Resolution No. 7549•
F � f
r < <
.. 4
1 RESOLUTION NO. 7549
2
A RESOLUTION OF THE CITY COUNCIL OF
3 THE CITY OF VERNON APPROVING THE
SALE OF SURPLUS REGIONAL CLEAN AIR
4 INCENTIVES MARKET TRADING CREDITS
AND APPROVING AND AUTHORIZING THE
5 FILING OF FORMS AND THE EXECUTION
OF VARIOUS AGREEMENTS AND DOCUMENTS
61 BY THE CITY ADMINISTRATOR OR HIS
DESIGNEE
7
8
9 WHEREAS, the City Council has approved a Resource
10 Procurement Plan and Credit Risk Management Policy (the "Policy")
11 for the Utilities Department (the "Department") in order to
12 provide the governing principles and tools under which the
13 Department will operate in the deregulated electric power market
14 and efficiently manage its resources; and
15 WHEREAS, the City has received a facility permit from
16 the South Coast Air Quality Management District ("SCAQMD") for
17 its power plant which gives the City an allowance of amounts
18 of Oxides of Nitrogen ("NOX") and Oxides of Sulfur ("SOX") to
19 emit into the atmosphere; and
20 WHEREAS, the SCAQMD has set up a Regional Clean Air
21 Incentives Market ("RECLAIM") Trading Credits (collectively,
22 "RTCs") program to provide a market incentive to allow facilities
23 flexibility in achieving emission reduction requirements for NOX
24 and SOX; and
25 WHEREAS, pursuant to the SCAQMD program the City may
26 sell its surplus NOX RTCs and surplus SOX RTCs, if available, for
27 consideration, either directly to another facility permit holder
28 or through an environmental brokerage firm; and
-1-
•
c r t
� i r
s r
1 WHEREAS, the City Clerk has recommended to the City
2 Council that it adopt a resolution to approve the sale of surplus
3 NOX RTCs and surplus SOX RTCs, if available, in this fiscal year
4 and, if applicable, in each succeeding fiscal year period
5 hereafter, and authorize the City Administrator to execute
6 documents and agreements to undertake the transactions, when and
7 if applicable.
8 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
9 THE CITY OF VERNON AS FOLLOWS:
10 SECTION 1: The City Council of the City of Vernon does
it hereby find and determine that the recitals contained hereinabove
12 are true and correct.
13 SECTION 2: The City Council of the City of Vernon
14 hereby approves the sale of surplus Oxides of Nitrogen ("NO,")
15 and surplus Oxides of Sulfur ("SOX") through the Regional Clean
16 Air Incentives Market ("RECLAIM") Trading Credits (collectively,
17 "RTCs") program established, regulated and administered by the
18 South Coast Air Quality Management District ("SCAQMD"), as such
19 surplus NOX RTCs and surplus SOX RTCs may become available to the
20 City during this fiscal year through June 30, 2000, and each
21 succeeding fiscal year period hereafter.
22 gEE MION33: The City Council of the City of Vernon
23 hereby approves the RECLAIM Trading Account Representative
24 Registration Form (the "Representative Registration Form"),
25 attached hereto as Exhibit A to this resolution, the RTCs
26 Transaction Registration Form, attached hereto as Exhibit B to
27 this resolution, and any other similar forms and documents which
28 SCAQMD may require and as the City Administrator may determine,
-2-
1 upon the advice of counsel, in order to undertake a NOX RTC sale
2 or a SOX RTC sale transaction during this fiscal year period or
3 each succeeding fiscal year period hereafter, as such NOX RTCs
4 and SOX RTCs become available and surplus to the City.
5 SECTION 4: The City Council of the City of Vernon
6 hereby authorizes the city Administrator or his designee, to
7 execute and file with the SCAQMD the Representative Registration
8 Form, the RTCs Transaction Registration Form and other similar
9 forms and documents for, and on behalf of, the City of Vernon.
10 SECTION 5: The City Council of the City of Vernon
it hereby approves the Agreement for Purchase and Sale of RECLAIM
12 Trading Credits (the "RTC Agreement"), attached hereto as Exhibit
13 C to this resolution, and the Clean Air Auction Representation
14 Agreement (the "Auction Agreement"), including Schedules A, B, C
15 and D to said Auction Agreement, by and between the City of
16 Vernon and Cantor Fitzgerald Brokerage, L.P., an environmental
17 brokerage firm specializing in the auction of NOX RTCs and SOX
18 RTCs, attached hereto as Exhibit D to this resolution, and any
19 other similar RTC purchase and sale agreement and brokerage NOX
20 RTC and SOX RTC auction agreement, as the City Administrator may
21 determine, upon the advice of counsel, by and between the City of
22 Vernon and other RTC purchasers and industry recognized
23 environmental brokerage firms, in order to undertake the sale of
24 the City's surplus NOX RTCs and surplus SOX RTCs during this
25 fiscal year period, through June 30, 2000 and each succeeding
26 fiscal year period hereafter, as such NOX RTCs and SOX RTCS
27 become available and surplus to the City.
28 SECTION,6: The City Council of the City of Vernon
=I=
1 hereby authorizes the City Administrator or his designee, to
2 execute the RTC Agreement, the Auction Agreement, and other
3 similar RTC purchase and sale agreements and auction agreements,
4 with other RTC purchasers and industry recognized environmental
5 brokerage firms for, and on behalf of, the City of Vernon.
6 SECTION 7: The City Council of the City of Vernon
7 hereby authorizes the City Administrator or his designee, to
8 execute and delivery any other documents incidental to the sale
9 of surplus NOx RTCs and surplus SOX RTCs this fiscal year, and
10 each succeeding fiscal year period hereafter, as such NOX RTCs
11 and SOX RTCs shall become available and surplus to the City.
