ENERGY MANAGEMENT AGREEMENT Between Texoga Tech and Fulcrum Power Services L.P. Dated January 11, 2007
Exhibit
10.7
Between
Texoga
Tech
and
Fulcrum
Power Services L.P.
Dated
January
11, 2007
TABLE
OF CONTENTS
|
ARTICLE
I
|
DEFINITIONS AND INTERPRETATION | 4 |
|
1.1
|
Definitions
|
4 |
|
1.2
|
Interpretation
|
7 |
|
ARTICLE
II
|
NATURE OF RELATIONSHIP AND TERM | 8 |
|
2.1
|
Standard
of Care
|
8 |
|
2.2
|
Directives
|
8 |
|
2.3
|
Non-Exclusivity;
Freedom to Pursue Opportunities
|
8 |
|
2.4
|
Reliance
on Information
|
8 |
|
2.5
|
Compliance
with Laws
|
8 |
|
2.6
|
Term
|
8 |
|
ARTICLE
III
|
AUTHORIZATIONS AND DUTIES | 9 |
|
3.1
|
Authorizations
and Duties
|
9 |
|
3.2
|
Scope
of Services
|
9 |
|
3.3
|
Record
Keeping and Reports
|
12 |
|
3.4
|
Staffing
|
12 |
|
ARTICLE
IV
|
FULCRUM'S REPRESENTATIONS AND WARRANTIES | 12 |
|
ARTICLE
V
|
TEXOGA’S REPRESENTATIONS AND WARRANTIES | 13 |
|
ARTICLE
VI
|
COMPENSATION | 13 |
|
6.1
|
Set
Up Fees
|
13 |
|
6.2
|
Reimbursable
Expenses
|
13 |
|
6.3
|
Monthly
Fee
|
14 |
|
6.4
|
Payment
|
14 |
|
6.5
|
Sales
and Use Taxes
|
14 |
|
6.6
|
Monthly
Settlement of ERCOT Revenues
|
14 |
|
6.7
|
Payment
Disputes
|
14 |
|
6.8
|
Interest
on Late Payments
|
14 |
|
ARTICLE
VII
|
SUSPENSION OF TERM OR EARLY TERMINATION | 15 |
|
7.1
|
Suspension
of Term
|
15 |
|
7.2
|
Resumption
of Operations
|
15 |
|
7.3
|
Early
Termination
|
15 |
|
|
||
|
ARTICLE
VIII
|
INDEMNITY | 15 |
|
8.1
|
“Claims”
Defined
|
15 |
|
8.2
|
Fulcrum
Indemnification Obligations
|
15 |
|
8.3
|
Texoga
Indemnification Obligations
|
15 |
|
8.4
|
Cooperation
Regarding Claims
|
16 |
|
8.5
|
Defense
of Claims and Limitation on Indemnity
|
16 |
|
8.6
|
Concurrent
Misconduct
|
16 |
|
8.7
|
No
Consequential Damages
|
16 |
|
8.8
|
Limitation
of Liability
|
16 |
|
|
|
ARTICLE
IX
|
DEFAULTS, REMEDIES AND DISPUTE RESOLUTION | 17 |
|
9.1
|
Events
of Default
|
17 |
|
9.2
|
Remedies
for Default
|
18 |
|
9.3
|
Termination
|
18 |
|
9.4
|
Rights
and Remedies in Law or Equity
|
18 |
|
9.5
|
Dispute
Resolution
|
19 |
|
ARTICLE
X
|
MISCELLANEOUS PROVISIONS | 20 |
|
10.1
|
Successors and Assigns | 20 |
|
10.2
|
Notices | 20 |
|
10.3
|
Entirety
|
22 |
|
10.4
|
Governing
Law
|
22 |
|
10.5
|
Counterparts
|
22 |
|
10.6
|
Scope
of Authority
|
22 |
|
10.7
|
Third
Parties
|
22 |
|
10.8
|
Confidentiality
|
22 |
|
10.9
|
Survival
of Obligations
|
22 |
|
10.10
|
Severability
|
22 |
|
10.11
|
Force
Majeure
|
23 |
|
10.12
|
No Implied Warranties | 23 |
This
Energy Management Agreement (this
“Agreement”) by and between Fulcrum Power Services L.P., a Texas limited
liability partnership (“Fulcrum”), and Texoga Technologies< Inc.
(“Texoga”), a Texas Corporation, sometimes hereinafter
referred to collectively as the “Parties” and individually as a “Party” is made
effective as of January 11, 2007 (the “Effective Date”).
RECITALS:
WHEREAS,
Texoga is the process of
developing a 5.4 MW biodiesel generating facility located in the City
of Oak Ridge North, TX (the “Facility”); and
WHEREAS
Fulcrum is engaged in the
business of providing Energy Management Services (as defined herein) for its
customers to assist them in the scheduling of energy and ancillary services
through the bilateral markets and the markets run by regional independent system
operators of the electricity transmission grid; and
WHEREAS,
Texoga desires to engage
Fulcrum to provide Energy Management Services in accordance with the duties
outlined in Section 3 as its non-exclusive agent of this Agreement, and Fulcrum
is willing to provide such Energy Management Services.
NOW,
THEREFORE, in consideration of the mutual promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Fulcrum and Texoga agree as follows:
I.
DEFINITIONS
AND INTERPRETATION
1.1 Definitions. The
following terms when used herein shall have the meanings set forth
below. Any other capitalized terms used but not defined herein shall
have the meanings ascribed to them in Section 2 of the ERCOT
Protocols.
"Affiliate"
means, with respect to any
Party, any other person (other than an individual) that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, such Party. For purposes of the foregoing
definition, “control” means the direct or indirect ownership of fifty percent
(50%) or more of the outstanding capital stock or other equity interests having
ordinary voting power
"Agreement"
means this Energy
Management Agreement, including all exhibits, amendments and supplements hereto,
all as the same may be amended or supplemented from time to time.
“Ancillary
Services” means the
ancillary services described in the ERCOT Protocols.
"Applicable
Laws" means any act,
statute, law, regulation, permit, license, ordinance, rule, judgment, order,
decree, directive, guideline, protocol or policy (to the extent mandatory)
or
any similar form of decision or determination by, or any interpretation or
administration of, any of the foregoing by any government authority with
jurisdiction over Texoga, or the Energy Management Services to be performed
under this Agreement.
"Business
Days" means all Days except
Saturdays, Sundays or holidays that banks observe in Texas.
"Confidential
Information" has the
meaning given such term in Section 10.8.
"CPT"
means the current prevailing time
in Houston, Texas.
“Customer
Effective Date” means the
first Day Texoga produces and schedules energy.
-4-
"Day"
means a consecutive 24-hour
period commencing at the beginning of the HE 0100 CPT and ending at the end
of
the HE 2400 CPT.
“Defaulting
Party” has the meaning set
forth in Section 9.2.
“Effective
Date" means the date first
set forth above in this Agreement.
"Energy
Management Services" means
services to assist Texoga in QSE scheduling for Texoga’s generation Facility
consistent with ERCOT Protocols, Applicable Laws, and includes the services
specifically enumerated in Section 3.2.
“ERCOT
Protocols” means the ERCOT
Operating Guides and the ERCOT Market Guides, as may be revised from time to
time.
"ERCOT”
means
the entity that is
charged with the nondiscriminatory coordination of market transactions,
system-wide transmission planning, and network reliability within ERCOT, known
as the ERCOT independent system operator (ISO), or its successor.
“Event
of Default” has the meaning set
forth in Section 9.
“Facility”
means
the 3
Caterpillar diesel generating sets with a rated capacity of 1.8 MW each,
aggregated as a 5.4 MW biodiesel power generation facility, located in the
City
of Oak Ridge North TX, owned by Texoga.
