to provide such prompt notice shall not relieve the Indemnifying Party of its obligations hereunder except to the extent such Indemnifying Party is prejudiced by such delay.

 

 

(b) An Indemnifying Party shall be entitled at its option and at its expense and with counsel of its selection, to assume and control the defense of any claims for Losses.

 

(c) An Indemnifying Party shall not settle or compromise any claim without the prior written consent of the Indemnified Party; provided, however, that an Indemnifying Party may settle or compromise such claim against an Indemnified Party without the consent of such Indemnified Party so long as such claim is solely for monetary damages that are paid in full by the Indemnifying Party and such Indemnified Party is fully released from liability by the claimant.

 

(d) Each Indemnified Party shall cooperate with its Indemnifying Party in connection with its defense or settlement of any claim of Losses.

 

 

Section 12.1 General Limitations of Liability.

 

(a) THE PARTIES CONFIRM THAT THE EXPRESS REMEDIES AND MEASURES OF DAMAGES PROVIDED IN THIS AGREEMENT SATISFY THE ESSENTIAL PURPOSES HEREOF. FOR BREACH OF ANY PROVISION FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED, SUCH 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. THE OBLIGOR’S LIABILITY SHALL BE LIMITED TO DIRECT ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY ARE WAIVED.

 

(b) NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES, OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR CONTRACT, OR OTHERWISE. The Parties further agree that the waivers and disclaimers of liability, indemnities, releases from liability, and limitations on liability expressed in this Agreement shall survive termination of this Agreement, and shall apply at all times, whether in contract, equity, tort or otherwise.

 

(c) 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.

 

 

(d) NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT, THE TOTAL LIABILITY OF ENERGY MANAGER UNDER THIS AGREEMENT SHALL NOT EXCEED [***].

 

Section 12.2 Limitation of MMC’s Liability. Energy Manager understands and agrees that, notwithstanding anything to the contrary herein: (a) no claim shall be made against any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of MMC in connection with this Agreement; (b) there shall be absolutely no personal liability or recourse for the payment of any amounts due hereunder, or the performance of any obligations hereunder against any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of MMC, irrespective of any failure to comply with the provisions of this Agreement; (d) Energy Manager shall have no right to any claim against MMC for any capital contributions from any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of MMC; and (e) the provisions of (a) through (d) are made expressly for the benefit of employees, shareholders, partners, members, representatives, officers and directors, whether past, present or future, of MMC.

 

Section 12.3 Limitation of Energy Manager’s Liability. MMC understands and agrees that, notwithstanding anything to the contrary herein: (a) no claim shall be made against any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of Energy Manager in connection with this Agreement; (b) there shall be absolutely no personal liability or recourse for the payment of any amounts due hereunder, or the performance of any obligations hereunder against any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of Energy Manager, irrespective of any failure to comply with the provisions of this Agreement; (c) MMC shall have no right to any claim against Energy Manager for any capital contributions from any employee, shareholder, partner, member, representative, officer or director, whether past, present or future, of Energy Manager; and (d) the provisions of (a) through (c) are made expressly for the benefit of employees, shareholders, partners, members, representatives, officers and directors, whether past, present or future, of Energy Manager.

 

 

Section 13.1 Non-Disclosure. Except as provided in Section 13.2, each Party agrees to hold in confidence any information imparted to it by the other Party which pertains to MMC’s or Energy Manager’s, as the case may be, business activity in any manner, and which is not the subject of general public knowledge, including, without limitation, proprietary processes (including analytics, models and frameworks), technical information and know-how, information concerning MMC management policies, economic policies, financial and other data (“Confidential Information”). Confidential Information shall not include: (a) information in the public domain, or (b) information obtained by a Party from a Third Party not under an obligation of nondisclosure to MMC or Energy Manager, as the case may be. This obligation shall continue to remain in full force and effect for two (2) years after the date of termination of this Agreement.

 

Section 13.2 Permitted Disclosure.