12 SECTION 8: The City Council of the City of Vernon
13 hereby authorizes the City Administrator to make whatever
14 administrative or nonsubstantive changes, upon the advice of
15 counsel, to any forms or documents required by the SCAQMD, the
16 RTC Trading Agreement, the Auction Agreement, or similar NOX RTC
17 and SOX RTC trading and auction agreements the City may enter
18 into, this fiscal year or each succeeding fiscal year period
19 hereafter, as is necessary to carry out and effectuate the intent
20 of this Resolution.
21 SECTION 9: The City Clerk of the City of Vernon shall
22 certify to the passage of this resolution and thereupon and
23 thereafter the same shall be in full force and effect.
24 APPROVED AND ADOPTED this 6th day of June, 2000.
25
ONIS C. MA G, YOR
26 ATTE� w%
27 v
BRUCE V. MALKENHORST, City Clerk
28, F4:res-.doc
-4-
1 STATE OF CALIFORNIA )
2 COUNTY OF LOS ANGELES )
3
4 I, BRUCE V. MALKENHORST, City Clerk of the City of
5 Vernon, do hereby certify that the foregoing Resolution, being
6 Resolution No. 7549, was duly adopted by the City Council of the
7 City of Vernon at a regular meeting of the City Council duly held
8 on Tuesday, June 6, 2000, and thereafter was duly signed by the
9 Mayor of the City of Vernon.
10
11
12
13
BRUCE V. MALKENHORST, City Clerk
14
15
16 ( SEAL)
17
18
19
20
21
22
23
24
25
26
27
28
EXHIBIT A
r. SOUTH COAST AIR QUALITY MANAGEMENT
DISTRICT Regional Clean Air Incentives Market Trading Account and Representative
Registration Form
Purpose of this form - This form Is used to identify the authorized account representative(s) for an RTC holder.
Section I - Company Information
Company Name
Company Street Address
Confirmations
Street # 1
Street If 2
City, State Zip
Zip
Section II - Designation of Representatives
Name
U
Phone #
Name
f �
Phone #
Title
Fax #
Title
U
Fax #
Mailing Address for Transaction
(If diBerent from Company Street Address.)
Street #1, or P.O. Box
Sheet # 2
City, State
Signature Date
Signature Date
Name Title Signature Date
Phone # Fax #
Section III - Account Number Identification
Do you hold a SCAQMD permit? Yes _ or No
If yes, please complete the following:
Facility ID # as shown on your RECLAIM Transaction Card or SCAQMD permits. If you do not
know your facility ID #, enter the number of one of your permits .
If no, the SCAQMD will assign you an ID # This number shah be used on all subsequent
transaction forms.
(For SCAQMD Use Only)
Section IV - Certification of Owners or Officers
I certify that I am an owner or officer of the company identified herein and authorize the above parties to act as the company's representatives in the
registration of any transactions for RTCs for the Facility identified herein. I am authorized to make this submission on behalf of the persons with an
ownership interest for whom this submission is made.
EXHIBIT A
I certify that the statements and information are true, accurate, and complete to the best of my knowledge.
U
Name TH18 Telephone Signature Date
Name Title Te h" Sigrrefrre Date
This form and SCAQMD's use shall not constitute arty acceptance of liability on behalf of SCAQMD for any RTC transaction which may be the
result of misrepresentation or error by trading partners or their fepreseraalives. This form and SCAQMD's use of it shall not be construed, in any
way, to create a fiduciary relationship with either the seller or buyer of RTCs or with any other parttt associated with such transactions.
Submit this form to:
SCAQMD, RECLAIM Administration - RTC Transfers, P.O. Box 4830, Diamond Bar CA 91765-0830
EXHIBIT B
South Coast Air Quality management District
Regional Clean Air Incentives Market Trading Credits (RTCs) Transaction Registration Form
This form may be used to register multiple transfers between a buyer and a set ler for a pollutant. Attach a separate form if more than
10 transfers are being registered.
Name of Buyer)Transferee Account
ID#
Name of Sellerfrransferor Account
IN
Pollutant: NOX or SOX odentify one pollutant only)
RTC Expiration Date (Month/Year) RTC Origination Zone (Coastal or Inland) Quantity (Pounds)
Price ($/Pound) Use Code (Buyer) Generation Code (Seller)
Account Source Code (Seller) Certificate Serial Number (Seller)
Use Codes (only one code per transaction) 01
increase RTC Allocation account balance to satisfy annual
Use under Rule 2005 - New Source Review for RECLAIM 03
compliance 02
Increase RTC cerlificale account balance without issuance of
physical certificate. 04
Increase RTC certificate account balance with issuance of
physical certificate 05
Refire RTCs from market without issuance of physical certificate
Retire RTCs from market with issuance of physical certificate 07
06
Facility Acquisition (Change of Ownership) NOTE. Certificate accautt balances mast be converted to Allocation balance to be
eligible for compliance use
Generation Codes 01'
Process Change 0?
Addition of Control Equipment 03•
Production Decrease 04'
Equipment or Facility Shutdown 05 Mobil
Source Emission Reduction Credit (MSERC) 06
Facility Acquisition (Change of Ownership) 07 RTCs
for Future Compliance Year, cause of generation not yet been determined •
Selection of this Generation Code must be
accompanied by the selection ,of Account Source Code "A" - Allocation Account
` Account Source Code (only one code per transaction) A
Allocation Account B"
Certificate Account C"
Printed Certificate (must fist Certificate Serial number and
attach certificate to this form) • • This Account Source Code may be
selected n"out providing a Generation Code
I certify that I am authorized to make this submission on behalf of the affected registered holders of the RTCs listed herein. I
certify that the statements are true, accurate, and complete to the best of my knowledge.