“Forecast”
shall
mean the report
generated by Texoga on a day-ahead and hourly basis outlining expected hourly
Power production for the Facility.
-5-
"Fulcrum"
means Fulcrum Power Services
L.P., and its permitted successors, affiliates and assigns.
"Fulcrum
Liaison" means the person
designated by Fulcrum under Section 3.4 hereof, who shall have full authority
to
bind Fulcrum in all matters relating to the performance and administration
of
this Agreement.
"Generation
Manager" means the
person(s) designated by Texoga under Section 3.1(c) for the general management
of the Texoga Facility, who shall have full authority to bind Texoga in all
matters relating to the performance and administration of this
Agreement.
“Generator”
means a power generation facility that produces power .
“Governmental
Authority” means any
federal, state, local, municipal or other government, any governmental,
regulatory or administrative agency, commission or other authority lawfully
exercising or entitled to exercise jurisdiction over the Parties or any
Transaction contemplated herein.
"HE"
means "hour ending."
“Texoga”
means
Texoga Tech and its
permitted successors, affiliates and assigns.
"Month"
means the period beginning at
the start of the HE 0100 CPT on the first Day of a calendar month and
terminating at the end of the HE 2400 CPT on the last Day of such calendar
month.
"Power"
means electrical energy
generated, purchased or sold by Texoga.
"Power
Contract(s)" means the contracts
entered into, or to be entered into, by Texoga for the purchase or sale of
Power
and/or Ancillary Services from third parties.
“PUCT”
means
the Public Utility
Commission of Texas.
“QSE”
shall
mean Qualified Scheduling
Entity as certified by ERCOT.
“Resource” is
a
generation facility capable of providing electrical power to the ERCOT
grid.
“Resource
Imbalance Charges” shall have
the meaning defined in the ERCOT Protocols.
“Resource
Plan” shall mean a plan
provided by a QSE to ERCOT indicating the forecasted
state of Resources including information on availability, limits and forecasted
Power generation of each Resource.
-6-
“Schedule
or Scheduling” when used as a
verb, means to notify, request and confirm with ERCOT or a counterparty that
a
quantity of Power or Ancillary Services is to be made available, delivered
or
received at a particular delivery point, and to provide such information and
take such other action as may be necessary to cause such Person to recognize
and
confirm the delivery with respect of that energy. A “Schedule” is the
schedule under which a quantity of Power or Ancillary Services are to be made
available, delivered or received together with all such information as may
be
necessary to implement the delivery or receipt of such energy.
"Term" means
the
period of this Agreement as specified in Section 2.5(a).
“Timely
Notice,” as contemplated within
Section 8.2 and 8.3, shall mean such notice by a party as would be required
to
enable the other party effectively to assert and prosecute appropriate defenses
relative to a Claim or legal action.
“Written
Communication” includes
electronic means via verified email transmissions, facsimile transmissions
and
other documents sent via mail services as attachments (see section
10.2).
1.2 Interpretation. Except
as otherwise expressly provided, the rules of interpretation and construction
set forth below shall apply to this Agreement:
(a) all
defined terms in the singular shall have the same meaning when used in the
plural and vice versa;
(b) the
terms "hereof," "herein," "hereto," and similar words refer to this entire
Agreement and not to any particular Article, Section, Exhibit or any other
subdivision of this Agreement;
(c) references
to "Article," "Section" or "Exhibit" are to this Agreement unless specified
otherwise;
(d) references
to any law, statute, rule, regulation, notification or statutory provision
(including Applicable Laws) shall be construed as a reference to the same as
it
applies to this Agreement and may have been, or may from time to time be,
amended, modified or re-enacted;
(e) references
to "includes," "including" and similar phrases shall mean "including, without
limitation";
(f) the
captions, section numbers and headings in this Agreement are included for
convenience of reference only and shall not in any way affect the meaning or
interpretation of this Agreement; and
(g) "or"
may not be mutually exclusive, and can be construed to mean "and" where the
context requires there to be a multiple rather than an alternative
obligation.
-7-
II.
NATURE
OF RELATIONSHIP AND TERM
2.1 Standard
of Care. Fulcrum shall perform Energy Management
Services for Texoga in accordance with (i) Applicable Laws, and, to the extent
not inconsistent with Applicable Laws, (ii) this Agreement, (iii) the Power
Contracts, and (iv) ERCOT Protocols.
2.2 Directives. Fulcrum
will follow directives issued to it by Texoga, provided that, in Fulcrum’s sole
reasonable discretion, doing so will not endanger health, safety, the
environment, or will result in a legal violation. Fulcrum will not be
liable to Texoga for any damages resulting from implementation of any such
directives, and Texoga will indemnify Fulcrum from and against any Claims
(defined in Section 8 below) arising in connection with Fulcrum’s carrying out
of Texoga’s directives.
2.3 Non-Exclusivity;
Freedom to Pursue
Opportunities. Fulcrum
shall provide the Energy Management Services to Texoga in a manner consistent
with industry standards. Texoga and Fulcrum each acknowledge that the
engagement of Fulcrum pursuant to this Agreement is non-exclusive with respect
to other arrangements that Texoga or Fulcrum may wish to enter into and Texoga
or Fulcrum may, notwithstanding this Agreement, engage in whatever activities
each may choose including, without limitation, providing or contracting for
services in the same geographic region (or other competing activities) for
its
own account (or for the account of others), regardless of whether the same
are
competitive with the other Party. Subject to the standard of care set
forth above, neither this Agreement nor any activity undertaken pursuant hereto
shall prevent Fulcrum from engaging in such activities, or require Fulcrum
to
disclose the same. Furthermore, Texoga shall provide Fulcrum the
right to provide similar energy management services to additional generation
assets that Texoga develops within the ERCOT region by allowing Fulcrum to
match
any offer made by another prospective provider of energy management
services.
2.4 Reliance
on Information.
(a) The Parties agree
and acknowledge that Fulcrum is not acting as a commodity trading advisor (as
defined in the Commodity Exchange Act). Any energy commodity
market information or opinions provided by Fulcrum to Texoga during the course
of the relationship subject to this Agreement are collateral to the contracted
relationship; such information
or opinions are the subjective views of Fulcrum and should not be construed
by
Texoga as investment or commodity hedging advice designed to meet the needs
of
Texoga.
(b) Texoga
shall provide accurate and timely information to Fulcrum including, but not
limited to, that needed by ERCOT in connection with services rendered hereunder
and needed by Fulcrum to otherwise perform its obligations under this
Agreement. Such information shall include Forecasts of expected power
production by the Facility in a timely manner prior to the ERCOT scheduling
deadlines. If Fulcrum has actual knowledge that information provided
by Texoga is inaccurate or incomplete, Fulcrum shall, as part of the Energy
Management Services provided, inform Texoga of such circumstance and advise
Texoga of the specific inaccuracy.
(c) To
the extent that Texoga is utilizing services provided by a third party to manage
all or a portion of its generation, and all or a portion of these services
will
be utilized by Fulcrum for the provision of Energy Management Services, Texoga
shall cause its third party service provider to coordinate the provision of
specifically related services with Fulcrum. Fulcrum shall not be
responsible for, and Texoga shall hold Fulcrum harmless from (i) any failure
of
the third party provider to provide all reasonably necessary information or
services that Fulcrum requests and (ii) any loss, liability, cause of action,
claim, or remedy that arises out of, or in connection with the actions or
inactions of any third party service provider.