 

(a) Either Party shall have the right to: (i) disclose Confidential Information (the “Disclosing Party”) to any Governmental Authority only to the extent that such Confidential Information is necessary to comply with such Governmental Authority to avoid legal sanctions or penalties, including findings of criminal or civil contempt; and (ii) disclose Confidential Information with respect to any litigation arising in connection with this Agreement only to the extent that such Confidential Information is required by law, rule, regulation, procedure, subpoena, court order or court requirement, or is material to the issues involved in or determinative to the outcome of such litigation; provided, however, that the Disclosing Party shall first (A) use reasonable efforts to give the other Party (the “Non-Disclosing Party”) as much prior notice of disclosure as is reasonably practicable, or if prior notice is not reasonably practicable, then as expeditiously as possible, to permit the Non-Disclosing Party to seek any protective order or other confidentiality protection as the Non-Disclosing Party, in its sole discretion and at its sole expense, may elect to seek; and (B) reasonably cooperate with the Non-Disclosing Party in protecting the Confidential Information that is to be disclosed, with such duty of cooperation not requiring the Disclosing Party to initiate or participate in any litigation or incur more than de minimis costs or expenses.

 

(b) Either Party shall have the right to disclose Confidential Information: (i) with the written consent of the other Parties; or (ii) to (a) its agents, advisors, auditors, legal counsel and insurers; (b) its Affiliates; (c) Lenders, potential Lenders, investors, potential investors, rating agencies and other members of the public in connection with the financing of the development, construction and operation of either Facility, including in connection with the listing of any shares, stocks, securities, bonds or any other similar financial instrument, but in each case only to the extent required in connection with obtaining such financing and (d) potential purchasers of an interest in MMC or any Facility; provided, however, any such party receiving any Confidential Information agrees to maintain the confidentiality of such Confidential Information in accordance with the terms hereof. Lenders shall be entitled to disclose Confidential Information to any Governmental Authority or in connection with litigation to the extent and subject to the conditions under which a Disclosing Party may disclose Confidential Information as provided in Section 13.2(a). Notwithstanding the foregoing, it shall not be deemed a breach of this Section 13.2(b) if a Party discloses the terms or conditions of a Transaction (other than the name and any other identifying information relating to the other Party), provided that the name or any other identifying information relating to the other Party may be disclosed only to an entity that aggregates and reports to the public price data on an aggregate basis.

 

 

 

Section 14.1 Energy Manager Representations and Warranties. Energy Manager represents and warrants to MMC as of the Effective Date that:

 

(a) Organization and Good Standing. MCP is a corporation duly formed, validly existing and in good standing under the laws of the State of Delaware and MCE is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware.

 

(b) Enforceability. This Agreement constitutes the legal, valid and binding obligation of Energy Manager, except as enforceability may be limited by (i) applicable Bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally, and (ii) general principles of equity.

 

(c) Due Authorization. The execution, delivery and performance of this Agreement by Energy Manager has been duly authorized by all requisite partnership action and does not and will not (i) conflict with any provisions of its organizational documents or any Applicable Law, or (ii) breach any provision of, or give any Person the right to declare or exercise any remedy under, or to accelerate the maturity, payment or performance of, or to cancel or terminate, any agreement or instrument to which it is a party or by which it, its property or assets may be bound or affected, except for those that would not materially adversely affect Energy Manager’s ability to perform its obligations hereunder.

 

(d) Regulatory Approvals. Neither the execution and delivery by Energy Manager of this Agreement, nor the consummation by Energy Manager of any of the Transactions contemplated hereby, requires the consent or approval of, the registration with, the recording or filing of any document with, or the taking of any other action in respect of any Governmental Authority, except those which have been duly obtained and are in full force and effect, except for those that would not materially adversely affect Energy Manager’s ability to perform its obligations hereunder; provided, however, that Energy Manager may file with the FERC such notices, if any, that it determines are necessary.

 

(e) Litigation. Energy Manager is not a party to any legal, administrative, arbitral, investigatorial or other proceeding or controversy pending, or to its knowledge, threatened, that could materially adversely affect its ability to perform its obligations hereunder.

 

(f) Forward Contract Merchant, Swap Participant and Master Netting Agreement. Energy Manager is a “forward contract merchant” and / or a “swap participant” and this Agreement is a “master netting agreement” within the meaning of the Bankruptcy Code. 

 

(g) Contracted Marketer. Energy Manager shall use commercially reasonable efforts to maintain its status as a “gas service provider and contracted marketer” as defined by San Diego Gas & Electric Co.