EXHIBIT1.3
Authorized Representative of BuyerRransferee (Prod Name) Authorized Representative of
Seller/Transferor (PrudName)
Signature Date :. Signature bate
When RTCs are bansferred from an Attooatfon, the debit shadresutt in an automatic amendment to the RTC Listing.
Submit this form with Transaction Registration Fee pursuant to Rule 301($52.40 prior to 711199) to
SCAQMD, RECLAIM Administration - RTC Transfers, P.O.4830, Diamond Bar, CA 91765-0830
EXHIBIT C
AGREEMENT FOR PURCHASE AND SALE OF
RECLAIM TRADING CREDITS
THIS AGREEMENT is made this day of May, 2000 by and between
a Corporation ("Seller"), and t a --
Corporation ('Buyer").
WHEREAS, Seller is the owner of certain oxides of nitrogen ("NO,") RECLAIM Trading
Credits {"RTCs"), which are defined in and governed by Regulation XX ("RECLAIM
Rules") of the South Coast Air Quality Management District (the "SCAQMD").
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell-VJWW-XX
Cycle 2,1999 NOx RTCs (hereinafter "the NO,, RTCs").
AND'WHEF'.EAS, both parties desire to fully consummate this purchase and sale, and cause
transfer of tb a NOx RTCs as soon as they reasonably can do so.
1. Purchase and Sale of the NO, RTCs. Seller shall sell to Buyer, and Buyer shall
purchase from Seller XXX pounds of Cycle 2,1999 NOx RTCs.
2. Transfer of Ownership of the NO, RTCs. Immediately *upon Seller's receipt of the
payment referred to in Paragraph 3 below, the NOx RTCs shall become the sole property and
entitlement of Buyer. Upon the payment of monies provided for in Section 3 below of this
Agreement and upon Buyer's receipt of documentation evidencing that the NO. RTCs have
been transfewed to Buyer, Buyer shall have no recourse against Seller in the event of change
of law goverroing the NO,, RTCs.
3. Purchase Price. The Purchase Price for the NO, RTCs is SXXIRTC or a total of
SXXX.
4. Purchase Price Payment. Simultaneous with the execution of this Agreement,
Buyer shalt wire to Cantor Fitzgerald Brokerage, L.P. ("CF") the Purchase Price and the
Buyer's Clean Air Auction Fee of SXXX as defined in Section 5 below. Upon CF's receipt
of the Seller -signed SCAQMD Form 2007-2 and the check made payable to the SCAQMD
for the RTC transfer fee in the amount of $53.40, a fully executed Form 2007 2 will be filed
with the SCAQMD to effect the transfer of the NO; RTCs from Seller to CF. Upon
confirmation from the SCAQMD that the NOx RTCs are in CF's account at the SCAQMD
and upon CF's receipt of the Buyer -signed SCAQMD Farm 2007-2 and the check made
payable to the SCAQMD for the RTC transfer fee in the amount of $53.40; %faity'vxecuted
Form 2007-2 will be filed with the SCAQMD to effect the transfer of the NO, RTCs to
Buyer. In thi: event that at any time prior to the issuance by SCAQMD of the documentation
that evidences the transfer of the NO. RTCs from Seller to Buyer, the NO, RTCs cease, for
any reason, i rkcluding any change in legislation or the RECLAIM Rules, beyond the
reasonable control of the parties, to be NO. RTCs tradable in accordance with the
RECLAIM F:ules as they exist as of the date of this Agreement, then Buyer may terminate
this Agreeine:nt without any liability or obligation to any party, and CF or Seller shall return
the Purchase Price to Buyer.
5. Broker's Fees. Buyer and Seller shall agree to split equally CF's Clean Air
Auction fee of 7% and to pay such commission simultaneous with CF's wire of the Purchase
Price to Seller. Buyer represents and warrants to Seller, and Seller represents and warrants
EXHIBIT C
2000
. RTC Purchase and Sale Agreement
May 4, 200
Page 2
to Buyer that; aside from CF, no broker or finder has been engaged by it, respectively, in
connection vrith this Agreement. Each parry shall indemnify and hold harmless the other
from all damages resulting from any claims that may be asserted against the other party by
any broker, finder, or other person with whom the indemnifying patty has dealt.
6. Warranty. ' Seller is the sole owner of record of the NO, RTCs that will be
transferred us Buyer free and clear of all encumbrances.
7. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which shall constitute the same
instrument, sad may be executed by facsimile copy.
& Additional Documents. At the request of either parry, the other party shall use best
efforts to execute and deliver such additional documents and do such other acts as may be
reasonably necessary to carry out the full intent and purpose of this Agreement.
9. Notice. All notices and other communications in connection with this
Agreement shall be sent to the following addresses: (a) For Buyer:
. Attention:_ , Telephone
No.: ( ) _ , Facsimile No.: ( ) ; (b) For Seller: _
_ ,California ; Attention: _
Telephone No.: ( ) - Facsimile No.: ( ) - ; with a copy to
Cantor Fitzg,rald Brokerage, L.P., Environmental Brokerage Services, 345 California Street,
Suite 1260, San Francisco, CA 94104, Attention: Christine Grandstaff, Telephone No.:
(800)228-29;i5x4, Facsimile No.: (949)597-0531.
10. Entirety. This Agreement sets forth the entire agreement of the parties with
respect to this matters contained herein and all prior understandings, negotiations, and
agreements with respect to same are merged herein.
11. Assignees. Buyer and Seller may assign their rights, duties and obligations
pursuant to this Agreement. The party assigning its rights to another must notify the other
parry in writing of such transfer of rights, duties, and obligations prior to the completion of
the final transaction of this Agreement.
12. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFOItN A.
Executed as of the date first above written.