2.5 Compliance
with Laws. Fulcrum
and Texoga shall
at all times comply with all Applicable Laws. This Agreement shall
automatically terminate on any date on which any change in Applicable Law
renders this Agreement illegal, null or void, or in the event that any
Governmental Authority with jurisdiction over a Party issues a rule, regulation
or order that has a materially adverse effect on one or more of the Parties’
ability to realize the anticipated economic benefits originally contemplated
by
the Parties at the time of execution of this Agreement; provided, however,
that
prior to exercising any right to terminate pursuant to this Section 2.5, the
Parties shall undertake good faith negotiations in an effort to modify this
Agreement to avoid or minimize the adverse impact of the statute, regulation,
order or decision on any Party. If the Parties are unable to
negotiate a satisfactory modification to this Agreement within thirty (30)
Business Days following the issuance of the order giving rise to such
renegotiation efforts, then this Agreement shall terminate at the close of
such
thirty (30) Business Day period.
2.6 Term
The term of this Agreement shall commence on the Effective Date, and shall
remain in effect until its expiration at the end of HE 2400 CPT on December
31,
2016, unless terminated earlier as provided in Section 9.3.
-8-
III.
AUTHORIZATIONS
AND DUTIES
3.1 Authorizations
and Duties.
(a) Texoga
will grant Fulcrum authority to perform the Energy Management Services as the
non-exclusive agent of Texoga, such agency authority to be limited to the
Scheduling of Power, subject to Written Communications and limitations given
by
Texoga from time to time; provided, however, that Texoga's instructions must
comply with the Scheduling deadlines as prescribed in the ERCOT
Protocols.
(b) Nothing
contained in this Agreement shall require Fulcrum to institute any legal or
regulatory proceeding with any Governmental Authority, or to pursue remedies
in
any venue or with any third party on behalf of Texoga in connection with any
of
the Energy Management Services provided under this
Agreement. Provided however, Fulcrum shall provide a commercially
reasonable amount of information and technical support to Texoga to assist
in
the filing of any of Texoga’s disputes with ERCOT, TDSPs, or other related third
parties. If Texoga’s efforts to resolve a dispute require a level of
support from Fulcrum that, in the sole discretion of Fulcrum, is deemed more
than commercially reasonable, Fulcrum will notify Texoga and if desired by
Texoga, Texoga shall compensate Fulcrum for its continued support for dispute
resolution.
(c) Texoga
will select a Generation Manager who shall be authorized, subject to any
necessary approvals, to act for and on behalf of Texoga on all matters
concerning this Agreement. In all such matters, Texoga shall be bound
by the written or oral communications, directions, requests and decisions made
by the Generation Manager. Texoga shall promptly notify Fulcrum in writing
as to
the selection of the Generation Manager and any replacements
thereof.
3.2 Scope
of Services.
The
Energy Management Services to be performed by Fulcrum shall include the
obligations and scope of work as follows:
(a) Set
Up Services. Upon the Effective Date of this Agreement,
Fulcrum shall work with Generation Manager to:
|
|
(i)
|
Incorporate
Texoga’s generation Facility into Fulcrum’s QSE with ERCOT for the purpose
of representing Texoga’s generation Facility;
and
|
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(ii)
|
Install
and manage the necessary communications, hardware and software
applications to meet the telemetry, voice and data requirements of
Fulcrum’s QSE as it relates to Texoga’s generation facility in accordance
with ERCOT Protocols.
|
(b) Scheduling
Services. Upon the Customer Effective Date, Fulcrum
shall provide the following services to support Texoga’s generation
Facility:
-9-
|
|
(i)
|
Assist
Texoga in making the economic decision to sell energy into the ERCOT
Balancing Energy Market based upon information provided by Texoga
and
recent ERCOT Balancing Energy Clearing Prices. In accordance
with strategic direction from Texoga, Fulcrum will submit schedules
to
ERCOT for each Settlement Interval based upon (i) the Forecast of
energy
to be produced from the Texoga generation Facility, (ii) the fuel
and
operating cost parameters set by Texoga. All energy produced by
Texoga will be sold and scheduled into the ERCOT Balancing Energy
Market,
unless the Parties by mutual agreement determine that changes in
the ERCOT
market warrant undertaking sales in other ERCOT market
categories. Any changes mutually agreed to will be codified in
an amendment to this agreement and will detail the duties to be performed
and the new compensation structure associated with the associated
duties.
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(ii)
|
Maintain
a 24-hour-per-day, seven-day-per-week scheduling center with qualified
personnel and shall be responsible for maintaining communication
equipment
between itself and ERCOT. To the extent that there is an impact
to Texoga, Fulcrum shall use commercially reasonable efforts to notify
Texoga of congestion alerts, scheduling discrepancies, and emergency
conditions as soon as practicable after ERCOT notifies Fulcrum of
the
same. Any change in Texoga’s schedule in response to such
notification shall be submitted to ERCOT if received by Fulcrum at
least
15 minutes before the applicable ERCOT deadline. Fulcrum will
use commercially reasonable efforts to communicate schedules or changes
to ERCOT within the time periods set forth herein, but Fulcrum
is not required to submit a schedule or change to ERCOT if ERCOT
or Texoga
does not inform Fulcrum sufficiently in advance for Fulcrum to submit
the
same before the applicable ERCOT
deadline.
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(iii)
|
Submit
a Resource Plan to ERCOT on behalf of Texoga sufficient to accommodate
the
quantity of energy scheduled by Fulcrum from Texoga’s
Resource.
|
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(iv)
|
Submit
Balancing Energy Service Down bid curves if required by
ERCOT. The bid curves will include (1) a dollar per megawatt,
(2) Quantity (MW), (3) Congestion Zone, and (4) Ramp
Rate.
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(v)
|
Administer
the distribution of any funds/revenues received by Fulcrum’s QSE from
ERCOT related to the sale of Balancing Energy from Texoga’s generating
Facility to ERCOT. Fulcrum will also provide analysis of
related ERCOT financial settlements and provide information and technical
assistance in the filing of any
disputes.
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(vi)
|
Inform
ERCOT of any event during which Texoga's generation Facility is incapable
of meeting its obligations in accordance with the ERCOT Protocols,
and to
the extent commercially practical, provide assistance to Texoga in
mitigating any damages in connection
therewith.
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-10-
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Operating
Services. Upon the Customer Effective Date, Fulcrum shall
operate Texoga’s generating Facility by remote control and dispatch
electricity in accord with the schedules submitted to ERCOT by Fulcrum
as
QSE.
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(c) Commencement
of Services. Fulcrum’s obligations under this
Agreement shall not commence until Texoga submits the information required
by
Section 3.2(d)(i) hereof.
(d)
Texoga’s
Obligations. Texoga shall have the following
obligations:
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(i)
|
As
soon as practicable following the Effective Date, Texoga shall (i)
complete and submit to PUCT a resource application and an asset
registration for the Facility (ii) complete and submit appropriate
documentation to ERCOT registering the Facility as a distributed
generation and designating Fulcrum as Texoga’s QSE (iii) enter into a
resource agreement with ERCOT for the Facility and (iv) complete
and
submit any and all documentation required by ERCOT authorizing Fulcrum
to
perform QSE services as set forth herein on Texoga’s
behalf.
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(ii)
|
Texoga
shall be responsible for installing the necessary telemetry hardware,
telecommunications, materials, programming time, etc. related to
SCADA,
voice and/or data communications to allow Fulcrum to monitor the
energy
produced by the Facility in real
time.
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(iii)
|
Texoga
shall provide Fulcrum adequate information to make informed decisions
regarding the provision of QSE services under this Agreement and
shall
provide such information sufficiently in advance of any ERCOT scheduling
or other deadline to allow Fulcrum to meet its obligations to
ERCOT.
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(iv)
|
Texoga
shall at all times operate using Prudent Utility Practice and comply
with
and be bound by all ERCOT Protocols as they pertain to the subject
matter
herein and the service provided.
