Loading...
HomeMy WebLinkAboutAgenda - 02-03-2009 - 6b ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 3, 2009 Action Agenda Item No. (p SUBJECT: UNC/Orange County Landfill Gas Recovery Agreement DEPARTMENT: Solid Waste Management PUBLIC HEARING: (YIN) No ATTACHMENT(S): Under Separate Cover INFORMATION CONTACT: 1. Proposed Agreement— UNC "Last and Best Offer"(A — Final; B— Redlined) Gwen Harvey, 245-2307 2. Pro forma Prospectives Gayle Wilson, 968-2885 3. County Engineer Easement Brian Ferrell, 732-2196 Memorandum 4. UNC Letter in Support of Agreement as Proposed PURPOSE: To present for BOCC discussion and decision the proposed Agreement for the joint UNC/Orange County Landfill Gas Recovery Project. BACKGROUND: In January 2008 the BOCC authorized entering into a Memorandum of Understanding (MOU) with the University of North Carolina at Chapel Hill (UNC) to ensure due diligence and anticipate effective implementation of a landfill gas recovery project. On April 15, 2008 the BOCC received a project update and request to proceed and authorized County staff to move forward with the development of a proposed final contract with UNC. The law firm of Alston & Bird, LLP, and Attorney David M. Meezan were retained by the BOCC in June 2008 to assist the County with the final negotiation and drafting of an agreement. County and UNC representatives used the ensuing period over a series of strategy sessions to define and make determinations on a large number of complex details pertaining to project development, ownership, operations, maintenance, financing, and compensation. A two-part presentation was conducted at the December 11, 2008 BOCC meeting. John Masson, with the UNC team provided a PowerPoint presentation on the joint landfill gas recovery project that was provided at the Public Information Meeting held on October 13, 2008. Attorney Meezan provided an overview and response to questions concerning terms and conditions of the proposed agreement. 2 Response to Questions from the BOCC on December 11 1) What are the possible impacts of the landfill gas transmission lines and other associated facilities on the proposed men's shelter at the former Duke Energy facility? Regarding possible impacts of the gas line and other associated facilities, UNC has indicated it will meet all environmental requirements as dictated by the State of North Carolina Department of Environment and Natural Resources, Division of Air Quality, and the Town of Chapel Hill noise ordinance. Based on the proposed area to be leased to the Town of Chapel Hill and the projected site for the landfill gas generator, the distance between the shelter and the generator will be as much as 400 to 500 feet. UNC has been in contact with Chris Moran, Executive Director of the Interfaith Council (IFC) and the IFC architectural consultant, Josh Gurlitz, to begin discussion of mutual compliance and compatibility issues. To date, no substantial problems have been identified for the planned relocation of the IFC Men's Shelter relative to the planned transmission lines or associated LFG facilities. 2) Why is there an ability to put landfill gas lines through the Greene Tract, but inability to put water and sewer lines through the Greene Tract? Orange County, Carrboro, Chapel Hill, Hillsborough and the Orange Water and Sewer Authority are parties to a Water and Sewer Management, Planning and Boundary Agreement (the "Water and Sewer Agreement"). This Agreement, among other things, places limitations on extension of water and sewer service in certain areas of the County. The Greene Tract is located within an OWASA Primary Service Area as defined in the Water and Sewer Agreement. The Water and Sewer Agreement permits extension of water and sewer service through the Greene Tract. In fact, the Town of Chapel Hill's Rogers Road Small Area Plan Task Force recommendations anticipate these utilities will be made available to the jointly owned portion of the Greene Tract (no development of the County owned portion of the Greene Tract is now contemplated). 3) What are the potential uses for the new revenues to the County from UNC for landfill gas? The timeline of implementation for the project make it unlikely that any substantive revenue will be received from this project for perhaps 3-5 years. Moreover, significant additional expenditures from the enterprise fund are coming up and require funding, including: • landfill closure costs and new operations center debt service • costs of possible implementation of the Solid Waste Planning Work Group recommendations (expected in late spring 2009) • transfer station land acquisition and development costs (including potential new expenditures generated by the new transfer station community advisory group) • significantly increased operating costs associated with operating a remote waste transfer facility including hauling and disposal costs. In addition, recyclable material markets have recently experienced significant reductions in prices paid resulting in less revenue to offset operational expenses. It is therefore unlikely there will be surplus revenues to fund new ventures or obligations and more than likely the solid waste enterprise fund will be challenged to maintain financial integrity through its current landfill to transfer station transition period. 3 Additional Issues Unresolved Post December 11 — Termination Rights and Flare Revenues In general terms, the proposed Agreement states the County will grant UNC the rights to the landfill gas ("LFG.") generated at the Eubanks Road Landfill. UNC will construct a system to collect, transport, and combust such LFG, initially through flaring and then through electricity generation. In exchange for the LFG rights, UNC will make monthly payments to the County based on a percentage of the heating energy value of LFG that UNC has flared and used to generate electricity. UNC is responsible for all costs and operating responsibilities associated with the LFG Project. Attachment 1A and 1B is the Proposed Agreement. Attachment 2 is the Pro forma documents. The proposed Agreement, in its current draft, remains problematic regarding the County's rights (termination or otherwise) in the event UNC fails to construct either the Gas Collection or Gas Conversion components of the landfill gas system. County staff previously understood UNC's negotiated position to be that the County could terminate the Agreement if UNC had not commenced operation of both the LFG Collection System and the Gas Conversion System within five (5) years of the parties' execution of the Agreement. However, in discussions between the parties after the December 11, 2008 BOCC meeting, UNC clarified its position (as reflected in the proposed Agreement) that the five (5)-year termination deadline would run from the date of the issuance of the last permit, easement, or other approval necessary to construct the LFG Collection system and the Gas Conversion System — not from the date the parties signed the Agreement. UNC further took the position any upward adjustments to the revenue the County would receive from gas flaring that might result from their delay in constructing either the Gas Collection or Gas Conversion System would not take effect until a period of time similarly running from the date of the issuance of the last permit, easement, or other approval necessary to construct the Gas Conversion System — not from the date the parties signed the Agreement. Staff is concerned the positions held by UNC do not provide the County with a meaningful remedy in the event UNC does not receive the necessary permits, easements, or approvals to authorize the construction of the Gas Conversion System. Under such circumstances there would not be any event to trigger a deadline that would provide the County with recourse to either adjust upward the percentage of revenue paid to the County for the flaring of LFG or to terminate the Agreement in the event UNC failed to construct the Gas Conversion System. This is not merely an academic concern because UNC may face very real hurdles in obtaining the approvals necessary to construct the Gas Conversion System. Attachment 3 is a memo from County Engineering on the subject easements through the Southern Human Services Center Campus. The County has explained its concerns extensively to UNC and attempted to negotiate a mutually-acceptable solution. UNC has participated fully in the dialog but ultimately indicated its position was final and non-negotiable. Attachment 4 is a memo from UNC that County staff requested to state their rationale regarding termination as well as prospects for receiving additional off-setting revenue for project development. While the County has no reason to believe UNC will not proceed to implement the two phases of the project in a timely manner, including pursuing the necessary easements, the proposed 4 Agreement essentially relies on the good faith of UNC to proceed rather than specific provisions in the Agreement. A Way Forward Under these circumstances the County Attorney's Office has continued to discuss internally another final compromise proposal concerning the County's rights in the event of a delay in the construction by UNC of the project. Such proposal would move the County to a position of foregoing a termination right in its entirety in case UNC is unable to construct either the LFG collection system or conversion system in exchange for a contractually guaranteed revenue stream beginning within eighteen months of the parties signing the agreement. This final compromise proposal has not been tested with UNC given their last stated position but does constitute the recommended position from the County Attorney's Office at this point in the process. As a consequence, County staff believes there are three options for BOCC discussion on February 3. 1. The BOCC may approve the Proposed Agreement "as is" (attached) with understanding, acceptance, and tolerance for the level of risk and exposure County staff emphasizes the material weaknesses in the proposed Agreement and the potential, however unlikely, of project implementation being indefinitely delayed (without the County having a practical legal recourse), even if for reasons unrelated to acquiring easements. Staff also confirms UNC is unwilling to negotiate further to incorporate provisions within the Agreement that would limit potential of indefinite deferment of implementation. 2. Do not approve the Proposed Agreement and direct County staff to pursue with UNC a final compromise proposal, to be formally developed by the County Attorney, to satisfactorily address the legal risks associated with the Proposed Agreement 3. Do not approve the Proposed Agreement and direct County staff to return on February 17, 2009 with an alternative approach for seeking competitive bids for entering into a landfill gas-to-energy development agreement under more secure terms and conditions on project implementation FINANCIAL IMPACT: During the term of the proposed agreement, revenue to the Solid Waste Enterprise Fund could range from $115,000 to $140,000 annually, with the potential for an additional $3,500 to $40,000 annually from the sale of renewable energy credits. The actual income will be variable and based on the actual implementation and development timeline, landfill methane output, natural gas price fluctuations, federal greenhouse gas policy and other economic externalities. RECOMMENDATION(S): The Manager recommends Option 2 to the BOCC: Do not approve the Proposed Agreement and direct County staff to pursue with UNC a final compromise proposal, to be formally developed by the County Attorney, to satisfactorily address the legal risks associated with the Proposed Agreement - January 25,2009 Metchmen+ t o 5 LANDFILL GAS AGREEMENT between ORANGE COUNTY, NORTH CAROLINA and THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL Dated as of February_, 2009 • (00018638.DOC 21) 6 TABLE OF CONTENTS ARTICLE I Definitions 4 ARTICLE II Respective Rights and Obligations of the Parties 4 A. Rights Granted to University 4 B. University's Operating Responsibility 4 C. The County's Operating Responsibilities 4 D. Operating Protocols 4 ARTICLE III Permitting and Construction of Fac >k : 4 ARTICLE IV Representations of the Parties ••• 4 A. The University's Representations 4 B. The County's Representations 4 C. Disclaimer of Warranties 4 ARTICLE V Liability... 4 ARTICLE VI Ten . L1 4 Nir A. Termination 9 4 B. Miscellaneous T- tion Events 4 C. Termination Rights of County 4 D. Rights Upon Termination or Expiration 4 ARTICLE VII Purchase and Sale of LFG 4 A. The University's Purchase Obligations 4 B. Payments to the County 4 C. Payment for Gas Flared 4 D. Payment for Gas Converted to Energy 4 E. Adjustments to County Payments 4 {00018638DOC 21} i 7 F. Billing 4 ARTICLE VIII Respective Effective Dates of the University's Obligations Under this Agreement 4 ARTICLE IX Landfill Gas Delivery 4 ARTICLE X Insurance and Taxes 4 ARTICLE XI Dispute Resolution 4 ARTICLE XII Force Majeure 4 ARTICLE XIII Miscellaneous 4 4111111 • it (00018638.DOC 21) • 8 LANDFILL GAS AGREEMENT This Agreement is entered into as of February ,2009 (the"Effective Date"), between Orange County, North Carolina(the "Coup and the University of North Carolina at Chapel Hill (the "University"). The County and the University are sometimes hereinafter referred to individually as"Party"and collectively as"Parties." REcrrais WHEREAS, the University is the flagship public research university of the State of North Carolina located in Chapel Hill,North Caro s WHEREAS, the University desires, in _ ce of i&.. niversity Sustainability Policy and the sustainability objectives associated with the pro• aroma North Campus, to pursue and implement projects in cooperation with community partn _i at preserve natural resources, conserve energy,reduce hazardous emissions,and lessen overall env :y i ental impacts; WHEREAS, the _ as a good steward of the environment and a leader in the growth, development,and ility o community,desires to partner with the University in its efforts to meet the goals of the U• 'ty _ °�.i Pol'cy and its other sustainability efforts; WHEREAS,the Umve ;..;:' determined that to help achieve these objectives it will work cooperatively with the County to e . dfili gas from the Orange County Landfill, and to convert that gas into energy to supply power and heat for the University's Carolina North Campus while at the same time removing significant quantities of greenhouse gases from the atmosphere; WHEREAS, the County desires, in furtherance of the health and well-being of its citizens and the fiscal soundness of the County, to enter into this Agreement with the University to make beneficial use of Landfill resources and to generate revenue for the County from the sale of LFG; WHEREAS, the County owns and operates the Orange County Landfill (NC Solid Waste Parcel 68-01) located on the north and south side of Eubanks Road, approximately 1.3 3 {00018638.DOC 21} 9 miles to the west of the Highway 86 exit from Interstate 40, and approximately five (5) miles north of Chapel Hill, at 1514 Eubanks Road, Chapel Hill,North Carolina, which consists of two land disposal areas, a "North" closed unit comprising about fifty (50) acres (the "North Landfill"), and a "South" operating unit comprising approximately twenty-five (25) acres and operated in four phases (the "South Landfill"). The South Landfill is currently operating in Phase 4 and is expected to reach capacity in the Spring of 2011; WHEREAS, waste acceptance records indicate that the North Landfill received about 12 million tons of waste during its operating period._.¢,'•m 1` 2 to June 1995. The capacity of the South Landfill is approximately 920,000 to' .n WHEREAS, Landfill Gas (as defined below), co principally of methane, carbon dioxide, nitrogen and traces of other constituent gases, is n i - a as a by-product of the decomposition of waste in the Landfill; WHEREAS, sub; wE terms and conditions set forth in this Agreement, the County desires to grant to 'versity exclusive right to design, develop, install and operate the LFG Project (as defined to ,dfill gas (and in particular, methane) and to convert LFG into one or more ' F of energy, thereby reducing associated greenhouse gas emissions from the Landfill, while a i e same time generating power from a renewable energy source; WHEREAS, subject to the terms and conditions set forth in this Agreement, the University desires to have the exclusive right to design, develop, install, and operate the LFG Project, and to collect,extract, and remove LFG from the Landfill,and either to destroy such gas or to convert all or any portion of it into energy to supply part of the University's energy needs at its Carolina North Campus,or for any other lawful purpose; and 4 (00018638.DOC 21) 10 WHEREAS, The County and the University desire to cooperate in the design, installation,and operation of the LFG Project because of the project's environmental,public, and economic benefits. NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties, and covenants contained in this Agreement, and o; ,;r good and valuable consideration,the receipt of which is hereby acknowledged,the P s hereby agree as follows: ARTICLE I DEFINITIONS 1. Adjusted BTU Equivalent Price means (a) in 2010, $9.00 per . .tu, and (b) each calendar year during the Term of the Agreement thereafter, $9.00 per MMBtu as adjusted upward on an annual, compounding bas .f ',.o percent (2%). The Adjusted BTU Equivalent ) 1i00, Prices are set forth on ExhibitA to this Agr 2. Approvals shall mean the L iv Project II'ts, easements, rights-of-way, consents, authorizations and other approvals that 4 .y be necessary for the University to install, construct,operate maintain and repair the LFG Pr. ect. Ave owance Market Price means the average monthly market price in U.S. do. as determin. ,- the methodology established by the Carbon Price Consultant in accordance , ' ...,..n .h 1_ of this Agreement, attributed to one Emission Allowance created under federal legis . ! .le United States enacting a Cap-and-Trade System to regulate GHG emissions. 4. BTU shall mean British Thermal Unit. 5. BTU Equivalent Price shall be determined monthly in advance as the Transco, zone 3 Pricing Point"midpoint" settlement price for natural gas published in the report named "Monthly Gas Price Assessments — Inside FERC" published by McGraw Hill Company. The 5 (00018638.DOC 21) 11 underlying data set is "Monthly Gas Price Assessments — Inside FERC". The value for September 2008 was$8.45 per million Btu. 6. Cap-and-Trade System means a system that (i) establishes a total cap on GHG emissions from an identified group of GHG emitters; (ii) establishes a market for Emission Allowances; and(iii)allows trading of Emission Allowances among GHG emitters. 7. Carbon Credit means any contractual, equitable or statutory legal right, interest, credit, offset, entitlement, benefit, allowance or certificate evidencing a reduction from the environment of one metric ton of carbon dioxide or C' °'= • • s verified by(i)a federal, state, or local Governmental Authority pursuant to laws • :._ ations ;;_ • •fishing a regulatory market for reductions of GHG emissions, or (ii) an indepe ? `r third-party utilizing nationally- recognized standards for establishing emissions reduction cr •e r` soc'ated with non-regulated, voluntary projects or activities. 8. Carbon P ultant means an independent, qualified nationally-recognized consulting firm wi E.` a cant erience in the regulated carbon markets established in the United States under fed s,} >.., a Cap-and-Trade System and the price of Emission Allowances in such •• 9. CO2e means carbo• dioxide equivalent, or the base reference for the determination of Global Warming Potential of Greenhouse Gases of a similar amount of carbon dioxide. 10. Conversion MMBTU RHV has the meaning set forth in Paragraph 118 of this Agreement. 11. Conversion Payment has the meaning set forth in Paragraph 117 of this Agreement. 6 {00018638.DOC 21} 12 12. Conversion Percentage means sixteen and six-tenths percent(16.6%). 13. Delivery Point shall mean the location at which the ownership, possession and control of the Landfill Gas is transferred from the County to the University. For purposes of this of this Agreement, the Delivery Point shall be the blower discharge point on the Landfill Property as shown on Exhibit B. 14. Effective Date has the meaning given in the preamble. 15. Emission Allowance shall mean an authorization issued by a Governmental Authority to emit one metric ton of CO2e. 16. Engine Start-up Date shall • =-:, • e k�;,• the engine located at the University's Carolina North Campus reaches steady- conditions and commences the conversion of Landfill Gas into usable energy. 17. Environmental Benefits shall mean all credits an,>' owances generated by and associated with the gene,*.f • tion, treatment, sale or use of the Landfill Gas, including Carbon Credits, E• Allow•t s, offsets, "green tags," and renewable energy credits, or any other asset • term •= ed to describe the environmental benefit of either d eying any . <s:• •t in • •dfill Gas (including methane) or using the Landfill Gas as a so energy. 18. E ; onmen Laws shall mean all Federal, state and local Laws concerning pollution or protec •e environment or human health, as the foregoing are enacted or in effect, on or prior to •e date hereof(including ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), including without limitation: (i) the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §§ 9601 et seq.; (ii) the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 7 (00018638.DOC 21} 13 U.S.C. §§ 6901 et seq.; (iii) the Oil Pollution Act (33 U.S.C. §§ 2701 et seq.); (iv) the Occupational Safety and Health Act(29 U.S.C. §§ 651 et seq.); (v)the Emergency Planning and Community Right-to-Know Act (42 U.S.C. §§ 11001 et seq.); (vi) the Endangered Species Act (16 U.S.C. §§ 1531 et seq.); (vii)the Clean Air Act(42 U.S.C. §§ 7401 et seq.); (vii)the Federal Water Pollution Control Act(33 U.S.C. §§ 1251 et seq.); (viii)the To '-. Substances Control Act (15 U.S.C. §§ 2601 et seq.); (ix)the Hazardous Materials T • • •► ;on Act(49 U.S.C. §§ 5101 et seq.); and(x)all North Carolina Laws comparable to the fa oing. 19. Extension Period has the meaning set forth in Paragraph 9 . . 20. Fair Market Value has the meaning set forth in Paragraph 110. 21. Flare Percentage means five and three-tenths percent(5.3%). 22. Flare MMBTU HHV •• ,, : • g set forth in Paragraph 115. 23. Flare Payment has the m • F 'aragraph 114. 24. Flare Start-up Date shall .- .e date '4-n the flare reaches steady-state conditions and commences the continuous burin : f • •dfill Gas. 25. � ecasted Carbon Price means, or a year during the Term of this Agreement, the corr ending Fo Carbon Price for such calendar year set forth in Exhibit A. Force Maj shall mean any cause or causes for delay of performance by a Party, which = �s of reaso• :' y within the control of the Party claiming Force Majeure and which, by the exe • •f F -asonable diligence, such Party is unable to prevent or overcome including without '••►i ;on, acts of God, terrorism, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, hurricanes, floods, high-water washouts, arrests and restraints of governments and people, strikes, lockouts, protests, or other industrial disturbances, civil disturbances, explosions, catastrophic events such 8 (00018638.DOC 21) 14 as breakage or accident to machinery or lines of pipe caused.by an event of Force Majeure, enactment of statutes, laws or regulations,and other acts of Governmental Authorities(excluding acts by a Party) frustrating the purposes of this Agreement. Force Majeure shall in no event include (1) any change in the economy or in the markets, pricing or demand for natural gas or LFG that affects the University's ability to use LFG,or the price at which LFG or natural gas can be sold,or(ii)increases in the cost of constructing or operating the LFG Project. 27. Gas Conversion System shall mean any equipment used by the University to convert the Landfill Gas into thermal or electric ener •cl •i •g an engine,generator or boiler. 28. Gas Flow Meter shall mean th • s) use, • measure the rate of Landfill Gas flow,methane content, and other parameters. 29. Gas Sold means any LFG delivered to the De o'i t. 30. Global Warming Potential or GWP means th- -stimate of the atmospheric warming resulting from of a unit mass of a particular Greenhouse Gas, in relation to the warming resul r._�� f - a the re b e of the same amount of carbon dioxide. 31. Governmen - any federal, state, local or foreign court, arbitrator, alternative dispute res• ' t; • • body, government or political subdivision or department thereof, or any governmental, . • •• • .: '• .tive or regulatory body, commission, board, bureau, agency or instrumentality. 32. Greenhouse Gases or GHGs means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,perfluorocarbons and sulphur hexafluoride 33. Higher Heating Value or HHV shall mean the amount of heat released when a known volume of methane is burned and shall equal 1012 BTUs per cubic foot of methane at one atmosphere pressure at 60 degrees Fahrenheit(60°F). 9 {00018638.DOC 21) 15 34. Kyoto Protocol means the protocol to the UNFCCC adopted at the Third Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto,Japan.on December 11, 1997,as may be amended. 35. Landfill means, collectively,the North Landfill and the South Landfill. 36. Landfill Gas or LFG shall mean the gas (and its constituent elements)generated from the decomposition of materials deposited in the Landfill. 37. Landfill Permits means all licenses, permits, certifications, authorizations, approvals, and entitlements issued by any Governme• Y6 Au • rity and relating to the operation, ownership, development and/or maintenance of •. a dfill, . of the foregoing may, from time to time hereafter, be amended or supplemented, '• , . • ., without limitation, Municipal Solid Waste Landfill Permit Number 68-01 issued to the Co •n o about May 5, 1982, as amended and as it may,from time to time hereafter,be further am- i ed or supplemented. 38. Laws means any law (including common law), statute, treaty, ordinance, rule, regulation, code, order, writ, injunction, judicial decision, decree, reporting or licensing requirement or • •er legally binding requirement of any Governmental Authority and shall include,_ u'l•out lima ._<= • Environmental Laws. LFG Colle' System shall mean all equipment at the Landfill, including piping, heade `' r! s, lateral es, wells, pumps, blowers, condensate knock-out vessels, flare, and related equipm E '•y the University to extract, collect, and treat Landfill Gas from the Landfill. 40. LFG Project shall mean the LFG Collection System, the Gas Conversion System,and the Pipeline. • 10 {00018638.DOC 21) 16 41. LFG Project Permits means all licenses, permits, certifications, authorizations, approvals, easements and entitlements issued by any Governmental Authority (including the County) and relating to the ownership, development, construction, installation, operation, maintenance and/or repair of the LFG Project, including, without limitation, any special use permits or special use permit modifications, as all of the foregoin: y, from time to time hereafter,be amended or supplemented. 42. Meter Point A shall be located on the h- : r line '_ ,, branches to the Gas Conversion System as shown on Exhibit A Meter Point A shall be the p. . here the heating energy content of Landfill Gas delivered to the Gas Conversion System is m- . 43. Meter Point A Methane Content has the meaning set forth in Paragraph 118. 44. Meter Point B shall be •n the header line that branches to the flare as shown on Exhibit A Meter Point B s I• i be = _. where the heating energy content of Landfill Gas delivered to the flare is measur-•► 45. Meter Point B Methane Content r ,e meaning set forth in Paragraph 115. 