By:
Buyer Date
By Date
. Seller
EXHIBIT D
CLEAN AIR AUCTION
REPRESENTATION AGREEMENT
This Representation Agreement ("Agreement") is made as of , 2000 by
and b:.tween Cantor Fitzgerald Brokerage, L.P., a Delaware limited partnership with offices
located at One World Trade Center, 105th Floor, New York, New York 10048 ("CF") and _
, a Corporation with offices located at _
("Principal").
RECITALS
1. CF intends to conduct one or more auctions ("Auctions") to be held with respect to
Regional Clean Air Incentives Market ("RECLAIM") Trading Credits ("RTCs"), and
Emissions Reduction Credits ("ERCs"), each as defined by the rules and regulations of the
South Coast Air Quality Management District of the State of California ("SCAQMD").
2. Principal desires to retain the services of CF as representative of Principal with
respect to the purchase and sale of RTCs and ERCs, in each case as directed by Principal, in
one or more Auctions.
-1
NOW THEREFORE, in consideration of the covenants and agreements set forth
herein, and for other consideration, the receipt and sufficiency of which is hereby
acknowledged, CF and Principal agree as follows:
1. Appointment as Agent. Principal hereby appoints CF as its agent with respect to the
purchase and sale of RTCs and ERCs in Auctions. CF agrees that Principal may purchase and
sell RTCs and ERCs other than in Auctions.
2. Agent's Authority.
(a) Sale. Principal authorizes CF to make an offer to sell RTCs and/or ERCs ("Sale
Credit;") in a scheduled Auction (the "Next Auction"), provided that all conditions set forth on
Schedule A attached hereto have been satisfied. These conditions include but are not limited
to: (i) ,provision of written instructions by Principal to CF; (ii) establishment of Pe formance
Guarantees by Principal in the form described on Schedule A sufficient to ensure the delivery
of any credits sold; (iii) deposit of funds by Principal sufficient to pay fees required hereunder
in comter-don with such offer; and (iv) acceptance by CF of such authorization by Principal.
(b) Purchase. Principal authorizes CF to make an offer to purchase RTCs and/or ERCs
("Purchase Credits") in the Next Auction, provided that all of the conditions demanded of
Purchaser listed on Schedule A have beta satisfied. Such conditions include, but are not
limited to: (i) provision of written instructions by Principal to CF; (ii) establishment of
Perfonnancc Guarantees by Principal in the form described on Schedule A sufficient to ensure
g:\p\aucdon\genaric.agr
EXHIBIT D
payment for all credits purchased, and fees due CF; and (iii) acceptance by CF of such
authorization by Principal.
(c) Alteration of Offers. From the date five business days in advance of the Next
Auction, Principal will not be permitted to alter any of the terms of an offer accepted by CF
("Accepted Offer") in accordance with the foregoing provisions, provided, that CF in its sole
discretion may authorize such alteration.
(d) Conforming Offers. CF will solicit offers, with respect to the Next Auction, to
purchase or sell ERCs and RTCs, as the case may be, pursuant to the Principal's instructions
in accordance with the foregoing provisions, and is authorized to accept on behalf of The
Principal any offer that conforms to the terms of such instructions (any such offer being
hereinafter referred to as a "Conforming Offer"). The Principal agrees that CF's acceptance
of a ('oinforming Offer will constitute the Principal's legally binding and irrevocable
agreement to purchase or sell ERCs or RTCs pursuant to the terms of this Agreement.
(e) Settlement Procedures. Upon the acceptance of a Conforming Offer, CF will
oversve the settlement of trades, and return of surplus Performance Guarantees in the manner
described in Schedule A.
(f) Other Principals. Principal agrees that CF may represent other potential sellers and
purchasers of RTCs and ERCs, or perform other duties related thereto, during and after the
term hereof. In addition, Principal understands that in representing a third party, CF may be
required to disclose material facts (but not including the identity of Principal or the details of
Princiml's offer) concerning Principal's position to the third party and Principal's consent for
CF to represent the third party is consent for CF to disclose such information.
(g) Regulatory Reports. CF will report information concerning completed sales
transactions. in ERCs and RTCs to SCAQMD, as required by law, rule or regulation.
3. Compensation. Principal shall compensate CF in accordance with the fees set forth
on Scbedule B attached hereto.
4. Reasonable Efforts; Compliance with Law. CF shall use reasonable efforts to locate
willing: and able purchasers and sellers, as the case may be, of ERCs and RTCs on behalf of
Principal. CF, however, makes no representation, warranty or guarantee to sell, purchase or
transfer ERCs or RTCs on Principal's behalf, and makes no assurances of any kind regarding
the success of CF's efforts. CF will undertake its obligations hereunder in compliance with all
applicable laws, rules and regulations (collectively, "Laws") in all material respects. CF has
used reasonable efforts to provide that the procedures set forth hereunder will be effective to
compleite the transactions contemplated hereby, and to comply in all material respects with
applicable rules and regulations of the SCAQMD.
5. Principal's Representations. The Principal represents, warrants, covenants and
agrees that (a) it understands the SCAQMD's rules and regulations regarding ERCs and RTCs,
g;lpla=ioalgtncric.agr
2
and the overall regulatory scheme in which ERCs and RTCs were created, (b) it will
independently determine the appropriateness of any transaction that the Principal initiates
pursuant to the terms of this Agreement, (c) that it will not rely on any statement of opinion or
fact made by CF, or any of CF's employees, agents or representatives, in making such
detennination, and (d) that it assumes the full risk as to the value, if any, that the ERCs or
RTCs may have at any time. The Principal further represents and warrants that the execution
and delivery of this Agreement and an Escrow Agreement, if required, and the consummation
of the transactions contemplated hereby and thereby, have in each such case been duly
authacized by appropriate action of the Principal, and that the person who has executed this
Agrecanent on behalf of the Principal has been duly authorised by the Principal to do so.