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(v)
|
Texoga
shall confer with Fulcrum no later than 9:00 a.m. CPT each Business
Day to
discuss the strategy for ERCOT Balancing Energy sales and shall provide
a
written Forecast for the Facility for the subsequent Day(s) and any
intra-day energy Forecast revisions for the current operating
Day. Texoga shall also provide Fulcrum with an estimate of fuel
cost and any other operating cost parameters under which it wishes
dispatch decisions to be made.
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-11-
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(vi)
|
Texoga
shall timely acknowledge the receipt of any messages transmitted
by
Fulcrum relating to the QSE services provided
hereby.
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(vii)
|
Texoga
shall provide accurate and complete information to Fulcrum for any
submission to ERCOT to enable a timely submission acceptable to ERCOT;
provided, however, if such information by Texoga relating to the
scheduling of delivery of any quantity of Energy by Fulcrum on behalf
of
Texoga to another QSE is incorrect, Texoga shall indemnify Fulcrum
and
agrees to pay Fulcrum any charges, costs, or penalties incurred by
Fulcrum
resulting from Texoga’s failure to comply with the terms and conditions
set forth in this Agreement
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(viii)
|
Texoga
shall monitor the Facility on a 24-hour-per-day, seven-days-a-week
basis,
and shall timely inform Fulcrum of any outages and with any changes
in
notice names, addresses, or telephone
numbers.
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3.3 Record
Keeping and Reports. Fulcrum shall keep and maintain
books, records, accounts and other documents necessary to accurately reflect
the
services performed pursuant to this Agreement in accordance with good business
practices, and generally accepted accounting principles. Fulcrum
shall prepare and distribute to Texoga such ERCOT information, as well as
reports regarding operational and contractual matters with respect to Texoga,
as
reasonably required by Texoga. All records and accounts maintained by
Fulcrum on behalf of Texoga pursuant to this Agreement shall be made available
by Fulcrum for inspection and copying by Texoga and its representatives upon
reasonable advance notice of seven (7) Business Days, and Fulcrum shall keep
and
preserve all such records and accounts for a period of at least two (2) years
from and after the close of the calendar year in which the events or
transactions recorded therein occurred.
3.4 Staffing. All
individuals retained by Fulcrum in the performance of the Energy Management
Services shall be the employees or subcontractors of Fulcrum, and their working
hours, rates of compensation and all other matters relating to their employment
or engagement shall be determined by Fulcrum. Fulcrum will designate
one person as Fulcrum Liaison to oversee its activities and carry out its
obligations under this Agreement. Fulcrum Liaison shall visit with
the Generation Manager as necessary to carry out his or her duties as set forth
in this Agreement and shall have full authority to bind Fulcrum in all matters
regarding the performance and administration of this
Agreement. Fulcrum Liaison shall report to Texoga through the
Generation Manager.
IV.
FULCRUM'S
REPRESENTATIONS AND WARRANTIES
Fulcrum
represents and warrants as
follows:
(a) Fulcrum
has, or by the time performance hereunder is to commence, will have, and will
continue to have throughout the Term, all permits, licenses, orders and
approvals of federal, state and local governmental and regulatory bodies
necessary to perform its obligations under this Agreement;
(b) The
execution, delivery and performance of this Agreement by Fulcrum (i) have been
duly and effectively authorized and this Agreement constitutes the valid and
binding obligation and agreement of Fulcrum; (ii) will not violate any provision
of any Applicable Law to which Fulcrum or this Agreement is subject; (iii)
will
not violate any judgment, order, decree or writ of any court; and (iv) will
not
require any consent, authorization or approval of, or exemption by, any
governmental regulatory body or other authority;
(c) Fulcrum
is a limited partnership duly formed and organized, validly existing and in
good
standing under the laws of the State of Texas, and in good standing in all
places where necessary in light of the business it conducts and will conduct
hereunder and the properties it owns;
(d) Fulcrum
is authorized to conduct business in the State of Texas;
(e) Fulcrum
is solvent and has not sought protection from its creditors in
Bankruptcy;
(f) There
are no impediments of any sort to Fulcrum entering into this Agreement and
performing its obligations hereunder; and
(g) The
party executing this Agreement on behalf of Fulcrum is duly authorized and
empowered to bind Fulcrum hereto.
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V.
TEXOGA'S
REPRESENTATIONS AND WARRANTIES
Texoga
represents and warrants as follows:
(a) Texoga
has or will have prior to the Customer Effective Date, all permits, licenses,
orders and approvals of federal, state and local governmental and regulatory
bodies necessary to perform its obligations under this Agreement;
(b) The
execution, delivery and performance of this Agreement by Texoga (i) have been
duly and effectively authorized and this Agreement constitutes the valid and
binding obligation and agreement of Texoga; (ii) will not violate any provision
of any Applicable Law to which
Texoga is subject; (iii) will not violate any judgment, order, decree or writ
of
any court; and (iv) will not require any consent, authorization or approval
of,
or exemption by, any governmental regulatory body or other
authority;
(c) Texoga
is a limited liability partnership duly formed and organized and
validly existing under the laws of the State of Texas and is in good standing
in
all places where necessary in light of the business it conducts and the
properties it owns;
(d) Texoga
is authorized to conduct business in the State of Texas;
(e) Texoga
is solvent and has not sought protection from its creditors in
Bankruptcy;
(f)
Texoga has provided to Fulcrum executed and complete copies of the Power
Contracts existing as of the Effective Date;
(g) There
are no impediments of any sort to Texoga entering into this Agreement;
and
(h) The
party executing this Agreement on behalf of Texoga is duly authorized and
empowered to bind Texoga hereto.
VI.
COMPENSATION
6.1 Set
Up Fees. Upon execution of this Agreement, Texoga
shall pay Fulcrum a set up fee of $10,000. Texoga shall also be responsible
for
any costs incurred by Fulcrum for telemetry hardware, telecommunications,
materials, programming time, etc. related to SCADA, voice and/or data
communications for QSE operations.
6.2 Reimbursable
Expenses. If Texoga requests support that requires
Fulcrum to incur travel expenses or any third party service fees, Texoga shall
reimburse Fulcrum for its reasonably incurred out of pocket expenses
related to such support. Any discretionary reimbursable expense of
Fulcrum in excess of $5,000 must be approved in advance by Texoga. To
the extent Fulcrum incurs any cost related to ERCOT charges, credit, or other
expenses, Texoga will reimburse Fulcrum for the entire cost on a pass through
basis upon presentation of receipts or other evidence of
payment. Such cost may include, but are not limited to, Uninstructed
Resource Charges, Resource Imbalance Charges and any liabilities that Fulcrum
incurs on behalf of Texoga in connection with any interaction undertaken on
Texoga’s behalf (a) with ERCOT, as may be directed or required by ERCOT
consistent with ERCOT Protocols or (b) as a result of Texoga’s failure to follow
Texoga’s schedules or ERCOT deployment instructions.
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6.3 Monthly
Fee. Fulcrum
will charge a
$6,000 fixed monthly fee for the first year of this Agreement. The
fee will be escalated by 5% each successive year for the term of the
Agreement. In addition, Fulcrum’s actual cost of ongoing monthly
telecommunication expenses shall be passed through to Texoga without any
additional markup.
6.4 Payment. Fulcrum
will prepare and submit an invoice to Texoga by the tenth (10th) Business
Day
following the Month in which Energy Management Services were rendered setting
forth the Monthly Fee, and reimbursable costs and expenses owed by Texoga to
Fulcrum. Such invoice shall include reasonable detail as to the
calculation of the amounts invoiced and supporting documentation.
6.5 Sales
and Use Taxes. All fees for services provided by Fulcrum
under this Agreement are exclusive of any state or federal sales and use taxes,
which may be applicable. Fulcrum reserves the right to ▇▇▇▇ and
collect applicable Sales and Use Taxes from Texoga.
