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HOU - Item 4A - Power Purchase Agreement for a Solar Power System at Angelus and Garvey Senior HousingROSEMEAD HOUSING DEVELOPMENT CORPORATION STAFF REPORT TO: THE HONORABLE PRESIDENT AND DIRECTORS FROM: JEFF ALLRED, EXECUTIVE DIRECTOR DATE: AUGUST 24, 2010 SUBJECT: POWER PURCHASE AGREEMENT FOR A SOLAR POWER SYSTEM AT ANGELUS AND GARVEY SENIOR HOUSING SUMMARY Levine Management Group, the management company of the two senior complexes owned by the Rosemead Housing Development Corporation (RHDC), recently contacted staff inquiring about the possibility of installing solar panels at the Angelus Senior Complex and the Garvey Senior Complex (see Attachment."A"). Their interest in investigating the possibility of installing solar electricity systems at the buildings arose as the result of the availability of significant rebates offered by Southern California Edison (SCE). SCE is a participant in the Multifamily Affordable Solar Housing (MASH) Program that provides up to 60% of the cost of solar systems. The MASH Program has been designed specifically to facilitate the acceleration of solar power in the affordable housing sector in California. The proposed project will produce an alternative source of energy for the Angelus Senior Complex and the Garvey Senior Complex. The goal is to enter into a Power Purchase Agreement (PPA) for both complexes so the RHDC will have a secure energy source alternative that will be below the cost spent for that same amount of energy purchased from SCE over the life of the PPA's (see Attachment "B" and "C"). Staff Recommendation It is recommended that Rosemead Housing Development Corporation approve a twenty (20) year Power Purchase Agreement (PPA) with SolarCity Corporation authorizing the installation, maintenance, and operation of solar panels at Angelus Senior Complex and Garvey Senior Complex with an option to renew for two (2) additional terms of five (5) years, and authorize the President to sign all documents. ANALYSIS Over the past year, Levine Management Group has investigated opportunities to implement the use of solar panels to help generate the energy needed to operate the Angelus Senior Complex and the Garvey Senior Complex. Two main implementation APPROVED FOR CITY COUNCIL AGENDA: ITiVg NO. Rosemead Housing Development Corporation Report August 24, 2010 Page 2 of 3 options have been investigated. One is to design, build, and own our own solar panel generation facility. The second option is to negotiate a "Power Purchase Agreement (PPA)" with a qualified company for a pre-determined timeframe. The difference between the two options is the first option requires the RHDC to fund, own, and operate the facility. In the second option, the RHDC negotiates a cost per kilowatt hour (kWh) for energy produced by the facility, which is designed, built, owned, maintained, and operated by the entity the PPA is entered into with. A PPA is becoming the new standard in helping corporations, municipalities, school districts, and government institutions to take advantage of incorporating clean energy through solar power. The PPA is a long-term agreement to buy power from a company that uses its own source of funds to build a solar energy generating system on a customer's site, and maintains and operates the facility for a pre-determined timeframe. Customers run their businesses as usual, without any of the headaches of owning a power plant. PPAs remove the pain of paying up-front system costs or worrying about the long-term operation and maintenance. Levine Management Group has recommended SolarCity Corporation as the entity for the RHDC to enter into a PPA with based on their knowledge and experience. The system would be owned and operated by SolarCity Corporation. They have committed to a flat electrical rate of $0.05 per kWh with a 0% annual cost escalation for the solar energy produced at both sites through the use of the solar panels. The remaining energy needed and not covered by the solar panels would be purchased through SCE. At the end of the PPA term, the solar energy equipment (facility) could be purchased at fair market value, or the PPA could be renewed on favorable terms. The PPA enables customers to benefit from the use of green energy, while still receiving some of the benefits of ownership, including lower electricity costs and a positive public image, and allows them to spend their capital budget on their core businesses. Customers typically enter into a fifteen to twenty-four year contract with a PPA provider, paying energy rates that are below existing utility prices. SolarCity Corporation is requesting a twenty (20) year contract with an option to renew for two (2) additional terms of five (5) years. Solar energy is a passive method of generating electricity and is immune from the factors that contribute to rising costs of fuel such as supply shortages, processing requirements, or labor issues. FISCAL ANALYSIS The installation, maintenance, and operation expenses will all be incurred by SolarCity Corporation. While savings could vary either up or down once a system is installed and bought on line, it is estimated that the electrical costs at Angelus Senior Complex could drop by 12% and by 20% for the Garvey Senior Complex in the first year alone. Rosemead Housing Development Corporation Report August 24, 2010 Paqe 3 of 3 LEGAL REVIEW The attached PPA's have been reviewed and approved by RHDC's Legal Counsel. PUBLIC NOTICE PROCESS Notice of the public hearing was published in the San Gabriel Valley Tribune on August 9, 2010, as well as through the regular agenda notification process. Prepared by: Michelle G. Ramirez Community Development Manager Submitted by: Stan Wong Community Development Director Attachment A - Solar Project Request Attachment B - Power Purchase Agreement - Angelus Senior Complex Attachment C - Power Purchase Agreement - Garvey Senior Complex ATTACHMENT A Solar Project For Angeles Senior Mousing Garvey Senior Housing Prepared By Levine Management Group, Inc. SOLAR PROJECT NTRODUCTION Our interest in investigating the possibility of installing solar electricity systems at buildings in the Southern California Edison (SCE) service arose as the result of our becoming aware of the availability of significant rebates. SCE is a participant in the Multifamily Affordable Solar Housing (MASH) Program that provides approximately 60% of the cost of solar systems. The federal government provides a 30% Investment Tax Credit (ITC) for solar systems. In addition, solar systems are eligible for accelerated five-year depreciation. Taken together, these programs provide very significant cost reductions for potential solar system installations. LMG manages eight properties in the SCE service area That are candidates for these incentives. Since L.MG does not have expertise with respect to solar technology, we sought and hired a consultant to assist us in the evaluation of the system options available to us. Initially, we concentrated on the system purchase option. Three potential vendors were contacted, and our consultant, Greg Reitz, helped us narrow the selection to two. The vendors were assigned four projects each, with Absolutely Solar given the Rosemead projects. This document contains information submitted by this vendor pertaining to these projects. This information went to our consultant who reviewed it and ran it through his model. He discussed it with Absolutely Solar, and he supplied us with his analysis. That is the information that we used. We felt this made more sense since it helped guard us against the potential use of overly optimistic projections that could be offered by the vendors. We also investigated an alternative approach know as a Power Purchase Agreement (PPA). Li this approach, the owners do not buy the solar systems. Rather; the vendor arranges a third party agreement in which a portion of the monthly savings from each building is paid back to the PPA under an eighteen-year agreement. Our understanding is that the level of solar production is guaranteed, and that on an annual basis, the amount paid to the PPA will always be less than the energy savings. At the end of the eighteen-year time frame, the owners have the option to purchase the equipment at its fair market value. However, it is presumed that at that time, the technology would likely be out of date, so that purchase, even at a very low price, would likely not be desirable. Again, the consultant reviewed the PPA vendor information that became the basis of our analysis. The final section of this document contains a financial analysis that compares and contrasts the savings generated under each option. Finally, please note that a Proof of Project -Milestone (PPA document must be submitted to SCE by June 24, 2010. Accordingly, a decision should be made by approximately June 21, 2010 in order to execute the necessary documents by this date. TABLE OF CONTENTS 1. Background Information • Rebate Q & A • Federal Incentive Program • MASH Program Report • MASH Program Reservation Letters and Extension Email • State Tax Information 2. Purchase Option • Absolutely Solar. Information • Absolutely Solar Sample Agreement • Absolutely Solar Proposals 3 e Power Purchase Agreement Option • Solar City Information • Solar City "Flow We Estimate Savings" • Solar City Proposals • Solar City Sample Contract 4. Financial Analysis & Comparison a ~ Y A p 2. ~ Q a O O ~ t r y ..I 49 6 ~ r x a, x 'o cA ° S r xad h t: h ~o a J ~Y 4+ F ° ef.s N \ i S ~aurv. ~'a' L m 4{ rs.' rf Cd= `kbx y, 'S s + s¢ at 3 ° ~4~4'ea~ ryr qv ad t r 6 x T- .w 1 r lr -o V M.A% "Tot x w, 4 00 ear z . ~,~a Yh e:G lr*#t'''H.r .4". 