 

Section 14.2 MMC Representations and Warranties. MMC represents and warrants to Energy Manager, as of the Effective Date, that:

 

 

(a) Organization and Good Standing. MMC Energy North America, MMC Mid-Sun LLC, MMC Chula Vista, LLC, and MMC Escondido LLC are each a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware.

 

(b) Enforceability. This Agreement constitutes the legal, valid and binding obligation of MMC, except as enforceability may be limited by (i) applicable Bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights of creditors generally and (ii) general principles of equity.

 

(c) Due Authorization. The execution, delivery and performance of this Agreement by MMC has been duly authorized by all requisite corporate action and does not and will not (i) conflict with any provisions of its organizational documents or any Applicable Law, or (ii) breach any provision of, or give any Person the right to declare or exercise any remedy under, or to accelerate the maturity, payment or performance of, or to cancel or terminate, any agreement or instrument to which it is a party or by which it, its property or assets may be bound or affected, except for those that would not materially adversely affect MMC’s ability to perform its obligations hereunder.

 

(d) Regulatory Approvals. Neither the execution and delivery by MMC of this Agreement, nor the consummation by MMC of any of the Transactions contemplated hereby, requires the consent or approval of, the giving of notice of to, the registration with, the recording or filing of any document with, or the taking of any other action in respect of any Governmental Authority, except those which have been duly obtained and are in full force and effect, except for those that would not materially adversely affect MMC’s ability to perform its obligations hereunder; provided, however, that MMC may file with the FERC such notices, if any, that it determines are necessary.

 

(e) Litigation. MMC is not a party to any legal, administrative, arbitral, investigatorial, regulatory, settlement or other proceeding or controversy pending or, to its knowledge, threatened, that could materially adversely affect its ability to perform its obligations hereunder.

 

(f) Forward Contract Merchant, Swap Participant and Master Netting Agreement. MMC is a “forward contract merchant” and/or a “swap participant” and this Agreement is a “master netting agreement” within the meaning of the Bankruptcy Code.

 

(g) Compliance. MMC will be solely responsible for complying with all standards, requirements and filings with respect to the ownership and operation of the Facilities including, without limitation, those set forth by FERC, NERC, WECC and CAISO, and all fees and penalties associated therewith. Energy Manager will use commercially reasonable efforts to provide MMC with data and information required for such filings provided MMC retains sole responsibility thereof, and Energy Manager makes no representation or warranty as to the accuracy or completeness of data and information provided.

 

 

 

MMC Credit Support. By November 1, 2008, MMC shall cause to be provided and maintained for the benefit of Energy Manager, collateral (the “MMC Credit Support”), in the form of (1) a Letter of Credit in the amount of [***] in the form attached hereto as Exhibit F, or in any other form acceptable to Energy Manager and (2) a guaranty agreement provided by the MMC Guarantor in the amount of [***] in the form of Exhibit E attached hereto, or in any other form acceptable to Energy Manager.

 

 

Section 16.1 Severability. If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other provision, agreement or covenant of this Agreement.

 

Section 16.2 Entire Agreement. This Agreement, together with the Exhibits, the EEI Master Agreement, the NAESB Agreement, Collateral Annex and the Master Netting Agreement, contain the complete agreement between the Parties with respect to the provision of Services as contained herein and supersedes all other agreements, whether written or oral, with respect to the matters contained herein. In the event of a conflict between this Agreement, the EEI Master Agreement, the NAESB Agreement, the Collateral Annex or the Master Netting Agreement, first, the Master Netting Agreement shall prevail, and, second, if the conflict between the agreements cannot be resolved under the Master Netting Agreement, this Agreement shall prevail.

 

Section 16.3 Amendment. Unless otherwise provided herein, no modification, amendment, or other change to this Agreement or the Exhibits will be binding on any Party unless consented to in writing by both Parties; provided, that MMC may revise the Operating and Dispatch Procedures as described herein.

 

Section 16.4 Assignment; Obligation of Energy Manager to Cooperate. This Agreement shall be binding upon the successors and assigns of the respective Parties hereto, and the covenants, conditions, rights and obligations of this Agreement shall run until the Agreement is terminated. No assignment of this Agreement, in whole or in part, shall be made without the prior written consent of the non-assigning Party, which consent shall not be unreasonably withheld, conditioned or delayed.