46. 1$to means one million(1,000,1 .0)BTUs. Mont ''g Statement has the meaning set forth in Paragraph 127. r-t North Lan " i• the meaning given in the Recitals. 49. line m . = pipes and equipment necessary to transport LFG from the LFG Collection System '_ 6. Conversion System. 50. SCF standard cubic feet, which means the amount of Landfill Gas which occupies one cubic foot of space when the Landfill Gas is at a pressure of 14.73 psia and a temperature of sixty degrees Fahrenheit(60°F). 51. South Landfill has the meaning given in the Recitals. 11 100018638-DOC 21) 17 52. Term has the meaning set forth in Paragraph 97 and shall include any Extension Period. 53. Waste Materials means collectively, any chemical, waste, material or substance that is listed or regulated under applicable Environmental Laws as a"waste"or as a"hazardous," "special"or"toxic" substance or waste, or as a"contaminant" or"pollutant" or words of similar import, including,without limitation,petroleum,petroleum products and byproducts. ARTICLE II RESPECTIVE RIGHTS AND OBLIG. •NS •''THE PARTIES A. Rights Granted to University 54. The County hereby grants to the Univ °f .al e sole and exclusive right to (a) design, develop, and construct the LFG Project; (b) collect, t and remove Landfill Gas from the Landfill; (c) produce energy from the Landfill Gas for th.: i niversity's own use, or for sale to one or more third • r the electrical grid; (d)derive Environmental Benefits from the treatment, destructi.,r use of .f 4;, Landfill Gas; and(e) do, at the Landfill, consistent with the University's obligations in L_ i e a der, all things necessary to carry out (i) the permitting, development co i a e - a and operation of the LFG Project; (ii) the collection, extraction, and removal of the Lan • ; (iii) the production of electrical or thermal energy; and (iv) the redirection, redelivery, transport or marketing of the Landfill Gas, or any portion thereof, to any third party. Provided, however, that the County expressly retains all rights in the Landfill Gas necessary to operate the Landfill in accordance with the Landfill Permits and all applicable Laws. 55. The University agrees to flare any Landfill Gas delivered to the Delivery Point that is not transported by the University to the Gas Conversion System as follows: (i) during the period occurring after the Flare Start-up Date and before the Engine Start-up Date; (ii) in the 12 (00018638_DOC 21) 18 event that LFG generated by the Landfill exceeds the capacity of the Gas Conversion System, as determined by the University in accordance with good engineering practices and industry standards; (iii) during Gas Conversion System maintenance, repair, or associated downtime; (iv) as reasonably necessary to protect human health, safety, or the environment; and (v) during the pendency of aforce majeure event affecting the Gas Conversion System. 56. The University shall have the right to use and access portions of the Landfill and such other property depicted on Exhibit C to carry out the development, construction, and operation of the LFG Project, including any activitie s .► to evaluate the feasibility of the LFG Project, or the design and permitting of _ =E Proj ;- The County agrees to make commercially reasonable efforts to assist the Universi • enever feasible, in accessing any parcel of property not owned solely by =ti •unty that is n or the construction and operation of the LFG Project,including the ene 57. The County shall grant the U rsity, wi additional University payment beyond the compensation set forth in this Agree.. t, h easements and rights of way through the Landfill site . .d other property owned solely b the County as may be necessary to drill gas extracts• ` ells, lay es, lateral lines, header lines, and any other part of the LFG Project infrastru, as contemp = by this Agreement, including, without limitation, the easements and rights o set fo I n Exhibit C. The County also grants the University, without additional Universe nt beyond the compensation set forth in this Agreement, licenses or other approvals to . utility lines on the Landfill and other property owned solely by the County for the LFG Project. The Parties agree that in the event the County is unable to grant the easements and rights of way set forth on Exhibit C or otherwise breaches any of its duties or obligations under this Paragraph 57, (i) the University's sole and exclusive remedy shall be the 13 (00018638.DOC 21) 19 right to terminate this Agreement in accordance with Article VI hereunder, and (ii) the University shall have no obligation to construct or complete the construction of the Pipeline or the Gas Conversion System,notwithstanding any terms to the contrary in this Agreement. • 58. In furtherance of the LFG Project,the County hereby grants to the University, and its employees, contractors and agents, a non-exclusive license (the " I_- 1 e") for the following purposes,provided that any employees, contractors, and agents - comply with the health and safety plan required to be developed under Paragraph 67 her <<der a. the right to drill, excavate, trench or otherwise disturb the i,< fill Property for the purpose of installing, constructing, operating, maintaining an t '•lacing gas wells, underground pipelines, tanks, Landfill Gas flaring mechanisms, and associated Landfill Gas eq ,IT,1,,at. b. the right to travel over any • ,a O r�.�_• _s on the Landfill Property and any adjacent property owned by th= .unty, as . =ch roads may be relocated by the County from time to time during l - S I of this Agreement, for the purpose of e. "» upon the Landfill Property. a e University acknowledges that it does not claim :, ,ership interest in the Landfill Property, except as otherwise stated herein, ►,x::'_•Of the University's use of the Landfill Property.. B. -= k', ersi 's I <eratin. Res.onsibili lir59. Subs I cle VIII of this Agreement and except as otherwise provided herein, the Universi • • operate the LFG Collection System and the Gas Conversion System at all times during the Term of this Agreement. 60. The operation, maintenance, and repair of the LFG Project shall be the sole responsibility and undertaken at the sole cost and expense of the University (and its contractors and agents) and shall be performed by the University, its employees, agents and subcontractors 14 {00018638.DOC 21) 20 (i) in compliance with all LFG Project Permits and applicable Laws and (ii) in accordance with good engineering practices and industry standards. The University assumes the risk of the delivery conditions (including the rate of flow, vacuum and pressure of delivery), quantity and quality of LFG. 61. The University is solely responsible for creating sufficient vacuum to extract LFG from Landfill and transfer it to the Delivery Point. Any such vacuum shall not adversely affect the County's Landfill operations, and the University shall adjust its operations of the LFG Project or install necessary equipment at its sole coy d e •erase to correct any such adverse effect. Should such adverse effects arise • �nr nivers is unable to correct through operational adjustments, the University shall, at the .' . r u Manager's written request, take commercially reasonable steps to promptly suspend the LFG ►} ..tio$ pending the correction of the conditions causing such adverse effects. 62. The Univ-.sm make commercially reasonable efforts to cooperate with the County in the prep and filing of any applications or other documents as may be necessary to perform the ‘ E�� - • »der this Agreement 63. The University s•. I� - bmit for the County's prior approval (which shall not be unreasonably withheld), all permit d• «. ••entation prepared in accordance with Paragraph 81 and all construction and design plans and specifications relating to the construction, operation, and maintenance of the LFG Collection System prior to commencing construction. The County shall have fifteen (15) calendar days to complete its review and approval of any such plans and specifications. Any plans and specifications for which the County has not provided a response within fifteen (15) calendar days shall be deemed approved. Should the County provide comments on the initial submission of any submitted plans and specifications, it shall then have 15 {00018638.DOC 21} 21 fifteen (15) calendar days to complete the final review and approval of such revised plans and specifications prepared by the University. Any revised plans and specifications for which the County has not provided a response within fifteen(15) calendar days shall be deemed approved. Should subsequent changes or modifications be made to the-plans and specifications after they have been approved, the County shall then have seven (7) days to review and approve such changes or modifications. Any subsequently revised plans and specifications for which the County has not provided a response within seven (7) days shall be deemed approved. Within a reasonable time after completing construction of the LFG Collection System, but no longer than sixty (60) days, the University shall provide to the County all "as-built"plans and specifications for the LFG Collection System. Until the "as-built" plans and specifications for the LFG Collection System are provided to the C. , e University shall keep the County informed as to the state of the construction of the L Co 1 E f ,F stem and the location of all then- installed components of such system. 64. The University, its employees, ` : ts and subcontractors shall minimize disruption to L, , 111 operations during construe I on, operation, and maintenance of the LFG Project "0 uring .u of this Agreement, the University, its employees, agents and subconm shall note onably interfere with the County's operation of the Landfill, including, bu` limited t•, e County's closure of portions of the Landfill and any other requirements under" f . i i Permits or applicable Laws, and shall reasonably ensure that the Landfill is not dams ed by the University. Should such damage occur, the University shall arrange for the repairs itself; provided, however, that the County has the right to take immediate action to effectuate whatever repairs are necessary to the Landfill and the University shall timely reimburse the County for the reasonable costs of any such repairs. The University shall use its 16 {00018638.DOC 21) 22 best efforts to design the LFG Collection System to minimize any incremental increase in the County's costs of Landfill closure incurred to accommodate the LFG Collection System. The University shall share equally (50-50) with the County the incremental increase in the County's costs of Landfill closure incurred to accommodate the LFG Collection System; provided, however, that the University shall not be obligated to pay, nor be - ' ible for, any costs and expenses in excess of$50,000. 65. The University shall, at its own expense, p =:;;are, ••r:= .' and submit to the County monthly reports on Landfill Gas production rates, which shall me'r,t >__- • accounting of all LFG and the methane content of such LFG delivered to Meter Points A and B. 66. Notwithstanding anything contained in this Agreement to the contrary, the University acknowledges that Landfill o. trKE + take precedence over the LFG Project, and, at all times during the term of the Agreemen •d " its terms, the County shall have the right to operate the Landfill, and to take all ac.. at its o t.'cost and expense that the County deems necessary or appropriate in connection s, ' • the operation and maintenance of the Landfill, includ. actions to comply with the . dfill Permits and any applicable Laws. The Univers" •er ac ; - •ges and agrees that the primary use of the Landfill is as a sanitary lan.i. , = the LFG be limited to production from the Landfill. 67. Universi• hall develop and implement a health and safety plan no less stringent than that •unty with regard to the University's operations at the Landfill and any work performed . ' its employees,contractors, or agents at the Landfill. - 68. The County shall allow the University to dispose at the Landfill, or at a wastewater treatment plant used for the Landfill's leachate, any Waste Materials generated by the LFG Project, provided such disposal is allowed under the Landfill and LFG Project Permits 17 (000li638.noc 21) 23 and applicable Laws. The University shall be responsible for any additional incremental costs incurred by the County for disposing of any such Waste Materials, including, without limitation, additional wastewater treatment charges or surcharges. If any Waste Materials cannot be lawfully disposed of at the Landfill or through the County's permits,then the University shall be responsible at its sole cost and expense for any necessary off-site disposal of such materials regardless of whether they are deemed a hazardous material or waste. C. The County's Operating Responsibilities 69. The County agrees to maintain the . •ii r cover in accordance with any applicable requirements of the Landfill Pe a • The & •ty further agrees to make commercially reasonable efforts to repair cracks, fissure -h ion or other adverse conditions in the Landfill that (i) may materially affect the LFG Collection em's capture of Landfill Gas or(ii)cause fugitive emissions of Landfill Gas from the Landfill. 70. The Coun•E r _:-•- responsible for complying with the Landfill Permits and all Laws applicable to G s e.: •tion E® maintenance of the Landfill, including, but not limited to, applicable provisions of ' • r-ments for MSWLF Facilities, 15A NCAC 13B.1626. 71. The County shall •• ommercially reasonable efforts to develop and operate the Landfill to enhance the production of Landfill Gas; provided, however, that nothing in this Agreement shall obligate the County to incur any costs or expenses to enhance the production of Landfill Gas or to take any action inconsistent with the terms and conditions of any Landfill Permits or applicable Laws. 72. The County is not obligated to deliver the Landfill Gas at any minimum flow rate or pressure and shall not be obligated to install or operate any of the facilities (including compression or vacuum facilities)to deliver the Landfill Gas. 18 (00018638.DOC 21) 24 73. The County has no obligation to (i) deliver or to sell any minimum amount of LFG to the Delivery Point; (ii)treat,process or condition the Landfill Gas, maintain or increase the pressure of Landfill Gas delivered to the University, or (iii) install any facilities (inclwling blowers or compression facilities) or, subject to Paragraphs 69 and 71, alter any landfilling methods or practices relating to the production, collection or delivery the Landfill Gas to the University. 74. The County shall not interfere with the Us. -rsity -•dfill Gas operations, except as such interference may be necessary to comply with the Landfill y` 'ts, by operation of Laws, or for the protection of the environment, human health, or safety. Eac' :'i shall use commercially reasonable efforts to advise the other Party fully in advance of any changes in the operation, maintenance, expansion, or e tivities that may adversely affect the business operations of the other at the Landfill. If P. r any action, refrains from taking any action, or undertakes any change in operati = , mainte' . -, expansion programs or other activities that will adversely affect, or threaten to •v-. ely affect the business operations of the other, such P. hall use commercially reasonab e efforts to give notice to the other Party as soon as • ticable, a Tmg the nature of the detriment and its cause, including emergency notice ' e of an em. ��ncy. However, in no event shall the County be required to delay action that it °' neces for the operation of the Landfill. If the alleged interference continues beyond ) calendar days, then the affected Party may invoke the Dispute Resolution procedure set out in Article XI hereunder. 75. The County shall make commercially reasonable efforts to cooperate with the University in its preparation, execution, and filing of any applications, permit submittals, 19 (00018638-DOC 21) 25 assignments of rights, and other documents as may be necessary to allow the University perform its obligations under this Agreement 76. The County shall make available to the University copies of all environmental information, reports, studies, landfill gas feasibility reports, assessments or other documents a f f e c t i n g t h e g e n e r a t i o n of Landfill Gas or t h e LFG P r o j e c t t h a t t h e C. ity has prepared or that have been prepared on the County's behalf. Such documen clude those the County is required to submit to the North Carolina Department of En ;. ent ° atural Resources. 77. The County shall reasonably ensure that the County, employees and contractors do not damage the LFG Project or disrupt the operation of the syste l . I ould such damage occur, the University has the right to take immediate action to effectuate whatever repairs are necessary to bring the LFG ;. "i to fully operational condition and the County shall timely reimburse the University for the -. o. • r C of of repair. 78. The County shall retain the sole exclusiv, ght, and shall have all obligations with regard to Landfill operations and for m- _;� all applicable Laws pertaining to such operation, excl ' e of the University's operation o the LFG Project. P O i era 'rotocols The Parties gee to develop and implement operating protocols for the LFG Collection ,1 incl • �w:, without limitation, monitoring and reporting procedures, communications an s cy response plans, and notification procedures. ARTICLE III PERMITTING AND CONSTRUCTION OF FACILITIES 80. The installation and construction of the LFG Project shall be the sole responsibility and be undertaken at the sole expense of the University, and shall be carried out in 20 (00018638.DOC 21) 26 compliance with the LFG Project Permits and all applicable Laws and in accordance with good engineering practices and industry standards. 81. Except as set forth in Paragraphs 57 and 58 of this Agreement, the University shall be solely responsible for securing any and all Approvals, including, without limitation, preparing all permit documentation for any Landfill or LFG Project Permits on which the County will be the permittee. Exhibit D contains a preliminary, but not exhaustive, list of Approvals that the University believes it must obtain to install, construct, operate, maintain, and repair the LFG Project. The University shall, at its own e E $ ..ply for and seek to obtain all Approvals, including those listed on Exhibit D $1 t ey are 7,3t required for the LFG Project. The University will apply for any such Approval as the • z 5`_ and operator of the LFG Project, r1,, and shall act as the "permittee," "owner" "operator"operator» for s I : A oject as may be appropriate under applicable Laws. 82. The Univ -s that it is in the Parties' mutual best economic interest for the LFG Prole, - coin expeditiously. Without limiting the generality of the University's obligations un. • 4 0,, • Bement, beginning on the Effective Date, the University shall work expeditio i d in good faith to (a)complete the LFG Collection System • within eighteen (18) months from i date of the issuance of the last Approval necessary to construct such system, and (b) complete the Gas Conversion System within thirty-four (34) months from the date of the issuance of the last Approval necessary to construct the Gas Conversion System and the Pipeline. If the University fails to complete the LFG Project within five (5) years of the date of the issuance of the last Approval necessary to construct the LFG Project,the County shall have the right to terminate the Agreement pursuant to Article VI. If the Engine Start-up Date does not occur within thirty-five (35) months after the date of the issuance 21 (000111638.DOC 21) 27 of the last Approval necessary to construct the Gas Conversion System and the Pipeline, the Flare Percentage shall be adjusted to equal ten and ninety-five one-hundredths percent(10.95%) for the purpose of calculating any Flare Payment under this Agreement and shall remain at such percentage until the occurrence of the Engine Start-up Date or five(5)years after the date of the issuance of the last Approval necessary to construct the Gas Conversio' ystem and the Pipeline, whichever occurs sooner. If the Engine Start-up Date does not within five (5) years after the date of the issuance of the last Approval necessary to • «' t E • Conversion System and the Pipeline, the Flare Percentage shall be adjusted to equal sixteen -tenths percent (16.6%) for the purpose of calculating any Flare Payment under this Agreement 1 • remain at such percentage until the occurrence of the Engine Start-up Date. Commencing thirty (30) days after the Effective Date of this A E.i t, the University shall hold monthly progress meetings to discuss progress toward achie E! these ;.F tion dates inch'ding the status of the construction of the components of the LFG P i ' t. The ersity shall invite representatives of the County to attend such progress meetings th University shall provide the County with reasonable adv. i,,.e written notice of the location and time of such meetings. The University shall di ute mee• F. '.I utes to the County following such progress meetings regardless of the o • .ttendance at meetings. ARTICLE IV REPRESENTATIONS OF THE PARTIES A. The U:i ersitv's Representations 83. The University represents and warrants that, in entering into this Agreement, it has relied upon its own estimates of Landfill Gas volumes, based upon publicly available waste disposal.records and standard modeling assumptions and projections. The University further represents that it has not relied upon Landfill Gas generation reports, drawings, and an'lysis 22 {00018638.DOC 21) 28 provided by the County or its consultant as an inducement for entering into this Agreement. The County shall promptly inform the University, however, of any errors, miscalculations, or omissions of which the County has knowledge, in any of the landfill reports it has prepared or furnished to the University. • 84. The University represents and warrants that it has le M authority and right to make and enter into the Agreement. B. The County's Representations 85. The County represents and warrants that it has fee simp to the Landfill Property. 86. The County represents and warrants that it has not made an assignment or agreement to sell to any party other I • versity the right to extract, collect, use, or sell the Landfill Gas. 87. The County represents and • that, bas upon calculations attached hereto as Exhibit E, previously submitted to the No " E Carolina Department of Environment and Natural Resources and performed in accordance , 'th 40 C.F.R. Part 60, Subpart WWW, the Landfill is not subject to the New Source Performance Standards for Municipal Solid Waste Landfills, 40 C.F.R. Part 60, Subpart WWW (2007) ("NSPS") or the Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills, 40 C.F.R. Part 60, Subpart Cc (2007) ("Emission Guidelines"). 88. The County represents and warrants that it has all environmental permits, authorizations, and approvals that are legally required to operate the Landfill, exclusive of any permits,authorizations,and approvals that may be necessary for the LFG Project. 89. The County represents that, in entering into this Agreement, it has relied upon its own estimates of the economic benefits of the LFG Project and has not relied upon any economic 23 {00018638.DOC 21} 29 or financial model prepared by the University or its consultant(s) as an inducement for entering into this Agreement. The University shall promptly inform the County, however, of any errors, miscalculations, or omissions of which the University has knowledge, in any of the reports it has prepared or furnished to the County. 90. The County represents and warrants that it has legal authority and right to make and enter into the Agreement. C. Disclaimer of Warranties . 91. Except as specifically set forth in Su f this Article III, the University accepts the condition of the Landfill, any real F subs , . an easement or right-of-way granted by the County, and the Landfill Gas "AS IS, II'�� 4 IS, WITH ALL FAULTS," and the University acknowledges that the County has not made §t does not hereby make, and specifically disclaims, any representations, guarantees, promi = covenants, agreements or warranties of any kind • whatsoever whether past, present or future, oral or written, expressed or imph ; s •cemin e condition or quality of the Landfill, any real property subject to an easement or �� • -.I ,r y the County, or the Landfill Gas and their fitness for any particular use,p a..: business or activity contemplated,intended or ongoing. ARTICLE V LIASQ.rrY 92. The University shall be solely responsible for the installation, construction, operation, maintenance, and repair of the LFG Project. It shall also be responsible, with respect to the LFG Project, for(a) the installing, constructing, operating, maintaining, and repairing the LFG Project in compliance with all LFG Project Permits and applicable Laws; (b)responding to any notices of violation or compliance inquiries; (c) defending any enforcement actions; (d) resolving any claims; and (e) paying any associated penalties. The University shall also be 24 (0001 s638.DOC 21) 30 responsible for damages and claims caused by the University's own negligence or that of its agents or employees. 93. The County shall be solely responsible for the operation, maintenance, closure, and post-closure of the Landfill, exclusive of the LFG Project. The County shall also be responsible with respect to the Landfill, exclusive of the LFG Proj- for (a) operating and closing the Landfill in compliance with all Landfill Permits and • _ :'' cable Laws; (b) responding to any notices of violation or compliance inquiries; (c) def . : . �_orcement actions; (d) resolving any claims; and(e)paying any associated penalties. 94. Except to the extent caused by the negligent operation of the L . Collection System by the University (or its contractors and agents), the County shall be solely responsible for defending any claims relating to }<< "',. ite migration of LFG or odors, pollution, or nuisance conditions directly caused by such F� k ,_uding claims brought by a regulatory agency,neighboring residents,businesses,or E parties. 95. In no event shall either Party •= e to the other Party for consequential, incidental, p 1' , - exemplary or indirect damage , including, but not limited to, loss of profits or reve downtirn . , loss of use of any property, or cost of substitute equipment or fac. tie , ,ether arising, tort, contract or otherwise. This provision shall survive the expiration or t I =tion of Agreement. 96. No . . 'P " Agreement is intended by the Parties nor shall be construed as a waiver of any sovere a, or other immunity to which either Party may be entitled to the fullest extent allowed by Law. ARTICLE VI TERM AND TERMINATION 25 {00018638.DOC 21) 31 97. The initial term of this Agreement shall commence on the Effective Date and shall expire on December 31,2029, or on such other date on which this Agreement is terminated in accordance with its provisions. Upon the expiration of the initial Term, the University shall have the right, to the exclusion of any other entity, to renew this Agreement for up to two (2) consecutive periods of five (5) years each. (each five-year period ._.n and the initial 20-year period shall be termed an"Extension Period.")At the expiration e initial 20-year term, or an Extension Period other than the second Extension Perio.b im's A, r_'ent shall be deemed extended for an additional five-year period unless the University gives • ::.