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Ina California Solar Initiative's Multifamily Affordable Solar Housing (IdASH) program offers up-front capacity- cased incentives for solar photovoltaic sys:ens that offset common area and tenant loads for quali~'ing affordable housing properties that have had an occupancy permit for at least two years. The qualifying developments also must b electric customers of Pacific Gas and EIaCt. IC Co., Souther California Edison, or San Diego Gas & Electric. Applications are available for MASH'S Track 1, which provides fixed rabates based on Yilla Nueva Apartments, aOgg-unit affordable the size of the photovoltaic system installed and its expected performance. For a "housing facility in san Ysidro, Calif., utilizes a system that offsets a common area load, owners will receive a rebate of $3.30 per 697-kilowatt solar system. Affordable housing watt, and for a system that offsets a tenant load, owners will receive a $4 per watt owners in California can now retrofit rebate. Track 2, which will o-er Mother incentives to applicants who provide help properties bate.lude solar systems with the of a Quantifiable "dir=_a tenant benefits," is still under r=eview and applications have-yet to be released. A¢ording to Riga rd Raeke, director of protect finance for Bor rego Solar Systems, Inc., the MASH program has $1 DB million in funding, which is roughly 30 megawatts of solar pow=_r. He says the program expects the funding to be around for four years, but that will depend on "how quickly developers take to this. I have a Concern it may go quick=_r because the rebate is so lucrative." Owners could be looking at the system paying for itself within five to seven years-potentially as little as three years depending on th=_ cost of the installation, the _system production, and the rebate level-and for roughly 43 percent to 65 percent of the test to 'De paid fgi by the Sat'Raeke says. H also adds that the one-time r _lbBte should b paid out to the owner within 3D days of the solar . . System being turned On. Another benefit for MASH participants is virtual net metering. This allows owners to apply the credits from a singl=e solar system tD multiple accounts on a site. The solar system will feed directly back into the grid any electricity not consumed on site, and the electric companies will allocate credits as the property owner or manager d=_sionates. For owner who are interested in utilizing solar power, Raeke recommends evaluating the potential buildings fi~> Ha says it's important to assess the roof conditions early as well ac other stru_ures in the development. Evaluating current rate schedules and Consumption is also key. If an owner is already on a discounted rate schedule or consumption isn't that high, it might not be beneficial for the owner, Raeke adds. With the MASH r=ebate incentive, Raeke also recommends for owners to think about the larger scale and look at several buildings to maxim e the economy Y. it since the rebates will only be around for a few ye=_r_. Raeke says Borrego has seen an interest from owners already. He also adds that he wouldn't be SJrprised to see more states creating spier incentives for owners. O nHn e Reso tlrces For more information on the Multifamily Affordable Solar Housing program, visit DDe.COMII w noomesolar W~W / 'd nCal/rebates- w~w =lv noslmash • www.enerov[ent_r.on SC-E - 1-.,~~St eLL_r~h,Ca On '-4, ACS Inceniive/Application FAQS O? D 2. How much money is available through the MASH program for S- customers? 3. How do I determiner mY multi-fenily building Meets the definition of low- income residential housing in the California Public Utilties Coos (PUC) Section 2852? 4. Does the MASH Program permit use of power purchas=e agreements? 5. How does California Health and Safety Cod>_ Section 50079.5 define "lower income housaholds'? 6. How much and what types of rebates are available? 76 \rJho Is eligible to receive incentives unbar the MASH program? E. Are tax incentives available? 9. Which solar technologlas are covered under MASH? 106 Ara incentives available for solar water haating System? 11. How do I apply for MASH incentives? i2. Do I need to follow tha threw -step appy-align pncess r I've air=_ady selected an installer? 13. How much are application Teas? 14. How can I check on the status of my application? 15. How long will the application process Take? 106 Can I apply for both Track 1A and Track 1B? 17. Why does my PV system need to be field-verified? 13. Are there classes offered in solar PV systems? 19. Do I need to obtain a building pemit? 20. How do I find a solar installer I can rust? 21. Where can I get more information? Q1. Does installing solar on affordable housing require out-of-pocket costs? A Yes, it does. The customer must pay up-froni costs for the photovoltaic equipment and inst51125or; however, MASH incentives, federal investment tax credits, renewable energy .-ram, and net metering credits can significantly reduce the customer's cost of photovoltaic Equipment and Installation. Each project will have a different payback period depending on ihs Type of finarino that the customer uses to fund the project- TOP Q2. How much money is available through the MASH program for SCE customers? A. Of the 8103.3^-. million allocated io the WASH, program, SCE's portion Of fne inc.;ntivs budget is summarized below: Incentive Budget Incentive Track Incentive Budget Track 1 AJB 534,655:032 Track 2' £9,2DD,0DD Total 543,855,032 `No more Than 20% of the Track 2 budget can be awarded in one review cycle. TOP Q3. How do I determine if my multi-family building meets the definition of low -income residential housing in the California Public Utilities Code (PUC) Section 2852? 70 _ Iam more, go to the California Law homspage and s-_arch for the code section. TOP Q4. Does the MASH Program permit use & power purchase agreements? k The MASH Program allows gu5tgmara to enter into power Purchase agreement with third parties, if the terns and conditions of The agreements comply with >_II existing statutes and reoulations that govern the production and sale of electricity. TOP eso rces/ncenae-applicason-izq.hm X714/201 SHR h-ttD_//v,~, sce.com/solarleadership/gosolar/mah1N rage i Oi D SCE Inc _ 've/a~ l Cauo_ FAQs Q5. now does California Health and Safety code section 5^0795 define "lower income households"? k Ca[lfomia Health and Safaiy Code Section 50079.5 dean>_s "lower income households' as follows: income does not=_ =cad the quatrfl,mg fruit, for lower income families as astablished and amend=_d from time to time pursuant to Se-.-ion 3 of the United States Housing Act of 19,7. The limits shall be Published by the deoatirn=_ni in the Cal"romia Cod=_ of Regulations as soon as possible after adoption by the Secretary of Housing and Urban Development In the event the federal standards are discontinued, the department shall, by regulation, establish income limits for lower income households for all Deocraohic ar=as of the slate at 30 care-ant of area m=_dlan income, adiustad for family sue and revised arrn'ually. "Lower income hDu'sahold= Includas very low income households, as defined in Section 50105, and extremely low income hous=eholds, as defined in Section 50106. The addition of this subdivision does not constitute a change in, but Is declaratory of, existing law. (C) As used in this seciiDn, ,area madlan income" means me m=_diar, family income of a geographic area of the To learn more, go to the California Law homepaae and search for the code section. TOP Q6. How much and what types of rebates are available? A. Multifamily Anordabl=_ SOlsr Housing (64ASH) has two incentive tracks - Track I AB and Tack 2. Track t ota s S3.30fn,at, for a system that offsets common load and S4.DOlwatt for a system that offsets ienani load. This rate is consistent across the three utilities, Unlike general market CSI, MASH does not have a declining rate based on volume of megawatts of confirmed incentive reservations issued in SCE's service- area. Track 2 is a competitive gran` application prawns where 'he applicant submits a proposed dollar per wzti for the prciect. Currently, fie only incentive nice available for the MASH program is tha Exp=_ded Penor,anc_ Based BuydDwn (EP3B). TOP Q7. Who is eligible to receive incentives under the MASH program? A. Eligibla elactric cusiomar of PG&E, SCE, and SDG&E may rec_iv an in-_ninle throuah the IvIASH program. In addition, all existing mutfamily affordabl>- hDUslnc that me=_t the definition of low incom residential housing astabllshed in Public Utiknas Cod=_ § 2B52.a2 and have an occupancy permit for at least two years. Specifically, this means multifamily housing financed with low-income housing tax credits, a:-exempt mortgage revenue bonds, g=eneral obligaiiDir bons, or local, sate or fed=eral loans or grants. The taciliy must also meet the deftnition of low- ineome households in Health and Saiay Code § SOD79.5 Planned new housing construction, including new housing development proiacts and new custom homes, are eligible for the New Solar Homes Partnership program. The Single Family Low Income Incentive Program, which is intended for homeowner who quality for low-income housing programs, is expected to be rolled out in the first quarter of 2009. TOP Q3. Are tax incentives available? A. In addition to rebates availaol through MASH, your project may also be eligibl= for a federal tax credit. Consult the IRS or your tax consultant for details on available tax credits. For additional information, click here. For the most current Statu Of