Inc. (NASDAQ:INCR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
|
Entry into a Material Definitive |
| Item 8.01 |
Other Events. |
| Item 9.01 |
Financial Statements and Exhibits. |
Exhibit Index
| Exhibit 10.1 |
Power Purchase Agreement, dated as |
| Exhibit 99.1 |
Press Release of Ormat Technologies, Inc. |
INFORMATION TO BE INCLUDED IN THE REPORT
|
Item .0 |
Entry into a Material Definitive |
On May 25, 2017, the power purchase agreement, dated as of
October 20, 2016 (the Portfolio PPA ) between ONGP LLC (ONGP or
Seller), an indirect, wholly-owned subsidiary of Ormat
Technologies, Inc. (the Company), and Southern California Public
Power Authority (SCCPA or the Buyer) received the final necessary
approval from the City of Los Angeles, enabling SCPPA to execute
the Portfolio PPA. The effective date (the Effective Date) of the
Portfolio PPA remains subject to the satisfaction of various
conditions, including certain regulatory notifications, delivery
of required credit support for certain of ONGPs obligations, and
delivery of other customary certifications and closing
conditions.
Portfolio Projects. Under the Portfolio
PPA, SCPPA will purchase the output of 150 MW of geothermal power
generation capacity, subject to adjustment (downward or upward)
as described below and in the Portfolio PPA, generated by the
following nine different geothermal energy facilities owned by
the Company: Tungsten Mountain 1 and Tungsten Mountain 2,
Steamboat Hills, Dixie Meadows 1 and Dixie Meadows 2, Baltazor
Hot Springs, Brady, Steamboat 2 and Steamboat 3 (each, a
Facility). At any time, and from time to time, on or prior to the
end of the Third Development Period (as defined below) ONGP can
either substitute or replace any one or more of the foregoing
Facilities with any one or more alternative geothermal energy
facilities owned by the Company set forth on a list of sixteen
such facilities included in the Portfolio PPA and defined as a
Pre-defined Additional Facility; provided that no such
substitution or replacement will cause any change to the minimum
and maximum electric energy generation that Seller is required to
deliver and sell and that Buyer is required to purchase, and
provided further that each Pre-defined Additional Facility that
replaces and becomes a Facility under the Portfolio PPA also
meets certain other pre-determined eligibility criteria. The
Facilities and the Pre-defined Additional Facilities comprise a
mix of fully constructed and operational geothermal power
projects owned by the Company as well as geothermal power
projects under various stages of leasing, exploration,
development or construction by the Company.
Energy Delivery; Sale and Purchase.
Seller is required to deliver energy under the Portfolio PPA in
three periods, as follows:
|
during the period commencing with the Effective Date of the |
|
during the period commencing on January 1, 2019 and ending |
|
during the period commencing on January 1, 2021 and |
The minimum and maximum delivery obligations within a relevant
period are referred to herein as the First, Second, or Third,
Development Period [Minimum] / [Maximum] Capacity, as
applicable.
Buyer is required to purchase all of the delivered energy up to
the maximum amount delivered during each development period and
thereafter, at a fixed price of $75.50 per MWh (without
escalation). However, for any test energy delivered during the
ramp up period of any Facility prior to such Facilitys
achieving its commercial operations or delivery commencement
dates (in accordance with the relevant conditions set forth in
the Portfolio PPA), Buyer shall only pay $56.63 per MWh. Buyer
is not required to purchase delivered energy in excess of the
maximum generation for the relevant period unless it consents
in writing.
Delivery Failures. The Portfolio PPA
sets forth certain liquidated damages that Seller is obligated
to pay Buyer if it fails to meet the relevant Development
Period Minimum Capacity, as described below:
|
if the aggregate net capacity of the Facilities at the |
|
if the aggregate net capacity of the Facilities at the |
|
if the aggregate net capacity of the Facilities at the |
Notwithstanding the foregoing, in no event shall Seller be
obligated to pay liquidated damages in excess of $48,000,000
in the aggregate.