6.6 Monthly
Settlement of ERCOT Revenues. The Parties
acknowledge
that the ERCOT Balancing Energy revenues related to the Texoga generation
Facility received by the Fulcrum QSE will be administered in accordance with
the
financial settlement process in the ERCOT Protocols. Fulcrum will
prepare a monthly settlement statement based upon the initial ERCOT settlement
statements received by its QSE and distribute the ERCOT Balancing Energy
revenues, net of any ERCOT charges, short payments, adjustments, or
resettlements. The Parties acknowledge that ERCOT’s initial
settlement statement and the related ERCOT Balancing Energy revenues or ERCOT
charges may be reduced or increased in subsequent settlement
statements. The Parties agree that any ERCOT adjustments subsequent
to the initial ERCOT settlement statement shall be remitted to the Party
owed. Fulcrum will remit any ERCOT revenues, net of ERCOT
charges due to Texoga by the 10th Business
Day of
the Month following the receipt of any revenues. Any amounts due to
ERCOT, including any amounts in dispute, shall be paid to Fulcrum within 10
days
of receipt of an invoice from Fulcrum. This Section shall survive
termination of this Agreement until accounting and billing for all third party
settlement statements related to the Energy Management Services under this
Agreement have been resolved. Any fees due Fulcrum under Section 6.4
of this Agreement shall be netted against any monies due to Texoga under this
Section 6.6.
6.7 Payment
Disputes. In the event of a dispute or question
regarding amounts that appear on the Texoga invoice submitted by Fulcrum, (i)
all amounts not in dispute or in question shall be promptly paid as and when
required by Section 6.6, (ii) the Party disputing an invoice shall promptly
transmit to the other Party an explanation of the dispute, (iii) Texoga and
Fulcrum shall immediately and amicably seek to resolve the dispute or question
and (iv) a resettlement payment shall be made within three (3) Business Days
following the resolution of the dispute. In the event the Parties are
unable to resolve the dispute, either Party may submit the matter for dispute
resolution in accordance with Section 9.6 hereof.
6.8 Interest
on Late Payments. If any payment is not remitted and
received in full on or before the due date therefore, the overdue amount shall
bear interest at the lesser of (a) two percent
(2%) per annum over the prime lending rate as may be published from time to
time
in the Wall Street Journal on such day, or if not published on such day then
the
most recent preceding day on which published, or (b) the maximum rate permitted
by applicable law.
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VII.
SUSPENSION
OF TERM OR EARLY TERMINATION
7.1 SUSPENSION
OF TERM. This Agreement is predicated on the ability of
Texoga to operate biodiesel-fueled electric generators to produce electricity
to
be sold into the ERCOT competitive wholesale market. Texoga may at
any time with written notice to Fulcrum suspend electric production and its
obligations to market electricity under this Agreement for a minimum period
of
30 days and a maximum period not to exceed one year if, in Texoga’s sole
judgment, it is not reasonable to operate generating facilities due
to:
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1.
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breakdown
of essential equipment that make operations
impossible,
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2.
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inability
to meet applicable rules for air emissions at a reasonable
cost,
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3.
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injunctions
or other orders of a court or regulatory authority with
jurisdiction,
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4.
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any
rule or order of a regulatory authority with jurisdiction that cannot
be
complied with at a reasonable cost,
or
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5.
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the
failure of available market prices in ERCOT to permit the recovery
of all
operating expenses and payment of interest and principal on the debt
associated with the generators.
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In
the
event of a suspension of term Texoga will pay to Fulcrum the sum of one half
(1/2) the then current Monthly Fee for each month there is a
suspension.
7.2 RESUMPTION
OF OPERATIONS. At any time within the period of suspension under
the provisions of Section 7.1 Texoga may give written notice of its intention
to
resume operations at least thirty days prior to such resumption of
operations. When operations are resumed, all the provisions of the
Agreement shall be in effect once more and the initial term will be extended
by
the length of the period of suspended operations.
7.3 EARLY
TERMINATION. In the event that a period of suspension shall last in
excess of one year, this Agreement will be deemed to have been terminated unless
both Fulcrum and Texoga agree otherwise in writing. Upon early
termination each party shall promptly pay any balances due under the provisions
of the Agreement. In addition, Fulcrum shall be entitled to a payment
of liquidated damages for early termination in the sum of one third (1/3) the
then current Monthly Fee for each of the remaining months in the initial term
of
the Agreement.
VIII.
INDEMNITY
8.1 “Claims”
Defined. For purposes of this Agreement, “Claims” means
all claims or actions by third parties threatened or filed, that directly or
indirectly relate to the subject matter of the indemnity being provided and
the
resulting losses, damages, expenses, attorney’s fees and costs, whether incurred
by settlement or otherwise, and whether such claims or actions are threatened
or
filed before or after the termination of this Agreement.
8.2 Fulcrum
Indemnification Obligations. Fulcrum will indemnify, defend and
hold harmless Texoga, and their managers, members, partners, directors,
officers, employees, agents successors and assigns (collectively, the “Texoga
Indemnitees”) from and against any and all Claims, to the extent caused
by or arising out of the gross negligence or willful misconduct of Fulcrum
Power
in connection with the performance of Fulcrum Power’s obligations hereunder;
provided that in no event shall Fulcrum Power be liable under this
Section for Claims to the extent caused by or arising out of the negligence,
willful misconduct or strict liability of one or more of the Texoga
Indemnitees.
8.3 Texoga
Indemnification Obligations. Texoga shall indemnify, defend and
hold harmless Fulcrum Power, and its affiliates and their respective managers,
members, partners, directors, officers, employees, agents, successors and
assigns (collectively, the “Fulcrum Power Indemnitees”) from and against
any and all Claims to the extent caused by or arising out of (a) the gross
negligence or willful misconduct of Texoga or any other Texoga Indemnitee in
connection with the performance of Texoga obligations hereunder: or (b) the
performance of Fulcrum Power or its obligations hereunder and in accordance
herewith: provided that in no event shall Texoga be liable under this
Section for Claims to the extent caused by or arising out of the gross
negligence, willful misconduct or strict liability of one or more of the Fulcrum
Indemnitees.
Texoga
also will indemnify, hold harmless and defend the Fulcrum Power Indemnitees
from
and against any and all Claims to the extent caused by or arising in any way
out
of remote dispatch activities (including but not limited to the start-up, ramp
down, variation, interruption or cessation of power being generated by the
Facility) relating to any of Texoga’s facilities and equipment, except to the
extent that such Claim results entirely from the gross negligence or willful
misconduct of the Fulcrum Power Indemnitees. Texoga understands that
Fulcrum Power may from time to time start, stop, restore or interrupt the
transmission of electric power and energy to the Texoga Facility or equipment,
with or without notice to Texoga, and agrees that such activities do not in
themselves result from the gross negligence or willful misconduct of the Fulcrum
Power Indemnitees.]
Notwithstanding
the foregoing, and without limiting its obligation to indemnify Fulcrum, Texoga
shall not be entitled to assume responsibility for or control of any defense
of
a Claim if an Event of Default has occurred and is continuing with respect
to
Texoga.
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8.4 Cooperation
Regarding Claims. If any party shall
receive notice or have knowledge of any Claim for indemnification by any Texoga
Indemnitee or Fulcrum Power Indemnitee (each, an “Indemnified Party”)
against the other party (the “Indemnifying Party”)
pursuant hereto, such Indemnified Party shall, as
promptly as possible,
give the Indemnifying Party notice of such Claim, including a reasonably
detailed description of the facts and circumstances relating to such Claim
and
the basis for its potential demand for indemnification with respect thereto,
and
a complete copy of all notices, pleadings and other papers related thereto:
provided that failure to give such prompt notice 9or to provide such
information and documents shall not be a reason for the Indemnifying Party
to
resist or refuse indemnification unless such failure shall materially diminish
the ability of the Indemnifying Party to respond to or to defend the Indemnified
Party against such Claim.