these tax cr=edits; you should contact the Internal Revenue Service and/or your tax prepares. TOP 09. Which solar technologies are covered under MASH? A MASH Incentives are available for solar photovoltaic (PV) technologies (roof- mount=_d, around-mounted and building-iniacrated Pv~ sized to meet actual or forecast or,-siia load. TOP http:HYN-v,7w.sce.corn/solarleadershin/eosolar/mash/M.?SHResouices/incentive-application-faq.htm 5/14/201, SCE - lace • ve/AapLeatien =AQs 010. Are incentives available for solar wager heating sy> =m? A. Currently there are no incentives for solar water heating systams in SCE's service area. TOP Q11. How do I apply for MASH incentives? A. In nearly all situation the installer takes care of the application on the customer's behalf when applyino for Track 1 incentives. Applications proceed through several stages be=fore peymeni-from Requested to Reserved to Completed. Qualified installers understand the application process and can optimize cusrom=_rs' inc=entives by completing the application and submitting all required bopurnents. TOP Q12. Do I need to follow the dues-slap application process if I've already selected an installer? A. Generally, MASH applications oo through the three-step application process. However, applicants can opt-in to the Two-step process. Keep in mind that your application is still subject to the requiremen-s detailed in the three step application process. Q13. How much are application fees? A There is no application fee for MASH. TOP Q14. How can I check, on the status of my application? A For Track 1, Your installer can provide you with regular updates regarding the status of your application. You can also contact your program administrator at (666) 584-7435 to get project updates. TOP Q15. How long will the application process take? A SCE wives to take less than 30 day to confirm MASH Track 1 r=_se_r ation rapuests. Application processing time depends on a number of f3ctors, inducing ma speed with which applicants respond to requests for more information or application corrections. To hale ensure your application is processed quickly, please note me most freauent issues ancuntared with applications are: missing enerey efficiency audi, listed equipment doe=_ not match EPB3 fool calculator pnntou-; copy of e_xecute_d contract for system purhas=_ and installation; missino signatura(s); and incomplete or missing docum=entation. TOP MASH applicants are granted a reservation period of 18 months to complete their project Q16. Can I apply for both Track IA and Track 1 B? A. Yes, you can apply for both Track IA to onset common load and Track B to offset tenant load. The system for the common area must be sized so that the system primarily onset=s part or all of the common area's electrical needs. Tenant areas will be aggregated for sizing limits. For example, up to 50 k1N of a system may be allocated to 10 units in a building without requiring system size justification because the average will be 5 kW or less TOP Q17. Why does my PV system need to be field-varified? A- Install=_d systems mast be field-versed to ensure the installation of high- peromance PV systems that are consistent with the information used to determine the estimated Performance, reservations and ultimately the final rebate. TOP Q18. Are there classes offered in solar PV systems? A. SCE hosts monthly introduction to the California Solar Initiative classes. The class is not soecmc to IAASH, however, it can provide you with a general understanding of PV systems. Please visit xvAv✓.sce.eom/esi for more informaiion. TOP Q19. Do I need to obtain a building permit? .A You will probably need to obtain a permit from the city or county building de_partmem. A solar vendodinstallar may be able To assist with this. -p Of s TOP 9 http://vzar~ar.sce.cona/solarlead-rship/Roso!ar/mash/l\IASHResourcts/inc.entilre-application-faq.htn ~/11/2010 PLe= 4 01 3 SCE - incen5ec/_~ u~lica~on FAQs Q20. How Jo I find a solar installer I can -rest? A, Qualified ooni;aciors a vgur L;ey to gauir tna most oroduciiva solar sir for your home or busirn_s=_. Choose a rapu;ahl_ installer by int=rviewing ai Fast three poteen.al installars and obtaining bits baar_ making }roar s>_Iection. tly I Tor v _ sysl~prlb _ >a - iii - i. _u -i a! CJ. _ appropri2ialylloensed CaOfomla =ntraciDrs in agGordanee with rules and regulations adopted by the California Contractors State Licensing Board (CSLB). :;II systems must be installed in conformance with the man-jacturefs specifications and with all applicable el=ectrical and building code standar_'s. TO? QYI. Where can I get more information? A For additional infomation on "going solar,` visit wv✓wsce.com/csi or wnntiv.gosolarcalifornia.gov. ca. 10 gm hittp://~ar'r\ ,.sce.com/solaile,adeiship/uosolai/mashf1N4ASHRCSOurces/incPnL e-application-faI5/1^/2010 SCE - Incennre/:4pp ca?i0Il FAQs YaQc of D 11 faq ham://n\*~TNa.sce.coin/solaileadership/aosolar/mashfNLkSHResou-rces/incentive-application-E htin 5/1~A/2o1( MASH Program Report 12 multifamily Affordable Solar Housing Semi-Annual Report January 20, 2010 - SOUTHERN CALIFORNIA ®I$aN ,.P Center for Sustainable EnergY urou~•in 1 A. EDISON IN ERNATlON4L Compenp' cn ~LtN'N,ui.iyu r~~'°i:..cyg M4- j r,] IJ Table of Contents Table of Contents ..........1 1. Executive Summary 2 2. Background ...........3 2.1. Incentive Types: Track 1 (A and B) and Track 2 ...........4 Table 2.1: MASH Track 1 Incentive Rates in $/Watt .:.........5 2.2. Virtual Net Metering ...........5 Figure 2.1: Conventional Solar Systems on Individually- Metered Multifamily Housing ...........6 Figure 2.2: Virtual Net Metering System on Individually-Metered Multifamily Housing ...........6 2.3. Eligibility ...........7 2.4. Budget ...........7 Table 2.2: MASH Budget Allocations by Utility Territory ............7 3. Program Progress ............8 3.1. Program Implementation to December 31, 2D09 ............8 3.2. Program Waitlist ..........10 3.3. How the Data Questions Called for in D.08-10-036 were Addressed ..........10 4. Program Progress ..........11 Table 4.1: MASH Applications by Month (2DD9) ..........11 Table 4.2: Summary Data: MASH Applications by Status 11 Table 4.2: Detailed Data: MASH Applications by Status ..........12 Table 4.3: MASH Applications by County 13 Table 4.4: MASH Applications by County (Capacity) 13 Table 4.5: MASH Applications by County 14 Table 4.6: MASH Applications by City 14 Table 4.7: MASH Applications by City (Capacity) ...........16 Table 4.8: MASH Applications by Cis 18 Table 4.9: MASH Program Expenditures by Program Administrator 20 5. Conclusions and Program Recommendations ...........21 MASH Semi-Annual Report, January 20, 2010 1 14 Multifamily Affordable Solar Housing Semi-Annual Report The California Center for Sustainable Energy (GCSE), on behalf of the California Solar Initiative (CSI) Program Administrators (PAs), submits this 2010 Semi-Annual Report for the Multifamily Affordable Solar Housing (MASH) Program, in compliance with the California Public Utilities Commission (CPUC or Commission) Decision (D.) 08-10-036, which requires the PAs to submit joint seni-annual reports to the Director of the Energy Division on the progress of the MASH Program.' The first MASH semi-annual report, dated January 20, 2010, captures administrative expense and program data from program inception through December 31, 20D9, and includes the items appearing in the following outline, requirements identified in Appendix A of D.08-10-036, and other data that Energy Division has requested. 1. Executive Summary The MASH Program is one of the CSI's two low-income programs and is administered by Pacific Gas and Electric (PG&E), Southern California Edison (SCE), and the California Center for Sustainable Energy (CCSE) in San Diego Gas and Electric territory (SDG&E) territory. The MASH Program provides incentives for the installation of solar photovoltaic (PV) generating systems on low-income multifamily housing, as defined in California Public Utilities Code (PUC) Section 2852. The MASH Program has two incentive tracks both of which are paid in the Expected Performance Based Buydowin (EPBB) format: 1. Track 1 provides fixed, capacity-based rebates at $3.30 per watt for solar PV generating systems that offset common area electrical load (Track 1 A) or at $4.00 per watt for solar PV generating systems that offset tenant common area electrical load (Track 1 B). Track 1 applications are reviewed on a first-come first-served basis. Track 2 is a competitive application process and provides variable rebates up to 100% of system and ongoing maintenance costs. To be awarded Track 2 funds, an applicant must demonstrate direct tenant benefit. Track 2 consists of two application cycles per year. The PAs began accepting applications for Track 1 in February 2009 and conducted the first round of Track 2 application evaluations between July and December 20D9. PG&E, SCE, and SDG&E began to offer a Virtual Net Metering (VNM) utility tariff option in June 2009 to simpliry the installation of solar PV generating systems in multifamily housing. I D.08-10-036, Ordering Paragraph No. 9 and Appendix A. In addition, the PAS will file a more detailed reporting of MASH axpenses, including VNM implementation, as part of the CSI semi-annual administrative expense report that is due on January 29, 2010. D.08-1D-033, ordering Paragraph No. 7 and Appendix. MASH Semi-Annual Report; January 20; 2010 15 The PAS received and processed the following numbers of applications in 2009: 384 MASH applications received 179 Track 1 applications reserved 1 Track 2 application reserved PG&E and CCSE received applications that exceeded funds available in their respective Track 1 budgets for 2D09, and both created a wait list. SCE received applications for over 90% of its Track 1 budgetz. Currently SCE has 1 DD% of its Track 2 budget available, PG&E has 90% and CCSE has 80%. 