Performance Security. Under the
Portfolio PPA, Seller is required to provide to Buyer a
letter of credit issued by an issuer meeting certain
qualifications set forth in the Portfolio PPA (A Qualifying
LC), in the aggregate amount of $16,000,000 to secure Sellers
obligation to pay liquidated damages as described above. If
such letter of credit is drawn upon and the available amount
reduces below $8,000,000, Seller is required to replenish (or
cause the replenishment of) the amount of the letter of
credit. The performance security letter of credit shall be
returned to Seller upon the earlier to occur of (x) the
aggregate net capacity of the Facilities exceeds the Third
Development Period Minimum Capacity, (ii) termination of the
Portfolio PPA while such letter of credit is outstanding, or
(iii) December 31, 2024.
Delivery Term Security. Under the
Portfolio PPA, Seller is required to provide a Qualifying LC
to Buyer, or a guarantee from a guarantor that meets certain
qualifications set forth in the Portfolio PPA, in an amount
that increases over time based on the MWs of aggregate net
capacity of the Facilities as they come on-line and achieve
their commercial operation and commercial delivery dates, up
to a maximum stated amount of $48,750,000.
Shortfall Energy and Liquidated
Damages. If Seller fails in any contract year
to deliver the Guaranteed Generation (as calculated in the
manner set forth in the Portfolio PPA) for reasons other than
curtailment required by Buyer, or failure by Buyer to accept
delivery, and after taking into account extensions as a
result of any Force Majeure (as defined in the Portfolio
PPA), then Seller is required to provide Buyer with
replacement energy meeting the requirements set forth in the
Portfolio PPA in an amount equal to the shortfall. If Seller
is unable to generate or procure sufficient replacement
energy to cover all of the shortfall, Seller is required to
pay Buyer Shortfall Liquidated Damages in an amount equal to
the positive difference, if any, between the price Buyer paid
for replacement energy, and the price Buyer would have paid
Seller if the amount of shortfall energy had been delivered
by Seller. The Shortfall Liquidated Damages are in lieu of
actual damages and notwithstanding any other provision of the
Portfolio PPA to the contrary other than a default comprising
failure by Seller in each two consecutive contract years to
deliver at least 50% of the Guaranteed Generation, shall be
Buyers sole remedy for failure to deliver energy.
Buyer Failure. Unless excused by
Force Majeure or Sellers failure to perform its obligations
under the Portfolio PPA, if Buyer fails to receive at the
points of delivery specified in the Portfolio PPA all or
any part of the energy required to be received by the
Buyer, then Buyer shall pay Seller, within 30 days of
request, an amount for each MWh of such deficiency equal to
the positive difference, if any, obtained by subtracting
the Sales Price received by the Seller from the price per
MWh that would have been payable to Seller by Buyer for the
energy not received by Buyer. The Sales Price means the
price at which Seller, acting in a commercially reasonable
manner, resells the energy or, absent a resale, the market
price for the quantity of energy not received by Buyer.
Certain Other Covenants and
Provisions. The Portfolio PPA contains
various other covenants and provisions, including Sellers
undertaking to (i) develop, construct, and operate the
Facilities (and any Pre-defined Additional Facility that is
used in substitution or replacement of a Facility) in
compliance with environmental and other legal requirements
in a manner that meets the applicable California Energy
Commission and/or California Public Utilities Commission
standards regarding greenhouse gas emissions and other
matters and so as to be RPS compliant (as defined in the
Portfolio PPA), (ii) provide Buyer access to the Facilities
and otherwise comply with certain reporting obligations to
Buyer in respect of the Facilities, and (iii) obtain and
maintain transmission services for the Facilities. The
Portfolio PPA also contains (i) customary provisions
regarding billing and payments, audits, metering and
related technical matters, (ii) scheduling and curtailment,
and (iii) customary representations by each of Seller and
Buyer.
Defaults and Termination. The
Portfolio PPA contains customary payment, performance and
bankruptcy events of defaults, subject in relevant cases
(but not for bankruptcy) to customary cure periods. In
addition to the more specific event of default described
above under Shortfall Energy and Liquidated Damages, the
Portfolio PPA also has a default for failure of Seller to
have achieved a minimum of 40 MW of aggregate net capacity
for the Facilities by the date that is 90 days after the
end of the Third Development Period. If Seller is the
defaulting party, Buyer may exercise any rights and
remedies under the Portfolio PPA or otherwise available at
law or in equity, including application of all amounts
available under the Performance Security against any
amounts then owed to Buyer, and may also terminate the
Portfolio PPA. If either party defaults, the non-defaulting
party may terminate the Portfolio PPA, and the defaulting
party shall pay the non-defaulting party a termination
payment calculated in the manner set forth in the Portfolio
PPA.