-n notice to the County of the University's intent not to extend this Agreement no later than .a - ` (90) days prior to the expiration of the preceding period. All provisions in this Agreement shall continue in effect during any extension period ex : ,ose terms may be otherwise modified by the Parties. Before the scheduled expiration o *rid Extension Period, the University shall have the right of a £��_ exclusive _otiations h the County for a period of one- hundred twenty(1 t for the ••ses of ne: m. ;1g a new or revised agreement relating to the LFG Project. The Uni•'r .� ' ..� ounty in writing of the University's decision to exercise this right no later 1: •ne (1) year prior to the expiration date of the second Extension Period. 98. Termination Procedures—In order to terminate this Agreement under this Article VI, and except as provided in Paragraph 101, a Party must first issue the other Party a.Notice of Default in accordance with the provisions set forth below. The Party in receipt of such Notice of Default shall then have the opportunity to cure the identified default within the specified cure period. If the Party in receipt of such Notice of Default fails to cure the specified default within the cure period, then the other Party may issue a Notice of Termination. Upon issuance, such a 26 (00018638.DOC21) 32 Notice of Termination shall be deemed a Notice of Dispute for purposes of Article XI of this Agreement and such Notice of Termination shall be submitted to dispute resolution in accordance with that Article. Subject to Article XI and except as otherwise provided in this Agreement, the termination rights provided in this Article VI are not in lieu oI but are in addition to,any other rights and remedies either Party may have under the circumstances. A. Termination Rights of the University 99. The University may issue the County a Notice of Default if the County breaches any of its material duties or obligations under this A me 1 and such breach is material to the University's rights and benefits under this Agr . ��E. If the k i ty does not cure such breach within forty-five (45) days after the date of the Um E <:> ;� s written Notice of Default, the University may issue the County a Notice of Termination. ded, however, that if by the nature of the breach, the University agrees that a cure can be achi ed, but not within forty-five (45) days, and that after ,_.*f such notice the County has begun to effect a cure without ' undue delay,then = 111, , F ve such time as is reasonably required to effect a cure with diligent effort,but in any e,'�� I (90)days from the date of the written Notice of Default from the University. 100. If, prior to 2029, the L generation rate falls below an average of 190 cfm over a consecutive one hundred eighty (180) day period due to no fault of the University, the University may issue the County a Notice of Default. If the LFG generation rate does not exceed an average of 190 cfm within the ninety (90) day period after the daze of the Notice of Default, then the University may issue the County a Notice of Termination. B. Miscellaneous Termination Events 101. This Agreement may be terminated by mutual agreement of the Parties. In addition, this Agreement shall terminate (without a cure period) if(a) the University's use of 27 (00018638.DOC 21} 33 LFG as a fuel source and for flaring should become unlawful due to no fault of the Parties;or(b) the LFG Project Permits or authorizations expire or are revoked due to no fault of the Parties and cannot be renewed or reinstated due to no fault of the Parties despite their best efforts, such that the University is unable to use the LFG as a fuel source and is unable to flare the LFG for the • remainder of the Term. C. Termination Rights of the County 102. The County may issue the University a Noti r ; De r=_° the University fails to make any of the payments due hereunder in accordance with this Agreem the University fails to cure the payment default within forty-five (45) days after the date of th en Notice of Default,then the County may issue the University a Notice of Termination. 103. The County may issue ►Y • versity a Notice of Default if the University breaches any of its material duties or obliga t a ns • Agreement(other than the making of payments in accordance with this Agreement, -rminati s of which is covered by Paragraph 102 hereunder) and such breach is material to-ry•e County's rights and benefits under this Agreement. If the University does not cure suc• breach within forty-five (45) days after the County' 'tten of Default, the County may issue the University a Notice of T- • ti _ Provided, ho -r,that if by the nature of the breach the County agrees that a cure can be achie •ut not wi forty-five (45) days, and that after receipt of such notice the University has be• I,' - t a cure without undue delay, then the University shall have such time as is reasonably uired to effect a cure with diligent effort, but in any event not to exceed ninety (90) days from the date that the University receives written Notice of Default from the County. 104. The County may issue the University a Notice of Default upon the occurrence of the following events: if the University abandons or vacates the entire LFG Project or removes 28 (00018638.DOC 21) 34 fixtures or equipment such that neither the flare nor the Gas Conversion System can operate, except for such removal that may be undertaken during maintenance, upkeep, or in the normal course of business. If the University falls to cure such default within forty-five (45) days after the date of the written Notice of Default, then the County may issue the University a Notice of Termination. 105. The County may issue the University a Notic Default if the University operates neither the Gas Conversion System nor the flare a pe E f one hundred eighty (180) consecutive days except (i) for a Force Majeure Event, and (ii) at s: •-ginning of the Term before the Gas Conversion System and flare have become operational. i ,,F, University fails to re-commence continuous operation of either the Gas Conversion System or the flare within forty-five (45) days after the daze of the Notice of Default, then the County may issue the University a Notice of Termination. D. Rights U :E •,ation or Expiration 106. S - • ,_ Provisions. Notwithstanding the expiration or earlier termination of this Agree s ever described, the following terms of this Agreement shall survive any sit. iration or termination: Article V, Subparts C and D of Article VI,Article VII,Article X, •_,�e XI,and Article XIII. 107. LFG Collection System. Following the expiration or termination of this Agreement, the University shall have the right to dismantle and remove from the Landfill or other County-owned property all or any portion of the equipment comprising the LFG Collection System. In the alternative, the University may elect to offer for sale to the County all or any portion of the equipment comprising the LFG Collection System for its Fair Market Value. If the University decides to dismantle and remove all or any portion of the equipment comprising the LFG Collection System, it shall perform such removal consistent with applicable Laws and 29 00018638-DOC 21) 35 any applicable provisions of the Landfill Permits and LFG Project Permits. The University shall permanently seal and cap all openings for pipes or equipment left in the Landfill in accordance with industry standards and any applicable provisions of the Landfill Permits and LFG Project Permits. The University shall use its best efforts to prevent damage to County property during such equipment removal process, and shall reimburse the County for the reasonable costs of repairing any damage to the Landfill or other County property. 108. Pipeline. Following the expiration or termination of this Agreement, the University shall remove any Landfill Gas from the P.- '}i le, p the Pipeline, and take any other actions relating to the closure of the Pipeline as co:-;r ;. :.uir •y applicable Laws and by any applicable provisions of the Landfill Permits and LFG Pr. 'ermits. 109. The University's Option to Offer the LFG 0 ,I „ on System for Sale to the County. If the University elects to offer for sale to the Co all or any portion of the equipment comprising th, llection System,it shall so notify the County in writing within thirty (30) days fo ` ;on or termination of this Agreement. If the County elects to purchase any such equl r, r: hall be on an "AS IS," "WHERE IS" AND "WITH ALL FAULTS" basis, b t - of any and all liens, for the Fair Market Value (defined herein). If the University does not . i ' y notify the County of an election to offer for sale to the County all or any portion of the LFG Collection System and the University fails to remove such equipment within one hundred eighty days (180) days after the expiration or termination of this Agreement, then any such equipment remaining on the County's property shall be deemed abandoned. If the County rejects a timely offer for sale by the University under this Paragraph of all or any portion of the LFG Collection System and the University fails to remove such equipment within one hundred eighty days (180) days after the date of such rejection, then any 30 {00018638.DOC 21) 36 such equipment remaining on the County's property shall be deemed abandoned; provided, however, that in the event the County subsequently makes productive use of such equipment, or leases or sells such equipment,then the County hall pay the University the Fair Market Value of such equipment 110. Fair Market Value. In the event the University elec ,,to offer for sale to the County all or any portion of the equipment comprising the LF', ollection System upon the expiration or termination of this Agreement, the Parties will r - in • d faith negotiations to determine the Fair Market Value of such equipment pursuant to this P• 'i 0. a. The term "Fair Market Value" shall mean the value I would be obtained for the equipment comprising the LFG Collection System that is the subject of the 0 z.K 's offer for sale in an arm's length transaction between an informed. .d ∎•■ z._ er under no compulsion to buy, and an informed and willing ' y er under ;`compulsion to sell,based upon the use of the University's LF t o ection System as an ongoing enterprise in its then current condition utilizing generally recognized professional a for the appraisal of industrial property used in the landfill gas bus' If the t ; a ty and the University cannot agree on a Fair Market Value for .pment comprising the LFG Collection System that is the subject of e University's offer for sale within thirty (30) Days following the initiation of good faith negotiations, then such Fair Market Value shall be mutually determined in an appraisal by an independent, qualified, 31 {00018638.DOC 21} 37 nationally recognized appraiser of industrial property similar to the University's LFG Collection System. ARTICLE VII PURCHASE AND SALE OF LFG, A. The University's Purchase Obligations 111. Subject to the terms and conditions of this A e County shall sell, and the University shall accept and purchase, all of the LFG is x liver •' e Delivery Point. B. Payments to the County 112. The University shall make payments ` C• based on the ; •g energy content of all Gas Sold. Such payments shall consist of • - Payment and the Conversion Payment, as calculated in accordance with Subparts C and D of . •cle VII. Such payments a n d any o t h e r p a y m e n t s that t h e U n i v e r s i t y m a y be r e q u i r e d t o 1 1 . .e under this Article shall be full compensation to , o •th for the heating energy content of the LFG and for any E n v i r o n m e n t a l Be.efi L F y A l l •m the destruction of the LFG, including those benefits associated with reducing gr., f _ - g. or producing renewable energy. 113. The University 'I 11 onthly cash payments to the County based on the heating energy content of the LFG 'vered to the University in the preceding calendar month, as determined in accordance with Subparts C and D of this Article VII. C. Payment for Gas Flared 114. Each month.during the Term of this Agreement, the University shall make payments to the County based on the heating energy content of the LFG that is delivered to the LFG flare (the "Flare Payment") (a) commencing upon the Flare Payment Date(as that term is defined in Article VIII hereunder) and continuing to the Conversion Payment Date (as that term 32 {00018638-DOC 21) 38 is defined in Article VIII hereunder); and (b) for any period after the Conversion Payment Date during which the University operates the flare. 115. The University shall continuously monitor the LFG at Meter Points A and B, and such LFG will be measured,recorded, and totalized on an hourly, daily and monthly basis. The heating energy content of the LFG delivered to the flare shall be based on its measured monthly methane content at Meter Point B. The methane content shall be measured in scf/month and shall be equal to the product of (a) the percent methane by volume, and (b) the LFG measured in scflmonth at Meter Point B (the "Meter Point i ' e . ,e Content"). For purposes of determining the Flare Payment,the total monthl 1 »` ;. ener- fp I ntent of the LFG measured at Meter Point B (the "Flare MMBTU HHV") shall be ob - . by dividing the product of(a) the Meter Point B Methane Content, and (b) 1,012, by 1,000,000. 1:F_< -ss in a formula, the Flare MMBTU HHV=Meter Point B Methane Content x 1012_ 1,000 0.0. 116.116. For a give I uring the Term of this Agreement,the Flare Payment shall be equal to the Flare ' '1 percentage may be adjusted in accordance with Subpart E of this Article VII, multi = F=. .•1 ed by multiplying (i) the Flare MMBTU HHV for such month by (u) ■r _ ser of the BTU Equivalent Price or the Adjusted BTU Equivalent Price. Expressed in a , is ula, the monthly Flare Payment = (0.053) x (Flare MMBTU HHV) x BTU Equivalent Price or Adjusted BTU Equivalent Price, whichever is less. A sample calculation of the Flare Payment is shown in Exhibit F. D. Payment for Gas Converted to Energy 117. Each month during the Term of this Agreement, the University shall make payments to the County based on the heating energy content of the LFG that is delivered to the Gas Conversion System (the "Conversion Payment") (a) commencing upon the Conversion 33 (00018638.DOC 21) • 39 Payment Date (as that term is defined in Article VIII hereunder); and (b) for any period during which the University operates the Gas Conversion System. 118. The University shall continuously monitor the LFG at Meter Points A and B, and such LFG will be measured, recorded, and totalized on an hourly, daily and monthly basis. The heating energy content of the LFG delivered to the Gas Conversion S -m shall be based on its measured monthly methane content at Meter Point A. The me a - •ntent shall be measured in scf/month and shall be equal to the product of(a) the perc me F volume, and (b) the LFG measured in scf/month at Meter Point A (the "Meter Point A Me Content"). For purposes of determining the Conversion Payment, the total monthly heating en, content of the LFG measured at Meter Point A (the "Conversion MMBTU HHV") shall be obtained by dividing the product of(a) the Meter P € ethane Content, and (b) 1,012, by 1,000,000. Expressed in a formula, the Conversion 11111 1 = = Meter Point A Methane Content x 1012_ 1,000,000. 119. For a given month during the T- •z:,of a's Agreement, the Conversion Payment shall be equal _ the product of (a) the Conver ion Percentage, as such percentage may be adj � accordance= I Subpart E of this Article VII, and (b) the product obtained by mul•pl << d .') the Conve `" MMBTU HHV for such month by (u) the lesser of the BTU Equivalent P the Adj BTU Equivalent Price. Expressed in a formula, the County's monthly Conversio• _ it= (.166) x (Conversion MMBTU HHV) x BTU Equivalent Price or Adjusted BTU Eq valent Price, whichever is less. A sample calculation of the Conversion Payment is shown in Exhibit F. 120. The Parties recognize that the regulations, policies and procedures governing reductions in GHG emissions and associated markets for Environmental Benefits, including 34 (00018638.DOC 21) 40 Carbon Credits and Emission Allowances, are evolving. Accordingly, the University will strive to adopt cost effective practices with respect to the LFG Project to maximize the Environmental Benefits resulting from the project and to measure and document them in a way that meets both the University's internal carbon reduction objectives and the County's objective to generate economic benefits.. E. Adjustments to County Payments 121. General. During the Term of this Agreement, the Parties acknowledge that changes in the renewable energy marketplace and in ,_ on of GHG emissions may occur that may affect the compensation paid to the unde .'s Agreement. Accordingly, pursuant to the terms and conditions hereunder, the P• a to make certain adjustments to the County's payments under the following circumstances forth in Paragraphs 122-125 hereunder: (a) beginning in 2015 and in each year thereafter d 'i; 'the Term the Agreement, to reflect certain differences r arise between the Average Allowance Market Prices for such years and the For-. €, G� Carbon ` .ces set forth on Exhibit A for such years (the "Emission Allowance Price Ad'ustm- EO ges in Global Warming Potential that may arise during the.Term of the Ay ent (the "GWP Adjustment"); and (c) to reflect additional compensation that may result a • . the University monetizing additional or different Environmental Benefits under this Agreement (the "Adjustment for Other Environmental Benefits"). The Parties shall jointly retain the Carbon Price Consultant, beginning on or about the date that the flare becomes operational, and the Parties shall share equally all fees and expenses payable to the Carbon Price Consultant. 122. Emission Allowance Price Adjustment. The Parties acknowledge that the Flare and Conversion Percentages have been established, in part, based on the Forecasted Carbon Prices set forth on Exhibit A. Any adjustment in the Flare and Conversion Percentages pursuant 35 (00018638-DOC 21) 41 to this Paragraph shall be based on a comparison of the Average Allowance Market Prices and the Forecasted Carbon Prices performed pursuant to a methodology (the "Emission Allowance Price Methodology") developed in accordance with the provisions of this Paragraph by the Carbon Price Consultant. No adjustments to the Flare Percentage or the Conversion Percentage shall be made(i)prior to 2015, or(ii) in any month during the Term of this Agreement in which a Cap-and-Trade System has not been enacted under federal legislation in the United States. a. Emission Allowance Price Methodology. Not later than one hundred eighty days (180) before the first month in which . s .jus i'ent is made under this Paragraph 122, the Parties shall direct bon ' - Consultant to develop a methodology meeting criteria mutually • , r .le to the Parties that shall permit the Parties to perform a comparison of the Ave o . i ce Market Prices and the Forecasted Carbon Prices by reference to (i) 4 ._ `'showing the prices at which Emission i r -s were purchased and sold in the regulated carbon market esta. in the '� .ted States under federal legislation enacting a Cap-and- Trade Syste « r ` 1 ormation that the Carbon Price Consultant determines is c F;F $ and reasonable in the carbon consulting industry. The Carbon Price Consul • ., shall document the Parties' agreement on the Emission Allowance Price Methodology. Any Dispute concerning the Emission Allowance Price Methodology shall be submitted to Dispute Resolution in accordance with Article XI of this Agreement. b. Flare and Conversion Payment Adjustments. Beginning in 2015 and continuing through the remaining Term of the Agreement, in any month in which a Cap-and- Trade System has been enacted under federal legislation in the United States, the 36 {00018638.noc 211 42 University shall apply the Emission Allowance Price Methodology to compare the Average Allowance Market Prices and the Forecasted Carbon Prices for the applicable month of the Agreement. c. If there is a positive or negative difference between the Average Allowance Market Price of an Emissions Allowance for the giv, : •• • • and the Forecasted Carbon Price for such month,the following ad ..• • the Flare Percentage for such month shall be made: The Flare Perceip. I shall . ,°�< • - • or decreased by 0.357% for each whole dollar (rounded down to the neare '` - e •,•liar) that the Average Allowance Market Price for such month is ei above (for increases) or below (for --;r reases) the Forecasted Carbon Price for such month; provided, however that the I.lop'.�-ntage for any month shall not be adjusted in a manner that results in t -• -ntage equaling a percentage greater than 8.51% or less than /o. For purposes of calculating adjustments under this Paragraph 122, the Flare centage shall reset each month to five and • percent (5.3%). For the avoidance of ambiguity and by way of example • the Flare Percentage is adjusted in January 2015 from five and =--tenths • nt(5.3%) to six percent(6.0%), the Flare Percentage shall reset to and .4. ---tenths percent (5.3%) for purposes of calculating any adj •••, to the Flare Percentage for the month of February 2015. d. If there is a positive or negative difference between the Average Allowance Market Price of an Emissions Allowance for the given month and the Forecasted Carbon Price for such month, the following adjustment to the Conversion 37 (00018638.DOC 21) 43 Percentage for such month shall be made: The Conversion Percentage shall be increased or decreased by 1.12% for each whole dollar (rounded down to the nearest whole dollar)that the Average Allowance Market Price for such month is either above (for increases) or below(for decreases) the Forecasted Carbon Price for such month;provided, however that the Conversion Percentage for any month shall not be adjusted in a manner that results in the adjusted Conversion Percentage equaling a percentage greater than 26.68% or less than 6.52%. For purposes of calculating adjustments r h Paragraph 122, the Conversion Percentage shall reset each mon ++ + an. -tenths percent (16.6%). For the avoidance of ambiguity and by wa example only, if the Conversion Percentage is adjusted in January 2015 fro++ ._ and six-tenths percent (16.6%) to fourteen percent (14.0%), the Conve on Percentage shall reset to sixteen ;-nths percent (16.6%) for purposes of calculating any adj ..E to the � +version Percentage for the month of February 2015. e. The Universi • z re y adjustments to the Flare and Conversion Percentages made this Paragraph 122, including the underlying calculations, in the monthly Billing Statement for such month issued to the County under Paragraph 127 hereunder. A sample calculation is provided in Exhibit G. 123. GWP Adjustment. The commercial terms set forth in this Agreement assume a Global Warming Potential(GWP) for methane of twenty-one(21)to calculate the Environmental Benefits that will result from the LFG Project's destruction of methane. Payments to the County 38 {00018638.DOC 21) 44 will be adjusted as set forth below to the extent that the GWP for methane changes during the Term of this Agreement as follows: a. For any month in which the GWP of methane is twenty-three (23) or greater, as accepted under any Laws regulating the GHG emissions of the University, or, in the absence of such Laws, as provided in the then-current General Reporting Protocol for the Voluntary Reporting Program published by The Climate Registry, then the University shall make a payment to the County in the Monthly Billing Statement for such month ,.N to enty-five percent (25%) of the product that results from multipl 7.11'a i) les .f the Average Market Price of Emissions Allowances or the Forecasted .n Price for such month by (ii) the difference between the number of metric tons 02- destroyed by the LFG Project calculated by reference to a GWP of twen• ee (23) or greater and the number o €' ms of CO2e destroyed by the LFG Project calculated by refe 1 of twenty-one (21). A sample calculation is provided in ibit G. . For an in ,a the GWP of methane is nineteen(19) or less, as accepted under any ► 4- re: AI +: the GHG emissions of the University, or, in the ce of 1 Laws, as provided in the then-current General Reporting Prot,;:. the Voluntary Reporting Program published by The Climate Rey' ' , then the University shall reduce the payment due the County in the Monthly Billing Statement for such month by an amount equal to twenty-five percent (25%) of the product that results from multiplying (i) the lesser of the Average Allowance Market Price or the Forecasted Carbon Price for such month 39 (00018638.DOC 21) 45 by(ii)the difference between the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of twenty-one(21)and the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of nineteen(19)or less. A sample calculation is provided in Exhibit G. 124. Adjustments for Other Environmental Benefits The snomic benefit of this Agreement is based in part upon the value of Carbon Credits. r arties recognize that during the Term of this Agreement, other Environmental Bene may enerated through the University's operation of the LFG Project, particularly as relate to the a :t for renewable energy. The Parties further recognize that the current state of the market for suc t onmental Benefits is unsettled with respect to whether, and to what extent, other Environmental Benefits may become available that are associ. s the operation of the LFG Project. The Parties recognize that during the Term of this Ay s i ent, ws, guidance, voluntary standards or comparable directives may be issued that cl e resp-r r= e valuation protocols for various Environmental Benefits associated with the LFG "=.t. 125. nsultation with the County, the University shall, on an ongoing basis, dete ss R o< the cafe: a ;on of Environmental Benefits associated with the LFG Project in ways o 1 • 1 as Carbon .s is would result in additional revenue to the County without compromism l er the ersity's ability to derive environmental benefit through the generation of C is or its achievement of other objectives for the LFG Project, including in particul: as it relates to the University's commitment under the American College and University Presidents Climate Commitment. If such alternative categorization of Environmental Benefits would result in a greater overall value to the University and a greater overall payment to the County than the County would receive if the Environmental Benefits were 40 (00018638.DOC 21) 46 solely categorized as Carbon Credits, and the University decides in a given month, in its sole discretion, to monetize a portion or all of the Environmental Benefits in a manner other than as Carbon Credits, the University shall pay to the County fifty percent (50%) of the proceeds resulting from such monetization net of any costs the University incurs both in monetizing the Environmental Benefits and replacing Carbon Credits that would otherwise have been generated by the operation of the LFG Project, if any, but for the University's decision to monetize another type of Environmental Benefit. Provided,however, that nothing in this Agreement shall obligate the County to incur all or any portion of any costs ex --4 any surplus proceeds resulting from the monetization of any Environmental B, # In the r ent the University generates a surplus in any month, it shall provide an accounting of lus revenue thus generated in the Monthly Billing Statement and the monthly payment to Co •ty shall be increased accordingly. A sample calculation is provided in Exhibit G. 126. Notwi • •g contained herein to the contrary, the County shall have the option, exerc . •y tim.- -.