2, Background In D.06-01-024, the Commission adopted the Staff proposal to set aside a minimum of 10% of CSI Program funds for projects installed by low-income residential customers and affordable housing projects.' In 2006, the California Legislature codified this requirement in Senate Bill (S B) 14 and Assembly Bill (AB) 2723.5 Subsequently, in D.D6-12-033, the Commission directed the PAS to conform the CSI Program to SB 1 and AS 2723 requirements and directed that 10% of the total ten-year CSI budget would be reserved for the low-income residential solar incentive programs that are now referred to as MASH and the Single-Family Affordable Solar Homes (SASH) Programs. On October 16, 2008, in D.08-10-036, the Commission established the 6108.34 million 44ASH Program as a component of the CSI Program. The MASH Program provides incentives "for solar installations on existing multifamily affordable housing that meet[s] the definition of low income residential housing established in Pub. Util. Code § 2852."5 The Commission adopted a two-track incentive structure, "vvith Track 1 providing up front incentives to systems that offset either common area or tenant load, and Track 2 providing an opportunity to compete for higher incentives through a grant program."' PG&E, SCE, and CCSE, in SDG&E's service territory, administer incentives under the MASH Program. The Commission selected the general market CSI PAS because,the target customers of the MASH Program, which are affordable housing building owners, are similar to the ' SCE exceeded its Tack 1 budget in January 2010 and has started a waitfist ' D.06-01-024, mimeo., pp. 5 and 27, Conclusion of Law 9 at p. 43 (see also Appendix A, pp. 2-3) ' s3 1 (Murray F. Levine), Cnapiar 132, Statutes of 2005, sets forth specific CSI program requirements regarding program budget, conditions for solar incentives, and eligibility criteria. ' As 2723 (?aviey), Chapter 864, Statutes 2006, required the Commission to ansore that not less than 10% of the CSI funds are used for the installation of solar energy systems on low-imam=-- residential housing and authorized the Commission to incorporate a revolving loan or loan ouarant>_e program for this purpose. D.08-10-036, Appendix A. mimeo., p. 1 D.08-10-036, mineo., p. 9. MASH Semi-Annual Report, January 20, 2010 16 commercial and non-profit customers of the general market CSI Program. The resulting synergy allowed the PAs to incorporate MASH into their existing CSI administrative structures and to implement MASH in a quick and cost-effective manner.8 The overall goals for the MASH Program are to: 1. Stimulate adoption of solar power in the affordable housing sector; 2. Improve energy utilization and overall quality of affordable housing through application of solar and energy efficiency technologies; 3. Decrease electricity use and costs without increasing monthly household expenses for affordable housing building occupants; and 4. Increase awareness and appreciation of the benefits of solar among affordable housing occupants and developers. The MASH Program will operate either until January 1, 2016, or when all funds available from the program's incentive budget have been allocated, whichever event occurs first. PUC Section 2852(c)(3) requires that any program dollars remaining unspent on January 1, 2016, are to be used for Low Income Energy Efficiency programs. 1.i. lncentive Types: Track 1 (A and B) and Track 2 The MASH Program is designed to substantially subsidize solar PV generating systems in multifamily housing. Incentivizing the installation of solar PV generating systems in the MASH Program is not as straightforward as the general market CSI Program. Although affordable housing building owners are the target market, two different categories of customers may receive the benefits from an installed system: the building owners and the tenants. The Commission ensured in the design of the incentive structure and rebate levels in the MASH Program that benefits of the installed systems would accrue to both categories of customers. To accomplish this goal, MASH incentives are divided into two different tracks: Track 1 and Track 2. Track 1 is similar to the general market CSI Program in that the rebate amount is both fixed and capacity-based. As shown in Table 2. 1, Track 1 offers different incentives for solar PV generating systems that cover the electric load for common and tenant areas. The rebates are based only on the EPBB method, which is a one-time lump sum payment after verification of system installation. EPBB incentive rates are fixed and do not automatically decline as the MASH Program progresses. The Administrative Law Judge assigned to the CSI proceeding, however, has the authority to reduce MASH Track 1 incentives by up to 1 D% each year.' ° D.OB-10-0366 P. 24-28 ° D.08-10-036, P. 14 MASH Semi-Annual Report, January 20, 2010 4 17 Table 2.1: 141ASH Track 1 incentfve Rates Li S/4Natt 1A: PV System Offsetting Track IB: PV System Of Common Area Load Tenant Area Load I S330NVatt I $4.0DMIatt Although different incentive rates exist for systems offsetting common or tenant area electrical load, no requirement mandates that either Track 1 A or Track 1 B solar PV generating systems provide any direct tenant benefit or decrease the monthly expenses or financial burden for the love-income tenants. On the other hand, Track 2 incorporates a direct tenant benefit requirement. Track 2 is a competitive grant-style structure that does not include a fixed rebate amount. Track 2 grants are awarded to applicants who provide quantifiable "direct tenant benefits" (i.e., any operating costs savings from solar that are shared with their tenants). Other categories of benefits that are considered in determining an award include energy efficiency improvements, green job creation or training, outreach and education for tenants on sustainability topics. Two award cycles exist each year, and the PAs can award up to 20% of the total Track 2 budget in any given cycle. Awards are not guaranteed during any cycle however. For each winning application, a PA can anrard up to 100% of capital costs of the project as well as ongoing operation and maintenance costs. To ensure that the PAs apply consistent criteria in evaluating Track 2 applications, the PAs developed a standardized statewide Track 2 application and review process with consultation from members of the affordable housing community. 2.2. Virtual Net Metering in December 1981, following adoption of D.93586, most utilities closed their Master Meter/Submeter Tariffs to new installations. PUC Section 780.5 required individual utility metering in multi-unit residential buildings that received building permits after July 1, 1982. While this setup encourages tenants to conserve energy, it can make it more challenging for building owners who want to install solar PV generating systems intended to serve tenants. In order to offset energy usage in tenant units, an owner would have to create a separate system with its own inverter for every meter on the property. MASH Semi-Annual Report, January 20, 2010 18 Figure L. Z: I.u IIVen t!3ndf Solar Sj'SL2P5 on In di Vidu2lly• A4ELerEd Id Lltif2.lly r:Das:ug solar generator multiple spst1 mss- solar panels utility Fn M !I VN, solar residential unit inverters meters In order to encourage solar installations on multi-unit affordable housing properties through the MASH Program, D. 08-10-036 directed SCE, PG&E and SDG&E to file tariffs for a VNM, which is a tariff that allows MASH participants to install a single solar PV generating system to cover the electricity load of the owner's common areas and the tenants' individual meters in a building. The electricity generated by the system is fed back into the grid through a Generator Output Meter, which measures the kWh produced. The participating utility then allocates bill credits resulting from the energy produced by the solar PV generating system to both the building owner's and tenants' individual utility accounts, based on a pre-arranged allocation agreement (see Figure 2.2). The VNltf tariff that PG&E, SCE, and SDG&E offers is currently limited to those customers that receive incentives through either the MASH Program or the California Energy Commission's New Solar Homes Partnership Program (affordable housing only). Figure 2.2: Virtual Net Metering System on Individually-Metered h4ultifamily Housing solar generator solar panels utility JJ LLI IM utility, residential unit ower moron meteor area ,m i~J m w N' meter solar generator inverter output meter MASH Semi-Annual Report, January 20, 2010 19 2.3. Eligibility Eligibility for the WASH Program is based on the characteristics of the affordable housing development rather than on the characteristics of the current individual residents. If a development qualifies, then all of the residents qualify whether or not they are love-income. Individual low-income residents in multifamily housing are not eligible to apply on their own. To qualify, a building must: 1. Mieet the definition of "low intone residential housing" as provided in PUC Section 2852; 2. Have an occupancy permit for at least two (2) years; and 3. Be within the service territories of SCE, PG&E, or SDG&E. 2.4. Budget: In an Assigned Commissioner's Ruling dated February 5, 2007, in R.06-03-004, one-half of the $216 million low income CSI budget adopted by the Commission in D.06-12-033 (S1D8 million) was reserved for the MASH Program. This budget, shown in Table 2.2, was adopted by the CPUC in D.D8-10-036. For information on MASH Program expenditures to date, see Table 4.9. The incentive allocation Equates to 88% of each PA's budget while the remaining 12% is reserved for marketing and outreach, evaluation, and other administrative expenditures. The PAs must spend 2% on evaluation; however, the remaining 1 D% can be split between general administration and marketing and outreach at the PA's discretion. Table 2.2: MASH Budget Allocations by Utility Territory PG&E ~ SCE i CCSE ~ Total ~ Budget % 43.7% 46% 103% 1DD% ~ Track 1A and 1B ~ 32,923,23D , 34,656,032 7,759,938 75,339,200 I, Track 2 j B,740,000 9,200;DDO 2;060,000 '20160D;ODD Administration (12%) j 5,681,350 I 5,9B0,36B I 1,339,D82 13,DDO,BOO Total 47 344 580 49,636,400 11,159;020 10B,340,00D MASH Semi-Annual Report, January 20, 2010 20 3. Progran Progress The MASH PAs have made significant progress since the creation of the program. This section of the report presents program achievements and milestones to December 31, 2DD9. 