 

Section 16.5 Notices. All notices or other communications required or permitted to be given hereunder shall be in writing and shall be effective (a) on the day of delivery when delivered in person; (b) on the day (if a Business Day and, if not, on the next following Business Day) on which it is transmitted if transmitted before four o’clock (4:00) p.m., recipient’s time (on any day), and if transmitted after that time, on the next following Business Day, when sent by telecopy or other electronic means and electronic confirmation of error free receipt is received; or (c) one (1) Business Day after the day when sent by overnight delivery by a recognized commercial courier service. Either Party may change its address[es] for notices by giving notice to the other Party in the manner set forth above.

 

 

(a) Notices or other communications to MMC shall be directed to the representatives listed below.

 

Notices & Correspondence	Scheduling & Operations	Payments
Denis Gagnon Chief Financial Officer MMC Energy, Inc. 26 Broadway, Suite 907 New York, NY 10004 Telephone: 1 ###-###-#### Facsimile: 1 ###-###-####   With a copy to: Dean M. Colucci, Esq. DLA Piper LLP (US) 1251 Avenue of the Americas New York, NY 10020 Telephone: 1 ###-###-#### Facsimile: 1 ###-###-####	Alex Sokoletsky MMC Energy Inc. 26 Broadway, Suite 907 New York, NY 10004 Telephone: 1 ###-###-#### Facsimile: 1 ###-###-####	Simba Dutt-Mazumdar MMC Energy Inc. 26 Broadway, Suite 907 New York, NY 10004 Telephone: 1 ###-###-#### Facsimile: 1 ###-###-####

(b) Notices or other communications to Energy Manager shall be directed to the representatives listed below.

 

 

Notices & Correspondence	Scheduling & Operations	Payments
Andre Templeman Senior Vice President Macquarie Cook Power Inc. 500 Dallas Street, Suite 3100 Houston, Texas 77002 Telephone: 713 ###-###-#### Facsimile: 713 ###-###-####   With copies to: Legal Department Macquarie Cook Power Inc. 500 Dallas Street, Suite 3100 Houston, Texas 77002 Telephone: 713 ###-###-#### Facsimile: 713 ###-###-####   Legal Department Macquarie Cook Energy, LLC 10100 Santa Monica Blvd., 18th Fl Los Angeles, CA 90067 Telephone: 310 ###-###-#### Facsimile: 310 ###-###-####	Power Day-Ahead Desk:  Telephone: 713 ###-###-#### Facsimile: 713 ###-###-####   Power Real-Time Desk:  Telephone: 713 ###-###-#### Facsimile: 713 ###-###-####   Power Mid-Office Confirmations: Telephone: 713 ###-###-#### Facsimile: 713 ###-###-####   Gas: Trade Operations - West Desk Macquarie Cook Energy, LLC 10100 Santa Monica Blvd., 18th Fl Los Angeles, CA 90067 Telephone: 310 ###-###-#### Facsimile: 310 ###-###-####	Power:   [***]     Gas:   [***]

Section 16.6 Additional Documents and Actions. Each Party agrees to execute and deliver from time to time such additional documents, and take such additional actions, as may be reasonably required by the other to give effect to the purposes and intent of this Agreement.

 

Section 16.7 Waiver. Any failure of any Party to enforce any of the provisions of this Agreement or to require compliance with any of its provisions at any time during the pendency of this Agreement shall in no way affect the validity of this Agreement, or any part hereof, and shall not be deemed a waiver of the right of any Party thereafter to enforce any and each such provision. None of the provisions of this Agreement shall be considered waived by a Party (by course of dealing or otherwise) unless such waiver is in writing and signed by such Party. No waiver shall be construed as a modification of any of the provisions of this Agreement or as a waiver of any default (present or future) hereunder or breach hereof, except as expressly stated in such waiver.

 

Section 16.8 Headings. The headings and captions contained in this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained herein.

 

Section 16.9 No Third Party Beneficiary. This Agreement is for the sole and exclusive benefit of the Parties hereto and the Indemnified Parties and shall not create a contractual relationship with, or cause of action in favor of, any Third Party.

 

 

Section 16.10 Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original and all of which shall be deemed one and the same Agreement.