=►d from time to time upon thirty(30) days' written notice to the University, to pure • a third party and to exchange such Carbon Credits,without any additional • E ation, for an amount equal to up to fifteen percent(15%) of the Carbon Credits generated by e LFG Project in a given month. The Carbon Credits purchased from a third party for exchange must be eligible carbon offsets under a Cap-and-Trade System enacted under federal legislation in the United States, or in the absence of such a system, must be eligible carbon offsets under the California Climate Action Registry, the Voluntary Carbon Standard, or the rules of any,regional compliance market, such as the Regional Greenhouse Gas Initiative or the Western Climate Initiative. 41 {0001863&DOC 21) 47 F. Billing 127. The University shall cause the metering devices to be read on the last day of each month during the Term of this Agreement. The University shall thereafter prepare and deliver to the County on or before the fifteenth(15th)day of each subsequent month the Flare Payment and the Conversion Payment along with a statement to the County (a "Monthly Billing Statement") providing all relevant metering information and data that will clearly indicate (and will permit the County to verify) the (i) quantity of Landfill Gas on an SCF basis delivered to the Meter Points A and B during the preceding calendar mon i;, ) •' Meter Point A Methane Content and the Meter Point B Methane Content; (iii) - I "TU HHV and the Conversion MMBTU HHV; (iv) the Flare Payment and the Conyers ,L, F ayment; (v) any adjustments made under Subpart E of this Article VII; and (vi) reasonably de r r: :. culations performed by the University to derive all of the foregoing information. ARTICLE VIII RESPECTIVE EFFECTIVE DATES OF THE UNIVERSITY'S OBLIGATIONS UNDER THIS AGREEMENT 128. 1. ction Date - (Construction of LFG Collection System): The Univ shall have n. ',ration to commence construction of.the LFG Collection System (or to contin ' ction of `LFG Collection System if construction has already commenced) prior to the Um >'.t 's st of all LFG Project Permits relating to such system. Within ten (10) days of its recei: the last Approval necessary to construct the LFG Collection System, the Party receiving such Approval shall notify the other Party in accordance with Paragraph 153 hereunder of the date of the issuance of such Approval. 42 (00018638.DOC 21) 48 129. Flare Payment Date: The University shall commence Flare Payments to the County thirty (30) days after the acceptance of the completed LFG Collection System by the North Carolina State Construction Office. 130. LFG Project Date: The University shall commence construction of the Pipeline and the Gas Conversion System after the occurrence of the following - Q i ts: a. The receipt of all necessary Approvals to construc - Pipeline. b. The receipt of all necessary LFG Project P- _ ". re • the Gas Conversion System and the Pipeline. Within ten(10) days of its receipt of the last Approval necessary to construct the Conversion System and the Pipeline, the Party receiving such Approval shall notify the other Party in accordance with Paragraph 153 hereunde E -.• - of the issuance of such Approval. 131. -Conversion Payment Dat= The k _ shall commence Conversion Payments to the County thirty (30) days after _:- acceptan«- of the completed Gas Conversion System by the North Carolina State Construction •: ;; . ARTICLE IX LANDFILL GAS DELIVERY 1 Ownership • ��;�_.'i tie of the Landfill Gas shall pass to the University at the Delivery Point. 133. For p• '`= of measuring the quantity of Landfill Gas delivered to the Delivery Point, the University shall install, at its own cost and expense, Gas Flow Meters for Meter Point A and Meter Point B with a design accuracy of not less than two percent(2%) for all parameters measured and taking into account verification methodologies for Environmental Benefits. 43 (00018638-DOC 21) 49 134. Such Gas Flow Meters shall be owned, operated,maintained and calibrated by the University at its sole cost and expense. The Gas Flow Meters shall be designed and operated to provide time-synchronized data. for MMBtu and to provide all other information required to be measured pursuant to this Agreement. The University's Gas Flow Meters shall be sealed, with the seals broken only for the purpose of inspecting, testing, repairing, or recalibrating the metering devices. The University shall keep its Gas Flow Meters accurate and in good working order and the University shall periodically test such metering equipment as the University deems necessary; provided that the University shall test its tp -ring° equipment at least once every six (6) months, but in no case less than any testing 8 �� ,r',lent se ..,s rth in any applicable Laws or manufacturers' recommendations. In the event a Gas E ;< Meters is to be tested, cleaned, repaired or recalibrated, or otherwise read or inspected by th ver ity, the University shall provide the County with five (5) days prior written notice of . such procedure, so that the County may be present a such procedure. The University shall preserve all charts, test data and similar r. s . 4 accor.'a; e with the record retention provisions of Paragraph 148 of this Agreement. The Co 1: - it to install and maintain its own Gas Flow Meters. 135. The County and its , 1;`s is shall have the right from time to time, at reasonable times during the Term, to monitor, access, and inspect the condition and use of the LFG Project and to monitor, access, and inspect work in progress and the day-to-day operation of the LFG Project. Any such monitoring, examinations, inspections or visits shall be conducted in a manner so as to cause minimum interference with the University's LFG Project. 44 (00018638.DOC 21) 50 • ARTICLE X INSURANCE AND TAKES 136. At all times during the term of this Agreement,the Parties shall maintain worker's compensation insurance, covering liability under applicable worker's compensation law, at the statutory coverage levels. 137. Any subcontractor retained by the University in connection with the construction of the LFG Project shall comply with the minimum insurance requirements specified by the North Carolina State Construction Office under ii_' ctions to Bidders and General Conditions of the Contract" (Form OC-15). Thy . sity s ; ,require each such construction subcontractor to maintain such coverages for the Cl periods required therein. Any subcontractor retained by the Universi �L' G� • ection with aeration of the LFG Project shall comply with the minimum insurance r �, •• :, , � .: ified' l•e"North Carolina General Contract Terms and Conditions" or the "Um<< ty of No Carolina at Chapel Hill General Terms and Conditions for Commodities and S. 'ces," as applicable. The University shall require each such operating subcontractor to ••. •taro such coverages for the time periods req • u' rem. ae No subcon 11 shall relieve any Party of its obligations under this Agreement. Each Party s• m -main p ' ; • y liable and obligated to the other Party for the timely and proper performanc its obligations hereunder even if such obligations are delegated to third-party subcon• . • rs. 139. Each Party shall be responsible for any taxes or assessments levied on any real, personal or tangible property owned by it,inclusive of any LFG on that party's respective side of the Delivery Point after the Effective Date of this Agreement. All transfer, documentary, sales, use, stamp, registration, recording, conveyance and other similar taxes, fees or charges 45 (000186 8D0C21) 51 (inch,rling any penalties and interest) arising from the transactions contemplated by this Agreement shall be paid by the University when due or collected from the University by the County in accordance with applicable Law. Half(50%) of the amount of taxes, fees or other charges paid by the University pursuant to the immediately preceding sentence shall be subsequently reimbursed to the University by the County by set-off• •. the Flare Payments. In accordance with applicable Law, the County will accept a ce r r • - or other documentation as required with respect to any claim by the University that • exem F .m the payment of any such taxes. To the extent applicable, the University and the County will, f-it own expense, file all necessary tax returns and other documentation with respect to such taxes, `the Parties will cooperate to the extent necessary with respect to such filings. : ,I Disc Britt.. 140. General. Any dispute, controv-? or claim that arises out of or relates to this Agreement (including any dispute over the e • - ce, validity, interpretation, performance, breach or r `s t ereof) (a"Dispute") shall be resolved in accordance with the procedures•specs r m this Article or to any party initiating litigation regarding such Dispute, except as set fo . •h 14. the Agreement. Each Party shall bear its own costs incurred in connection with 'spu - solution process under this Article. The entire dispute resolution process set forth in - ;de XI is a compromise negotiation. Subject to the North Carolina Public Records Act and other applicable Laws, all offers, promises, conduct and statements, whether oral or written, made in the course of dispute resolution by any of the Parties, their agents, employees, experts and attorneys are confidential. Subject to the North Carolina Public Records Act and other applicable Laws, such offers, promises, conduct and statements are 46 {00018638.DOC 21} 52 privileged under any applicable arbitration privilege,are subject to Rule 408 of the Federal Rules of Evidence and any state counterpart rules or doctrine and are inadmissible and not discoverable for any purpose, including impeachment, in litigation between the Parties to the litigation; provided, however, that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its presentation or use during the dispute resolution process hereunder. 141. Notice. If a Dispute arises under this Agreement the claimant Party (the "Claimant") shall provide a written notice of the Dis = (` •.ce of Dispute")to the other Party ("Respondent"), which shall contain a reasonabl state nt of the nature of the Dispute and the relief requested. A Notice of Termination is �=a r •rdance with Article VI shall be deemed a Notice of Dispute for purposes of this Article XI. 142. Executive Review. Upon receipt of a Notice ' Dispute, the University's Director of Energy Se �, -� a Assistant County Manager shall meet in person and, unless the Parties mu in wri to a different time period, shall have thirty (30) calendar days to discuss,consider an ; _ o resolve the Dispute. If, upon the expiration of such time period, the Unive Director of Energy Services and the Assistant County Manager have been unable to resolve e Dispute, then they shall immediately submit the dispute for Senior Executive Review in accordance with Paragraph 143 of this Agreement. 143. Senior Executive Review. For disputes that are submitted for Senior Executive Review pursuant to Paragraph 142 of this. Agreement, the University's Associate Vice Chancellor for Campus Services (or higher-level authority) and the County Manager (or higher- level authority) shall meet in person and, unless the Parties mutually agree in writing to a different time period, shall have thirty (30) calendar days to discuss, consider and attempt in 47 {00018638_DOC 21} 53 good faith to resolve the Dispute. If, upon the expiration of such time period, the University's Associate Vice Chancellor for Campus Services (or higher-level authority) and the County Manager (or higher-level authority) have been unable to resolve the Dispute, then the Dispute shall be submitted to non-binding mediation in accordance with Paragraph 144 of this Agreement. 144. Non-Binding Mediation. If the Executive Review and Senior Executive Review dispute resolution processes are unsuccessful,the Parties shall be obligated to submit the Dispute to non-binding mediation through the use of a neutral, independent, disinterested mediator selected by the Parties from a professional mediation firm. If such Dispute is not resolved through the non-binding mediation process within one hundred twenty (120) days after the date of the Notice of Dispute or Notice of Te ! E .e n (or such other time period as mutually agreed to by the Parties in writing), either P. . • 1. e'�.: 'ligation in any court of competent jurisdiction. The Parties shall share equally ,r t fees and " penes payable to any mediator retained hereunder. 145. tinued Performance; No To lig of Cure Periods. Except when clearly preven ,°'`1 •m doin.. the matter in dispute, the Parties shall continue performing their obli..ati' _ !der this Agr E nt while any Dispute is being resolved as provided in this Article unless and :';r ch obli: 4 ons are terminated by the termination or expiration of this Agreement. The ■.,, . z - for a Party to cure any breach of the terms of this Agreement shall not be tolled by the p- a dency of any dispute resolution procedures. 146. Equitable Relief. Notwithstanding anything contained in this Agreement to the contrary, the Parties shall be entitled to seek injunctive or other equitable relief in any court of 48 (00018638.DOC21) • 54 competent jurisdiction whenever the facts or circumstances would permit a Party to seek such equitable relief without obligation to post bond. ARTICLE XII FORCE MAJEURE 147. Suspension of Obligations. It because of a Force Ma.- i - event, either Party is unable, in whole or in part, to carry out its obligations under •". / ment, then such Party shall give written notice and reasonably full details of the F. _;° Maj vent to the other Party as soon as possible after the event's occurrence. Upon such notice, •ligation of the noticing Party (other than the obligation to make any payments under this Ay t) shall be suspended during the period in which the Party is unable to perform because of the Force Majeure event,but for no longer period, • that: a. the burden of proof • whe•• _ •rce Majeure event has occurred shall be upon the Party cl. • once Maj• s'-; b. the nonperforming Party s l make all reasonable efforts to continue to perform its obligations de • te the occurrence of a Force Majeure event; c.- the • ?-rforming Party shall provide the other Party with prompt written notice i e cessation of the Force Majeure event. ARTICLE XIII MISCELLANEOUS 148. Records. During the term of this Agreement, and for a period of three (3) years thereafter (unless a longer period of time is required under applicable Laws), each Party shall keep and maintain complete and accurate records and all other data required by each of them for the purposes of the proper administration of this Agreement. Each Party shall have the right, at 49 {00018638.DOC zit 55 its sole expense during normal business hours, to examine the other Party's records to the extent necessary to verify the accuracy of any statement, change, notice or computation made hereunder. 149. Amendment to Agreement. This Agreement may be amended or modified only by a written instrument signed by each of the Parties. 150. Disclaimer of Joint Venture, Partnership and Agency. This Agreement shall not be interpreted or construed to create an association,joint venture, or partnership between the County and the University,or to impose any.partners oblig. ;on or liability upon such Parties. Neither the County nor the University shall hav :■. t, po ;; or authority to enter into any agreement or undertaking for, or act on behalf of, or to r be an agent of representative of, or to otherwise bind,the other Party. 151. Severability. If any term or provision of this =• eement or the application thereof to any person or i ce be invalid or unenforceable to any extent,the remainder of this Agreement or cation such terms and provisions to persons or circumstances other than those to which it is he •■■ shall not be affected thereby, except each Party shall be obligated to re << the remaining terms appropriately, and each term and provision of this Agreement shall be .1'd and be enforceable to the fullest extent permitted by law. 152. Assignment. Neither Party may assign or transfer its respective rights and obligations under this Agreement, except with the consent of the other Party, which shall be in that Party's sole discretion. Any assignment purportedly made by a Party without the requisite consent of the other Party shall be null and void. 50 (0001863 s.noc 21) 56 153. Notices. All notices and other communications under this Agreement(other than regularly scheduled payments)shall be addressed as follows: Orange County: Orange County Solid Waste Director P. O. Box 17177 Chapel Hill,NC 27516 (Current Director. Gayle Wilson) FAX 919-932-2900 Orange County Manager P. O. Box 8181 Hillsboroughh,NC 27278 (Current Manager: Laura Blackmon) FAX With a copy to: Orange County Attorney P. O. Box 8181 Hillsborough,NC 27278 Nip. FAX: Orange County Emergency Cont' . Orange County Solid Waste Operate - Manager ently: Paul Spire) (919)624-0221 The Univ of North Carolina at Chapel Hill: irector of Services :ranch SI t, Campus Box 1855 Hill, ► _' 27599-1855 (C F on Ray DuBose) PHO FAX: With a copy to: The University of North Carolina at Chapel Hill General Counsel Campus Box 9105 Chapel Hill,NC 27599-9105 51 {00018638.DOC 211 57 (Current General Counsel: Leslie Strohm) FAX: 919-843-1617 University Emergency Contact: Such notices and communications shall be deemed to have been given and received when personally delivered or upon receipt as evidenced by a United States Postal Service Receipt for Certified Mail or evidence of delivery by a private express mail se UPS,FedEx, DHL) or upon receipt by facsimile provided that the sender promp 1 - delivers a copy of the notice together with the receipt issued by the sender's facsimil- achine, f e recipient. Either Party may change the address to which communications or payments are to be - b notice to the other Party as set forth above. 154. Integration. This Agr- LZ u t is intended by the Parties as the final expression of their agreement with respect to such sub both written and oral, and supersedes all previous agreements. 155. Waiver. No delay or omission a Party to exercise any right occurring upon any non-compliance or default by the other P with respect to any of the terms of the Agreemen any such right or power or be construed to be a waiver thereof A waiv either the Co .r, r the University of any failure of the other Party to perform any of its obligati der this ment shall not be construed as a waiver of any future or continuing failur- ' ure hether similar or dissimilar thereto. 156. Choice' Law. This Agreement and any provisions contained herein shall be interpreted under the laws of North Carolina without regard to principles of conflicts of law. 157. Communications. Neither Party shall make any public announcement concerning this Agreement-nor the transaction contemplated herein without first obtaining the approval of the other Party which approval shall not be unreasonably withheld or delayed. 52 (00018638-DOC 21) 58 158. Equal Opportanity/Non-discrimination. The Parties shall comply with all federal and state requirements concerning fair employment and employment practices discriminating by reason of race, color, religion, gender, national origin, disability, age, creed, veteran's status,or sexual orientation. 159. No Third Party Beneficiaries. The Agreement is not intended to and does not confer any right or benefit on any third party. • .53 (00018638.DOC 211 59 IN WITNESS WHEREOF, the Parties hereto have caused the execution of this Agreement by the representatives whose names appear below as of the date first written above. ORANGE COUNTY,NORTH CAROLINA BY: ITS DATE: ter„ UNIVERSITY OF NOR OLINA AT CHAPEL HILL BY: ti ITS: 54 {00018638.DOC 21} 60 Exhibit A 2010 9.00 6.50 $ $ 2011 9.18 7.25 $ $ 2012 936 7.75 $ $ 2013 9.55 8.00 $ $ 2014 9.74 11.55 $ $ 2015 9.94 18.00 $ $ 2016 10.14 19.02 $ $ • 2017 1034 20.04 $ $ 2018 10.54 21.06. $ $ 2019 10.76 22.08 $ $ 2020 10.97 23.10 $ $ 2021 11.19 24.40 $ $ 2022 11.41 25.70 $ $ 2023 11.64 27.00 $ $ 2024 11.88 28.30 $ $ 2025 12.11 29.60 $ $ 2026 12.36 31.24 $ $ 2027 12.60 32.88 $ $ 2028 12.85 34.52 $ $ 2029 13.11 36.16 2030 $ $ (00018638.DOC 21) 61 1337 37.80 $ $ 2031 13.64 38.56 $ $ 2032 13.91 40.11 $ $ 2033 14.19 42.57 $ $ 2034 14.48 46.08 $ $ 2035 14.77 48.40 $ $ 2036 15.06 4937 $ $ 2037 1536 5136 $ $ 2038 15.67 54.51 $ $ 2039 15.98 59.00 Note 1:2010-2014 estimated by Energy Strategies,LLC with input from Oliver Inc.. 2015-2039 based on S.2191,Nicholas Institute ADAGE Forecast. (00018638.DOC 21) Exhibit B I A • 414 h. E. i, S. -_ • E 14, , 111104111111 i IMO° 11114141 1..10.11111 111111141.11 ' , / ti, SOUTH LANDFILL NORTH LANDFILL MOISTURE SEPARATOR CONDENSATE METER POINT 8 -- FLARE COLLECTION TANK II(FLOW AND METHANE CONTENT) ._ 0 7.-GAS FILTER (DUPLEX) BACK-UP • LFG EXTRACTION FLARE PUMP METER POINT A - -- CONVERSION SYSTEM DELIVERY I__ FLOW AND METHANE POINT CONTENT �7 COND. -- _ REFRIGERANT GAS COMPRESSOR CHILLER -L- II TO LANOFILL RITE COLLECTION TION SYSTEM SYSTEM LOW PRESSURE GAS PIPELINE TO GAS CONVERSION SYSTEM '2.2 MILES ELECTRICITY TO F SILENCER �` UNIVERSITY 4111:1"'""7 ENGINE; EXHAUST ._=' i.lIli luII I 1 • T . i 1.0MW ENGINE/GENERATOR SET GAS CONVERSION SYSTEM 0) N (00018638.DOC 21) Exhibit C i i / 1 i j,,j _ ...._11___I.1_4_I I I I 11 \It r, :21--'''1.J.'4.s!" 11,,,...--...,‘...‘,...:-.1.11/7''-',.l?:: 1 se\'P„,\Ir.‘,,,.....1,\,.._,Ti.,.."'',,t__1....__, , '1..... -7 , , ' r --il-'1 / ' 2\\ '--\ ''' ' j 1 ::''.-1 d / / I i - _____ ,,,, ^',/ ,:',:ji,.--,ir - „ ......,,,.. „..„, ,,,J. , \--' ' -, I t t It- 1 1 I r 1 / , 4, 1 ,, , , , ,_ , .. r-r-, , r,,,.... __,:___„„,,_ ,,,,:, , , ,,, „ 7---„, _____,---- \ - ,--1-1 L IA ,,, / --rr .,, ,i „ , --- \ , , -/ft,,$-.. ' 7,t V' 1 if'-'17 i --'-----1 V ) H 7: \ ' 7 le i 7 I/ / \ j,,,1,:. ," 1--iir-fl- ,,l_t_r_i r 1 i.,,‘ 1 1 itim_t_fl.,_1, I, , : , 41 I ig log ii 1 VPI ili.j,,7,P-1-4')_11.--1 i',.'w! 1/7'2 \ ri 4-- -, --1 i i / Id'I s, \ / 1 1 1 f/ ,,,,, ,-, , f,,,,,, /,,iii ., ,, _ fin-s 1 11 If Pi( '4,e,4,, i A /.7.7 fi , 7'..--r'-;\1,---,s c,,,t -'4 --] f—Itl /"7/!,A,/,,i/i-f2'.f,?71 r, / 1 -' -1 l'"'-'4‘314i LI f/1J?'S 1 H;) /,4f c,./ e f st e.__L:4 ..., / L.IJ _...t h.. -17 / 1 I I I i --1--1 •/ 0 ,,,,',\v':,;,-- ,-,1 ,', ,•.\ ,,,,, '''.:::,-;,-•--ii..• i 1 fin -1 __,, i.„,\ 0 , \ , ,,, ,__. ....,isfl-i:i it ':,I i 1 :_./.-:I II ti_, - fir ii- il il -' --;""Z*7---::T.,.,',.,1„., ::---1;1 Al 71:ii:71:11";:ii_17;L jr:I ri IT 7.7 1:17,,IT 1:I-.1 r 7-I'7:-:r(ii'II -, „Tr ...L)_ -J r I i 1 1 ' 1 irt It '—'°- ,, , r-,--..... i ,,,, _, ..--1''At r" ,,,',';', V ',-/)\ - -1 ...,./„..,,4,: i .. It:5:V' 1 i 1 1 i 1----3''/.- lc-, l'-,,If' " r- r ,f",„-"-4" s 1 ii/ .7 4 i 1 4-.?/ '7,1,''''' / r1 , 1,, , ,..t 1 . , ,,,,,, i h. 11 A (1_4,if / / 7 C (00018638,Doc 2.0 Exhibit C cont. Description of Easements Property ID Number Approximate Approximate Length Type of Use Approximate Width Approximate Width Location of Easement of Easement on of Permanent of Construction on Parcel Parcel Easement Easement 9870662911 (County southeast corner of Landfill Gas Pipe,6" . Landfill site,south property 1,500 LF to 12" diameter 10 LF 20 LF section) 9870751483 parallel to north Landfill Gas Pipe,6" . property line 350 LF to 12" diameter 10 LF 20 LF 9870855283 parallel to north Landfill Gas Pipe, 6" ' property line and east 3,000 LF to 12" diameter 10 LF 20 LF property line _ 9880008527 parallel to north Landfill Gas Pipe, 6" . (Homestead Road) property line,adjacent to 12" diameter,and . to roadway 1,200 LF Electricalltelecomm 20 LF 3OLF ductbank and vaults • • rn {00018638.DOC 21) II 65 Exhibit D ADDTOVaIB Landfill Site Solid waste permit Air permit for flare Duke Energy -New Service Pipeline Utilities Commission(NCUC) Town of Chapel Hill Dept. of Transportation Orange County—Easements Duke Energy—Easements Dept. of Insurance State Construction Office Dept. of Natural Resources Norfolk Southern Railroad Gas Conversion Building Town of Chapel Hill—ZCP Dept. of Insurance State Construction Office Air Permit for engine Dept. of Natural Resources OWASA {00018638_DOC 21) 66 Exhibit E Calculations demonstrating that Landfill is not subject to NSPS (see attached) (00018638.DOC 211 Exhibit F Exhibit F:Sample'Calculation of Monthly Hare and Conversion Payments to Orange County I #M o01 Hari w r��ft ! qur„ ir JC 3 fa.ilsa 4 . xt' Li {, n::;0nµrl MEMO a:. Mom or . I L r x �yrfx8'"� N * ` If phi#f 1i M1 fix 1 1 ,r. _ MEM • • rn {00018638.DOC 21} 8 I i Ji •ti IF r 1111111 t j`1 II it I 1111 I g 3 3 3 1 3 I 3 3 e a i 3 1 ii 1 t r 111i Ili III if I : : : : : : : : : : Z r r it is Si a a fill r.. Ca ilif § M M M M M M M ■ a a a a a a I T I 5 L 1 15 i it I l i .r 89 November-203-2008-January 25.2009 ` b(Chmer,k 1613 (UNC edits added on top of County's 1/16/09 edits. County's edits appear in blue and red font. UNC's edits appear in green font.') LANDFILL GAS AGREEMENT between ORANGE COUNTY, NORTH CAROLINA and THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL Dated as of Deeem February , 2008200 {00022477.DOC} 70 TABLE OF CONTENTS, ARTICLE I Definitions 5 ARTICLE II Respective Rights and Obligations of the Parties 12 A. Rights Granted to.University 12 B. University's Operating Responsibility 14 C. The County's Operating Responsibilities 18 D. Operating Protocols 2812 ARTICLE III Permitting and Construction of Facilities 2112 ARTICLE IV Representations of the Parties 2212 A. The University's Repre = ions 2212 B. The County's Representati s )0p 2314 C. Disclaimer of Warranties 2412 ARTICLE V Liability 2412 ARTICLE VI Term and Termination 2512 A. Termination Rights of the University 2712 B. Miscellaneous Termination Events 2-712 C. Termination Rights of the County 2812 D. Rights Upon Termination or Expiration 2912 ARTICLE VII Purchase and Sale of LFG 3412 A. The University's Purchase Obligations 34-12 B. Payments to the County 3212 C. Payment for Gas Flared 3212 D. Payment for Gas Converted to Energy 3-312 E. Adjustments to County Payments 3412 {00022477.DOC) i 71 F. Billing 41.12 ARTICLE VIII Respective Effective Dates of the University's Obligations Under this Agreement 42a ARTICLE IX Landfill Gas Delivery 4212 ARTICLE X Insurance and Taxes 4412 ARTICLE XI Dispute Resolution 4 512 ARTICLE XII Force Majeure 48112 ARTICLE XIII Miscellaneous 4812 {00022477.DOC} 72 LANDFILL GAS AGREEMENT This Agreement is entered into as of Deeember3aaeafyFebruary , 20082009 (the "ClesiftgEffective Date"), between Orange County, North Carolina (the "County") and the University of North Carolina at Chapel Hill(the"University"). The County and the University are sometimes hereinafter referred to individually as "Party" and collectively as"Parties."