3.1. Program Implementation to December 31, 2009 The Commission presented an implementation plan for the MASH program in D.08-1 D-036 and its Appendix A. The requirements of the implementation plan (shown in itaiics) and the progress to December 31, 2009, are identified below: Krithin 60 days the Program Administrators shall jointly file an advice letter with proposed amendments to the CSI Handbook to incorporate the MASH program. The handbook should address Track 1 incentives and all elements of the MASH program necessary for implementation of Track 1. On behalf of the PAs, CCSE filed CCSE Advice 2, SCE Advice 2297-E, and PG&E Advice 3378-E with the Commission on December 15, 2008, which was approved on January 22, 2009 with an effective date of January 14, 2009. This advice filing implemented the MASH section in the CSI Handbook, which describes Track 1 and associated requirements. Within 90 days of this order, the Program Administrators shall jointly file an advice letter with a standardized stateivide Track 2 application and review process as well as the handbook changes necessary to implement Track 2. c On behalf of the PA.s, PG&E filed PG&E Advice 3402-E, SCE Advice 2310, and CCSE Advice 4 with the Commission on January 14, 2009, which proposed modifications to the CSI Handbook to incorporate Track 2 of the MASH Program. The Energy Division issued an Advice Letter Suspension Notice on February 11, 2009, because the filing did not include the Track 2 application and review Process. o On behalf of the PAs, PG&E filed PG&E Advice 3402-E-A, SCE Advice 2310-E- A, and CCSE Advice 4-A on March 11, 2009, which included the Track 2 application and review process requested by Energy Division. The Commission approved the advice filing on May 27, 2009, with an effective date of May 22, 2009. PG&E, SCE, and SDG&E shall each file an advice letter, within 120 days of this order, proposing a VNM tariff applicable to individually metered multifamily affordable housing properties that install a solar energy system through the MASH program. MASH Semi-Annual Report, January 20, 2010 21 Each utility's VNM tariff must comply with § 2827 and Appendix B of this order. o On February 13, 2DD9, PG&E filed Advice 3422-E, Establishment of Rate Schedule NEMVNM - Virtual Net Energy Metering Tariff in Compliance With Decision 08-10-036. A supplemental filing (Advice 3422-E-A), Establishment of Schedule NEMVNMA -Virtual Net Energy Metering (VNM) Service for Individually Metered Residential Units and Owners with Housing Receiving Incentives from the Multifamily Affordable Solar Housing (BASH) Program or the New Solar Homes Partnership (NSHP) Affordable Housing Program was filed on April 10, 2009. Energy Division approved Advice 3422-E-A on June 12, 2009, with an effective date of June 8, 2009. SCE filed Advice 2322-E establishing a MASH Virtual Net Metering schedule (MASH-VNM) with the Energy Division on February 13, 2009, and filed supplemental Advice 2322-E-A on April 14, 2DD9, to incorporate revisions to the tariff sheets as advised by the Energy Division. Energy Division approved Advice 2322-E-A on June 12, 2009, with an effective date of June 8, 2009. On February 13, 2009, SDG&E filed Advice Letter 2D64-E, Establishment of Schedule VNM-A in compliance with D.08-10-036. Per the request of the Energy Division, a supplemental filing (2D64-E-A) )eras submitted to the Commission on April 17, 2DD9, to provide additional clarifications to SDG&E's Virtual Net Energy Metering proposal. Advice Letter 2064-E-A was approved by the Energy Division on June 12, 2009 with an effective date of June 8, 2009. Within four months from the Commission order adopting the program, the MASH shall be implemented in the service territories of PG&E, SCE, and SDG&E such that applications are available to the public. o On February 17, 2009, the PAs launched MASH Track 1 and made the Track 1 Reservation Request Form, Proof of Project Milestone Form and Incentive Claim Form, along with a list of the necessary supporting documents available on their respective web sites. By the end of 2010, the Program, Administrators shall have made reasonable efforts to identify the eligible population across the state within the PG&E, SCE, and SDG&E service territories, and have attempted to contact them about the MASH program. The PAs immediately reached out to affordable housing community. In the first six months after launch of the MASH Program, the PAs held workshops, served on panels in relevant statewide and local affordable housing conferences, and met with representatives of the affordable housing community to discuss their concerns with the MASH Program as designed. The PAs also reached out to key MASH Semi-Annual Report, January 20, 2090 22 stakeholders, including the United States Department of Housing and Urban Development and non-profit developers, and leveraged upon their respective Love Income Energy Efficiency departments within each service territory. By the end of 2012, 50 affordable housing buildings should install solar energy systems through the program. While the PAs have not yet reached this milestone, 179 applications have been reserved and, assuming they meet their installation deadline as listed in their respective reservation confirmation letters, approximately 179 projects should be installed by the deadline. Currently, two projects have been successfully interconnected to the electrical grid in SCE's service territory. 3.2. Progran Vrraitlist As of October 26, 2009, PG&E had received more applications than sufficient to exhaust its Track 1 allotted budget of 532.9M in its service territory and created a waitlist for all new applications. Each day that PG&E receives project applications, a lottery is conducted to determine an individual application's position on the waitlist. PG&E funds waitlisted projects as funding becomes available through attrition or system size reduction for reserved projects. As of December 31, 20D9, PG&E has a waitlist of 63 projects totaling $15.2 million. On December 28, 2009 CCSE began a waitlist following the same procedures as PG&E. As of December 31, 2009 CCSE has a waitlist of 1 project totaling $137,050. As of January 1, 2010, PG&E is not accepting new applications for its MASH Track 1 Waitlist. If sufficient projects drop out or if more funding is added to the PG&E budget, PG&E will again begin to accept new applications for MASH Track 1 incentives. 3.3. How the Data Questions Called for in D.08-10-035 were Addressed Data points noted in D.08-10-03610 were discussed in detail with the Energy Division to ensure clarity and consistency in reporting for all Program Administrators. New or revised data points are indicated in Section 4.1 and have been added at the discretion of the Energy Division. 1D D-08-10-036, Appendix A, p. 6 MASH Semi-Annual Report, January 20, 2010 10 23 4, Program Progress The MASH program began accepting applications for Track 1 incentives in February 2009 and Track 2 applications in July 2DD9. Program progress as illustrated from various data points is shown in Table 4.1. Table 4.1: 14ASH Applications by Month (2009) Month Feb Mar ! Apr May Jun ' Jul" Aug' Sep' Oct'0 Nov' Dec I Total PG&E 13 2 0 1 29 5 22 52 80 r 21 15 240 SCE 3 3 1 I 0 D 0 0 11 12 32 59 121 CCSE 0 0 .0 1 0 0 0 1 3 1 11 8 0 23 I Total 1 16 1 5 1 1 2 29 5 22 66 103 I 61 I 74 , 384 Table 4.2: Summary Data: MASH Applications by Status summary Data (Track 1) Projects reserved 5 I 1,32 12 179 Projects Under Review 16 .3 1107 125 Total Reserved Capacity 0.392 MW 8332 MW 1.025 MW 10297 MW Total Under Review Capacity.... 