Term and Miscellaneous. The
Portfolio PPA has a term (the Agreement Term) that shall
commence on the Effective Date and shall end on the last
day of the Delivery Term (defined below) (or upon the
expiration or earlier termination in accordance with its
terms). The Delivery Term of the Portfolio PPA is the
period of time commencing at the beginning of the first
contract year and ending on December 31, 2043 (unless
sooner terminated in accordance with its terms). The
Portfolio PPA is subject to early termination (i) by mutual
agreement of the parties, (ii) upon the occurrence of a
default, by the non-defaulting party, (iii) if one or more
Force Majeure events reduces the aggregate net capacity of
the Facilities, or prevent Buyer from accepting the
aggregate net capacity of the Facilities, in each case
subject to certain threshold levels of capacity and time
periods, and in each case subject to a Force Majeure cure
period, all as set forth in the Portfolio PPA, (iv) by
Seller, in the event regulatory notices regarding certain
exemptions have not become final and no longer subject to
appeal within 60 days after the Effective Date, or (v) if
the CEC issues a decision that the Agreement fails to
comply with Article 1 of Chapter 11 of Division 2 of Title
20 of the California Code of Regulations (regarding
greenhouse gas emissions applicable to power plants 10 MW
and larger).
Subject to certain exceptions, neither party may assign
the Portfolio PPA without the prior written consent of
the other party. Buyer may assign any or all of its
rights under the Portfolio PPA without the consent of
Seller provided that the assignee has an investment grade
rating and such investment grade rating will not be
impaired as a result of the assignment. Seller may, in
connection with any financing or refinancing of any
Facility, grant a security interest to its lenders and/or
equity providers in the Portfolio PPA subject to Buyers
consent and execution of customary consents to
assignments in favor of such lenders and/or equity
providers, which consent may not be unreasonably
withheld, conditioned or delayed by Buyer.
The Portfolio PPA is governed by California Law (without
regard to conflicts of law principles).
The foregoing summary of the Portfolio PPA is not
exhaustive, does not contain complete descriptions of all
of the parties rights and obligations under the Portfolio
PPA and is qualified in its entirety by reference to the
Portfolio PPA, a copy of which is filed hereto as Exhibit
10.1, and incorporated herein by reference.
| Item 8.01 |
Other Events. |
On June 1, 2017, the Company issued a press release
announcing receipt of the final approval for the Power
Purchase Agreement. A copy of the Companys press release
is furnished as Exhibit 99.1 to this Current Report on
Form 8-K and is incorporated herein by reference.
| Item 9.01 |
Financial Statements and Exhibits. |
| (d) |
Exhibits |
| Exhibit 10.1 |
Power Purchase Agreement, dated as of October 20, |
| Exhibit 99.1 |
Press Release of Ormat Technologies, Inc. dated |
About Inc. (NASDAQ:INCR)
INC Research Holdings, Inc. is a global contract research organization (CRO). The Company is focused on Phase I to Phase IV clinical development services for the biopharmaceutical and medical device industries. The Company operates through two segments: Clinical Development Services and Phase I Services. The Company’s Clinical Development Services segment offers all clinical development services, including full-service global studies, as well as ancillary services, such as clinical monitoring, investigator recruitment, patient recruitment, data management, study reports to assist customers with their drug development process, quality assurance audits and specialized consulting services. The Company’s Phase I Services segment focuses on clinical development services for Phase I trials, which include scientific exploratory medicine, first-in-human studies through proof-of-concept stages and support for Phase I studies in established compounds. Inc. (NASDAQ:INCR) Recent Trading Information
Inc. (NASDAQ:INCR) closed its last trading session 00.00 at 56.85 with 1,353,651 shares trading hands.