6. Indemnification. The Principal agrees to indemnify CF, and CF's agents,
representatives, employees, officers, partners and directors, and to hold each of them harmless
from -ind against any claim, liability, damage, or expense (including reasonable legal fees)
arisiAcr out of or in connection with any transaction initiated under or contemplated by this
Agreement, except in the case of willful misconduct or gross negligence on the part of CF or
any sitch person. Willful misconduct or gross negligence on the part of any entity or
individual otherwise entitled to be indemnified hereunder shall not affect the availability of
indemnification to any other such entity or individual.
7. Force Majeure. CF shall have no duties or responsibilities with respect to the
purchase and sale of ERCs and RTCs except those expressly set forth in this Agreement. CF
shall not be responsible or liable for any failure or delay in the performance of its obligations
under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond
its control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or
military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of
utilities, transportation, computer (hardware or software) or communications service;
accidents; labor disputes; acts of civil or military authority; governmental actions; or inability
to obmin labor, material, equipment or transportation. If any provision of this Agreement shall
be unlawful or unduly burdensome to either CF or Principal due to a change in applicable law,
rule, regulation, or the interpretation or enforcement of any of them by one or more entities to
the regulation of which either party is subject, such party shall not be in breach of this
agreement by virtue of compliance with such law, rule or regulation, and the parties shall use
good taith efforts to agree on amendments hereto so as to conform this Agreement to such law,
rule or regulation. CF shall be entitled to conclusively rely upon any certification, notice or
other communication (including by telephone, telex, facsimile, telegram or cable) reasonably
believed by it to be genuine and correct and to have been signed or sent by or on behalf of an
approved person ("Approved Person") of Principal. Set forth in Schedule C attached hereto is
a list c-f Approved Persons, which list may be amended by Principal from time to time upon
notice to CF. No provision of this Agreement shall require CF to expend or risk its own funds
in the ',mrformance of its duties hereunder. In no event shall CF be responsible for special,
indirect or consequential damages or lost profits or loss of business.
g;lp%auct ionlgenedc.agr
8. Confidential Information. (a) If Principal desires any information submitted to CF
to be treated confidentially, it will designate such information in writing as "Confidential"
("Information"). CF will use its best efforts to keep the Information confidential, and not
reveal it to parties other than those employees, agents, partners, shareholders, officers,
directors or other representatives (collectively, "Representatives") of CF or its affiliates who
have .actual need in furtherance of CF's obligations hereunder and activities in connection
therewith ("Contract Activities"). CF will direct its Representatives receiving the Information
of its confidential nature, and direct such Representatives to treat the Information confidentially
and nat to use it except in connection with the Contract Activities. Without the prior written
consent of the Principal and subject to the exceptions set forth below, CF will direct its
Representatives not to disclose to any third person that any Information has been made
available from the Principal, or the nature of any of the Information.
(b) If CF or any of its Representatives is required by the SCAQMD or another
regulaory entity or pursuant to legal process, to disclose any Information or the existence or
nature: of the discussions or transactions between us, CF will promptly notify the Principal to
permit it to seek a protective order or take other appropriate action. CF will also exercise its
reasonable best efforts to cooperate in Principal's efforts to obtain a protective order or other
reasonable assurance that confidential treatment will be accorded the Information and the
existai,ce of the discussions or transactions between the parties. If, in the absence of a
protective order, CF or any of its Representatives is compelled as a matter of law (or required
in order to fulfil CF's obligations hereunder) to disclose the Information or the existence of
discussions between the parties, CF may disclose to the parry compelling disclosure only that
part of the Information or the discussions as is required to be disclosed by law or as a
necessary part of the fulfillment of CF's obligations hereunder. In connection therewith, the
Principal explicitly grants CF and its Representatives the right to disclose all information
regarding the Principal to the SCAQMD, as it may require from time to time in order fvr CF
to complete the transactions contemplated hereby and undertaken by the Principal. CF will
identify as "confidential" Information submitted to any such entity, and if requested by
Principal in writing, will seek confidential treatment of such Information under those
exemptions specifically requested by Principal, from applicable laws, rules and regulations
mandating or permitting disclosure of such Information.
(c) Notwithstanding the foregoing, it is understood that when known or available in the
trade ar otherwise in the public domain, through no act or failure to act by CF or its
Repre.enmtive(s), or if previously and lawfully known to such party or if subsequently
lawfully acquired by such party from third parties not under any obligation of confidentiality or
secrecy to the Principal, such information will not be deemed to be Information subject hereto.
9. Notices. Notices and other written communications required by or contemplated to
be matte pursuant to the terms of this Agreement may be sent by first-class mail, postage
prepaid, by overnight courier or other guaranteed -delivery service, or by facsimile
transmission, as follows:
g:\p%sucd oa\Scnarie.asr
4
If to 'F:
Cantor Fitzgerald Brokerage, L.P.
One 'World Trade Center
New York, New York 10048
Attn: Carlton W. Bartels
Fax Number: 212-938-4252
If to the Principal:
Attn:
Tcl Number:
Fax Number:
Either party may change the address or fax number to which notices are to be sent by giving
notice thereof in the manner described herein. Any notice or communication to be delivered
hereunder shall be deemed to have been delivered when the party for whom delivery is
intended is in actual receipt thereof. Neither CF nor the Principal shall be held responsible for
delays in the transmission or execution of Instructions, notices or other communications due to
a breakdown or failure of transmission or communication facilities, or for any other cause
beyond the control of CF or the Principal, as the case may be.
10. Termination. Either party hereto may terminate this Agreement upon giving notice
to the other party advising the effective date of such termination, provided, however, that any
such termination shall not relieve either party of any liability or obligation that was incurred
prior to the effectiveness of such termination. The Principal acknowledges that any
Confoming Offer that has been accepted by CF on the Principal's behalf prior to the effective
date of such termination shall remain binding on the Principal pursuant to the terms of this
Agreement.