1672 MW ; 0.401 JAW 8.247 IJAN 10.273 MIN Total Reserved Incentives $ 1,261,278 $ 31,005,861 $ 3,794,340 3 $ 36,217,869 Total Under Review incentives (S) ; $ 6,498;650 ! i $ 1,324,083 ; $ 28,632,454 S 36, 298,767 Projects Paid 0 0 2 2 Total Incentives Paid $ 0 $ D $ 206,339 $ 208,339 n Projects Waitlisted j 1 03 D I 64 Total Waitlisted Capacity 0.042 MW 4.1 B9 IAW 0' 4.231 NAN Total Waitlisted Incentives ' $ 137,050 $ 14,206,027 S 0 $ 14,343,077 AverageProject costs (srwatt) $ 8.67ANatt S 8.75APkbti I. $ 8.04NJati" ILIA Total Master-Metered (Reserved) 0 8 4 12 Total lnriividoally Metered (Reserved) 5 ;j 154 8- I 167 I " Includes 1 PG&E Track 2 application •'O Includes 1 PG&E Track 2 application 13 Includes 22 PG&E Track 2 applications, 5 SCE Track 2 Applications & 2 CCSE includes Track 2 Applications " Includes 28 PG&E waitlistad projects All PG&E projects are waiBisted 16 All PG&E projects are waitisted All capacity measured in CEC-AC fe Approximately $70Dk in Track 1 will go to Waitlist=_d projects in 2010 "Only includes reserved and paid projects MASH Semi-Annual Report, January 20, 2010 11 24 Table 4.2 provides a detailed breakdown of the "Reserved," "Paid," and "Under Review" capacity (in CEC-AC JAW) for all MASH applications received between program inception on February 17, 2D09 and December 31, 2009. Table 4.2: Detailed Data; MASH Applications by Status Detailed Breakdown Track 1A j GCSE PG&E SCE I Total track 1a: Total Reserved Capacity 0.263 MW 5.474 WY e 0.346 MW 5.065 MW Track 1a: Total Reserved Incentives (S) , $ 720,413 I S 16,289,576 $ 1,130,049 6 20,140,036 Track la: # Projects Paid { 0 0 1 r 1 Track 1a: Total Incentives Paid $ 0 1 $ D $124,317 ' $ 124,317 Track 1B Track 1 b: Total Reserved Capacity 0.129 MVV 3.358 MW 0.611 iJIVV t 4.212 low Track 1b: Total Reserved Incentives($) 6540,865 6 12:716,285 $ 2,664,291 S 16,077,851 Track 1 b: # Projects Paid 0 0 1 ! i Track 1 b: Total Incentives Paid $ 0 ' Track 2 $ 0 $ 84,D22 $ 84,022 Track 2: # Projects Awarded 1 1 0 2 Track 2: Total Awarded Capacity 063 MW i .177 MW 0 MW 0.240 MW Track 2: Total Awarded Incentives($) S 412,000 $871,799 D S 1,283,749 Track 2: # Projects Paid , 0 D 0 0 ) Track 2: total Incentives Paid j 0 0 0 D Waitlist Track 1 a: Total Waitlisted Capacity 0.042 IJNJ 2.112 IJW 0 MW 2.7154 64W Track 1a: Total Waitlisted Incentives i S 137,050 S 9,081,653 $ D $ 9,218,703 Track 1 b: Total Waitlisted Capacity 0 114W L468 MW 0 MW 1.468 MW J LTrack 1b_ Total Waitlisted Incentives $ 0 $ 5,124,374 $ 0 S5,124,374 MASH Semi-Annual Report, January 20, 2010 12 25 Table 4.3: MASH Applications by County CCSE PG&E County j # of Apps County 4 # of Apps County of Apps San Diego 21 San Francisco 53 Los Angelis 48 Alameda 50 Rivatside 13 Contra Costa I 23 San 15 j l Bernardino Santa Clara i 22 Santa 14 f 5arbara h4ann 21 Orangz 1D i t Monterey 10 Tulare B j Fresno 5 I Ventura 7 i Santa Barbara 5 Sacramento 5 Soifer 4 1 I Other/UnspearledLO 29 Table 4.4: MASH Applications by County (Capacity) ero GCSE I PG&t 1 County Capacity (MVV County ; San Diego 2054 San Francisco I Alameda Contra Costa Capacity (MV✓) 3.312 2.129 1.514 County , Los Ang_Ies Rivarsldz San Bernardino Capacity (MM 3.+05 j 1.797 ~ L190 Santa Clara 1..314 Ventura D-624 1 Santa Barbara 0.645 j Orange 0.615 IoDnt-rey 0.621 SantaBafiara 0.732 I i Mann 0.621 Tulare 0.206 1. Sacramento 0.594 Fresno 0.534 San Mateo 0.330 Other/Unspecified 1,745 2° Includes all counties not in the top 10 MASH Semi-Annual Report, January 20, 2010 13 26 T.t,ta S c• MASH Annbrations by COUntV ($1 CCSE - PG&E SCE County Incentive County Incentive County incentive($) 1 San Dieoo $ 7,759.938 ; San Francisco S 12,137,593 Los Angeles S 12,851,230 Alameda $ 7,165,294 Riverside $ 66,225,220 Contra Costa S 5,097,387 San Bernardino , $ 4,047,702 Santa Clara S 4.704,296 Ventura j $ 3,044,399 Santa Barbara , $ 2,506,211 ' Santa BadDara S 2,831,953 Monterey $ 2,234,639 Orange S 2,758,816 j Fresno_ $ 1,885,703 Tulare $ 666,974 Marin $ 1,633,837 Sacramento S 1,498.274 j San Mateo $ 1,056,660 j Other/Unspecified S 5,801,524 Table 4.5: MUSH Applications by City CCSE PG&E SCE City r of Apps 1 City of Apps City i - of Apps Escondido - 72 y SarfFrancisco 51 Goleta 10 San Diego 7 San Jose 21 Lancaster 9 Oceanside 1 i Oaktand 10 San Bernardino i 7 Vista Richmond 10 Santa Barbara i 4 Novato 9 Patin Spnngs 4 { San Rafael 6 Compton 4 Hayward 5 Inglewood 3 ' Morgan Hill 5 Palmdale 3 j Wast 5 Signal Hill 3 Beri;elay 4 Victorville 3 - - - Davis 4 West Covina Fremont 4 Santa Monica 2 Yuba City 4 Irvine 2 _ Chico 3 Camarillo 2 } : Fresno 3 • Cathedral,City 2 j Gilroy 3 Desert Hot S rings 2 'Salinas 3 Duarte 2 Walnut Creek 3 Indian Wells 2 Bakersfield 2 Los Angeles 2 BrentwDod 2 Norco 2 I t E n2 n ills 2 O>.mard 2~J MASH Semi-Annual Report, January 20, 2010 14 27 Table 4.6: MASH Applications by City (Cont'd) CCSE PG&E SCE 1 Freedom ( 2 Pomona 2 Guadalupe 2 Porterville 2 Livermore 2 Rosamond 2 Marina 2 Rosemead 2 Monterey 2 Santa Ana , 2 j Oakdale 2 Simi Valley 1 2 Oakley 2 Tulare 2 Pleasant Hill 2 Woodlake 2 Point Reyes Station 2 Long Beach 1 San Leandro 2 Huntingon 1 Santa Maria 2 Corona 1 1 Union Ciry 2 i Temecula 1 Angle's Camp 1 Apple Valley 1 .Antioch 1 Baldwin Park 1 Arvin 1 Beaumoni 1 - Belvedere 1 Bell Gardens 7 ~ I Carmal 1 Blythe 1 Clayton 7 ^ Cason 1 f Clovis 1 Downey Colusa 1 El Monte 1 Corte Madera ! 1 Fullerton 1 Dixon 1 La Mirada 1 j i Dublin 1 La Palma 1 ' East Palo Alto 1 La Veme 1 _ Fowler LakemIood 1 Greenfield 7 Lindsey 1 Hercules 1 Midway City 1 Hollister 1 hAoreno Valley 7 Kmgsburg 1 Niorongo Valley 1 { '.Larkspur Ojai 1 j Los Banos 1 Pico Rivera 1 I Los Gatos J a Rialto r 1 Madera 1 Ridgecrest 1 Manteca 1 1Orrance 1 Martinez 1 Upland 1 i t Oliveherst 1 Ventura 1 1 Pajaro 1 i Westminster 1 Parliar 1 f Metier TPinole 1 i Pleasanton 1 # MASH Semi-Annual Report, January 20, 2010 is 28 Table 4.6: n4ASH Applications by City (Cont'd) CCSE PG&E SCE + Pad Bluff 1 Rhoned Park 1 Rocklin 1 Rodeo . 1 San Jose 1 San Bruno 1 San Pablo { 1 Santa Barbara Santa Rosa f 1 i - Seaside 1 Selma 1 Shatter 1 I Sonora 1 St Helena 1 Stockton 1 Tiburon 1 Tracy Table 4.7: MASH Applications by I CCSE PG&E SCE San Diego 1.464 San Francisco { 2.864 Lancaster { 0367 Escondido 0.405 ' San Jose 1..3A8 Goleta 0.654 Vista j 0.164 Richmond 0.639 { San Bernardino 0.626 Oceanside 0.030 Santa Idiaria 0.594 Rosamond 0.569 West Sacramento 0.511 Corona 0.494 Oaklan8 0.-46 Oxnard 0.419 I I I Davis I 0.351 Cathedral City { 0.399 A Kingsburg D341 "Palmdale 0.350 Carmel 0.335 Camarillo j 0.255 Halnvard 0.330 Palm Sonngs 0253 t San Bruno 1 0287 { Long Beach 0.234 Clayton 0.286 Pomona 0.225 I Gilroy 0.282 Indian Wells 0.219 IJianna 02D6 Irvine 0.164 Novato 0.196 I Duarte I 0.179 Salinas 0.191 West Covina 0,173 i I Fremont 0.180 , La Palma 0136 Morgan Hill 0,156 Viciorville 0.129 ( I Pleasant Hill 0.156 Compton I D.127 n 1-d 'Am .na + 0115 1 MASH Semi-Annual Report. January 20. 2010 16 29 Table 4,7: MASH Applications by CO (Capacity) (Cont'd) GCSE PG&E j SCE San Rafael 0:145 i Inglewood 0.115 Oliverherst 0.142 Mbrongo Valley 0.313 San Jose 0.137 Westminster 0.112 Bakersneld 0.135 Blythe 0.105 Pleasanton 0.135 Los Angeles 0.103 Guadalupe 0.124 Fullerton 0.092 1 Manteca 0.123 La Verne 0.091 Greenneld 0.107 Simi valley 0.091 Rhonert Park 0.106 Desert Hoi 1 Springs 1 0.088 Arvin ( 0.105 Huntington Beach 0.087 i Hercules 0.102 Signal Hill O.D86 San Leandro 0.097 Santa h4onica i 0.086 Emeryville 0.096 Upland 0.085 Walnui Creek O.D95 Santa Barbara 0,078 Fresno 0.091 Whifier D.D76 k Clovis O.D37 Rialto 0.074 are Corte -a 0.083 La Mirada 0.074 Berkeley , 0.062 Ventu a 0.072 Union City 3.082 Apple Valley 11 0.066 i Tracy 0.079 Beaumont 0.056 d Seaside 0.070 Rosemead 0.063 j Antioch 1 0.063 Temecula 0.062 Ftezdom 0.061 Bell Gardens t 0.058 f I Los Banos ( 0.060 Tulare 0.055 ' Livermore 0.058 Porterville 0.056 Stockton 0.058 Baldwin Park 0.055 Chico 0.056 TCarson 0.055 Dublin t 0.053 Pico Rivera 0.053 Oakley 0:050 ± El Monte 0.050 Angles Camp O.045 VNoodlake 0.043 Pinole 0.043 Torrance 0.039 Colusa Oakdale 0.040 0.039 Ojai Midway City 0.036 0.032 Sonora I 0.037 Downey 0.030 A 03g o n77 Madera D.D36 Ridgecrest j 0.025 r ; Pajaro 0.035 Lindsey 0.025 Santa Barbara I D.035 Moreno Valley i 0.012 St Helena 1034 ABASH Semi-Annual Report, January 20, 2090 17 30 Table 4.7: MASH Applications by City (Capacity) (CDni d) CCSE i PG&E SCE Fonder 0.032 7 Monterey 0.030 Parker 0.030 Hollister 0.029 I San Pablo ' 0.028 Rodeo 0.027 Point Reyes Station D.024 i i East Palo Alio 0.023 Dixon 0.021 j ) " Red Bluff 0.020 Shaffer 0.015 I ! Selma 0.015 Belvedere j 0.015 j Rocklin 0.013 Los Gatos j D.DDS Larkspur 0.005 1 Santa Rosa D.DDS j Tiburon 0:004 Table 4.8: MASH Applications by City (S) GCSE t PG&E SCE I City Iocentive($) city Incentive($) City Incentive($) San Diego $ 5,427,159 San Francisco $ 10,596383 Lancaster S3,268,995 Escondido $ 11566;6B5 San Jose' $ 4,221,499 , Goleta S 2,548,470 ? Vista $ 649,425 Richmond S 2,128172 Rosamond $ 2.224,244 Oceanside 116,60'9 Santa IJeria S 1,984,246 San 6emardino $ 2,112,210 I West I Sacramento $ 1,498,274 Corona - $ 1,583,931 Oakland $ 1,458;659 . Oxnard S 1,507,878 ; Davis $ 1,274,830 Cathedral City $ 1,498,185 Kingsburg S 1,245,363 ; Palmdale $ 1,191,664 ' Cannel $ 1,162798 Camarillo $ 964,876 I Hayward S 1,DB4,707 Indian Wells $ 877,156 I San Bruno ( $ 1,056,68 Palm Springs , S 865,841 Clayton s 1,043,758: Long Beach $ 765,215 Gilroy ( $ 812,1 D9 Pomona $713,066 Marina $ 720.288 Irvin- S 617,868 Novato $713 366 Duarte $ 566,693 Salinas Fremont _ $ 700,157 West Covina ^S 639,662 La Palma ' $ 558,733 $ 440,355 MASH Semi-Annual Report, January 20, 2010 18 31 Table 4.8: MASH Applications by City (Cont'd) CCSE PG&E SCE Morgan Hill $ 615,397 • Idwronoo Valley S 426,590 Pleasant Hill S 560,716 Victowill=_ 421,891 j : Yuba City t S 513,024 Santa An $ 418,921 San Rafael $ 504,411 Compton $ 396,960 { Olivemerst $ 494,094 ! Inglewood $374,1 73 Sa n Jose S 491,004 Westminsfer 5 351,201 BakaMfield $ 489,581 1 Blythe $ 345,794 I Pleasanton S468,956 Lps Angeles S 336,56D i i Brentwood ! S46D,304 Huntington Beach $327,944 Guadalupe $ 412,320 Simi Valley $ 321,D6B 1 Manteca $ 410,531 ; Norco S 308,194 Greenfield $ 3B9,043 Fullerton S 304,844 Rhonert Park $ 382,566 La Verne $300,349 Arvin J l $ 354,DD8 Desert Hot S nngs S 291,350 1 r Hercules . S340,863 ; Santa Barbara $ 283,483 San Leandro $ 337,363 1 Santa Monica ~ $ 277,086 EmeryAlle 5300,554 Upland 5274,526 Walnut Creek S 279,309 { Ventura