 

Section 16.11 Governing Law and Venue. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF ITS CONFLICTS OF LAWS PRINCIPLES CALLING FOR APPLICATION OF THE LAWS OF ANOTHER STATE (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). The Parties hereby irrevocably consent to exclusive venue and jurisdiction in the federal courts in the Southern District of New York. The Parties hereby irrevocably waive their right to a jury trial to the fullest extent permitted by law.

 

Section 16.12 Continued Performance. The Parties shall continue to perform under this Agreement during the pendency of any dispute hereunder.

 

Section 16.13 MMC Control. Notwithstanding anything in this Agreement to the contrary, MMC retains and shall retain ultimate decision-making authority and control with respect to each respective Facility for purposes of Part II of the FPA, including ultimate decision-making authority and control relating to the operation of such Facility and the sale of Power (including Ancillary Services) from such Facility. Without limiting the generality of the foregoing sentence with respect to MMC, neither Energy Manager nor its agent has the ability under this agreement or otherwise to direct the dispatch of, or sales from, each Facility with respect to Capacity that is subject to a tolling agreement.

 

Section 16.14 Survival. Notwithstanding any provisions herein to the contrary, the obligations set forth in Section 6.4(b) shall survive termination as set forth in such section, and the obligations of each Party in Articles VIII, XI, XII and XIII shall survive indefinitely.

 

 

[THE REMAINDER OF THE PAGE IS INTENTIONALLY LEFT BLANK]

 

IN WITNESS WHEREOF, the following Parties have executed this Agreement as of the 1st of November, 2008.

 

	MMC ENERGY NORTH AMERICA, LLC
	By:	/s/ Denis Gagnon
	Name:	Denis Gagnon
	Title:	Chief Financial Officer
	MMC CHULA VISTA, LLC
	By:	/s/ Denis Gagnon
	Name:	Denis Gagnon
	Title:	Chief Financial Officer
	MMC ESCONDIDO, LLC
	By:	/s/ Denis Gagnon
	Name:	Denis Gagnon
	Title:	Chief Financial Officer
	MMC MID-SUN LLC
	By:	/s/ Denis Gagnon
	Name:	Denis Gagnon
	Title:	Chief Financial Officer

 

 

 

	MACQUARIE COOK POWER INC.
	By:	/s/ Stuart Zisman
	Name:	Stuart Zisman
	Title:	DD
	MACQUARIE COOK ENERGY, LLC
	By:	/s/ Joe Forbes
	Name:	Joe Forbes
	Title:	Senior Lawyer

 

 

 

[***]

 

 

 

 

 

 

 

 

 

 

 

 

[***]

 

 

 

 

 

 

 

 

[***]

 

 

 

 

 

 

 

 

 

MMC Energy North America, LLC. - Contact List
Contact	Email	Phone	Mobile

[***]

 

Macquarie Cook Power Inc. - Contact List
Contact	Email	Phone	Mobile

[***]

 

 

 

 

 

GUARANTY, dated as of November 1, 2008, by MMC ENERGY, INC., a Delaware corporation (the “Guarantor”), in favor of Macquarie Cook Power Inc., a corporation organized under the laws of the State of Delaware and Macquarie Cook Energy, LLC, a limited liability company organized under the laws of the State of Delaware (collectively, the “Beneficiary”).

 

 

Guaranty.

 

 

In connection with the EEI Master Power Purchase and Sale Agreements, dated as of November 1, 2008 (the “EEI Master Agreements”), the North American Energy Standards Board Base Contracts for Retail Sale and Purchase of Natural Gas dated as of November 1, 2008 (the “NAESB Master Agreement”) (collectively, the “Master Agreements”) and the Energy Management Agreement dated as of November 1, 2008 (the “Energy Management Agreement”) (collectively, the “Agreements”), between Beneficiary and MMC Energy North America, LLC, MMC Mid-Sin LLC, MMC Chula Vista, LLC and MMC Escondido, LLC, each a limited liability company organized and existing under the laws of the State of Delaware, (collectively the “Counterparty”), subject to the terms and conditions set forth herein and effective from the date of the Agreement, the Guarantor irrevocably and unconditionally guarantees to the Beneficiary, its successors and permitted assigns, the prompt payment on demand, of any amount due and payable to the Beneficiary under the Agreements, subject to any applicable grace period thereunder (the “Obligations”).