[County's change acceptable to UNCJ RECrrArs WHEREAS,the University is the flagship public research university of the State of North Carolina located in Chapel Hill,North Carolina; WHEREAS,the University desires, in furtherance of its University Sustainability Policy and the sustainability objectives associated with the proposed Carolina North Campus, to pursue and implement projects in cooperation with community partners that preserve natural resources, conserve energy,reduce hazardous emissions,and lessen overall environmental impacts; WHEREAS, the County, as a good steward of the environment and a leader in the growth, development, and sustainability of the community,desires to partner with the University in its efforts to meet the goals of the University Sustainability Policy and its other sustainability efforts; WHEREAS,the University has determined that to help achieve these objectives it will work cooperatively with the County to extract landfill gas from the Orange County Landfill, and to convert that gas into energy to supply power and heat for the University's Carolina North Campus while at the same time removing significant quantities of greenhouse gases from the atmosphere; WHEREAS,the County desires,in furtherance of the health and well-being of its citizens and the fiscal soundness of the County,to enter into this Agreement with the University to make beneficial use of Landfill resources and to generate revenue for the County from the sale of LFG; (00022477.DOC) 73 WHEREAS,the County owns and operates the Orange County Landfill (NC Solid Waste Parcel 68-01)located on the north and south side of Eubanks Road,approximately 1.3 miles to the west of the Highway 86 exit from Interstate 40, and approximately five(5)miles north of Chapel Hill, at 1514 Eubanks Road, Chapel Hill, North Carolina, which consists of two land disposal areas,a"North"closed unit comprising about fifty(50)acres(the"North Landfill"),and a"South" operating unit comprising approximately twenty-five (25) acres and operated in four phases (the "South Landfill"). The South Landfill is currently operating in Phase 4 and is expected to reach capacity in the Spring of 2011; WHEREAS,waste acceptance records indicate that the North Landfill received about 1.2 million tons of waste during its operating period from 1972 to June 1995. The capacity of the South Landfill is approximately 920,000 tons; WHEREAS, Landfill Gas (as defined below), consisting principally of methane, carbon dioxide, nitrogen and traces of other constituent gases, is generated as a by-product of the • decomposition of waste in the Landfill; WHEREAS, subject to the terms and conditions set forth in this Agreement, the County desires to grant to the University the exclusive right to design,develop,install and operate the LFG Project(as defined below) to process the landfill gas (and in particular, methane) and to convert LFG into one or more forms of energy, thereby reducing associated greenhouse gas emissions from the Landfill,while at the same time generating power from a renewable energy source; WHEREAS, subject to the terms and conditions set forth in this Agreement, the University desires to have the exclusive right to design, develop, install, and operate the LFG Project, and to collect,extract, and remove LFG from the Landfill, and either to destroy such gas • {00022477.DOC} 74 or to convert all or any portion of it into energy to supply part of the University's energy needs at its Carolina North Campus,or for any other lawful purpose; and WHEREAS,The County and the University desire to cooperate in the design,installation, and operation of the LFG Project because of the project's environmental, public, and economic benefits. NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties,and covenants contained in this Agreement,and other good and valuable consideration, the receipt of which is hereby acknowledged,the Parties hereby agree as follows: ARTICLE I DEFINITIONS 1. Adjusted BTU Equivalent Price means (a) in 2010, $9.00 per MMBtu, and (b) each calendar year during the Term of the Agreement thereafter, $9.00 per MMBtu as adjusted upward on an annual, compounding basis by two percent (2%). The Adjusted BTU Equivalent Prices are set forth on Exhibit A to this Agreement. 2. Approvals shall mean the LFG Project Permits, easements, rights-of-way, consents, authorizations and other approvals that may be necessary for the University to install, construct,operate,maintain and repair the LFG Project. 3. Average Allowance Market Price means the average monthly market price in U.S. dollars, as determined by the methodology established by the Carbon Price Consultant in accordance with Paragraph 123122 of this Agreement, attributed to one Emission Allowance created under federal legislation in the United States enacting a Cap-and-Trade System to regulate GHG emissions. 4. BTU shall mean British Thermal Unit. {00022477.DOC} 75 5. BTU Equivalent Price shall be determined monthly in advance as the Transco, zone 3 Pricing Point "midpoint" settlement price for natural gas published in the report named "Monthly Gas Price Assessments— Inside FERC" published by McGraw Hill Company. The underlying data set is"Monthly Gas Price Assessments—Inside FERC". The value for September 2008 was$8.45 per million Btu. 6. Cap-and-Trade System means a system that (i) establishes a total cap on GHG emissions from an identified group of GHG emitters; (ii) establishes a market for Emission Allowances;and(iii)allows trading of Emission Allowances among GHG emitters. 7. Carbon Credit means any contractual, equitable or statutory legal right, interest, credit, offset, entitlement, benefit, allowance or certificate evidencing a reduction from the environment of one metric ton of carbon dioxide or CO2e that is verified by(i)a federal, state,or local Governmental Authority pursuant to laws or regulations establishing a regulatory market for reductions of GHG emissions, or (ii) an independent third-party utilizing nationally-recognized standards for establishing emissions reduction credits associated with non-regulated, voluntary projects or activities. 8. Carbon Price Consultant means an independent, qualified nationally-recognized consulting firm with significant experience in the regulated carbon markets established in the United States under federal legislation enacting a Cap-and-Trade System and the price of Emission Allowances in such markets. 9. C42e means carbon dioxide equivalent,or the base reference for the determination of Global Warming Potential of Greenhouse Gases of a similar amount of carbon dioxide. 10. Conversion MMBTU HHV has the meaning set forth in Paragraph 44-9118 of this Agreement. (00022477_DOC) 76 " 11. Conversion Payment has the meaning set forth in Paragraph 1-8117 of this Agreement. 12. Conversion Percentage means sixteen and six-tenths percent(16.6%). 13. Delivery Point shall mean the location at which the ownership, possession and control of the Landfill Gas is transferred from the County to the University.For purposes of this of this Agreement,the Delivery Point shall be the blower discharge point on the Landfill Property as shown on Exhibit B. 14. ElosingEffective Date has the meaning given in the preamble. on different dates, the date the last casement is granted shall be the Effective Date. [Changes acceptable to UNCJ l Emission Allowance shall mean an authorization issued by a Governmental Authority to emit one metric ton of CO2e. 16 Engine Start-up Date shall be the date when the engine located at the University's Carolina North Campus reaches steady-state conditions and commences the conversion of Landfill Gas into usable energy. 17. 18 -Environmental Benefits shall mean all credits and allowances generated by and associated with the generation, destruction, treatment, sale or use of the Landfill Gas, including Carbon Credits, Emission Allowances, offsets, "green tams," and renewable energy credits, or any other asset or term that may hereinafter be used to describe the environmental benefit of either destroying any pollutant in the Landfill Gas (including methane) or using the Landfill Gas as a source of energy. (00022477.DOC) 77 1& Environmental Laws shall mean all Federal, state and local Laws concerning pollution or protection of the environment or human health, as the foregoing are enacted or in effect, on or prior to the date hereof(including ambient air, soil, surface water, ground water, wetlands, land or subsurface strata), including without limitation: (i) the Comprehensive Environmental Response Compensation and Liability Act,42 U.S.C. §§ 9601 et seq.;(ii)the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901 et seq.; (iii) the Oil Pollution Act(33 U.S.C. §§ 2701 et seq.); (iv)the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.); (v) the Emergency Planning and Community Right-to-Know Act(42 U.S.C. §§ 11001 et seq.); (vi)the Endangered Species Act(16 U.S.C. §§ - 1531 et seq.);(vii)the Clean Air Act(42 U.S.C. §§ 7401 et seq.);(vii)the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.); (viii) the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.);(ix)the Hazardous Materials Transportation Act(49 U.S.C. §§ 5101 et seq.);and(x) all North Carolina Laws comparable to the foregoing. 12. 2OExtension Period has the meaning set forth in Paragraph 9&91 20, 21:-Fair Market Value has the meaning set forth in Paragraph-1-1-1,110. 2L 32,Flare Percentage means five and three-tenths percent(5.3%). 22. 23.Flare MMBTU HHV has the meaning set forth in Paragraph i-1 1 5 23. 24.Flare Payment has the meaning set forth in Paragraph 1151U1 24. 25,Flare Start-up Date shall be the date when the flare reaches steady-state conditions and commences the continuous burning of Landfill Gas. 25 26,Forecasted Carbon Price means,for a year during the Term of this Agreement, the corresponding Forecasted Carbon Price for such calendar year set forth in Exhibit A. {00022477.DOC} 78 26 2--Force Majeure shall mean any cause or causes for delay of performance by a Party,which are not reasonably within the control of the Party claiming Force Majeure and which, by the exercise of reasonable diligence, such Party is unable to prevent or overcome including without limitation,acts of God,terrorism,acts of the public enemy,wars,blockades,insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, hurricanes, floods, high-water washouts, arrests and restraints of governments and people, strikes, lockouts, protests, or other industrial disturbances, civil disturbances, explosions, catastrophic events such as breakage or accident to machinery or lines of pipe caused by an event of Force Majeure,enactment of statutes, laws or regulations, and other acts of Governmental Authorities (excluding acts by a Party) frustrating the purposes of this Agreement Force Majeure shall in no event include(i)any change in the economy or in the markets, pricing or demand for natural gas or LFG that affects the University's ability to use LFG, or the price at which LFG or natural gas can be sold, or (ii) increases in the cost of constructing or operating the LFG Project 27, 2&-Gas Conversion System shall mean any equipment used by the University to convert the Landfill Gas into thermal or electric energy, including an engine,generator or boiler. 28. 29-Gas Flow Meter shall mean the device(s)used to measure the rate of Landfill Gas flow,methane content,and other parameters. 29, 30:-Gas Sold means any LFG delivered to the Delivery Point. 30. 3 -Global Warming Potential or GWP means the estimate of the atmospheric warming resulting from the release of a unit mass of a particular Greenhouse Gas,in relation to the warming resulting from the release of the same amount of carbon dioxide. 31. 32—Governmental Authority means any federal, state, local or foreign court, arbitrator, alternative dispute resolution body, government or political subdivision or department {00022477.noc} 79 thereof, or any governmental, administrative or regulatory body, commission, board, bureau, agency or instrumentality. 32. 33=Greenhouse Gases or GHGs means carbon dioxide, methane, nitrous oxide, hydrofluorocarbons,perfluorocarbons and sulphur hexafluoride 33 34.-Higher Heating Value or HHV shall mean the amount of heat released when a known volume of methane is burned and shall equal 1012 BTUs per cubic foot of methane at one atmosphere pressure at 60 degrees Fahrenheit(60°F). 34. 3S—Kyoto Protocol means the protocol to the UNFCCC adopted at the Third Conference of the Parties to the United Nations Framework Convention on Climate Change in Kyoto,Japan on December 11, 1997,as may be amended. 34 36=-Landfill means,collectively,the North Landfill and the South Landfill. 3 -Landfill Gas or LFG shall mean the gas (and its constituent elements) generated from the decomposition of materials deposited in the Landfill. 37. 38—Landfill Permits means all licenses, permits, certifications, authorizations, approvals, and entitlements issued by any Governmental Authority and relating to the operation, ownership,development and/or maintenance of the Landfill,as all of the foregoing may,from time to time hereafter, be amended or supplemented, including, without limitation, Municipal Solid Waste Landfill Permit Number 68-01 issued to the County on or about May 5, 1982, as amended and as it may, from time to time hereafter,be further amended or supplemented. 3& 39-Laws means any law(including common law), statute, treaty,ordinance, rule, regulation, code, order, writ, injunction, judicial decision, decree, reporting or licensing requirement or other legally binding requirement of any Governmental Authority and shall include, without limitation, all Environmental Laws. {00022477_DOC} 80 32- 40:--LFG Collection System shall mean all equipment at the Landfill, including piping,header lines,lateral lines,wells,pumps,blowers,condensate knock-out vessels,flare,and related equipment used by the University to extract, collect, and treat Landfill Gas from the Landfill. 4I—LFG Project shall mean the LFG Collection System, the Gas Conversion System,and the Pipeline. 42-LFG Project Permits means all licenses,permits,certifications,authorizations, approvals, easements and entitlements issued by any Governmental Authority (including the County) and relating to the ownership, development, construction, installation, operation, maintenance and/or repair of the LFG Project, including, without limitation, any special use permits or special use permit modifications, as all of the foregoing may, from time to time hereafter,be amended or supplemented. 42. 43- Meter Point A shall be located on the header line that branches to the Gas Conversion System as shown on Exhibit B. Meter Point A shall be the point where the heating energy content of Landfill Gas delivered to the Gas Conversion System is measured. 43 44—Meter Point A Methane Content has the meaning set forth in Paragraph -14-97118. 44: 45:-Meter Point B shall be located on the header line that branches to the flare as shown on Exhibit B. Meter Point B shall be the point where the heating energy content of Landfill Gas delivered to the flare is measured. 45. 46-Meter Point B Methane Content has the meaning set forth in Paragraph X115. 47-MMBtn means one million(1,000,000)BTUs. (00022477_DOC) 81 4� 48.Monthly Billing Statement has the meaning set forth in Paragraph 128.127. 4 49,North Landfill has the meaning given in the Recitals. 42. Mk-Pipeline means all pipes and equipment necessary to transport LFG from the LFG Collection System to the Gas Conversion System. 5� SL-SCF means standard cubic feet,which means the amount of Landfill Gas which occupies one cubic foot of space when the Landfill Gas is at a pressure of 14.73 psia and a temperature of sixty degrees Fahrenheit(60°F). 51. 52. South Landfill has the meaning given in the Recitals. 52. 53—Terri has the meaning set forth in Paragraph 98_22 and shall include any Extension Period. 53. 54.—Waste Materials means collectively, any chemical, waste, material or substance that is listed or regulated under applicable Environmental Laws as a "waste" or as a "hazardous," "special" or "toxic" substance or waste, or as a "contaminant" or "pollutant" or words of similar import, including, without limitation, petroleum, petroleum products and byproducts. ARTICLE II RESPECTIVE RIGHTS AND OBLIGATIONS OF THE PARTIES A. Rights Granted to University 54= :-The County hereby grants to the University the sole and exclusive right to (a) design,develop,and construct the LFG Project; (b)collect,extract and remove Landfill Gas from the Landfill; (c)produce energy from the Landfill Gas for the University's own use,or for sale to one or more third parties or the electrical grid; (d) derive Environmental Benefits from the treatment, destruction and use of the Landfill Gas; and(e) do, at the Landfill,-consistent with the University's obligations in Articles H and III hereunder, all things necessary to carry out (i) the {00022477.DOC} 82 permitting, development construction, and operation of the LFG Project; (ii) the collection, extraction,and removal of the Landfill Gas;(iii)the production of electrical or thermal energy,and (iv)the redirection,redelivery,transport or marketing of the Landfill Gas, or any portion thereof; to any third party. Provided,however,that the County expressly retains all rights hi the Landfill Gas necessary to operate the Landfill in accordance with the Landfill Permits and all applicable Laws. The University agrees to flare any Landfill Gas delivered to the Delivery Point that is not transported by the University to.the Gas Conversion System as follows: (i) during the period occurring after the Flare Start-up Date and before the Engine Start-up Date;(ii)in the event that LFG generated by the Landfill exceeds the capacity of the Gas Conversion System, as determined by the University in accordance with good engineering practices and industry standards; (iii) during Gas Conversion System maintenance, repair, or associated downtime; (iv) as reasonably necessary to protect human health, safety, or the environment; and (v) during the pendency of aforce majeure event affecting the Gas Conversion System. 56. 57. The University shall have the right to use and access portions of the Landfill and such other property depicted on Exhibit C to carry out the development, construction, and operation of the LFG Project, including any activities necessary to evaluate the feasibility of the LFG Project, or the design and permitting of the LFG Project. The County agrees to make commercially reasonable efforts to assist the University, whenever feasible, in accessing any parcel of property not owned solely by the County that is necessary for the construction and operation of the LFG Project, including the Greene Tract. 57. &-The County shall grant the University, without additional University payment beyond the compensation set forth in this Agreement, such easements and rights of way through {00022477.DOC} 83 the Landfill site and other property owned solely by the County as may be necessary to drill gas extraction wells, lay pipelines, lateral lines, header lines, and any other part of the LFG Project infrastructure as contemplated by this Agreement,including,without limitation,the easements and rights of away set forth on Exhibit C. The County also grants the University, without additional University payment beyond the compensation set forth in this Agreement, licenses or other approvals to install utility lines on the Landfill and other property owned solely by the County for the LFG Project. The obligations of the University to perform The Parties agree that in the event the County is unable to grant the easements and ri.J • r -t 1_1 •, •• • • - i - breaches any of its duties or obligations under this Agreement are subject to the County granting - - =- . • 1 • •e ,'ye** ' .•I .■ i e. 'v- L „ -d be the right to terminate this a eement in accordance with Article VI hereunder and (ii the University shall have no obligation to constructor com 1 to t e construction of the Pipeline or the Gas Conversion stem ,!tai hs . •• _ - • to th- • , I aav • t.'s Agr--me 58. 59:-In furtherance of the LFG Project,the County hereby grants to the University, and its employees, contractors and agents, a non-exclusive license (the "License") for the following purposes, provided that any employees, contractors, and agents shall comply with the health and safety plan required to be developed under Paragraph 686.7 hereunder: a. the right to drill,excavate,trench or otherwise disturb the Landfill Property for the purpose of installing,constructing,operating,maintaining and replacing gas wells, underground pipelines, tanks, Landfill Gas flaring mechanisms, and associated Landfill Gas equipment. {00022477.DOC} 84 • b. the right to travel over any access roads located on the Landfill Property and any adjacent property owned by the County, as such roads may be relocated by the County from time to time during the term of this Agreement, for the purpose of entry upon the Landfill Property. The University acknowledges that it does not claim any ownership interest in the Landfill Property, except as otherwise stated herein,because of the University's use of the Landfill Property. B. University's Operating Responsibility 5 Subject to Article VIII of this Agreement and except as otherwise provided herein,the University shall operate the LFG Collection System and the Gas Conversion System at all times during the Term of this Agreement. 5t The operation, maintenance, and repair of the LFG Project shall be the sole responsibility and undertaken at the sole cost and expense of the University (and its contractors • and agents)and shall be performed by the University,its employees,agents and subcontractors(i) in compliance with all LFG Project Permits and applicable Laws and(ii)in accordance with good engineering practices and industry standards. The University assumes the risk of the delivery conditions (including the rate of flow, vacuum and pressure of delivery), quantity and quality of LFG. The University is solely responsible for creating sufficient vacuum to extract LFG from Landfill and transfer it to the Delivery Point. Any such vacuum shall not adversely affect the County's Landfill operations, and the University shall adjust its operations of the LFG Project or install necessary equipment at its sole cost and expense to correct any such adverse effect. Should such adverse effects arise that the University is unable to correct through operational adjustments, the University shall, at the County Manager's written request, take (00022477.DOC} 85 commercially reasonable steps to promptly suspend the LFG operations pending the correction of the conditions causing such adverse effects. .62. 63,The University shall make commercially reasonable efforts to cooperate with the County in the preparation,execution,and filing of any applications or other documents as may be necessary to perform the County's obligations under this Agreement. 6.3 64-The University shall submit for the County's prior approval(which shall not be unreasonably withheld), all permit documentation prepared in accordance with Paragraph g2 and all construction and design plans and specifications relating to the construction,operation,and maintenance of the LFG Collection System prior to commencing construction. The County shall have fifteen (15) calendar days to complete its review and approval of any such plans and specifications. Any plans and specifications for which the County has not provided a response within fifteen(i 5)calendar days shall be deemed approved. Should the County provide comments on the initial submission of any submitted plans and specifications, it shall then have fifteen(15) calendar days to complete the final review and approval of such revised plans and specifications prepared by the University. Any revised plans and specifications for which the County has not provided a response within fifteen (15) calendar days shall be deemed approved. Should subsequent changes or modifications be made to the-plans and specifications after they have been approved, the County shall then have seven (7) days to review and approve such changes or modifications. Any subsequently revised plans and specifications for which the County has not provided a response within seven (7) days shall be deemed approved. Within a reasonable time after completing construction of the LFG Collection System, but no longer than sixty (60) days, the University shall provide to the County all "as-built" plans and specifications for the LFG Collection System. Until the"as-built"plans and specifications for the LFG Collection System are {00022477.DOC} 86 provided to the County, the University shall keep the County informed as to the state of the construction of the LFG Collection System and the location of all then-installed components of such system. ¢4,. 65-The University, its employees, agents and subcontractors shall minimize disruption to Landfill operations during construction, operation, and maintenance of the LFG Project During the term of this Agreement, the University, its employees, agents and subcontractors shall not unreasonably interfere with the County's operation of the Landfill, including, but not limited to, the County's closure of portions of the Landfill and any other requirements under the Landfill Permits or applicable Laws, and shall reasonably ensure that the Landfill is not damaged by the University. Should such damage occur, the University shall arrange for the repairs itself; provided, however, that the County has the right to take immediate action to effectuate whatever repairs are necessary to the Landfill and the University shall timely reimburse the County for the reasonable costs of any such repairs. The University shall use its best efforts to design the LFG Collection System to minimize any incremental increase in the County's costs of Landfill closure incurred to accommodate the LFG Collection System. The University shall share equally (50-50) with the County the incremental increase in the County's costs of Landfill closure incurred to accommodate the LFG Collection System;provided,however,that the University shall not be obligated to pay,nor be responsible for,any costs and expenses in excess of $50,000. 66-The University shall, at its own expense,prepare, maintain, and submit to the County monthly reports on Landfill Gas production rates,which shall include an accounting of all LFG and the methane content of such LFG delivered to Meter Points A and B. (00022477.DOC) 87 67-Notwithstanding anything contained in this Agreement to the contrary, the University acknowledges that Landfill operations take precedence over the LFG Project,and,at all times during the term of the Agreement,and subject to its terms,the County shall have the right to operate the Landfill, and to take all actions at its own cost and expense that the County deems necessary or appropriate in connection with the operation and maintenance of the Landfill, including actions to comply with the Landfill Permits and any applicable Laws. The University further acknowledges and agrees that the primary use of the Landfill is as a sanitary landfill, and that the LFG shall be limited to production from the Landfill. 68—The University shall develop and implement a health and safety plan no less stringent than that of the County with regard to the University's operations at the Landfill and any work performed by its employees, contractors, or agents at the Landfill. 68. 69—The County shall allow the University to dispose at the Landfill, or at a wastewater treatment plant used for the Landfill's leachate,any Waste Materials generated by the LFG Project, provided such disposal is allowed under the Landfill and LFG Project Permits and applicable Laws. The University shall be responsible for any additional incremental costs incurred by the County for disposing of any such Waste Materials,including,without limitation, additional wastewater treatment charges or surcharges. If any Waste Materials cannot be lawfully disposed of at the Landfill or through the County's permits,then the University shall be responsible at its sole cost and expense for any necessary off-site disposal of such materials regardless of whether they are deemed a hazardous material or waste. C. The County's Operating Responsibilities 69. 70—The County agrees to maintain the landfill cover in accordance with any applicable requirements of the Landfill Permits. The County further agrees to make commercially reasonable efforts to repair cracks,fissures,erosion or other adverse conditions in the Landfill that {00022477.DOC} 88 (i)may materially affect the LFG Collection System's capture of Landfill Gas or(ii)cause fugitive emissions of Landfill Gas from the Landfill. 7� 74=The County shall be responsible for complying with the Landfill Permits and all Laws applicable to the operation and maintenance of the Landfill, including, but not limited to, applicable provisions of the Operational Requirements for MSWLF Facilities, 15A NCAC 13B.1626. 