11. Miscellaneous. (a) Nothing in this Agreement shall be deemed to create a joint
venture:, franchise, partnership or principal -agent relationship between CF and Principal.
(b) This Agreement contains the entire agreement of the parties with respect to the
subject matter hereof and no modification or waiver of any provision hereof will be binding
upon a: y party unless in writing and signed by the parties hereto. No waiver or modification
shall b -. deemed to be a subsequent waiver or modification of the same or any other term,
covenant or condition in this Agreement.
g:%p%aucd )nXgeneric.agr
M
(c) The invalidity or uncnforceability of any particular provision of this Agreement
shall not affect the other provisions and this Agreement shall be construed in all respects as if
such invalid or unenforceable provisions were omitted.
(d) This Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, permitted assigns, heirs, executors and administrators.
(e) This Agreement may not be assigned, in whole or in part, by either party hereto
without the prior written consent of the other parry (any purported assignment hereof in
violation of this provision being null and void); however, it may be assigned in whole or in
part by CF to any affiliate or to any successor in interest of CF or y..&filiate'by merger,
consolidation, reorganization or otherwise.
(f) This Agreement may be executed in various counterparts, each of which shall be
deenu5d an original, but all of which together shall constitute one and the same instrument.
(g) The headings contained in this Agreement are for reference purposes only and shall
not of Fect- in any way the meaning or interpretation of this Agreement. Section, subsection,
recital and party references are to this Agreement unless otherwise specified.
(h) The rights and remedies provided for hereunder are cumulative and are not
exclusive of any rights and remedies that may be available to any party under applicable law,
in equity, or otherwise.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
G"[G EFFECT TO ITS CONFLICT OF LAWS PRINCIPLES. CF AND PRINCIPAL
HEREBY IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF CALIFORNIA AND/OR THE COURTS OF THE UNITED
STAT:-S OF AMERICA IN THE STATE OF CALIFORNIA, FOR PURPOSES OF ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT, AND EACH IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT* AND ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT HAS.MEN'SROUGHT IN
AN INCONVENIENT FORUM. CF and Principal hereby irrevocably consent to the service
of process outside the territorial jurisdiction of such courts in any such action or proceeding by
mailing; copies thereof by certified U.S, mail, return receipt requested and postage prepaid, to
its address as specified in Section 9.
SAplauc63nlgeneAc.aU
2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day sad year first above written.
CANTOR FITZGERALD BROKERAGE, L.P.
By:
Carlton W. Bartels
Managing Director
By:
g:\p\auai4►a\generlc.agr
Schedule A to
Clean Air Auction
Representation Agreement
Clean Air Auction Procedures and
Requirements of Cantor Rtzgerald and Principals
for the Clean Air Auction
The following procedures are to be followed by Cantor Fitzgerald ("CF") in conducting the Clean Air
Auctiws, and by the Principal when participating in the Clean Air Auction. Capitalized terms used and not separataely
definer: herein have the meanings ascribed to them in the Clean Air Auction Remotion Agreement
("Agre-umt"). Cantor Fitzgerald sponsors two types of Clean Air Auctions: a continuous, standing auction
r`Continuous Auction"), and periodic market clearing auctions scheduled to correspond with the end of the
RECL)JM compliance cycles ("Reconciliation Auctions"). Except as specified, all procedures described herein
apply tAs both Continuous and Reconciliation Auctions. Principals bidding to buy credits are herein refeired.to as
"Purchs isers"; Principals offering credits for sale are herein referred to as "Sellers".
Genersl Procedures:
Requirements of Sellers:
1) Written Instructions. Principal must issue written instructions and representations to CF, in form and
substance acceptable to CF, specifying all of the information and representations required on Schedule D (EZ Form
or Standard Form) to the Agreement if offering RTCs for sale, and or Schedule E to the Agreement if offering ERCs
for sale. Principal may alter orders placed in the Continuous Auction prior to acceptance of a Conforming Order by
CF. Orders placed in the periodic Reconciliation, Auctions may only be altered in accordance with paragraph 2.c of
the Agreement.
2) Performance Guarantees - Delivery of Sale Credits. Unless explicitly stated in writing and agreed to
by CF at the time the order is placed, Principal must establish Performance Guarantees as described herein.
Principal must irrevocably consign the Sale Credits to CF: i) in the case of RTCs, by transferring the credits to the
account of CF with SCAQMD, or, iii) in the case of ER" by providing CF with a completed and executed
SCAQDID Form 401(Application for Emission Reduction Credit Certificate) indicating the transfer of the total
quantity of Sale Credits offered for sale in the Clean Air Auction, and a copy of the current Emission Reduction
Certificrte containing the Sale Credits (or the replacement form for either such form, as may be determined by the
SCAQI,(D from time to time). For the periodic Reconciliation Auctions, Performance Guarantees must be in place
prior to the first day of the auction. For Continuous Auctions, delivery of the Sale Credits must be initiated within
five days of placing the order to sell.
3) Acceptance by CF. CF in its sole discretion rnay accept authorization by Principal to sell Sale Credits.
CF shale. accept or reject authorization within four business days of receipt thereof.
4) Transfer of Credits Sold. In the case where CF has accepted a Conforming Offer for any or all of the
Sale Crtdits, the Seller shall execute any forms required to effect the transfer of credits to the ultimate Purchaser.
Note: in the case that only a portion of ERCs offered for sale are sold, these forms may include the execution of a
new Form 401 indicating the quantity of ERCs sold.