8.5 Defense
of Claims and Limitation on Indemnity.
(a) The
Indemnifying Party shall be entitled, at its option and expense and with counsel
of its selection (subject to the prior approval of the Indemnifying Party,
which
approval shall not unreasonably be withheld, delayed or conditioned) , to assume
and control the defense of any Claim, provided, that the Indemnifying
Party gives prompt notice of its intention to do so top the Indemnified Party
and reimburses the Indemnified Party for the reasonable costs and expenses
incurred by the Indemnified Party prior to the assumption by the Indemnifying
Party of such defense.
(b) Notwithstanding
the provisions of this Section, unless and until the Indemnifying Party
acknowledges in writing its obligation to indemnify the Indemnified Party and
assumes control of the defense of a Claim in accordance with paragraph (a)
of
this Section, the Indemnified Party may contest, defend and litigate, with
counsel of its own selection, any Claim resulting from, related to or arising
out of any matter for which it is entitled to be indemnified hereunder, and
the
reasonable costs and expenses thereof shall be subject to the indemnification
obligations of the Indemnifying Party hereunder.
(c) No
Indemnifying Party shall be entitled to settle or compromise any such Claim
without the prior written consent of the Indemnified Party: provided that
after agreeing in writing to indemnify the Indemnified Party, the Indemnified
Party may settle or compromise any Claim without the approval of the Indemnified
Party; (i) such Claim is solely for monetary damages that are paid in full
by
the Indemnified Party; (ii) the agreement resolving the Claim makes clear that
such agreement is a compromise of disputed claims and that neither the agreement
nor any provision thereof, nor any consideration given thereunder is to be
construed as, or offered as evidence of, an admission or an acknowledgement
of
the validity or merit, or lack thereof, of the disputed Claim; and (iii) the
Indemnified Party is fully released from liability by the claimant.
(d) The
Indemnified Party shall have the right to employ its own counsel and such
counsel may participate in such Claim, but the fees and expenses of such counsel
shall be at the
expense of the Indemnified Party, when and as occurred, unless (i) the
employment of counsel by the Indemnified Party has been authorized in writing
by
the Indemnifying Party and the Indemnifying Party has agreed to pay such fees
and expenses, (ii) the Indemnified Party shall have reasonably concluded, upon
advise of counsel, that there would be a conflict of interest between the
Indemnifying Party and the Indemnified Party in the conduct of the defense
of
such Claim, (iii) the Indemnifying Party shall not in fact have employed
independent counsel reasonably satisfactory to the Indemnified Party to assume
the defense of such Claim; or (iv) the Indemnified Party shall have reasonably
concluded, upon advise of counsel, and specifically notified the Indemnifying
Party either that there may be specific defenses available to it that are
different from those available to the Indemnifying Party or the Claim involves
matters beyond the scope hereof or could have a material adverse affect upon
it
beyond the scope itself. If the preceding sentence shall be
applicable, then counsel for the Indemnified Party shall have the right to
direct the defense of such Claim on behalf of the Indemnified Party and the
reasonable fees and disbursements of such counsel shall be at the cost and
expense of the Indemnifying Party.
8.6 Concurrent
Misconduct. If
Claims against Fulcrum or Texoga arise from the joint or concurrent misconduct
of each, each Party’s indemnity obligation to the other shall be limited to the
proportion that each Party’s misconduct contributed to the Claim.
8.7 No
Consequential Damages. FOR BREACH OF ANY PROVISION OF
THIS AGREEMENT FOR WHICH AN EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED,
THE LIABILITY OF THE BREACHING PARTY SHALL BE LIMITED AS SET FORTH IN THAT
PROVISION, AND ALL OTHER DAMAGES OR REMEDIES ARE HEREBY WAIVED. IF NO
REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED, THE LIABILITY OF THE
BREACHING PARTY SHALL BE LIMITED TO DIRECT, ACTUAL DAMAGES ONLY AND ALL OTHER
DAMAGES AND REMEDIES ARE WAIVED. In no event shall either Party be
liable under any provision of this Agreement, whether in contract, in tort
(INCLUDING NEGLIGENCE, STRICT LIABILITY) or otherwise, for any indirect,
special, incidental, punitive or consequential damages resulting from the
performance or nonperformance of its obligations under the Agreement or from
termination of the Agreement (except if due to the fraud, willful misconduct
or
self-dealing of a Party).
8.8 Limitation
of Liability. Fulcrum shall have no liability for any
failure to obtain the best, highest or most competitive price in connection
with
this agreement. Notwithstanding anything to the contrary contained in
the Agreement, in no circumstances shall the total aggregate liability of
Fulcrum for the term of this Agreement exceed the total compensation earned
by
Fulcrum under this Agreement during the Month immediately preceding the date
of
the occurrence of the event giving rise to liability.
-16-
IX.
DEFAULTS,
REMEDIES AND DISPUTE RESOLUTION
9.1 Events
of Default. Each of the following shall constitute an
Event of Default under this Agreement:
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(a)
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Material
Breach. Either Texoga or Fulcrum shall fail in any material
respect to comply with, observe or perform the terms and conditions
of
this Agreement. The failure of Texoga or Fulcrum to comply
with Applicable Laws shall not constitute an Event of Default
if such failure is not likely to subject the other Party to material
liability;
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(b)
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Continued
Non-payment. Either Texoga or Fulcrum shall fail to make
payment of any amount due and owing; and such failure is not
remedied within 7 Business Days after written notice given by the
non-defaulting party to the defaulting
party;
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(c)
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Material
Misrepresentation. Any representation made by Texoga or
Fulcrum hereunder proves to have been false or incorrect in any material
respect when made;
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(d)
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Voluntary
Bankruptcy. Either Texoga or Fulcrum shall (i) apply for or consent to
the appointment of a trustee, receiver, liquidator, custodian, or
the like
for itself, its assets or its properties, (ii) be unable, or admit
in
writing the inability, to pay its debts as they mature, (iii) make
a
general assignment for the benefit of its creditors, (iv) commence
a
voluntary case under a chapter of the Bankruptcy Reform Act of 1978
or
other applicable Legal Requirement, or file a petition, answer, or
consent
seeking reorganization or an answer admitting the material allegations
of
a petition filed against it in any bankruptcy, reorganization, or
insolvency proceeding, or fail to controvert in a timely and appropriate
manner (or acquiesce in writing to) any such petition, or (v) take
any
corporate or partnership action for the purposes of effecting any
of the
foregoing; or
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(e)
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Involuntary
Bankruptcy. A proceeding or case shall be commenced, without the
application or consent of Texoga or Fulcrum against which the proceeding
or case was commenced, in any court of competent jurisdiction,
seeking: (i) its liquidation, reorganization of its debts,
dissolution, or winding-up, or the composition or readjustment of
its
debts; (ii) the appointment of a receiver, custodian, liquidator,
or the
like of Texoga or Fulcrum or of all or any substantial part of its
assets;
or (iii) similar relief in respect of any such Party under any law
relating to bankruptcy, insolvency, reorganization of its debts,
winding-up, composition or adjustment of debt, and such proceeding
shall
remain in effect, for a period of thirty (30)
Days.