71� -The County shall make commercially reasonable efforts to develop and operate the Landfill to enhance the production of Landfill Gas; provided, however, that nothing in this Agreement shall obligate the County to incur any costs or expenses to enhance the production of Landfill Gas or to take any action inconsistent with the terms and conditions of any Landfill Permits or applicable Laws. 22z The County is not obligated to deliver the Landfill Gas at any minimum flow rate or pressure and shall not be obligated to install or operate any of the facilities (including compression or vacuum facilities)to deliver the Landfill Gas. 2 74.The County has no obligation to (i) deliver or to sell any minimum amount of LFG to the Delivery Point;(ii)treat,process or condition the Landfill Gas,maintain or increase the pressure of Landfill Gas delivered to the University,or(iii)install any facilities(including blowers or compression facilities) or, subject to Paragraphs 700 and 72371,alter any landfilling methods or practices relating to the production,collection or delivery of the Landfill Gas to the University. 14. The County shall not interfere with the University's Landfill Gas operations, except as such interference may be necessary to comply with the Landfill Permits,by operation of Laws, or for the protection of the environment, human health, or safety. Each Party shall use commercially reasonable efforts to advise the other Party fully in advance of any changes in the {00022477.DOC} 89 operation, maintenance, expansion, or other activities that may adversely affect the business operations of the other at the Landfill. If any Party takes any action, refrains from taking any action, or undertakes any change in.operations, maintenance, expansion programs or other activities that will adversely affect, or threaten to adversely affect the business operations of the other,such Party shall use commercially reasonable efforts to give notice to the other Party as soon as practicable, describing the nature of the detriment and its cause,including emergency notice in the case of an emergency. However,in no event shall the County be required to delay action that it deems necessary for the operation of the Landfill. If the alleged interference continues beyond thirty(30)calendar days,then the affected Party may invoke the Dispute Resolution procedures set out in Article XI hereunder. 75. The County shall make commercially reasonable efforts to cooperate with the University in its preparation, execution, and filing of any applications, permit submittals, assignments of rights, and other documents as may be necessary to allow the University perform its obligations under this Agreement. 76. The County shall make available to the University copies of all environmental information, reports, studies, landfill gas feasibility reports, assessments or other documents affecting the generation of Landfill Gas or the LFG Project that the County has prepared or that have been prepared on the County's behalf. Such documents include those the County is required to submit to the North Carolina Department of Environment and Natural Resources. 77. 78—The County shall reasonably ensure that the County, its employees and contractors do not damage the LFG Project or disrupt the operation of the system. Should such damage occur,the University has the right to take immediate action to effectuate whatever repairs {00022477.DOC} 90 • are necessary to bring the LFG Project into fully operational condition and the County shall timely reimburse the University for the reasonable costs of repair. 7$. 79,The County shall retain the sole and exclusive right, and shall have all obligations with regard to Landfill operations and for meeting, all applicable Laws Ping to such operation,exclusive of the University's operation of the LFG Project. D. Operating Protocols 72. 80-The Parties agree to develop and implement operating protocols for the LFG Collection System, including, without limitation, monitoring and reporting procedures, communications and emergency response plans, and notification procedures. ARTICLE III PERMITTING AND CONSTRUCTION OF FAcILmI c 81,The installation and construction of the LFG Project shall be the sole responsibility and be undertaken at the sole expense of the University, and shall be carried out in . compliance with the LFG Project Permits and all applicable Laws and in accordance with good engineering practices and industry standards. BL 82—Except as set forth in Paragraphs 3$51 and 595$ of this Agreement, the University shall be solely responsible for securing any and all Approvals, including, without limitation, preparing all permit.documentation for any Landfill or LFG Project Permits on which the County will be the permittee. Exhibit D contains a preliminary, but not exhaustive, list of Approvals that the University believes it must obtain to install, construct, operate, maintain, and repair the LFG Project. The University shall, at its own expense, apply for and seek to obtain all Approvals, including those listed on Exhibit D unless they are not required for the LFG Project. The University will apply for any such Approval as the owner and operator of the LFG Project,and {00022477.DOC} 91 shall act as the"permittee,""owner"and"operator"for such project as may be appropriate under applicable Laws. $2 83,11e University recognizes that it is in the Parties'mutual best economic interest for the LFG Project to be completed expeditiously. Without limiting the generality of the University's obligations under Article II of this Agreement, beginning on the C4esingEffective Date,the University shall work expeditiously and in good faith to(a)complete the LFG Collection System within eighteen(18)months from the Clos_ Dated?te of the issuance of the last Atmrov necessary to construct such system, and (b) complete the Gas Conversion System within thirty-four(34)months from the a of the issuance of the last Approval necessary to construct such system the Gas Conversation System and the Pipeline. If the University fails to complete the LFG Collection-System Project within five (5) years of the Closing Date Effective Date date of the issuance of the last Approval necessary to construct the LFG Project,the County shall have the right to terminate the Agreement pursuant to Article VI. If the Engine Start-up Date does not occur within thirty-five(35)months after the Effective Datedate of the issuance of the last Approval necessary to construct the Gas Conversion System and the Pipeline,the Flare Percentage shall be adjusted to equal ten and ninety-five one-hundredths percent(10.95%)for the purpose of calculating any Flare Payment under this Agreement and shall remain at such percentage until the occurrence of the Engine Start-up Date or five(5)years after the to of the issuance of the last Approval necessary to construct the Gas Conversion System and the Pipeline, whichever occurs sooner. If the Engine Start-up Date does not occur within five(5)years after the Effective Datodate of the issuance of the last Approval necessary to construct the Gas Conversion System and the Pipeline, the Flare Percentage shall be adjusted to equal sixteen and six-tenths percent(16.6%)for the purpose of calculating any Flare Payment under this Agreement and shall • {00022477.DOC} • 92 remain at such percentage until the occurrence of the Engine Start-up Date. Commencing thirty (30) days after the Glesiag$ffective Date of this Agreement, the University shall hold monthly progress meetings to discuss progress toward achieving these completion dates including the status of the construction of the components of the LFG Project. The University shall invite representatives of the County to attend such progress meetings and the University shall provide the County with reasonable advance written notice of the location and time of such meetings. The University shall distribute meeting minutes to the County following such progress meetings regardless of the County's attendance at such meetings. ARTICLE IV • REPRESENTATIONS OF THE PARTIES A. The University's Representations 83. S4 The University represents and warrants that,in entering into this Agreement,it has relied upon its own estimates of Landfill Gas volumes, based upon publicly available waste disposal records and standard modeling assumptions and projections. The University further represents that it has not relied upon Landfill Gas generation reports, drawings, and analysis provided by the County or its consultant as an inducement for entering into this Agreement. The County shall promptly inform the University, however, of any errors, miscalculations, or omissions of which the County has knowledge, in any of the landfill reports it has prepared or furnished to the University. B4t 8-5v-The University represents and warrants that it has legal authority and right to make and enter into the Agreement. B. The County's Representations 85. 86-The County represents and warrants that it has fee simple title to the Landfill Property. (00022477.DOC} 93 $ V.-The County represents and warrants that it has not made an assignment or University the right to collect,use,or sell the agreement to sell to any party other than the U ty gh extract, ect, , Landfill Gas. $� 88—The County represents and warrants that, based upon calculations attached hereto as Exhibit E,previously submitted to the North Carolina Department of Environment and Natural Resources and performed in accordance with 40 C.F.R. Part 60, Subpart WWW, the Landfill is not subject to the New Source Performance Standards for Municipal Solid Waste Landfills, 40 C.F.R. Part 60, Subpart WWW (2007) ("NSPS") or the Emission Guidelines and Compliance Times for Municipal Solid Waste Landfills, 40 C.F.R. Part 60, Subpart Cc (2007) ("Emission Guidelines"). B& 89—The County represents and warrants that it has all environmental permits, authorizations, and approvals that are legally required to operate the Landfill, exclusive of any permits,authorizations, and approvals that may be necessary for the LFG Project. 89. 90-The County represents that, in entering into this Agreement, it has relied upon its own estimates of the economic benefits of the LFG Project and has not relied upon any economic or financial model prepared by the University or its consultant(s) as an inducement for entering into this Agreement. The University shall promptly inform the County,however, of any errors,miscalculations,or omissions of which the University has knowledge,in any of the reports it has prepared or furnished to the County. 90. 91-The County represents and warrants that it has legal authority and right to make and enter into the Agreement. C. Disclaimer of Warranties 91. 92-Except as specifically set forth in Subpart B of this Article III, the University accepts the condition of the Landfill, any real property subject to an easement or right-of-way {00022477.DOC} 94 granted by the County,and the Landfill Gas "AS IS,WHERE IS,WITH ALL FAULTS,"and the University acknowledges that the County has not made and does not hereby make,and specifically disclaims, any representations, guarantees,promises, covenants, agreements or warranties of any kind or nature whatsoever whether past, present or future, oral or written, expressed or implied, concerning the condition or quality of the Landfill, any real property subject to an easement or right-of-way granted by the County, or the Landfill Gas and their fitness for any particular use, purpose,business or activity contemplated,intended or ongoing. ARTICLE V LIABILITY 92. 93—The University shall be solely responsible for the installation, construction, operation,maintenance,and repair of the LFG Project. It shall also be responsible,with respect to the LFG Project,for(a)the installing,constructing,operating,maintaining,and repairing the LFG Project in compliance with all LFG Project Permits and applicable Laws; (b) responding to any notices of violation or compliance inquiries; (c) defending any enforcement actions; (d)resolving any claims; and(e)paying any associated penalties. The University shall also be responsible for damages and claims caused by the University's own negligence or that of its agents or employees. 93. 947-The County shall be solely responsible for the operation,maintenance,closure, and post-closure of the Landfill, exclusive of the LFG Project. The County shall also be responsible with respect to the Landfill,exclusive of the LFG Project,for(a)operating and closing the Landfill in compliance with all Landfill Permits and applicable Laws; (b) responding to any notices of violation or compliance inquiries; (c)defending any enforcement actions; (d)resolving any claims; and(e)paying any associated penalties. 94. 9-Except to the extent caused by the negligent operation of the LFG Collection System by the University(or its contractors and agents),the County shall be solely responsible for {00022477.DOC} 95 • defending any claims relating to the off-site migration of LFG or odors, pollution, or nuisance conditions directly caused by such migration, including claims brought by a regulatory agency, neighboring residents,businesses,or third parties. 96—ln no event shall either Party be liable to the other Party for consequential, incidental,punitive,exemplary or indirect damages,including,but not limited to,loss of profits or revenue,downtime costs, loss of use of any property,or cost of substitute equipment or facilities, whether arising in tort, contract or otherwise. This provision shall survive the expiration or termination of this Agreement. 2.12. 97:-Nothing in this Agreement is intended by the Parties nor shall be construed as a waiver of any sovereign or other immunity to which either Party may be entitled to the fullest extent allowed by Law. ARTICLE VI TERM AND TERMINATION 9Z 9&-The initial term of this Agreement shall commence on the ClesingEffective Date and shall expire on December 31, 2029, or on such other date on which this Agreement is terminated in accordance with its provisions. Upon the expiration of the initial Term, the University shall have the right,to the exclusion of any other entity,to renew this Agreement for up to two (2) consecutive periods of five (5) years each. (each five-year period beyond the initial 20-year period shall be termed an"Extension Period.")At the expiration of the initial 20-year term, or an Extension Period other than the second Extension Period, this Agreement shall be deemed extended for an additional five-year period unless the University gives written notice to the County of the University's intent not to extend this Agreement no later than ninety (90) days prior to the expiration of the preceding period.All provisions in this Agreement shall continue in effect during any extension period except as those terms may be otherwise modified by the Parties. Before the (00022477.DOC) 96 scheduled expiration date of the second Extension Period, the University shall have the right of entering into exclusive negotiations with the County for a period of one-hundred twenty (120) days for the purposes of negotiating a new or revised agreement relating to the LFG Project. The University shall notify the County in writing of the University's decision to exercise this right no later than one(1)year prior to the expiration date of the second Extension Period. 2$s 99—Termination Procedures — In order to terminate this Agreement under this Article VI, and except as provided in Parazraph 102,101,a Party must first issue the other Party a Notice of Default in accordance with the provisions set forth below. The Party in receipt of such Notice of Default shall then have the opportunity to cure the identified default within the specified cure period. If the Party in receipt of such Notice of Default fails to cure the specified default within the cure period, then the other Party may issue a Notice of Termination. Upon issuance, such a Notice of Termination shall be deemed a Notice of Dispute for purposes of Article XI of this Agreement and such Notice of Termination shall be submitted to dispute resolution in accordance with that Article. Subject to Article)(Land except as otherwise provided in this Agreement,the termination rights provided in this Article VI are not in lieu of, but are in addition to, any other rights and remedies either Party may have under the circumstances. A. Termination Rights of the University QQ. MIX—The University may issue the County a Notice of Default if the County breaches any of its material duties or obligations under this Agreement and such breach is material to the University's rights and benefits under this Agreement If the County does not cure such breach within forty-five (45) days after the date of the University's written Notice of Default,the University may issue the County a Notice of Termination. Provided,however,that if by the nature of the breach,the University agrees that a cure can be achieved,but not within forty-five(45)days, and that after receipt of such notice the County has begun to effect a cure without undue delay, {00022477.DOC} 97 then the County shall have such time as is reasonably required to effect a cure with diligent effort, but in any event not to exceed ninety(90)days from the date of the written Notice of Default from the University. 19L 10-1. If,prior to 2029, the LFG generation rate falls below an average of 190 cfm over a consecutive one hundred eighty (180) day period due to no fault of the University, the University may issue the County a Notice of Default. If the LFG generation rate does not exceed an average of 190 cfm within the ninety(90)day period after the date of the Notice of Default,then the University may issue the County a Notice of Termination. B. Miscellaneous Termination Events Bit 102-This Agreement may be terminated by mutual agreement of the Parties. In addition,this Agreement shall terminate(without a cure period)if(a)the University's use of LFG as a fuel source and for flaring should become unlawful due to no fault of the Parties; or (b) the LFG Project Permits or authorizations expire or are revoked due to no fault of the Parties and cannot be renewed or reinstated due to no fault of the Parties despite their best efforts,such that the University is unable to use the LFG as a fuel source and is unable to flare the LFG for the remainder of the Term. C. Termination Rights of the County 102. 103-The County may issue the University a Notice of Default if the University fails to make any of the payments due hereunder in accordance with this Agreement. If the University fails to cure the payment default within forty-five(45)days after the date of the written Notice of Default,then the County may issue the University a Notice of Termination. 103. 104.The County may issue the University a Notice of Default if the University breaches any of its material duties or obligations under this Agreement(other than the making of payments in accordance with this Agreement, the termination of which is covered by Paragraph . {00022477.DOC} 98 -1-031Q2 hereunder) and such breach is material to the County's rights and benefits under this Agreement. If the University does not cure such breach within forty-five (45) days after the County's written Notice of Default,the County may issue the University a Notice of Termination. Provided,however,that if by the nature of the breach the County agrees that a cure can be achieved, but not within forty-five(45)days,and that after receipt of such notice the University has begun to effect a cure without undue delay, then the University shall have such time as is reasonably required to effect a cure with diligent effort,but in any event not to exceed ninety(90)days from the date that the University receives written Notice of Default from the County. 1Q4. 105-,The County may issue the University a Notice of Default upon the occurrence of the following events: if the University abandons or vacates the entire LFG Project or removes fixtures or equipment such that neither the flare nor the Gas Conversion System can operate, except for such removal that may be undertaken during maintenance, upkeep, or in the normal course of business. If the University fails to cure such default within forty-five(45)days after the date of the written Notice of Default, then the County may issue the University a Notice of Termination. 105. 4067-The County may issue the University a Notice of Default if the University operates neither the Gas Conversion System nor the flare for a period of one hundred eighty(180) consecutive days except(i)for a Force Majeure Event,and(ii)at the beginning of the Term before the Gas Conversion System and flare have become operational. If the University fails to re-commence continuous operation of either the Gas Conversion System or the flare within forty-five (45) days after the date of the Notice of Default, then the County may issue the University a Notice of Termination. D. Rights Upon Termination or Expiration {00022477.DOC} 99 107,Survival of Selected Provisions. Notwithstanding the expiration or earlier termination of this Agreement for any reason however described, the following terms of this Agreement shall survive any such expiration or termination: Article V, Subparts C and D of Article VI,Article VII,Article X,Article XI, and Article XIII. 107, —LFG Collection System. Following the expiration or termination of this Agreement,the University shall have the right to dismantle and remove from the Landfill or other County-owned property all or any portion of the equipment comprising the LFG Collection System. In the alternative, the University may elect to offer for sale to the County all or any portion of the equipment comprising the LFG Collection System for its Fair Market Value. If the University decides to dismantle and remove all or any portion of the equipment comprising the LFG Collection System, it shall perform such removal consistent with applicable Laws and any applicable provisions of the Landfill Permits and LFG Project Permits. The University shall permanently seal and cap all openings for pipes or equipment left in the Landfill in accordance with industry standards and any applicable provisions of the Landfill Permits and LFG Project Permits. The University shall use its best efforts to prevent damage to County property during such equipment removal process, and shall reimburse the County for the reasonable costs of repairing any damage to the Landfill or other County property. 108. 109. Pipeline. Following the expiration or termination of this Agreement, the University shall remove any Landfill Gas from the Pipeline, cap the Pipeline, and take any other actions relating to the closure of the Pipeline as may be required by applicable Laws and by any applicable provisions of the Landfill Permits and LFG Project Permits. 109. 110. The University's Option to Offer the LFG Collection System for Sale to the County. If the University elects to offer for sale to the County all or any portion of the equipment {00022477.DOC} 100 comprising the LFG Collection System, it shall so notify the County in writing within thirty(30) days following any expiration or termination of this Agreement. If the County elects to purchase any such equipment, such purchase shall be on an "AS IS," "WHERE IS" AND "WITH ALL FAULTS"basis, but free of any and all liens, for the Fair Market Value (defined herein). If the University does not timely notify the County of an election to offer for sale to the County all or any portion of the LFG Collection System and the University fails to remove such equipment within one hundred eighty days(180)days after the expiration or termination of this Agreement,then any such equipment remaining on the County's property shall be deemed abandoned. If sod" thenthe County reiects a timely offer for sale b the Universi under this P graph of all or . .e ti• . e . -C!• I . . .. � 1 - • to _- 1i IV- UCs '. . ei _s'1 one hundred eighty days (180) days after the date of such election, then . 1 such equipment • in the event the County subsequently makes productive use of such equipment, or leases or sells such equipment, then the County shall pay the University the Fair Market Value of such equipment. [County changes acceptable to UNCJ 110. 11-1-.-Fair Market Value. In the event the University elects to offer for sale to the County all or any portion of the equipment comprising the LFG Collection System upon the • expiration or termination of this Agreement, the Parties will enter into good faith negotiations to determine the Fair Market Value of such equipment pursuant to this Paragraph 444-am a. The term "Fair Market Value" shall mean the value which would be obtained for the equipment comprising the LFG Collection System that is the subject of the University's offer for sale in an arm's length transaction (00022477.DOC) • 101 between an informed and willing buyer under no compulsion to buy,and an informed and willing seller under no compulsion to sell,based upon the use of the University's LFG Collection System as an ongoing enterprise in its then current condition utilizing generally recognized professional criteria for the appraisal of industrial property used in the landfill gas business. b. If the County and the University cannot agree on a Fair Market Value for the equipment comprising the LFG.Collection System that is the subject of the University's offer for sale within thirty (30) Days following the initiation of good faith negotiations, then such Fair Market Value shall be mutually determined in an appraisal by an independent, qualified, nationally recognized appraiser of industrial property similar to the University's LFG Collection System. ARTICLE VII PURCHASE AND SALE OF LFG A. The University's Purchase Obligations lll: 112,Subject to the terms and conditions of this Agreement,the County shall sell, and the University shall accept and purchase,all of the LFG that is delivered to the Delivery Point. B. Payments to the County 1,1L 14-&-The University shall make payments to the County based on the heating energy content of all Gas Sold. Such payments shall consist of the Flare Payment and the Conversion Payment,as calculated in accordance with Subparts C and D of this Article VII. Such payments and any other payments that the University may be required to make under this Article shall be full compensation to the County both for the heating energy content of the LFG and for {00022477.DOC} 102 any Environmental Benefits resulting from the destruction of the LFG, including those benefits associated with reducing greenhouse gas emissions or producing renewable energy. 113. 114.The University will make monthly cash payments to the County based on the heating energy content of the LFG delivered to the University in the preceding calendar month,as determined in accordance with Subparts C and D of this Article VII. C. Payment for Gas Flared 114k 1-15T-Each month during the Term of this Agreement, the University shall make payments to the County based on the heating energy content of the LFG that is delivered to the LFG flare (the "Flare Payment") (a) commencing upon the Flare Payment Date (as that term is defined in Article VIII hereunder)and continuing to the Conversion Payment Date(as that term is defined in Article VIII hereunder); and (b) for any period after the Conversion Payment Date during which the University operates the flare. 111 116,The University shall continuously monitor the LFG at Meter Points A and B, and such LFG will be measured, recorded, and totalized on an hourly, daily and monthly basis. • The heating energy content of the LFG delivered to the flare shall be based on its measured monthly methane content at Meter Point B. The methane content shall be measured in scf/month and shall be equal to the product of(a)the percent methane by volume,and(b)the LFG measured in scf/month at Meter Point B (the "Meter Point B Methane Content"). For purposes of determining the Flare Payment,the total monthly heating energy content of the LFG measured at Meter Point B (the "Flare MMBTU HHV") shall be obtained by dividing the product of(a) the Meter Point B Methane Content, and(b) 1,012, by 1,000,000. Expressed in a formula, the Flare MMBTU HEW=Meter Point B Methane Content x 1012_ 1,000,000. 