Requirtithents of Purchasers:
1) Written Instnrctions. Principal must Issue written instructions and representations to CF, in form and
substanc a acceptable to CF, specifying all of the information and representations required on Schedule D (EZ Fong
or Standard Forms) to the Agreement if bidding to purchase RTCs andlor Schedule E if bidding to purchase ERCs.
2) Deposit of Funds Principal must deposit with CF, at such time and with such further documentation as
CF may reasonably require, in the form either of cash or a standby letter of credit in favor of CF (substantially in the
form of Schedule F to the Agreement] sufficient to (i) effect the purchase of the Purchase Credits at the maximum
purchase: price and in the maximum quantity for which Principal is bidding for Purchase Credits, and 00 pay the
maximtna fees required hereunder in connection with such offer. [Note: Principals may request a deposit waiver
Schedule A: Page 1 of 3
which allows Principal to lower the required deposit to an amount lower than the value calculated under 01 and 00
above ("Deposit Waiveel. Such requests will only be granted if found acceptable by CF and the potentially affected
Sellers.)
3) Acceptance by CF. CF in its sole discretion may accept authorization by Principal to purchase Purchase
Credit.. CF shall accept or reject authorization within four business days of receipt thereof.
Requimments of CF-
1) Review of Instructions. CF will review written, instructions by Principal to ensure they = complete
and wf'-;] promptly notify Principal if they are not complete.
2) Review of Performance Guarantees. CF will review Poforawnce Guarantees placed by Principal to
ensure they are adequate to ensure performance by Principal in the event that one or more Conforming Orders is
accepted.
a) Incomplete Delivery of Sale Credits. Should delivery of the Sale Credits to CF not be
completed at the time CF identifies a Conforming Order, CF shall inform the potentially affected Purebaset(s) that
the Sal..- Credits have not been successfully delivered to CF; and Purchasers may inform CF diar i) they consent to
being matched to any Sella knowingly accepting that if the Seller fails to complete delivery, the sale may be
canceled without recourse by Principal to CF or Seller, or ii) they do not wish to be matched to such Seller until
Seller':. Sale Craft have been successfully deposited.
b) Deposit: Walvers. Should Principal seek a Deposit Waiver. CF shall inform the potentially
affected Sellers of such request; and Sellers may Whim CF that: i) they consent to such a Deposit Waiver thereby
allowing them to be matched to any Purchaser knowingly accepting that if the Purchaser falls to make timely
paymera the sale may be canceled without recourse by Principal to CF or Purchaser, or ii) they reject such a Deposit
Waiver, thereby, limiting Seller's participation in the Auction to sales to Purchasers that have placed Performance
Guarantees adequate to cover their purchases.
3) Solicitation of Conforming Offers. CF will solicit Conforming Offers as described in Paragraph 2(d)
of thefigreemeot.
4) Conflrmation. On the acceptance of a Conforming Offer, CF will provide, by facsimile transmission,
confirmation ("Confirmation") thereof to Principal as soon as practicable (but is no event later than five business
days) fallowing such acceptance, indicating the number and of date(s) of the ERC(s) or RTC(s) being
transferred, and the purchase price(s) and the anticipated settlement date(s) therefor.
5) Return of Surplus Performance Guarantees. Within five business days of the close of the
Reconciliadon Auction or withdrawal of an order in the Continuous Auction, CF will initiate the return of all
Perfamance Guarantees no longer required to ensure performance bithe Principal with respect to completed
transactions or transactions for which their remains open interest (including return of Performance Guarantees where
no Contbrming Offer was accepted). CF offers to retain unsold RTCs in the account of CF with SCAQMD to
facilitate; Principal's offering the unsold RTCs for sale in future Clean Air Auctions (Continuous or Reconciliation).
6) Collection of Amounts Due. CF will notify each successful bidder for Purchase Credits who has not
deposited sufficient cash with CF to cover the fall cost of the purchased credits, including applicable 6M, of the
amount :We to the Seller of EM or RTCs with respect to the applicable Conforming Oft plus applicable fees.
Such bidder will have four business days thereafter to deposit such cash with CF. On the fifth business day
following such notificadon, if it has not received cash in sufficient amounts, CF will: i) draw an the applicabla letter
of credit, if on deposit with CF, in the amount of the deficit, or 1i) inform the affected Seller of such a delay at which
time Sal ler may advise CF to cancel the sale to the Purchaw.
7) Transfer or Credits to Purchasers. As soon as practicable (but no later than five business days)
following either confirmation that funds in the amount required hereunder with respect to a Conforming Offer have
been received
�4ved by CF, or CF has drawn on the applicable letter of credit, CF will initiate the delivery of the applicable
'Sale Credits to the Purchaser.
a) Transdar orims. CF will instruct SCAQMD to transfer the applicable RTCs to the account
as SCAQMD Of The applicable bidder for Purchase Credits.
Schedule A: Page 2 of 3
• r �
b) Transfer of ERCs. CF will provide the Seller with one or more Form 401(s) specifying the
amount of each" of ERC sold in the Auction. Seller shall execute the Form 401(s) and return to CF so that
information regarding the ul mum Purebaser may be completed. in the can whom the quantity of ERCs sold is
equal t o the quantity specified on the Form 401 held as a Performance Guarantee and is sold to a single Purchaser,
CF may utilize the executed Forth 40) . If Seller fails to return the executed Form 401(s) wid& five business days,
CF shall be See to utilize the Forst 401(s) held as a Performance Gu==Ue as necessary to effect delivery ofERCs
to ttu i dtimate Purchaser(s), and Seller shall reimburse CF for any expenses associated with the issuaaoe of
additional ERC certificates, which would not have beery necessary if Seller bad supplied the Form 401(s) as
requwnd.