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-17-
9.2 Remedies
for Default. Except to the extent more limited rights
are provided elsewhere in this Agreement, if an Event of Default occurs and
Fulcrum is the Defaulting Party (defined below), then Texoga shall provide
Fulcrum with notice of the Event of Default. Except to the extent more limited
rights are provided elsewhere in this Agreement, if an Event of Default occurs
and Texoga is the Defaulting Party, then Fulcrum shall provide Texoga with
notice of the Event of Default. For purposes of the foregoing the
"Defaulting Party" shall mean Texoga where Texoga has failed to perform or
otherwise breached the terms of this Agreement under the conditions specified
in
Section 9.1 and shall mean Fulcrum where Fulcrum has failed to perform or
otherwise breached the terms of this Agreement under the conditions specified
in
Section 9.1. Following receipt of a notice of an Event of Default,
the Defaulting Party shall have a period of time in which to cure the Event
of
Default as follows:
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(a)
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If
the Event of Default is the event described in Section 9.1(a), (b)
or (c),
the Defaulting Party shall have five (5) Days to cure such Event
of
Default after receipt of notice thereof from the other Party, provided
that if such failure is not capable of being cured within such five
(5)
Day period with the exercise of reasonable diligence, then such cure
period shall be extended for an additional reasonable period of time,
not
to exceed ten (10) Days, so long as the Defaulting Party is exercising
reasonable diligence to cure such failure;
or
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(b)
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If
the Event of Default is the event described in Section 9.1(d) or
(e), the
Defaulting Party shall have thirty (30) Days to cure such Event of
Default
after receipt of notice thereof from the other
Party.
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9.3 Termination. Upon
the occurrence of any default, the Party not in default may, in addition to
any
other rights and remedies available to it under this Agreement, terminate this
Agreement upon written notice of at least fifteen (15) Days to the Defaulting
Party. Upon termination of this Agreement, neither Party shall have
any further obligation or liability hereunder to the other Party, except for
liabilities that are incurred prior to or upon termination and any other rights,
obligations or liabilities that expressly survive termination of this
Agreement.
9.4 Rights
and Remedies in Law or Equity.
(a) Except
as limited by this Agreement, in the case of a breach by either Party of its
representations or warranties or non-performance of its obligations hereunder,
or an event of default, in addition to the right to terminate this Agreement
pursuant to Section 9.3, each Party shall have all rights and remedies provided
in law or equity.
(b) Any
fines, late fees, interest or penalties incurred by Fulcrum for noncompliance
with Applicable Laws shall not be reimbursed by Texoga but shall be the sole
responsibility
of Fulcrum (unless such noncompliance is the result of action or inaction on
the
part of Texoga or its designated representatives, or the noncompliance is a
result of Fulcrum following the directions of Texoga in which case such fines,
late fees, interest or penalties shall be the sole obligation of Texoga and
Texoga shall indemnify and hold harmless Fulcrum from and against any and all
potential exposure as further defined in Section VIII of this
document).
-18-
9.5 Dispute
Resolution.
(a) Any
controversy or claim arising under this Agreement shall be submitted to binding
arbitration by either Party filing a notice of intent to arbitrate with the
other Party and the American Arbitration Association (“AAA”) office in Houston,
Texas, in the manner described for initiation of arbitration under the AAA
Arbitration Rules. The Arbitration Rules applicable to arbitration
under this Agreement shall be subject to the provisions of this Section 9.6
and
its subparts. Arbitration shall be initiated within a reasonable time
after the failure to resolve the claim or dispute but, in any event, before
the
claim would be barred in court by the applicable statute of
limitation.
(b) Disputes
involving claims in the amount of $100,000 or less (exclusive of claimed
interest, arbitration fees and costs) shall be resolved by one (1) arbitrator
selected in accordance with the provisions of the Arbitration
Rules.
(c) Disputes
involving claims in excess of $100,000 (exclusive of claimed interest,
arbitration fees and costs) shall be resolved by three (3) arbitrators selected
by the Parties from the AAA's roster of neutrals in accordance with the
procedure specified below. Each Party shall have ten (10) Days after
the circulation by the AAA of a list of proposed arbitrators to designate
arbitrators. In addition to challenges for cause, each Party shall
have five (5) peremptory challenges to the list of arbitrators circulated by
the
AAA.
(d) The
arbitrator(s) shall render their award in writing and sign the
award. In those instances where three (3) arbitrators are appointed,
any award, order, or relief of the arbitrators shall be determined by majority
decision of the arbitrators, and submitted to the Parties in writing signed
by a
majority of the arbitrators. The arbitrator(s) shall state in writing
the reasons for their award.
(e) The
arbitrator(s) shall not have the power to award punitive, treble or exemplary
damages.
(f) The
costs and expenses of arbitration, including, without limitation, attorneys'
fees, the costs of the arbitration proceeding, and the costs and expenses of
the
arbitrators, shall be borne by the losing Party or in such proportions as the
arbitrator(s) shall determine in their discretion.
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(g) Where
common or related questions of law or fact favor the expeditious and complete
resolution of disputes in a single proceeding involving all interested persons,
as determined in the discretion of the arbitrator(s), the arbitrator(s) shall
have authority to allow the participation as parties of persons other than
Texoga and Fulcrum in arbitration proceedings under this Agreement, to
consolidate claims of Texoga and Fulcrum in a single arbitration proceeding
under this Agreement, and to order claims and disputes under this Agreement
be
resolved in other pending dispute resolution proceedings involving other
persons. Claims and disputes under this Agreement resolved in other
pending dispute resolution proceedings, where such resolution has been ordered
by the arbitrator(s), shall be binding on the Parties as fully as if decided
by
arbitration under this Agreement.
(h) The
arbitrator(s) shall have authority to order discovery in their discretion,
including the subpoena of witnesses and documents, such orders to be enforced
by
a court otherwise having jurisdiction over the Parties in accordance with
Section 9.5(l).
(i) If
the Parties fail to appoint arbitrators in the manner and within the two
limitations described at subparagraphs (b) and (c) above, the AAA shall promptly
make the appointment of neutral, qualified arbitrator(s). The Parties
shall notify the AAA, by telephone within two (2) Days, of any objection by
a
Party to the arbitrator(s) so selected. Any objection by a Party to
an arbitrator(s) shall be confirmed in writing to the AAA with a copy to the
other Party. After consideration of such objection, the AAA may
either confirm the appointment or may appoint a different
arbitrator(s).
(j) The
arbitrator(s) shall have authority to interpret and apply the terms and
conditions of this Agreement and to order any remedy allowed by this Agreement,
but may not change any term or condition of this Agreement, deprive either
Party
of a remedy expressly provided hereunder, or provide any right or remedy that
has been excluded hereunder.
(k) Any
interim relief or decision ordered by the arbitrator(s) may be immediately
and
specifically enforced by a court otherwise having jurisdiction over the
Parties.
(l) The
location for any commenced arbitration under these provisions shall be Houston,
Texas.
(m) Unless
earlier terminated pursuant to Section 9.3, the Parties shall continue to
perform their obligations under this Agreement pending final resolution pursuant
to this Section 9.6 of any controversy or claim arising out of or relating
to
this Agreement or the breach hereof.
X.
MISCELLANEOUS
PROVISIONS
10.1 Successors
and Assigns. Neither Party shall assign this Agreement
or any of the agreements attached as Exhibits hereto, nor any part thereof,
without the prior written consent of the other Party. Such consent is
not to be unreasonably withheld. Except as permitted herein, any
purported assignment without such prior written consent shall be null and
void.
10.2 Notices.
(a) Except
as otherwise provided herein or in written procedures that Texoga and Fulcrum
develop with respect to Power transactions, any notice and other communication
to a Party required or authorized by this Agreement shall be in writing and
addressed as set forth below, and shall be deemed given (i) when delivered
in
person, (ii) whether actually received or not, four (4) Business Days after
it
is deposited in any U.S. post office or mail receptacle, certified or registered
mail, return receipt requested, postage prepaid, or (iii) on the next delivery
Day after it is placed with an expedited delivery service and designated for
next-day service with proof of delivery.
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Texoga:
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Fulcrum: |
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Texoga
Technologies Inc
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Fulcrum
Power Services L.P.
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Attention:
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Attention: |
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Telephone:
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Telephone: |
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| Facsimile: |
Facsimile:
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Either
Party may, by written notice to the other, change the representative or the
address to which such notices and communications are to be sent.