116. 11-1-For a given month during the Term of this Agreement,the Flare Payment shall be equal to the Flare Percentage,as such percentage may be adjusted in accordance with Subpart E {00022477.DOC} 103 of this Article VII, multiplied by the product obtained by multiplying(i)the Flare MMBTU HHV for such month by (ii) the lesser of the BTU Equivalent Price or the Adjusted BTU Equivalent Price. Expressed in a formula, the monthly Flare Payment=(0.053) x(Flare MMBTU HHV) x BTU Equivalent Price or Adjusted BTU Equivalent Price,whichever is less. A sample calculation of the Flare Payment is shown in Exhibit F. D. Payment for Gas Converted to Energy 117. 11S. Each month during the Term of this Agreement, the University shall make payments to the County based on the heating energy content of the LFG that is delivered to the Gas Conversion System (the "Conversion Payment") (a) commencing upon the Conversion Payment Date (as that term is defined in Article VIII hereunder); and (b) for any period during which the University operates the Gas Conversion System. 11$. 4411-The University shall continuously monitor the LFG at Meter Points A and B, and such LFG will be measured,recorded,and totalized on an hourly,daily and monthly basis.The heating energy content of the LFG delivered to the Gas Conversion System shall be based on its measured monthly methane content at Meter Point A. The methane content shall be measured in scf/month and shall be equal to the product of(a)the percent methane by volume,and(b)the LFG measured in scf/month at Meter Point A(the"Meter Point A Methane Content"). For purposes of determining the Conversion Payment, the total monthly heating energy content of the LFG measured at Meter Point A(the "Conversion MMBTU HHV") shall be obtained by dividing the product of(a)the Meter Point A Methane Content, and (b) 1,012, by 1,000,000. Expressed in a formula,the Conversion MMBTU HHV=Meter Point A Methane Content x 1012_ 1,000,000. 119. 120. For a given month during the Term of this Agreement, the Conversion Payment shall be equal to the product of(a)the Conversion Percentage,as such percentage may be adjusted in accordance with Subpart E of this Article VII, and (b) the product obtained by {00022477.DOC} • 104 multiplying (i) the Conversion M'vlBTU HEW for such month by (ii) the lesser of the BTU Equivalent Price or the Adjusted BTU Equivalent Price. Expressed in a formula, the County's monthly Conversion Payment=(.166)x(Conversion MMBTU HHV)x BTU Equivalent Price or Adjusted BTU Equivalent Price, whichever is less. A sample calculation of the Conversion Payment is shown in Exhibit F. 1241 1-21The Parties recognize that the regulations,policies and procedures governing reductions in GHG emissions and associated markets for Environmental Benefits, including Carbon Credits and Emission Allowances,are evolving. Accordingly,the University will strive to adopt cost effective practices with respect to the LFG Project to maximize the Environmental Benefits resulting from the project and to measure and document them in a way that meets both the University's internal carbon reduction objectives and the County's objective to generate economic benefits. E. Adjustments to County Payments • 121. 122. General. During the Term of this Agreement, the Parties acknowledge that changes in the renewable energy marketplace and in the regulation of GHG emissions may occur that may affect the compensation paid to the County under this Agreement. Accordingly,pursuant to the terms and conditions hereunder, the Parties agree to make certain adjustments to the County's payments under the following circumstances as set forth in Paragraphs 123 126122-125 hereunder: (a) beginning in 2015 and in each year thereafter during the Term the Agreement, to reflect certain differences that may arise between the Average Allowance Market Prices for such years and the Forecasted Carbon Prices set forth on Exhibit A for such years (the "Emission Allowance Price Adjustment"); (b)to reflect changes in Global Warming Potential that may arise during the Term of the Agreement (the "GWP Adjustment"); and (c) to reflect additional compensation that may result from the University monetizing additional or different (00022477.DOC) • 105 Environmental Benefits under this Agreement (the "Adjustment for Other Environmental Benefits"). The Parties shall jointly retain the Carbon Price Consultant,beginning on or about the date that the flare becomes operational, and the Parties shall share equally all fees and expenses payable to the Carbon Price Consultant. 122= 423:-Emission Allowance Price Adjustment. The Parties acknowledge that the Flare and Conversion Percentages have been established,in part,based on the Forecasted Carbon Prices set forth on Exhibit A. Any adjustment in the Flare and Conversion Percentages pursuant to this Paragraph shall be based on a comparison of the Average Allowance Market Prices and the Forecasted Carbon Prices performed pursuant to a methodology(the "Emission Allowance Price Methodology")developed in accordance with the provisions of this Paragraph by the Carbon Price Consultant. No adjustments to the Flare Percentage or the Conversion Percentage shall be made (i)prior to 2015,or(ii)in any month during the Term of this Agreement in which a Cap-and-Trade System has not been enacted under federal legislation in the United States. a. Emission Allowance Price Methodology. Not later than one hundred eighty days (180) before the first month in which an adjustment is made under this Paragraph 123,122, the Parties shall direct the Carbon Price Consultant to develop a methodology meeting criteria mutually acceptable to the Parties that shall permit the Parties to perform a comparison of the Average Allowance Market Prices and the Forecasted Carbon Prices by reference to (i) data showing the prices at which Emission Allowances were purchased and sold in the regulated carbon market established in the United States under federal legislation enacting a Cap-and-Trade System, and (ii) such other information that the Carbon Price Consultant determines is customary and reasonable in the carbon consulting industry. The {00022477.DOC} 106 Carbon Price Consultant shall document the Parties' agreement on the Emission Allowance Price Methodology. Any Dispute concerning the Emission Allowance. Price Methodology shall be submitted to Dispute Resolution in accordance with Article XI of this Agreement. b. Flare and Conversion Payment Adjustments. Beginning in 2015 and continuing through the remaining Term of the Agreement, in any month in which a Cap-and-Trade System has been enacted under federal legislation in the United States, the University shall apply the Emission Allowance Price Methodology to compare the Average Allowance Market Prices and the Forecasted Carbon Prices for the applicable month of the Agreement. c. If there is a positive or negative difference between the Average Allowance Market Price of an Emissions Allowance for the given month and the Forecasted Carbon Price for such month, the following adjustment to the Flare Percentage for such month shall be made: The Flare Percentage shall be increased or decreased by 0.3 57% for each whole dollar(rounded down to the nearest whole dollar)that the Average Allowance Market Price for such month is either above(for increases).or below (for decreases) the Forecasted Carbon Price for such month; provided, however that the Flare Percentage for any month shall not be adjusted in a manner that results in the adjusted Flare Percentage equaling a percentage greater than 8.51% or less than 2.09%. For purposes of calculating adjustments under this Paragraph 123,122, the Flare Percentage shall reset each month to five and • three-tenths percent (5.3%). For the avoidance of ambiguity and by way of example only, if the Flare Percentage is adjusted in January 2015 from five and {00022477.DOC} • 107 three-tenths percent(5.3%)to six percent(6.0%),the Flare Percentage shall reset to five and three-tenths percent(53%)for purposes of calculating any adjustments to the Flare Percentage for the month of February 2015. d. If there is a positive or negative difference between the Average Allowance Market Price of an Emissions Allowance for the given month and the Forecasted Carbon Price for such month, the following adjustment to the Conversion Percentage for such month shall be made: The Conversion Percentage shall be increased or decreased by 1.12% for each whole dollar (rounded down to the nearest whole dollar) that the Average Allowance Market Price for such month is either above (for increases) or below (for decreases) the Forecasted Carbon Price for such month;provided,however that the Conversion Percentage for any month shall not be adjusted in a manner that results in the adjusted Conversion Percentage equaling a percentage greater than 26.68%or less than 6.52%. For purposes of calculating adjustments under this Paragraph 123,122. the Conversion Percentage shall reset each month to sixteen and six-tenths percent (16.6%). For the avoidance of ambiguity and by way of example only,if the Conversion Percentage is adjusted in January 2015 from sixteen and six-tenths percent (16.6%) to fourteen percent (14.0%), the Conversion Percentage shall reset to sixteen and six-tenths percent (16.6%) for purposes of calculating any adjustments to the Conversion Percentage for the month of February 2015. e. The University shall reflect any adjustments to the Flare and Conversion Percentages made under this Paragraph 123,122 including the underlying {00022477.DOC} 108 calculations,in the monthly Billing Statement for such month issued to the County under Paragraph 428127 hereunder. A sample calculation is provided in Exhibit G. 123. 124.GWP Adjustment.The commercial terms set forth in this Agreement assume a Global Warming Potential(GWP)for methane of twenty-one(21)to calculate the Environmental Benefits that will result from the LFG Project's destruction of methane. Payments to the County will be adjusted as set forth below to the extent that the GWP for methane changes during the Term of this Agreement as follows: a. For any month in which the GWP of methane is twenty-three (23) or greater, as accepted under any Laws regulating the GHG emissions of the University,or,in the absence of such Laws, as provided in the then-current General Reporting Protocol for the Voluntary Reporting Program published by The Climate Registry,then the University shall make a payment to the County in the Monthly Billing Statement for such month equal to twenty-five percent(25%)of the product that results from multiplying the(i)lesser of the Average Market Price of Emissions Allowances or the Forecasted Carbon Price for such month by (ii) the difference between the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of twenty-three(23)or greater and the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of twenty-one(21). A sample calculation is provided in Exhibit G. b. For any month in which the GWP of methane is nineteen(19)or less, as accepted under any Laws regulating the GHG emissions of the University,or,in the absence of such Laws, as provided in the then-current General Reporting Protocol for the Voluntary Reporting Program published by The Climate Registry, then the {00022477.DOC} 109 University shall reduce the payment due the County in the Monthly Billing Statement for such month by an amount equal to twenty-five percent(25%) of the product that results from multiplying (i) the lesser of the Average Allowance Market Price or the Forecasted Carbon Price for such month by(ii)the difference between the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of twenty-one(21)and the number of metric tons of CO2e destroyed by the LFG Project calculated by reference to a GWP of nineteen(19) or less. A sample calculation is provided in Exhibit G. 124. 125 -Adjustments for Other Environmental Benefits The economic benefit of this Agreement is based in part upon the value of Carbon Credits. The Parties recognize that during the Term of this Agreement,other Environmental Benefits may be generated through the University's operation of the LFG Project,particularly as relate to the market for renewable energy. The Parties further recognize that the current state of the market for such Environmental Benefits is unsettled with respect to whether, and to what extent, other Environmental Benefits may become available that are associated with the operation of the LFG Project. The Parties recognize that during the Term of this Agreement, new Laws, guidance,voluntary standards or comparable directives may be issued that clarify the respective valuation protocols for various Environmental Benefits associated with the LFG Project. 125. 126. In consultation with the County, the University shall, on an ongoing basis, determine if the categorization of Environmental Benefits associated with the LFG Project in ways other than as Carbon Credits would result in additional revenue to the County without compromising either the University's ability to derive environmental benefit through the generation of Carbon Credits or its achievement of other objectives for the LFG Project,including {00022477.DOC} 110 in particular as it relates to the University's commitment under the American College and University Presidents Climate Commitment. If such alternative categorization of Environmental Benefits would result in a greater overall value to the University and a greater overall payment to the County than the County would receive if the Environmental Benefits were solely categorized as Carbon Credits,and the University decides in a given month,in its sole discretion,to monetize a portion or all of the Environmental Benefits in a manner other than as Carbon Credits, the University shall pay to the County fifty percent (50%) of the proceeds resulting from such monetization net of any costs the University incurs both in monetizing the Environmental Benefits and replacing Carbon Credits that would otherwise have been generated by the operation of the LFG Project, if any,but for the University's decision to monetize another type of Environmental Benefit. Provided,however, that nothing in this Agreement shall obligate the County to incur all or any portion of any costs that exceed any surplus proceeds resulting from the monetization of any Environmental Benefits. In the event the University generates a surplus in any month, it shall provide an accounting of the surplus revenue thus generated in the Monthly Billing Statement and the monthly payment to the County shall be increased accordingly. A sample calculation is provided in Exhibit G. J.2 4471-Notwithstanding anything contained herein to the contrary, the County shall have the option,exercisable at any time and from time to time upon thirty(30)days'written notice to the University, to purchase Carbon Credits from a third party and to exchange such Carbon Credits,without any additional compensation, for an amount equal to up to fifteen percent(15%) of the Carbon Credits generated by the LFG Project in a given month. The Carbon Credits purchased from a third party for exchange must be eligible carbon offsets under a Cap-and-Trade System enacted under federal legislation in the United States, or in the absence of such a system, {00022477.DOC} 111 must be eligible carbon offsets under the California Climate Action Registry, the Voluntary Carbon Standard, or the rules of any regional compliance market, such as the Regional Greenhouse Gas Initiative or the Western Climate Initiative. F. Billing 121 12S-The University shall cause the metering devices to be read on the last day of each month during the Term of this Agreement. The University shall thereafter prepare and deliver to the County on or before the fifteenth (15th) day of each subsequent month the Flare Payment and the Conversion Payment along with a statement to the County (a"Monthly Billing Statement") providing all relevant metering information and data that will clearly indicate (and will permit the County to verify)the(i)quantity of Landfill Gas on an SCF basis delivered to the Meter Points A and B during the preceding calendar month; (ii) the Meter Point A Methane Content and the Meter Point B Methane Content;(iii)the Flare MMBTU HHV and the Conversion MMBTU HHV; (iv) the Flare Payment and the Conversion Payment; (v) any adjustments made under Subpart E of this Article VII; and (vi) reasonably detailed calculations performed by the University to derive all of the foregoing information. ARTICLE VIII RESPECTIVE EFFECTIVE DATES OF THE UNIVERSITY'S OBLIGATIONS UNDER THIS AGREEMENT 128. 129. Construction Date - (Construction of LFG Collection System): The University shall have no obligation to commence construction of the LFG Collection System(or to continue construction of the LFG Collection System if construction has already commenced)prior to the University's receipt of all LFG Project Permits- • • • e days of its receipt of the last Appr s val necessary to constru t the LFG Collection System.the P. receiving such Approval shall notify the other Party in accordance with Par. ar• •h 153 hereunder of the date of the issuance of such Approval. [County changes acceptable to UNCJ {00022477.DOC} • 112 122 130,-Flare Payment Date: The University shall commence Flare Payments to the County thirty(30)days after the acceptance of the completed LFG Collection System by the North Carolina State Construction Office. 13� 131LFG Project Date: The University shall commence construction of the Pipeline and the Gas Conversion System after the occurrence of the following events: a. The receipt of all necessary Approvals to construct the Pipeline. b. The receipt of all necessary LFG Project Permits relating to the Gas Conversion System and the Pipeline. Within ten 101 days of its rec-ipt of the last Approval necessary to construct the Gas Conversion System and the Pipeline. the Party receivin• such Approval shall notify the other Pant, in accordance with P. • . •ph 153 hereunder of le date of the issuance of such Approval. [County changes acceptable to UNCJ 131. 132. Conversion Payment Date: The University shall commence Conversion Payments to the County thirty (30) days after the acceptance of the completed Gas Conversion System by the North Carolina State Construction Office. ARTICLE IX LANDFILL GAS DELIVERY 132. 133. Ownership and title of the Landfill Gas shall pass to the University at the Delivery Point. 131 134—For purposes of measuring the quantity of Landfill Gas delivered to the Delivery Point,the University shall install,at its own cost and expense,Gas Flow Meters for Meter Point A and Meter Point B with a design accuracy of not less than two percent (2%) for all {00022477.DOC} 113 parameters measured and taking into account verification methodologies for Environmental Benefits. 111 13s5-Such Gas Flow Meters shall be owned,operated,maintained and calibrated by the University at its sole cost and expense. The Gas Flow Meters shall be designed and operated to provide time-synchronized data for MMBtu and to provide all other information required to be measured pursuant to this Agreement The University's Gas Flow Meters shall be sealed,with the seals broken only for the purpose of inspecting, testing, repairing, or recalibrating the metering devices. The University shall keep its Gas Flow Meters accurate and in good working order and the University shall periodically test such metering equipment as the University deems necessary; provided that the University shall test its metering equipment at least once every six(6)months, but in no case less than any testing requirement set forth in any applicable Laws or manufacturers' recommendations. In the event a Gas Flow Meters is to be tested,cleaned,repaired or recalibrated, or otherwise read or inspected by the University,the University shall provide the County with five (5)days prior written notice of any such procedure, so that the County may be present during any such procedure. The University shall preserve all charts, test data and similar records in accordance with the record retention provisions of Paragraph X491 8 of this Agreement. The County shall have the right to install and maintain its own Gas Flow Meters. 135. -The County and its agents shall have the right from time to time,at reasonable times during the Term, to monitor, access, and inspect the condition and use of the LFG Project and to monitor, access, and inspect work in progress and the day-to-day operation of the LFG Project Any such monitoring, examinations, inspections or visits shall be conducted in a manner -so as to cause minimum interference with the University's LFG Project {00022477.DOC} 114 ARTICLE X INSURANCE AND TAXES 13.6. 137,-At all times during the term of this Agreement, the Parties shall maintain worker's compensation insurance,covering liability under applicable worker's compensation law, at the statutory coverage levels. 131. 438.Any subcontractor retained by the University in connection with the construction of the LFG Project shall comply with the minimum insurance requirements specified by the North Carolina State Construction Office under the "Instructions to Bidders and General Conditions of the Contract" (Form OC-15). The University shall require each such construction subcontractor to maintain such coverages for the time periods required therein. Any subcontractor retained by the University in connection with the operation of the LFG Project shall comply with the minimum insurance requirements specified in the `North Carolina General Contract Terms and Conditions" or the "University of North Carolina at Chapel Hill General Terms and Conditions for Commodities and Services," as applicable. The University shall require each such operating subcontractor to maintain such coverages for the time periods required therein. 13 1139—No subcontracting shall relieve any Party of its obligations under this Agreement. Each Party shall remain primarily liable and obligated to the other Party for the timely and proper performance of all of its obligations hereunder even if such obligations are delegated to third-party subcontractors. 139. 14 VEach Party shall be responsible for any taxes or assessments levied on any real, personal or tangible property owned by it, inclusive of any LFG on that party's respective side of the Delivery Point after the ClesingEffective Date of this Agreement. All transfer, documentary, sales, use, stamp, registration, recording, conveyance and other similar taxes, fees or charges (including any penalties and interest) arising from the transactions contemplated by this {00022477.DOC} 115 Agreement shall be paid by the University when due or collected from the University by the County in accordance with applicable Law. Half(50%) of the amount of taxes, fees or other charges paid by the University pursuant to the immediately preceding sentence shall be subsequently reimbursed to the University by the County by set-off against the Flare Payments. In accordance with applicable Law, the County will accept a certificate or other documentation as required with respect to any claim by the University that it is exempt from the payment of any such taxes. To the extent applicable,the University and the County will, at their own expense, file all necessary tax returns and other documentation with respect to such taxes, and the Parties will cooperate to the extent necessary with respect to such filings. ARTICLE XI DISPUTE RESOLUTION 141 141-GeneraL Any dispute,controversy or claim that arises out of or relates to this Agreement(including any dispute over the existence,validity,interpretation,performance,breach or termination thereof)(a"Dispute")shall be resolved in accordance with the procedures specified in this Article XI prior to any party initiating litigation regarding such Dispute,except as set forth in Paragraph 44-71, . of the Agreement. Each Party shall bear its own costs incurred in connection with any dispute resolution process under this Article. The entire dispute resolution process set forth in this Article XI is a compromise negotiation. Subject to the North Carolina Public Records Act and other applicable Laws, all offers, promises, conduct and statements, whether oral or written, made in the course of dispute resolution by any of the Parties, their agents, employees, experts and attorneys are confidential. Subject to the North Carolina Public Records Act and other applicable Laws, such offers, promises, conduct and statements are privileged under any applicable arbitration privilege, are subject to Rule 408 of the Federal Rules of Evidence and any (00022477.DOC) 116 state counterpart rules or doctrine and are inadmissible and not discoverable for any purpose, including impeachment,in litigation between the Parties to the litigation;provided,however,that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its presentation or use during the dispute resolution process hereunder. 14L 142,--Notice. If a Dispute arises under this Agreement the claimant Party (the "Claimant") shall provide a written notice of the Dispute("Notice of Dispute")to the other Party ("Respondent"), which shall contain a reasonably detailed statement of the nature of the Dispute and the relief requested. A Notice of Termination issued in accordance with Article VI shall be deemed a Notice of Dispute for purposes of this Article XI. 142. 143. Executive Review. Upon receipt of a Notice of Dispute, the University's Director of Energy Services and the Assistant County Manager shall meet in person and,unless the Parties mutually agree in writing to a different time period, shall have thirty(30)calendar days to • discuss,consider and attempt in good faith to resolve the Dispute. If,upon the expiration of such time period,the University's Director of Energy Services and the Assistant County Manager have been unable to resolve the Dispute, then they shall immediately submit the dispute for Senior Executive Review in accordance with Paragraph 444143 of this Agreement. 143. 144. Senior Executive Review. For disputes that are submitted for Senior Executive Review pursuant to Paragraph 443142 of this Agreement, the University's Associate Vice Chancellor for Campus Services (or higher-level authority) and the County Manager (or higher-level authority) shall meet in person and,unless the Parties mutually agree in writing to a different time period,shall have thirty(30)calendar days to discuss,consider and attempt in good faith to resolve the Dispute. If,upon the expiration of such time period,the University's Associate {00022477.DOC} 117 Vice Chancellor for Campus Services (or higher-level authority) and the County Manager (or higher-level authority) have been unable to resolve the Dispute, then the Dispute shall be submitted to non-binding mediation in accordance with Paragraph 445144 of this Agreement. ]44 -Non-Binding Mediation. If the Executive Review and Senior Executive Review dispute resolution processes are unsuccessful,the Parties shall be obligated to submit the Dispute to non-binding mediation through the use of a neutral,independent,disinterested mediator selected by the Parties from a professional mediation firm. If such Dispute is not resolved through the non-binding mediation process within one hundred twenty (120) days after the date of the Notice of Dispute or Notice of Termination(or such other time period as mutually agreed to by the Parties in writing), either Party may initiate litigation in any court of competent jurisdiction. The Parties shall share equally all fees and expenses payable to any mediator retained hereunder. 