 

The Guarantor hereby waives acceptance of this Guaranty, diligence, promptness, presentment, demand on Counterparty for payment, protest of nonpayment and all notices of any kind. In addition, the Guarantor’s obligations hereunder shall not be affected by the existence, validity, enforceability, perfection, or extent of any collateral therefor. The Beneficiary shall not be obligated to proceed against Counterparty before claiming under the Guaranty nor to file any claim relating to the Obligations in the event that Counterparty becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Beneficiary so to file shall not affect the Guarantor’s obligations hereunder. The Guarantor agrees that its obligations under this Guaranty constitute a guaranty of payment and not of collection.

 

Consents, Waivers and Renewals. The Guarantor agrees that the Beneficiary, may at any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the Guarantor, extend the time of payment of, exchange or surrender any collateral for, or renew any of the Obligations, and may also make any agreement with Counterparty or with any other party to or person liable on any of the Obligations, or interested therein, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Beneficiary and Counterparty or any such other party or person, without in any way impairing or affecting this Guaranty. The Guarantor agrees that the Beneficiary may resort to the Guarantor for payment of any of the Obligations, whether or not the Beneficiary shall have resorted to any collateral security, or shall have proceeded against any other obligor principally or secondarily obligated with respect to any of the Obligations.

 

 

Expenses. The Guarantor agrees to pay on demand all out-of-pocket expenses (including without limitation the reasonable fees and disbursements of Beneficiary’s counsel) incurred in the enforcement or protection of the rights of the Beneficiary hereunder; provided, that the Guarantor shall not be liable for any expenses of the Beneficiary if no payment under this Guaranty is due.

 

Subrogation. The Guarantor will not exercise any rights that it may acquire by way of subrogation until all Obligations to the Beneficiary shall have been paid in full. If any amount shall be paid to the Guarantor in violation of the preceding sentence, such amount shall be held for the benefit of the Beneficiary and shall forthwith be paid to the Beneficiary to be credited and applied to the Obligations, whether matured or unmatured. Subject to the foregoing, upon payment of all the Obligations, the Guarantor shall be subrogated to the rights of the Beneficiary against Counterparty and the Beneficiary agrees to take at the Guarantor’s expense such steps as the Guarantor may reasonably request to implement such subrogation.

 

Cumulative Rights. No failure on the part of the Beneficiary to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Beneficiary of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power. Each and every right, remedy and power hereby granted to the Beneficiary or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Beneficiary from time to time.

 

Representations and Warranties.

 

The Guarantor is a corporation duly existing under the laws of the State of Delaware.

 

 

The execution, delivery and performance of this Guaranty have been duly authorized by all necessary corporate action and do not conflict with any provision of law, any regulation, or the Guarantor’s charter or by-laws, or any agreement binding upon it.

 

No consent, approval and authorization of, registration with, or declaration to any governmental authority are required in connection with the execution, delivery and performance of this Guaranty.

 

This Guaranty constitutes the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

Continuing Guaranty. The Guaranty shall remain in full force and effect and be binding upon the Guarantor and its successors and permitted assigns, and inure to the benefit of the Beneficiary and its successors and permitted assigns, until all of the Obligations have been satisfied in full. In the event that any payment by Counterparty in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder in respect of such Obligations as if such payment had not been made.

 

Notices. All notices in connection with this Guaranty shall be deemed effective, if in writing and delivered in person or by courier, on the date delivered to the following address (or such other address that the Guarantor shall notify the Beneficiary of in writing):

 

 

GUARANTOR

 

26 Broadway, Suite 960

 

New York, New York 10004

 

 

Attention: Denis Gagnon

 

With a copy to:

 

Dean M. Colucci

 

 

DLA Piper LLP

 

1251 Avenue of the Americas

 

New York, NY 10020

 

 

Governing Law. The Guaranty shall be governed by, and construed in accordance with, the laws of the State of New York, without reference to choice of law doctrine.

 

IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered by the Guarantor to the Beneficiary as of the date first above written.

 

 

	GUARANTOR
	By:	/s/Denis Gagnon
		Name: Denis Gagnon
		Title: Chief Financial Officer