8) Transfer of Proceeds to Sellers. As soon as practicable (belt no later than two business days) after CF
received confirmation that the RTCs have been transferred to the applicable account or that an ERC certificate bas
been reissued, CF will wire the funds in payment for the ERCs or RTCa to the Seller thereof~ Beneficial ownership
of the IZTCs or ERC-% together with all incidents of ownership (except to the extent first CF holds title to such RTCs
or ERU in connection with the transfer thereof) and the risk of loss, shall transfer from the Seller to the Purchaser
thereof' at such time as the transfer to the Purchaser is deemed effective by the SCAQMD.
Schedule A. Paze 3 of 3
c c-{. M
�edule B to
Air/��
Repro atation Avvemeat
Compensation Schedule
For Clean Air Auction
Principal shall compensate CF as follows:
1) Placing Offers:
a) Continuous Auction Fee:
Theft are no order fees for the Continuous Auction; however, Principal Will pay SCAQMD fray when
transferring RTCs into or out of the auction accounts.
2) Completed Purchases or Sales:
a) Continuous Auction Tr nsaction Fee:
For each completed Purchase, Sale, or Swap ttat:saction, a fee equal to 3.5% of the U.S. Dollar value of
each such completed Purchase, Sale, or Swap transaction. However, any completed Purchase, Sale. or
Swap transaction is subject to a minimum fee of 5100.
Schedule B. Pane t of 1
Schedule C to
Clean Air Auction
Representation Agreement
List of Approved Persons
In accordance with the paragraph 7 of the Clean Air Auction Representation Agreem= 4
the following, pessoas ate herein authorized to issue binding insuucdons to CF with regard to
Principal's participation in the Clean Air Auction.
Name
Title
Signature
Schedule C: Page 1 of I
SCHEDULE D
` EZ ORDER FORM
FOR TRADING RTCs IN TSE CONTINUOUS CLEAN AIR AUCTION
Sponsored by Cantor Fitzgerald Environmental Brokerage Services
1.
Contact Name and Title
2.
Company Name
3.
Telephone and Facsimile
( ) ( )
4.
Mailimg Address
5.
Facility Name and Address
6.
SCAQMD ID
7.
Existing or New Facility
8.
Fee:
3.5% of each completed purchase or sale. (min. fee for any successful
sate or purchase — $100).
9.
Type of Order (circle or underline the appropriate terms on each line):
a. This is a PURCHASE or SALE or OPTION order;
b. For SOx RTCs
or NOx RTCs;
c. From Cycle 1
or Cycle 2 or Either Cycle (buyers only);
d. La Zone 1
or Zone 2 or Either Zone (buyers only).
...
RTC Order Table:
1 V.
Number of RTCs
Unit Price $0.000/RT
=�
cle 2
199�9/00
r2OOO
2000/01
200�1/02
2002/03
2003
2003/04
2004
2004/05
2005
2005106
M2O
2006/07
2007
2007/08
2008
2009/09
2009
2009/10
2010
201 D/11
2010+
201D/11+
2011
201 t/12
2012
2012/13
2012/13+
PTI - AIte a 'n Lu--Mg Sum 11dic 12L Entim
Cantor Fi0gerald's Fee for each completed purchase or sale as rw.-L rezieccea to Ine vrucr priceM
entered on the RTC Order Table.
Questions? Call (800) 228-2955 or Fax (415) 296-9582; (949) 597-0531 for assistance.
Schedule D to Clean Air Auction Reoresentadon Agreement F9. Order Fil... Dante t of 7
SCHEDULE D
This order form is an integral part of the Clean Air Auction Representation Agreement
("Agreement") made as of . by and between Cantor Fitzgerald Brokerage, L.P., a Delaware
limited partnership, with offices located at One World Trade Center,105th Floor, New York, New
York 10048 ("CF") and the undersigned ("Principal"), which desires to buy and/or sell Regional
Clean Air Incentives Market ("RECLAIM") Trading Credits ("RTCs"), in the South Coast Air . .
Quality Msinagement District of the State of California ("SCAQMD").
Principal hereby represents, warrants, covenants and agrees as follows:
1. Principal affirms to CF each and every representation and warranty set forth in section 5 of
the Agreement as of the date hereof.
2. Prh2cipal represents and warrants that the RTCs that are hereby offered for sale by
Principal acre not subject in any way to any lien, security interest, pledge, or other encumbrance
(collectiveb-, "Encumbrances").
3. Principal represents that the RTCs offered for sale hereby are owned by Principal, free and
clear of all :Encumbrances, and Principal has no actual knowledge of any prior or future
governmental action that could impair the PrincipaI's title to, or the validity or transferability of,
the RTCs.
4. Principal understands that RTCs are government creations providing a means for transfer of
limited privileges to emit certain pollutants into the atmosphere, and that RTCs are and wal remain
subject to governmental regulation, modification, devaluation, cancellation, confiscation or
revocation, and that neither CF nor any other buyer, seller or owner of RTCs is responsible for any
such govern mental action.
5. Principal agrees that if Principal purchases RTCs that once the purchased RTCs are
confirmed to Principal's account at the SCAQMD, Principal will assume all risks of those RTCs,
including any loss of value due to governmental action or market conditions. Principal further
agrees that any purchase of RTCs will be without recourse to the seller thereof or CF, and the
RTCs are sold without any warranty, express or'implied, as to their title, condition, quality, fitness
.for a general or particular purpose, merchantability or otherwise.
IN W[TNESS WMREOF, Principal has caused an Approved Person (as defined in the
Agreement) to execute this order form on the date stated below.
Name of Company:
Authorized Signature:
Print Name:
Title:
Date:
Question,;? Call (800) 228-2955 or Fax (415) 296-9582; (949) 597-0531 for assistance.
Schedule D to Clean Air Auction Renreaenrarinn a ffmor,.n* F7 n•a•• V----- • n-- o -Ir-r