145. 146 Continued Performance;No Tolling of Cure Periods. Except when clearly prevented from doing so by the matter in dispute, the Parties shall continue performing their obligations under this Agreement while any Dispute is being resolved as provided in this Article unless and until such obligations are terminated by the termination or expiration of this Agreement. The time frame for a Party to cure any breach of the terms of this Agreement shall not be tolled by the pendency of any dispute resolution procedures. 146. 1-4-7r-Equitable Relief. Notwithstanding anything contained in this Agreement to the contrary,the Parties shall be entitled to seek injunctive or other equitable relief in any court of competent jurisdiction whenever the facts or circumstances would permit a Party to seek such equitable relief without obligation to post bond. ARTICLE XII FORCE MAJEURE • (00022477_DOC} 118 4Z Suspension of Obligations. It because of a Force Majeure event,either Party is unable, in whole or in part, to carry out its obligations under this Agreement, then such Party shall give written notice and reasonably full details of the Force Majeure event to the other Party as soon as possible after the event's occurrence. Upon such notice, the obligations of the noticing Party(other than the obligation to make any payments under this Agreement) shall be suspended during the period in which the Party is unable to perform because of the Force Majeure event,but for no longer period,provided that: a. the burden of proof on whether a Force Majeure event has occurred shall be upon the Party claiming Force Majeure; b. the nonperforming Party shall make all reasonable efforts to continue to perform its obligations despite the occurrence of a Force Majeure event; and c. the nonperforming Party shall provide the other Party with prompt written notice of the cessation of the Force Majeure event. ARTICLE XIII MISCELLANEOUS 1481 149-Records. During the term of this Agreement, and for a period of three (3) years thereafter(unless a longer period of time is required under applicable Laws),each Party shall keep and maintain complete and accurate records and all other data required by each of them for the purposes of the proper administration of this Agreement. Each Party shall have the right,at its sole expense during normal business hours, to examine the other Party's records to the extent necessary to verify the accuracy of any statement,change,notice or computation made hereunder. 149. 130.Amendment to Agreement. This Agreement may be amended or modified only by a written instrument signed by each of the Parties. {00022477.DOC} 119 150. 431~.--Disclaimer of Joint Venture, Partnership and Agency. This Agreement shall not be interpreted or construed to create an association,joint venture,or partnership between the County and the University, or to impose any partnership obligation or liability upon such Parties.Neither the County nor the University shall have any right,power or authority to enter into any agreement or undertaking for,or act on behalf of,or to act as or be an agent of representative of, or to otherwise bind,the other Party. ISL 152. Severability. If any term or provision of this Agreement or the application thereof to any person or circumstance be invalid or unenforceable to any extent,the remainder of this Agreement or the application of such terms and provisions to persons or circumstances other than those to which it is held invalid or unenforceable shall not be affected thereby, except each Party shall be obligated to reform the remaining terms appropriately,and each term and provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law. 152. 153. Assignment. Neither Party may assign or transfer its respective rights and obligations under this Agreement,except with the consent of the other Party,which shall be in that Party's sole discretion.Any assignment purportedly made by a Party without the requisite consent of the other Party shall be null and void. 153. 154.Notices. All notices and other communications under this Agreement (other than regularly scheduled payments) shall be addressed as follows: Orange County: Orange County Solid Waste Director P. O. Box 17177 Chapel Hill,NC 27516 (Current Director: Gayle Wilson) FAX: 919-932-2900 Orange County Manager P. O. Box 8181 (00022477.DOC) . 120 Hillsborough,NC 27278 (Current Manager:Laura Blackmon) FAX: With a copy to: Orange County Attorney P. O. Box 8181 Hillsborough,NC 27278 FAX: Orange County.Emergency Contact: Orange County Solid Waste Operations Manager (Currently: Paul Spire) • PHONE: (919) 624-0221 • The University of North Carolina at Chapel Hill: Director of Energy Services 925 Branch Street, Campus Box 1855 Chapel Hill,NC 27599-1855 (Current Director: Ray DuBose) PHONE: FAX: With a copy to: The University of North Carolina at Chapel Hill General Counsel Campus Box 9105 Chapel Hill,NC 27599-9105 (Current General Counsel: Leslie Strohm) FAX: 919-843-1617 University Emergency Contact: Such notices and communications shall be deemed to have been given and received when personally delivered or upon receipt as evidenced by a United States Postal Service Receipt for Certified Mail or evidence of delivery by a private express mail service(e.g.,UPS, FedEx,DHL) or upon receipt by facsimile provided that the sender promptly thereafter delivers a copy of the notice together with the receipt issued by the sender's facsimile machine,to the recipient. Either {00022477.DOC} 121 Party may change the address to which communications or payments are to be made by notice to the other Party as set forth above. 1M. 455 Integration. This Agreement is intended by the Parties as the final expression of their agreement with respect to such subject matter, both written and oral, and supersedes all previous agreements. 155. -Waiver. No delay or omission by a Party to exercise any right occurring upon any non-compliance or default by the other Party with respect to any of the terms of the Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either the County or the University of any failure of the other Party to perform any of its obligations under this Agreement shall not be construed as a waiver of any future or continuing failure or failures, whether similar or dissimilar thereto. 156. 157.Choice of Law. This Agreement and any provisions contained herein shall be interpreted under the laws of North Carolina without regard to principles of conflicts of law. 15 158. Communications. Neither Party shall make any public announcement concerning this Agreement nor the transaction contemplated herein without first obtaining the approval of the other Party which approval shall not be unreasonably withheld or delayed. 158. 159.Equal Opportunity/Non-discrimination. The Parties shall comply with all federal and state requirements concerning fair employment and employment practices discriminating by reason of race, color, religion, gender, national origin, disability, age, creed, veteran's status, or sexual orientation. 159. 160. No Third Party Beneficiaries. The Agreement is not intended to and does not confer any right or benefit on any third party. {00022477.DOC} 122 IN WITNESS WHEREOF,the Parties hereto have caused the execution of this Agreement by the representatives whose names appear below as of the date first written above. ORANGE COUNTY,NORTH CAROLINA BY: ITS: • DATE: UNIVERSITY OF NORTH CAROLINA AT CHAPEL HILL BY: ITS: DATE: (00022477.DOC) 123 Exhibit A 2010 $ 9.00 $ 6.50 2011 $ 9.18 $ 7.25 2012 $ 9.36 $ 7.75 2013 $ 9.55 $ 8.00 2014 $ 9.74 $ 11.55 2015 $ 9.94 $ 18.00 • 2016 $ 10.14 $ 19.02 2017 $ 1034 $ 20.04 2018 $ 10.54 $ 21.06 2019 $ 10.76 $ 22.08 2020 $ 10.97 $ 23.10 2021 $ 11.19 $ 24.40 2022 $ 11.41 $ 25.70 2023 $ 11.64 $ 27.00 2024 $ 11.88 $ 28.30 2025 $ 12.11 $ 29.60 2026 $ 12.36 $ 31.24 2027 $ 12.60 $ 32.88 2028 $ 12.85 $ 34.52 • 2029 $ 13.11 $ 36.16 2030 $ 13.37 $ 37.80 2031 $ 13.64 $ 38.56 • 2032 $ 13.91 $ 40.11 2033 $ 14.19 $ 42.57 • 2034 $ 14.48 $ 46.08 2035 $ 14.77 $ 48.40 2036 $ 15.06 $ 4937 2037 $ 1536 $ 51.36 2038 $ 15.67 $ 54.51 2039 $ 15.98 $ 59.00 Note 1:2010-2014 estimated by Energy Strategies,LLC with input from Oliver Inc.. • 2015-2039 based on S.2191,Nicholas Institute ADAGE Forecast. {00022477.DOC} Exhibit B �rrM ! 1'I Sri` 4\ II `l I ' 1 SOUTH LANDFILL NORTH LANDFILL MOISTURE �"'-- SEPARATOR CONDENSATE METER POINT 8 — FLARE COLLECTION TANK (FLOW AND METHANE CONTENT) !max GAS FILTER (DUPLEX) BACK—UP LFG! EXTRACTION FEE PUMP I METER POINT A — CONVERSION SYSTEM DEU I— asami , ■ VERY (FL O ENT AND METHANE POINT (9 1".'''"""".. Cji , COND. . REFRIGERANT ■••■• GAS COMPRESSOR CHILLER "- AN( F1�L.. SITE TO LEACHATE COLLECTION TION SYSTEM LOW PRESSURE GAS PIPELINE TO GAS CONVERSION SYSTEM 1 12.2 MILES■ ELECTRICITY TO SILENCER UNIVERSITY 'ENGINE EXHAUST It1 1 lieu 1 11111111 . 1.0MW ENGINE/GENERATOR SET GAS CONVERSION SYSTEM f {00022477.DOC} i / 1 I ' _ �, : Exhibit c j F ------t --y- �'- 11 7,iu n r r I UIrlC,\'7--- t rr'1 rCl ��t_ ,4 _4 E 4-"` -:,:: f J'c '` 111 ! i�`Si .c `` ''`. „i 1 \\ ''7-...,-,_.� �.�,�_------ .-�..� lr fal LLrr err�, ° i--, Q, 1,1c,,> � �L 1 f �_ 3 �� �7.'�� _...-_�""C�` ) JJJ 7 a1 r.r-r rr cr 1 / r c . - 4..L { 11 o r �_ t j wa�� �� i v - / \4, �t <I t" ti_ wl�,. t ' - - y ''; j-----:A\-----1‘}1 ,, ;'}...µ �•� Wray ---� �i,.. _ 1}:r•' �""+,..'Y ' --c 't. ,.,,,,. 9'; „r,g `, `. ry _ I �i! 7 TEr Er .r, Pint 4\ \ r �� ' r " f 181(� It 1 4, ^\"_■of 7 1 1-•_...,. } r "-,-..I \''�1� :,:(r----1 j., �- •.`.t 1�} ---, • i g 1..... �`ti,-`-, a_ "'_°"r l t,a, Crf,17, ■ : \x t_ i--di xr h)I c :.^1f,��i 1 - -. r tt<,ry '' J! L'°rqL "�� 1i �� r.� � ltati ��p y � � { ( 1 ._j 3 i- ,�%v �;. '�::� ` ) r� ^" 1 „,0 ! tr P � n f �` � � F`�� t i? .,.�� ! j [P,� ; r�l�rruCr � f ,76 s ..,, is 1� 9 a y iii t+,d,---, ~i1rd 'I���t�fi.d .l �� ti (� {�j')f J( 1l > �11t J ./1/----„,//--',r4��7y } :s!` '! lu� ,.•� ` ftF 7 � ih� 6� 4 .1 r+ � ` ° L—/ ti a ..) lit-':-1 i _ / ''i F''''' �`1 Sir t F4-1 r• 1' a?...m )„_,..„, Fir {, P ,r ti N. i t�/ '-i _ 1II1! !� r r i t�f,.'” t G rr!t �T ) ." � l h 1[ t ) 1 Tai �\„,,, 1 r ,� ' � i T 'mil ecr r'r`'irt ,, rl �,,,f� t,-1--3" dJr ;- ' + 1:11T r r it .� j i- � - � r� y a�.2t%i I. r./)'�°.5T t'1 •rqs �rf - �ti.,rT ;f �± f ir�r!y� rry t j�('p}...�. ,"t��,}jl a 1.,.?`r'' t ) _...r F..r4�r'i�� 3 .. --e.,`--L. ;`k�,Ll "SJ'sn^"r tti!"`'i ',-r, :.� (_, � -^£,", I i••• �:.1� 7_,.54' I 1`i.,1 !1.-N '"'- I' - 7 t b r; f,�s�r -�l c,, x,�,'s`'�•''� <-I i,7Ct ' t 7� 7 rwrs C s'-'-717'7:1 _:-+� yS r 1 , cr t nrx ^ �'�v" 1 r 'r \\ 7ovn , !.t_ r�. 12:4 �{ V/off -� } Fes: ,_ ( ,r�:'drrc:r � T rya �qan fir'gar, 1t r"T "F „� t r /1 Cau�r �n Lo'r (py"�_ 71�� °��j� 1pr�`� ;rr°t� 1,1,,ti /II- ' �E � (r` it 1 j.— j��' a �° r, �, ,' E ''• r7[� A ".- !. (i -, - tip ,_.•;_�� .!_"k �� $j� - �_f \. y 2'-i''"-- �y`f ,,• •- 1 _ CIS,. I; '""h�.. ��� ]/' !�-F ii_fsi4.1,::::: ::.i' f � 71L J!! +�'. r y ... �•�' 'f!��(�(,J���--,.. -��+�. �L > r 9 L�r;,i; ��,��� c'r'l,;rCE .' �'�- ''' �� "'."rrUrr 4�2247� � , �r �ILUnrs .�., �i ] ti( I'.� ------1 ' 4 7�•�'-',,,`- ylb ■ Exhibit C cont. • Description of Easements Property ID Number Approximate Approximate Length Type of Use Approximate Width Approximate Width Location of Easement of Easement on of Permanent of Construction on Parcel Parcel Easement Easement 987066291 (County southeast corner of Landfill Gas Pipe,6"to Landfill site, south property 1,500 LF 12" diameter 10 LF 20 LF section) 9870751483 parallel to north Landfill Gas Pipe,6"to property line 350 LF 12" diameter 10 LF 20 LF 9870855283 parallel to north Landfill Gas Pipe,6"to property line and east 3,000 LF 12" diameter 10 LF 20 LF property line 9880008527 parallel to north Landfill Gas Pipe,6"to (Homestead Road) property line,adjacent 12" diameter,and to roadway 1,200 LF Electrical/telecomm 20 LF 3OLF ductbank and vaults • - {00022477.DOC} rn 127 Exhibit D Approvals Landfill Site Solid waste permit Air permit for flare Duke Energy -New Service Pipeline Utilities Commission(NCUC) Town of Chapel Hill Dept. of Transportation Orange County—Easements Duke Energy—Easements Dept. of Insurance State Construction Office Dept. of Natural Resources Norfolk Southern Railroad Gas Conversion Building Town of Chapel Hill—ZCP Dept. of Insurance State Construction Office Air Permit for engine Dept. of Natural Resources OWASA {00022477.DOC} 128 Exhibit E Calculations demonstrating that Landfill is not subject to NSPS (see attached) • {00022477.DOC} • Exhibit F • Exhibit Ft Sample Calculation of Monthly Hare and Oonvardon Payments to Orange County Firmamilloollam tww . K go JI 18 CI!WI N•i: j 4 ! 777'f• 33 mown IMltll!'�OJall�'dtlljMl� !V 7 rtimormINONAmt N it • m rydy tibtl1� H,k �, f i ii t. Iii ocroad.o..04 4 nwookomel •40.ffox4 1owyg orris .140.1 • • {00022477.DOC} cc 130 . 1 3 • 1 ESilit s s 5 .: 5 S 5 5 1 5 I •r. r I / filla 1 I I W $ 1 1 1 # 5 5 5 s i 7 i - r s R * s .r 7 7 It t f f t i t t f t XIIIII / III E 311 , 1111 $ 1 = I k k e If Y • et za J.1, 1 1 111 15i : E IIIII ! I fl P , I it 4 J. _ fill I. I Pro forma Prospectives University of North Carolina at Chapel Hill and Orange County Landfill Gas Project Projected Cash Flow to County by Project Senario Scenario 1-Optimistic° scenario 2-Realistic° scenario 3-Delayed° Senario 4-Flare..Onlv° $enario S-Flare(Worst Case)° %of Energy REC Total %of Energy REC Total %of Energy REC Total %of Energy REC Total %of Energy REC Total Date (S) (Si (5) (5) (5) ($) (S) (5) (5) (5) (5) (S) (S) (5). (5) 2/1/2009 $ - $ • $ - $ $ - $ - $ $ - $ $ - $ - $ - $ $ - $ 7/1/2010 $ 43,689 $ - 5 43,689 $ 24,272 5 • $ 24,272 5 24,272 $ - $ 24,272 $ 24,272 5 - $ 24,272 $ • $ $ - 7/1/2011 $ 105,694 $ 23,459 $ 129,153 $ 64,294 $ 3,351 $ 67,646 $ 57,394 $ $ 57,394 $ 57,394 $ - $ 57,394 $ - $ • $ 7/1/2012 $ 138,302 $ 40,303 $ 178,604 $ 138;302 $ 40,303 $ 178,604 $ 114,225 5 - $ 114,225 $ 53,250 $ - $ 53,250 5 - $ - $ 7/1/2013 $ 137,282 5 40,917 $ 178,198 $ 1.37,282 $ 40,917 5 178,198 $ 110,671 $ - $ 110,671 $ 51,290 $ $ 51,290 $ - $ - $ $ 11337;270576 $ 117604528701 , $ , $ ,51 164,209 $ 164,209 5 48,640 $ $ 48,640 $ - $ $ - 7/1/2015 7/1/2014 $ 5$ 3243'808144$ , $$ 137137,707 256 $ 2334,884 014 $ 160172,270 9 $$ 159,637 $$ $ 159,637 $ 47,280 $ 5 47,280 $ - $ • $ 7/1/2016 $ 136,949 $ 22,141 $ 159,089 $ 136,949 $ 22,141 $ 159,089 $ 155,295 $ - $ 155,295 $ 46,000 $ - $ 46,000 $ - $ - 7/1/2017 $ 136,864 $ 21,291 $ 158,155 $ 136,864 $ 21,291 $ 158,155 $ 151,260 $ - $ 151,260 $ 44,800 $ - 5 44,800 $ - $ -. $ - 7/1/2018 5 136,664 $ 20,466 $ .157,129 $ 136,664. $ 20,466 $ 157,129 $ 147,153 $ $ 147,153 5 43,590 $ - $ 43,590 $ - $ - $ 7/1/2019 $ 136,719 5 19,665 $ 156,384 $ 136,719 5 19,665 $ 156,384 $ 143,373 $ - $ 143,373 $ 42,470 $ - $ 42,470 $ • 5 - $ 7/1/2020 $ 133,706 $ 18,231 $ 151,938 $ 133,706 $ 18,231 $ 151,938 $ 139,789 $ - 5 139,789 $ 41,410 $ - $ 41,410 $ - $ - $ _ 7/1/2021 $ 131,017 $ 16,296 $ 147,313 $ 131,017 $ 16,296 $ 147,313 $ 136,978 $ - 5 136,978 $ 40,570 $ - $ 40,570 $ - $ - $ 7/1/2022 $ 128,382 $ 14,509 $ 142,891 $ 128,382 $ 14,509 $ 142,891 $ 134,223 $ - 5 134,223 $ 39,760 $ - $ 39,760 $ - 5 $ 7/1/2023 5 125,801 $ 12,859 $ 138,660 $ 125,801 S 12,859 $ 138,660 $ 131,524 $ - $ 131,524 $ 38,960 5 - $ 38,960 $ $ - $ 7/1/2024 $ 123,272 $ 11,338 5 134,610 $ 123,272 $ 11,338 $ 134,610 S 128,880 $ $ 128,880 $ 38,170 $ - $ 38,170 $ - $ - $ • 7/1/2025 $ 120,793 $ 9,940 5 130,733 $ 120,793 $ 9,940 $ 130,733 $ 126,289 $ - $ 126,289 $ 37,410 $ - $ 37,410 $ - $ - $ • 7/1/2026 $ 118,365 $ 8,133 $ 126,498 $ 118,365 $ 8,133 $ 126,498 $ 123,750 $ - $ 123,750 $ 36,650 $ - S 36,650 $ - $ - $ 7/1/2027 $ 115,986 $ 6,474 5 122,460 $ 115,986 5 6,474 $ 122,460 $ 121,263 $ - $ 121,263 $ 35,920 $ $ 35,920 $ - $ - $ 7/1/2028 $ 113,655 $ 4,953 $ 118,608 $ 113,655 $ 4,953 :5 118,608 $ 118,826 $ $ 118,826 $ 35,200 $ - $ 35,200 $ - $ $ . 7/1/2029 $ 111,371 $ 3,562 $ 114,933 $ 111,371 $ 3,562 $ 114,933 $ 116,438 $ - $ 116,438 $ 34,490 $ $ 34,490 $ - $ - $ - NPV $1,477,979 $ 236,045 $1,714,025 $1,423,190 $ 218,222 51,641,412 $1,470,044 $ - $1,470,044 $ 503,445 $ $ 503,445 $ • $ - $ - Notes: Senario 1- Optimistic-Flare operational within 14 months of the Effective Date of Contract,and Energy Conversion withing 28 months.° Senario 2- Realistic-Flare operational within 18 months of the Effective Date of Contract,and Energy Conversion withing 34 months.° n Senario 3- Delayed-Flare operational within 18 months of the Effective Date of the Contract,and Energy Conversion delayed beyond 60 months of the Effective Date. 3- (Flare percentage Increases to 10.95%starting in the 35th month and 16.6%after five years.)ili 3 Senarle 4- Flare,Only;Flare is operational within 18 months of the Effective Date of the Contract,but UNC Is unable to obtain all required approvals for the Energy Conversion System and the Pipeline° N Senario 5-Worst Case UNC is unable to obtain all required permits for Energy Conversion System and the Pipeline,and UNC does not implement the Collection and Flaring System (1)Prepared by Energy Strategies,LLC (2)Prepared by Diver Inc 1/20/09 Revised 1/26/2009 tom) University of North Caro at Chapel Hill and Orange County Landfill Project Sample Cash Flows to County by Project Schedule Scenario. $200,0°0 I . Revised 01/ 6 2 009 $180,000 .__. _. .... $160,000 _ 1` $140,°00 $120,000 " $100,000 �,� $80,000 .,. Optimistic --0-Realistic $60,000 ® . Delayed -l- Flare,Only 40,OOQ �. ...... -Worst Case 4 $20,00° $` ti�ti��oti���1y������ti�1����1�4�o�h^���Q�ti\l4��tiN��������y ����� ��ti4�����4����4ry") f Vtkti�ti01' 11'~�������ti����� *Please refer to accompanying table for actual values 1/16/09 co N A ffoch (nen+ 3133 ORANGE COUNTY HILLSBOROUGH NORTH CAROLINA ranayer's Olke Orla67 ed/7J2 MEMORANDUM TO: Ray DuBose,UNC Energy Services COPIES: Gwen Harvey,Assistant County Manager Gayle Wilson, Solid Waste Director Brian Ferrell,Attorney for Orange County Pam Jones,Purchasing Director David Stancil,ERCD Director John Masson,UNC Facilities Planning ,/ ( - FROM: R.Kevin Lindley,PE,Engineering Specialist I .0 / I. i • DATE: 12/31/08 SUBJECT: Easements for UNC's proposed Landfill Gas Pipeline Project This memo contains my understanding of the various outstanding issues regarding the granting of easements across Orange County(the"County")owned property for the proposed Landfill Gas(LFG) project. In general,there are two areas that will be addressed. First,there are issues that UNC will resolve with entities other than the County regarding the routing of the LFG pipeline and/or ductbank. Second, a discussion'of how the granting mg of the easements will be handled by-tle County. It is my understanding from the conversations with John Masson and the various engineers working on this project for UNC that there are some unresolved issues concerning the routing of the proposed easements. To begin with,the proposed easement would cross an area designated by the Town of Chapel Hill as a"Resource Conservation District"(RCD) `At last check,there was a question as to whether crossing the RCD-would be allowed,due to the disturbance that would be caused in the area. The second issue involves a condition of the Special Use Permit(SUP)that the County was required to obtain for the Southern Human Services Center and the Seymour Center. The SUP requires a vegetative buffer of a specified width and type between Homestead Road and the rest of the County's property. Currently,there is enough room to satisfy these buffer requirements and locate the easement on County property. However,the Department of Transportation(DOT)has indicated their desire to widen Homestead Road in the future. The widened road would not allow enough space between the proposed LFG easement and Homestead Rd.to maintain the required buffer width. Thus,the County would be in violation of their SUP with the Town of Chapel Hill. Both of these are issues that UNC needs to resolve with the Town of Chapel Hill(with input from DOT)prior to formally requesting easements from the . Board of County Commissioners(BOCC). Unless these two issues with the Town can be resolved,the currently proposed routing of an easement across County property on Homestead Road will be problematic. AREA CODE (919) 245-2300 • 688-7331 • FAX (919) 644-3004 Ext. 2300 134 Another pending issue that will be important to the Homestead Road easements is whether the ductbank will be routed down Homestead Road,across County property,or down Martin Luther King,Jr. Boulevard. The level of disruption caused to County property and the size of the final easement will be affected by this decision. The issue as I understand it revolves around the identification of wetlands or other sensitive property through which the ductbank would have to pass if it was installed along Homestead Road. You have informed me that the regulatory process for obtaining approval for routing the ductbank down Homestead Road may take nearly a year. Because the routing of the ductbank will fundamentally affect the type and quality of the disruption to County property and will affect the size of the easement,and due to the time delay that may result from a decision to route the easement along Homestead Road,it is my view that,if at all possible,UNC should decide on their routing prior to presentation of the LFG Agreement to the BOCC for final decision so that staff can inform the BOCC of the likely scope of disruption on County property and the approximate Effective Date of the agreement. I have raised this issue with Brian Ferrell,in the County attorney's office,and he has indicated that he will discuss the issue of the Effective Date of the Agreement with UNC's counsel,Will Tricomi,in the event that UNC will be unable to decide on the route of the ductbank before presenting the LFG Agreement to the BOCC for a final decision. I am not aware of any issues with the proposed easements across the property owned by Orange County and used for landfill purposes. The easement across the County owned portion of the"Greene Tract" should be acceptable as well. The only issue that I've heard concerning the Greene Tract is the possibility that the routing may take the LFG pipeline through a specimen tree or other highly valuable tree. David Stancil,with Orange County's Environmental Resource and Conservation Department,has directed his staff to walk the property in order to identify any such trees or other vegetation. We will notify you of the results of this investigation as soon as it is complete. The route may need to deviate slightly if such a tree was in danger of being destroyed. Once the issues listed above are resolved,then the process to convey the easements would begin. County staff will need to review and approve the easement plat maps(which will accurately describe the proposed easements across County property)and the proposed easement agreements before any construction on County property begins. Once staff approves the easement plat map and the easement agreements,then the plats and easements will be presented to the BOCC for final approval. Once approved by the BOCC,construction within the easements can begin. If you have any questions about this memo or need more information,please advise. I can be reached either by phone at(919)245-2313 or by email at klindley @co.orange.nc.us. Alf Q�h m en+. 15 THE UNIVERSITY li of NORTH CAROLINA ENERGY SERVICES at CHAPEL HILL DEPARTMENT 925 BRANCH STREET P 919.966.4L00 CAMPUS BOX 1855 F 919-843.7328 CHAPEL HILL,NC 27599-185$ Ray.DuBose @energynnc.edu RAYMOND E.DUBOSE Director January 26, 2009 Orange County Board of Commissioners • 200 South Cameron Street Post Office Box 8181 Hillsborough, North Carolina 27278 Re: Landfill Gas Project Issues • Dear Commissioners: I am responding to the two issues which have arisen from the County. Regarding That UNC will do nothing for originally five, and now it seems like — because of the requirement for all easements to be acquired—up to six years" The proposed contract under Section 82 reflects the University's commitment to work expeditiously and in good faith to complete the LFG Collection System within eighteen (18) months from the Closing Date and complete the Gas Conversion System within thirty-four (34) months from the Effective Date. If the University breaches this covenant, the County can send the University a Notice of Default pursuant to Section 103 and begin the process for contract termination. UNC is also agreeing to a covenant stating that if the University fails to complete the LFG Project within five (5) years of the date of the issuance of the last easement/approval necessary to construct the LFG Project, the County may terminate the agreement. The University is prepared to begin immediately on this project. The University's consultant on this projects estimates that the University and the County are losing approximately $50,000 in benefits for each month that the landfill gas is not harvested. Also, every month delay results in the equivalent of over 3,000 metric tons of CO2 releasing into the atmosphere. This is strong incentive for the University to move forward expeditiously. The University has invested over $75,000 to date (not including UNC staff time and expenses) on Consultant/legal fees for a feasibility study, subsequent economic modeling and contract negotiation, $28k on a property survey of the proposed pipeline routing and is prepared to commit to several hundred thousand dollars in fees for the project design as soon as the contract is approved. All this money will be pre-invested before the system becomes operational, clearly demonstrating UNC's commitment to advancing the project in a timely fashion. 136 Orange County Board of Commissioners 2 January 26, 2009 Regarding That UNC may receive Federal or State economic stimulus funds to account for this project — raising the question of whether economic parity is being preserved for the County" The University has not submitted and has no plans to submit for economic stimulus funds for this project. Even if the University were to obtain funds from a third party to help defray the expense of the project, the risk is still upon the University to entirely fund the project. By agreement, the County is not sharing in any other downside or upside opportunity/risk associated with funding. The University is exposed to significant upside risk associated with cost overruns. We cannot see the fairness or merit of adding an additional level of complexity to the commercial terms of the agreement to accommodate this request We do want to iterate and emphasize that the University very much wants to do this project. It is in our own best interest to get it done as quickly as possible because the gas is a finite resource, and every day we delay increases the risk that we will not be able to recover our costs. We feel, and I'm sure County elected officials would feel the same way if they were in our shoes, it's a real stretch for any public entity to agree to a deal wherein it could invest substantial sums and then have the contract terminated if it doesn't perform through no fault of its own. In the current draft agreement, we have agreed to expose ourselves to that potential outcome. I hope that is an indication of how much we want to partner with the County to make this a successful project. We have continued to discuss these same issues over the past three months without significant change to the contract proposed. We believe the contract proposal as it stands is very strong, protects the interest of both the University and the County, and provides a fair and equitable sharing of the benefits of the project. We think it is time to move forward with a final decision based on these terms. Sincerely, AT714^-- Raymond E. DuBose, P.E. Director for Energy Services cc: Carolyn Elfland Will Tricomi