S 270,243 1 Fresno $ 264,506 1 Apple Valley $ 269,0'69 Clovis $ 261,980 Signal Hill $ 267,389 Corte h4adera $ 261,944 d Whittier $248,949 Berkeley i S 260,030 La Mirada , S243,612 t Union City $ 225,367 I Rialto $ 242474 Tracy $216,845 Beaumont S212,57,3 Seaside S213,876 Rosemead $207,543 Antioch $ 207,632 Temecula $ 204,DB5 Freedom $ 202,673 : Bell Gardens $ 192,647 Los Banos j $ 200,505 i Porterville ' $ 181,091 1 f :'Livsrmove $ 195,144 ..Baldwin Park S180,454 l Stockton S 196,129 Tulare $ 179,164 i Chico $ 191,977 , Carson $ 177,900 . Dublin $ 187,407 Pico Rivera ' $ 171,234 Oakley $ 155,737 El Monte 5 162;924 Angles Camp $ 151,808 Woodlake $ 143,438 v Pinole $ 141,075 Ojai $ 139,805 Colusa $ 135,691 , Torrance $ 126,291 ' a Oakdale $ 130,907 Lakewood S 115,170 Sonora $ 127,241 Midway City $ 105,036 Ir4arEnez 5 120,526 1 Dovwney $ 97,383 Madera $ 118,480 Ridgecrest $ 84,058 MASH Semi-Annual Report, January 20, 2010 19 32 Table 4.8: MASH Applications by City O (Coni d) GCSE PG&E SCE Pajaro $ 112,174 Lindsey $ 79,223 Santa Barbara $ 109,645 Moreno Valley $ 38,103 St Helena S 108,649 c j Fowler S 101,612 { Monterey $ 99,151 Parlier 5 96,535 i Hollister $ 93,545 San Pablo $ 93,374 { Rodeo S 77,421 Point Reyes Station $ 75,237 East Palo Alto $ 66,228 Dixon i $ 62,317 Red Bluff $ 56,417 Shafter $ 501879 i Selma $ 50,233 ' Belvedere $ 47,336 1 Rocklin $ 41,3D0 j Los Gatos { $ 19,484 6arkspur $ 17,681 I { ! Santa Rosa { S 16,335' { Tiburon ! $ 13,860 Table 4.4: MASH Program Expenditures by Program Administrator j MASH Program Expenditure Data Oct 16, 2D082' to December 31, 2009 I CCSE I PG&E { SCE i Total 1'Expen'diture Type ! Expenditure $ Expenditure $ Expenditure $ Expenditure $ ; Administrative { s 109,100 { $ 2D9,940 259,D93 $578,133 Marketing t S17,546 S 19,638: $ 17,039 $54223 Measurement & I so $ O $ 0 so Valuation i Incentive $0, $ D $ 208,3339 , S 208,339 J 21 Date of Decision OB-10-035 MASH Semi-Annual Report, January 20, 2010 20 33 5. Conclusions and Program Recommendations • The PAS have satisfied all of the program implementation guidelines and milestones set forth in D.08-10-036. • Participation by the affordable housing community was initially slow, but the volume of applications rapidly increased, which resulted in almost complete subscription of Track 1 funds. • As expected, applications were concentrated in larger cities. Nevertheless, the PAS received applications from locations throughout their respective territories. • Track 2 did not satisfy program goals in the first funding cycle because submitted applications generally did not provide the tenant benefits required to receive incentives above the Track 1 level. • Given the speed of MASH Track 1 subscriptions, the PAS would support a review of the Track 1 incentive amount in order to ensure that the optimal number of eligible love-income customers may participate in the MASH program. !MASH Semi-Annual Report, January 20, 2010 21 34 MASH Program Reseivation Letters and Extension Email ~s < Janet Okawa(Dsce.COm > 4/14/2,31_0 11:55 AM Hi Ilan, Sorry I sent off the list before I vas finished. Your request for an extension of 4 weeks has been granted and the new extension dates are shovam belDV,'. i ne date you had for MASIH09-00095 should have been May 3, 2010. Project Date Reservation No Extension Canyon Terrace Apartments SCE MASH09-00095 Ponderosa Village SCE MASH09-00096 Mountain Shadows Apartments SCE MASH09-00097 Eucalyptus Park Apartments SCE MASH09-00098 Barnard Park Villas SCE MASH09-00101 CandleWDod Park Apartments SCE MASH09-00102 Angeles Senior Housing SCE MASH09-00103 Garvey Senior Housing SCE MASH09-00104 If you have any questions, give me a call. June 3, 2010 June 28, 2010 May 27, 2010 May 27, 2010 May 27, 2010 May 27, 2010 June 24, 2010 June 24, 2010 Thanks Janet Okavkia Southern California Edison California Solar Initiative and Self-Generation Incentive Programs Multifamily Affordable- Solar Housing (626) 302-3920 36 EDISON' March 25. 2010 Attn: Peter Welch Absolutely Solar Eleetic 2146 Lemoyne Street Los Angeles, CA 90026 RE: Multifamily Affordable Solar Housing, Reservation Request No. SCE TAASH09- 00103 - "Levine Management (.Angelus Senior Housing)" 2417 Angelus Avenue - Reservation Request (RR) Connrned Reservation Notice (Please reference this number, -with all correspondence) Dear Mr. Weich: ;ve are pleased to __fonn you that your Aultfamily Affordable Solar Housing (MASH) Track I appLcation h=s been conditionally app- oved. The following summarizes what you w?ll be insta ling for the MASH Program: Applicant Process: Installation Type: System Size: Design Factor: Project Cost: Payment Type: Incentive Rate: Incentive Allocation: Reserved Incentive: PPM Due Date: 3-Step PV 2;.939 CEC .AC 0.99857 5150,121.00 EPBB S3.30/watt 100.0% Common Load $78,887 May 24, 2010 The amount of your incentive may vary if the "as-built system" does not match the information you have subm fted. Please remember that the Proof of Project Milestone (PPM) submittal must be received on or before the PPM due date or the reservation will be canceled. .Also, please keep in ?rand that the customer is responsible for costs associated with the metering requirements described in 'lie CSI Handbook. 37 In accordance witli Assembly Bill 1714, sided by fne GOVer!lor o;h lens 7, 200/ Callfonna Solar lruTiative (including A1ASH) pai?icipanr5 are not required to be. on a Tame-of-Use (TOU) rate Ohis time. If you are not othervvise required to take Service on a T OU ra e, you may choose either to be placed on a TOU rate or remain on your p.reseat 3r If yGu have any quesi?or!s, please call us ai (SOS) i8?-!A36~ or serld all err! 3!1 to CSIGrou.pOsce.corn. ~.cldit?onaliv rileP.losi uarrenr CSI Pr0=-am Handboo~ and r0i?i is are a\; able on SCB'S \~'eb Site at )ill'W SCe. COM/17IMSh: 51 ALI- Aileen Lagbao Program Manager Mumfanlily Affordable Solar lousing Program Cc: Jeff Levine Levine l\iailaQeln t (A:,12 US SBn10r Housing) S22 S. Robertson Bo„1e\ar~ Suite 300 "Los Angeles; CA 9003j 38 ~5,"i• ;.,T 40L~2Ii U.rIfpBNIA SON' !.n cRfS]A't4.i1'J'J~'.L-1tl%LL51~ Ccaw.n] Marcn 24. 2010 A=: Peter `Weich Absolutely Solar Electric 2146 Lemoyne Street Los "Angeles, CA 90026 RE: Multifamily Affordable Solar Housing, Reservation Request No. SCE MASH09- 00104 - "Levine Management Group, Inc. (Garvey Senior Housing)" 9100 Gal-,,ey Avenue - Reservation Request (RR) Confirmed Reservation Notice (Please reference this number with all correspondence) Des l br. Wcieh: We are pleased to inform you that your Multifamily Affordable Solar Housing (!42? SH) Track I application has been conditionally approved. The follo,A ing summarizes islrat you will be installing for the MASH Prograa: Agglicant Process: 3-Step Lustallation Type: PV System Size: 39?45 CEC .AC Design Factor: 0.99369 Project Cost. $246,100.00 Payment Type: EPBB Incentive Rate: S330hvatt Incentive Allocation: 100.0% Cc= on Load Reserved Incentive: S128;677 PFAI Due Date: May 24, 2010 1 r,e an]ount of your incentive may vary if the "as-built system" does not match the info r nation you have submitted. Please remember that the Proof of Project Milestone (PPM) submittal must be received on or before the PPM due date or the reservation will be canceled. Also, please keep in mind that the customer is responsible for costs associated with the leteretg requirements described in the CSI Handbook. 39 - .i }1 Assembly X111 1714, sidled by the Gover?or O] luxe In accoAa- ce Wii- Cal: fomia Solar Lmtiative (includnia MASH) part cipar_s aye no-, req tired to be on 3 Time-of-Use Cl U) i3Ce 32 this tll it e. ]f POU ai"e not otilei w lse rP.Olllr ed 20 take sei"✓1C9 oil a 1DU rate; you nlay cl'ioose tiffim to be placed oil a i OU rate or remain on ';'OUr presetI rate. If you have any q, ions, please call us at (866) 684-7436, or send an email to CSIGroup ~esce.ooni. Additionally, the most curT2Qt CSI Program Handbook and fowls ac° arailable on SCE's Vileb site at la~nr.~ce.cmizh~iash. Prom -u -Manager Ninltifatnilp AS*ordable Solar Housing Progralu Cc: Jeff Levine Levine Management (Gainey Senior Housine) 822 S. Robertson Boulevard, Suite 200 Los Angeles, CA 40036 40 e r et r?H , 1F r b _ Y.. n _ + - h `y c. o v.: , . o e Pon n ,h,{ tkaa i' ~ e°3;5 t 1 m ~ ~o ~ , c z4 ~ r^a cw A t r•,. t .'.J ';d' 3, .k -.;.1.761 y ;.e3[ t - oaf +9U' T•.+"n~~}+' n w~ ti ,&'~s it 4c c fr ' z _ gC' s{ [ y rtr .tGS.Cc .r ~ ~ ~ t+p + 1;. t'Fi y i~~r t`~ p-o- ~r'~<..1 f ~w VMM r3k t~ : vim.. ` r ° s • r s na'. 'a+`s+aL 1 0 2 t t m 6 >w' a zFas~,}; F t Yst n` a. ~i n, 1 r " 1 1W US" {a 'J 7 d 'tic° K-p- p r-, i r L s ii$ 7 c J~ + a a oyk t03 yr. 4 ' r >yrS v rr .i' 0 5 4v t{¢ wl +Sr trd ~('q o +t ~ r 4x r r to I " 'Y` S .«'r5"'ih3gC my, y A # ?0 t y F-I C } S< } 2 J { a !c a6~im 6Y 4 ay '47. . y f"'N .1 pz 4 e x i- rT -foist q.,,`~ r! 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M'' i'j 3} o:""a +F`~`r Y40 :H.nl i4 p B r xg, ~~qq~ t- a u , w1 x ~f p o 'r?dJ y# 1 $ _ •sv,rpr w ~ ,y ~A ~ btr'Y`.r. xr~ r r y t.. ~v~ ~.Y ai`jFyt '}3. ia~~: F y.% xQ' >H a ' r r ~ ~ Y SS ~r y t~ r ~t o'er. } L rW F;.,> f~•~ ll ~h'4 P~ t',~. i e' : tb ~ .WC ~ 4-t r. eri- y J*f ~t r^'ts y ° xa ,n l >4. F ' ex' 'in r.~• Kam: sonr" ~r - sk yr t t t f3 . . aipp JM r 4 .d4' T~;h r J a :ML r er Y. e~° e7> < yd' f 4 y v h s ; r t r 1 pt ♦ 2 1 t., 1 ,r Z•-A,3 0' F K t4? 1 V°fl "11'Er'~6x 4°~...va , s.'n n .