(b) All
routine operational notices and communications between the Parties may be
delivered pursuant to Section 10.2(a), above,; and if delivered by facsimile,
such notices and communications shall be deemed given upon the sending party's
receipt of telephonic confirmation from the receiving party of successful
transmission, provided that the Day on which such facsimile is transmitted
is a
Business Day. If the Day on which the facsimile is transmitted is not
a Business Day or the facsimile is transmitted after 6:00 p.m. CPT on a Business
Day, then such facsimile shall be deemed to have been delivered and received
on
the next following Business Day. Further, all routine operational
notices and communications between the Parties and notices during an emergency
or other unforeseen event may be made in person or by telephone.
(c) Invoices
and any communications or notices regarding billing or payments shall be sent
to
the following address:
|
Texoga:
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Fulcrum:
|
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Texoga
Technologies Inc.
|
Fulcrum Power Services L.P. |
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Attention:
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Attention: |
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Telephone:
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Telephone: |
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10.3 Entirety. This
Agreement contains the entire agreement between Texoga and Fulcrum with respect
to the subject matter hereof and supersedes all prior negotiations,
representations, contracts or agreements whether written or
oral. This Agreement may be modified, amended, altered or rescinded
only by a writing expressly referring to this Agreement and signed by the
Parties. No delay, failure or waiver on the part of either Party in
exercising any rights hereunder, and no partial or single exercise thereof,
will
constitute a waiver of such rights or of any other rights
hereunder.
10.4 Governing
Law. This Agreement shall be interpreted, construed and
governed by the laws of the State of Texas, notwithstanding any conflict-of-laws
principles that might require the application of the laws of another
jurisdiction.
10.5 Counterparts. This
Agreement may be executed in any number of counterparts with the same effect
as
if the Parties had signed the same document. All counterparts shall
be construed together and shall constitute one and the same
agreement.
10.6 Scope
of Authority. Nothing contained herein shall be deemed
to create a relationship of employer-employee, association, partnership, or
joint venture between the Parties. Fulcrum shall not have authority,
and shall not represent nor imply that it has authority, to bind Texoga in
any
manner whatsoever or to incur any liability or obligation on Texoga's behalf
except as is provided pursuant to Section 3.2.
10.7 Third
Parties. This Agreement is intended solely for the
exclusive benefit of Fulcrum and Texoga. Nothing in this Agreement
shall be construed to create any duty, obligation, or liability to any third
party.
10.8 Confidentiality. Texoga
and Fulcrum shall treat as confidential all information and data
delivered to it by the Parties to this Agreement, whether delivered
electronically, orally, or
in
tangible form, or that they learn as a result of the performance of this
Agreement which (i) relate to the business affairs of the Parties and (ii)
if
delivered electronically or in tangible form, are expressly designated by label,
stamp or other written communication as confidential at the time of
delivery (collectively, the "Confidential Information"). Whether or
not otherwise identified in writing as confidential pursuant to (ii) above,
all
Texoga information and data regarding pricing, transaction terms, operations,
and the Power Contracts shall be Confidential Information. During the
term of this Agreement and until two (2) years after the termination or
expiration of this Agreement, each Party agrees not to disclose or permit the
disclosure of any portion of the Confidential Information to any third party,
other than as may be necessary or appropriate in furtherance of the purposes
of
this Agreement or in the conduct of the disclosing Party’s legitimate business
affairs, provided, that either Texoga or Fulcrum may disclose any
Confidential Information (a) that has become generally available to the public,
(b) that may be required or appropriate in any report, statement, or
testimony submitted to any municipal, state, or Federal regulatory body having
or claiming to have jurisdiction over the Party or the subject matter of this
Agreement, (c) that may be required or appropriate in response to any summons
or
subpoena or in connection with any litigation, or (d) that may be required
in
order to comply with any law, order, regulation, or ruling applicable to either
Party, provided, that the Party required to make such disclosure shall
agree to take reasonable steps to protect the Confidential Information and
shall
disclose only that portion of the Confidential Information that it is required
to disclose, and provided further, that the disclosing Party shall notify the
other Party reasonably in advance of any disclosure, where possible, so as
to
allow the other Party to attempt to resist disclosure through the courts or
other similar forum. In addition to its confidentiality
obligations described in this Section 10.8, Fulcrum shall abide by the
confidentiality obligations set forth in Texoga's Power Contracts to the same
extent as Texoga is obligated thereunder.
10.9 Survival
of Obligations. The following Sections shall survive
termination of this Agreement: Section 3.3 (Record Keeping and
Reports), Section 6.8 (Interest on Late Payments), Section 73. (Early
Termination), Section 8.2 (Fulcrum Indemnification Obligations), 8.3
(Texoga Indemnification Obligations), Section 8.6 (No Consequential Damages),
Section 9.4 (Rights upon Termination), Section 9.5 (Rights and Remedies in
Law
or Equity), Section 9.6 (Dispute Resolution), Section 10.4 (Governing Law),
and
Section 10.8 (Confidentiality).
10.10 Severability.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable, such provision shall be fully severable; this Agreement shall
be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Agreement; and the remaining provisions
of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from
this
Agreement.
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10.11 Force
Majeure. If any Party is rendered unable, wholly or in
part, by force majeure to perform its obligations under this Agreement, other
than the obligation to make payments then or subsequently due, it is mutually
agreed that performance of the respective obligations of the Parties, so far
as
they are affected by such force majeure, shall be suspended without
liability from the inception of any such inability until it is corrected, but
for no longer period. The term "force majeure" means an event that
(a) was not within the control of the Party claiming its occurrence; and (b)
could not have been prevented or avoided by such Party through the exercise
of
due diligence. "Force majeure" includes, but is not limited to, (i)
physical events such as acts of God, landslides, lightning, earthquakes, fires,
storms, or storm warnings, such as hurricanes, which result in evacuation of
the
affected area, disruption of telecommunication services, floods, washouts,
explosions, or breakage or accident to telecommunications equipment,
transmission lines or power delivery equipment; and (ii) acts of others such
as
strikes, lockouts, or other industrial disturbances, riots, sabotage,
insurrections or wars. No Party shall be required to settle any labor
disputes against its will. A Party claiming the existence of an event
of force majeure shall give the other Party oral notice, followed by written
notice via facsimile, as soon as reasonable. Any delay in furnishing
such notice shall not delay the effective time of a suspension under this
Section 10.11.
10.12 No
Implied Warranties. THE REPRESENTATIONS AND WARRANTIES
OF TEXOGA AND FULCRUM ARE SET FORTH FULLY AND COMPLETELY IN THIS
AGREEMENT. THE PARTIES HEREBY EXPRESSLY DISCLAIM AND NEGATE ANY OTHER
REPRESENTATION OR WARRANTY OF ANY KIND HEREUNDER, WHETHER EXPRESS, IMPLIED,
STATUTORY, OR OTHER, WRITTEN OR ORAL, INCLUDING ANY REPRESENTATION OR WARRANTY
WITH RESPECT TO CONFORMITY OR MODELS OR SAMPLES, MERCHANTABILITY, OR FITNESS
FOR
ANY PARTICULAR PURPOSE.
-23-
IN
WITNESS WHEREOF, and with the intent to be bound thereby, the Parties hereto
have caused their duly authorized representatives to execute this Energy
Management Agreement on their behalf effective as of the day and year first
written above.
Texoga Technologies,
Inc.
By: /s/
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
Title: President
and CEO
Fulcrum
Power
Services L.P., by its general partner Fulcrum Energy L.L.C.
By: /s/
▇▇▇
▇▇▇▇▇
Name: ▇▇▇
▇▇▇▇▇
Title: Authorized
Representative
Date: 1-12-07
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