+t r~ p' took? AT K !y+{ 3-'n~ •,'4r h._ .u... 4 r R r J Absolutely Solar* bnfoinnation 42 ABSOLUT L - SOLAR -Photovoltaic Po«'er Systens in Los Angeles ,olutelu~olar 43 Page 1 of 1 },tml 5/14/2010 13,°Qien and development by OSKOUI+UbKUU1. INS-. C - 08 Absolutely Solar. All Rights Reserved. A3SOLUTELYSCLAR - Photovoltaic Power Systems in Los Angeles Designers and L-istallers of Photovolt:aic Sy stems in the greater Los Angeles Area Page -1. of 1 Some Californians are turung to solar power to protect themselves from the types of blackouts that resulted from California's recent energy disaster. Others, frustrated by the prospect of forever being at the mercy of local and state utility providers are anxious to enjoy energy autonomy and are realizing how quickly an investment in a solar system will pay off as energy rates rise at a meteoric pace. Of all the energy sources available, solar has perhaps the most promise. Technically, the sun is capable of producing the raw power required to satisfy the energy needs of every human being on earth. Environmentally, it is the least destructive of all possible sources of energy. Practically, it can be adjusted to power nearly everything. For these reasons, solar power is clearly the energy resource of the future. 44 ol.,nn1 r n 5/14/2010 In today's climate of groV6ng energy needs and increasing environmental coneem-s; millions of homeovaers and businesses are seeking alternatives to the use of non-renewable and polluting fossil fuels. One such alternative is Solar Energy - Solar Power. ABSOLUTELYSOLAK - Photovoltaic Power Systems in Los Angeles Providing Los Angeles \,~th premiere photovoltaic services since 2001. Page I of 1 Phone Consultarion _ T =fr, ;ant a ase call trs a~~rr~3~r z " m 3rsrsee3sultaa ea tc~d-tom r system for your energy needs. Site Evaluation and Estirnatz Alter ue initial phone consultation, our owner. Peter eich „ill visit your site to assess the enact requ rements of R your project and to deteriatme the cost and benefits of your system. A detailed estimate „rill then be prepared for you. Building and Electrical Permits After the proposal is accepted; Absolutely Solar „rill obtain the necessary building permits and assist you in filing for rebates and incentives from your utility company. Installation The supplier will deliver the system directly to your site. Our qual fled electricians, ,with the supervision of our engineer ,avill then expertly install your system and test it thoroughly. Inspection by Local Building and Safely Office Building and Safe Deartment. en completed, the installation will be inspected and approved by your local t' P Wallcdirough and Training Our engineer, Ulrich Buelhoff, „il] , vallc you through all the aspects of the system from stars-up to monitoring and emergency shut-downs. N\7arrant}r All solar panels have a 20 to 25 year manufacturer N,'arranty. Inverters have a standard manufacturer's warran y of 10 years. The ~ varranty on our labor is 5 years. 45 httt~:/ha~>ular.absolutzlysolar.com/szrnices.html 5/14/2010 ABSOLUTELY SOLAR - Photovoltaic Pow i Sys-ms L Los ^mgeles paa= 1 of 1 about Us Sen ices About Photovolt is po,,ver hacentives Gallen Tes nonials Request Quote Contact So1_ar Power n more Detail Sun solar energy is quite simply the energy produced directly by the sun and collected on Earth. The sun creates its energy through a thermonuclear process that converts hydrogen to helium. That process creates heat and electromagnetic radiation. The electromagnetic radiation (including visible light, infra-red light, and ultra-violet radiation) streams out into space in all directions. A small fraction of that radiation reaches the Earth. With the help of solar panels, that radiation can be harnessed and later converted into electricity. Solar Panels Photovoltaic (or PV) systems convert light energy into electricity. The term "photo" is a stem from the Greek "phos" which means "light." "Volt" is named for Alessandro Volta, a scientist ~vho studied electricity in the 1Sth and 19th centuries. Photovoltaic systems are most commonly known as "solar systems." The primary component of a solar sy s?em is an array of panels that directly converts sunlight into electrical energy. Solar panels contain crystal cells made of semiconductor material; usually silicon. These cells transform light from the sun into an electrical current. 46 5/14/2010 htto://Nv~~7v-absolutelysolar. conn/about photovoltaic.html Absolutely Solar Proposals i i 47 Cost Anolysis Draft Angelus Senior Housing Size Production CSI System Size Electricity Costx Electricity Production per year installation cost MASH Rebate System owner out of pocket expenses Federal Tax grant Net Cost Depreciation savings** Cost after 6 years Payback tame Total cost (after 6 yrs) Electricity Production per year Payback time: Energy production after 30 y, s*** Electricity cost calculation Total monthly bill Total electricity used Electricity cost 23.939 CEC-AC (kW) ?2,111 kWh/year 23.905 $0.121 per kWh 55,116.35 $150,121 $78,887 __$71,23H- 521,370 $49,864 $24,828 $25,036 $25,D36 $5,116.35 4.89 years $243,412.52 $1,508.990 12,420 $0.121 ee Depreciation calculation project Cost (after Bash Rebate) $71,235 1/2 of Federal tax grant 510,685.18 Depreciation Basis= Pr Cost-1/2 tax gr. $60,549.33 Depreciation Basis $60,549.3 $12,109.9 41.OD% $4,965.04 lstyr $19,375.8 41.00% $7,944.07 2ndyr 511,625.5 41.OD% $4,766.44 3rd yr $6,981.3 41.00% $2,862.35 4th yr $6,975.3 41.00% $2,859.87 5th yr $3,487.6 41.00% $1,429.93 6th yr $24,827.75 Total Depreciation alter . 48 Angelus Senior Housing Costknalysis Draft a~....4....Fi.... ~ 2n vcsrc Energy Price increase 39/ n/year Yrl $5,116.35 Yr2 $5,269.84 Yr3 $5,427.94 Yr 4 55,590.77 Yr 5 $5,758.50 Yr 6 $5,931.25 Yr 7 $6,109.19 Yr 8 $6,292.47 Yr 9 $6,481.24 Yr 10 $6,675.68 Yr 11 $6,875.95 Yr 12 $7,082.23 Yr 13 $7,294.69 Yr14 $7,513.53 Yr 15 $7,738.94 Yr 16 $7,971.11 Yr 17 $8,210.24 Yr 18 $8,456.55 Yr 19 $8,710.24 Yr 20 $8,971.55 Yr 21 $9,240.70 Yr 22 $9,517.92 Yr23 $9,803.46 Yr24 $10,D97.56 Yr 25 $10,400.49 Yr 26 $ 10,712.50 Yr 27 $11,033.88 Yr 28 $11,364.89 Yr 29 511,705.84 Yr30 $12,057.02 Total Production after 30 yrs. $243.412.52 Angelus Senior Housing 49 G U fi o~ V~ ^W /Ye W ~Q V iO o °o °p °p o 4 0 00 °o ° op o0 o ° ° p 0 0 0 ° o m M ~ an n ir. 50 Y m a Y N Y N r Y N Y N Y N i C } N m Y N ~ N } N Y N ~ O Y .nom Y ~ _ .J n Y N C Y N Y } ~y ~ C Y N Cl Y D} T r r Y tp Y Y' C T m Y` N } 'i Y C °O 0 0 0 o 'n 0 awn 0 m O m O V f N m 7 c U G D u 7 7 T m C! J' D N 0 c d h d Cost Analysis Draft Cost/Benefit Analysis Solar System Production Solar Energy production Accumulated Cost amortization Yr 1 $5,116.35 55,116.35 $44,899.11 Yr2 55,269.84 $10,386.19 537,755.03. ,},r3 $5,427.94 $15,814.13 $33,78859 Yr 4 $5,590.77 $21,404.90 $31,726.24 Yr5 $5,758.50 $27,163.40 529,666.38 1'r 6 $5,931.25 $33,094.65 $29,036.44 Yr7 $6,109.19 $39,203.85 58DO.00 Yr 8 $6,292.47 $45,496.31 5800.00 Yr 9 $6,481.24 $51,977.55 $90D.OD Yr10 $6,675.68 $58,653.23 5800.OD Yr 11 $6,875.95 $65,529.18 5800.00 Yr 12 $7,082.23 572,611.40 $800.00 Yr13 $7,294.69 $79,906.10 $800.00 Yr14 57,513.53 587,419.63 $800.00 Yr 15 $7,738.94 $95,15857 $80D.OD Yr16 $7,971.11 $103,129.68 $SDO.OD Yr 17 $8,210.24 $111,339.92 $800.00 Yr 18 $8,456.55 $119,796.47 $SOD.OD Yr 19 $8,710.24 5128,506.71 $8DO.OD' Yr 20 $8,971.55 $137,478.26 $800.OD Yr 21 $9,240.70 $146,718.96 5800.OD Yr 22 $9,517.92 $156,236.88 $9DO.OD Yr23 $9,803.46 5166,040.34 $800.00 Yr24 $10,09736 5176,137.90 58()0.00 Yr 25 $1014DO.49 $186,538.39 $500.00 Yr26 $10,712.50 $197,250.89 $800.00 Yr27 'Yr 26 $11,03338 $11,364.89 $208,284.77 5219,649.66 $9DO.OD $SDO.OD' Yr 29 511,705.84 $231,355.50 $800.00 Yr30 $12,057.02 $243,412.52 $800.00 51 Angelus Senior Housing r_ P. YI Q ti I N , m I _ N Y N Y! N N tV p' Ci cu L N ~ r ty... Qf _ _ u ~ ti L u T I > ti V 'N 'Y . ti H I IQ L Y L Y 6T' Y n +f j. i Y 1 L~ O L1 O ~ O N O ~ O T .N L 0 h C 52 Cost Analysis Draft Cnternat [date of Return before Depreciation Investment -$49,864 IRR Yrl $5,116.35 Yr2 $5,269.84 Yr3 55,427.94 Yr4 $5,590.77 -26.66% Yr5 $5,758.50 -17.08% Yr6 $5,931.25 -10.37% Yr7 $6,109.19 -5.53% Yr8 $6,292.47 1.93% Yr9 $6,481.24 0.819/D Yr10 $6,675.68 2.93% Yrll $6,875.95 4.60% Yr12 $7,082.23 5.94% Yr13 $7,294.69 7.03% Yr14 $7,513.53 7.92% Yr15 I $7,738.94 8.66% Yr16 $7,971.11 9.28% Yr17 $8,210.24 9.80% Yr18 $8,456.55 10.24% Yr19 $8,710.24 10.61%', Yr20 $8,971.55 10.93% Yr21 $9,240.70 11.21%. Yr22 $9,517.92 11.45% Yr23 $9,803.46 11.66% Yr24 $10,097.56 11.84% Yr25 $10,400.49 12.00% Yr26 $10,712.50 12.13% Yr27 $11,033.88 12.26% Yr28 $11,364.89 12.36% Yr29 $11,705.84 12.46% Yr30 $12,057.02 12.54% 53 Absolute Angelus Senior Housing F D _Q Q n Q r nT ~ ~ I Y I N ~ i N ~ Y I ' I N N I I Y I ~ I N IF I 4 N N I Y I I ~ N N - /S H ~I N CC I o L L : 1 I Y I I Y I I N N ffs ~ ~ Y i i v~ Q ~ I Y a 'II I I~ ~ - I a 6. I I } ~ u i I WIN RUT" i a° 2° 2° o 0 0 0 0 0 0 0 0 0 ° N m c Ll a O L O C n N a Q 54 Cost Analysis Graft [nternaf Fate of Return with Depreciation Investment 425,036 IRR Yrl $5,116.35 Yr2 55,269.84 -42.78% Yr3 $5,427.94 -19.71% 'Yr4 $5,590.77 -5.90% Yr5 $5,758.50 2.73% Yr6 $5,931.25 8.38% Yr7 $6,109.19 12.23 YD YrS $6,292.47 14.93% Yr9 $6,481.24 16.89% Yr10 56,675.68 18.34% Yr11 $6,875.95 19.42% Yr12 57,082.23 20.25% Yr13 $7,294.69 20.89% Yr14 $7,513.53 21.39% Yr15 57,738.94 21.78% 'Yr16 $7,971.11 22.09% Yr17 58,210.24 22.34%; ' $8,456.55 22.54% $8,710.24 22.70% gYr20 $8,971.55 22.83% $9,240.70 22.94% Y22 $9,517.92 23.03% Yr23 $9,803.46 23.10% Yr24 $10097.56 23.16% $10,400.49 23.20% $10,712.50 23.24% V $11,033.88 23.29% 511,364.89 23.30% $11,705.84 23.33% 512,057.02 23.34% 55 ,Ntrsolucety5 iar Angelus Senior Housing Cost Analysis Draft Garvey Senior Housing Size 39.245 CEC-AC (kW) Production 69,591 kWh/year CSI System Size 33.393 Electricity Cost* $0.133 per kWh Electricity Production per year $9,252.12 Installation cost $246,IOD MASH Rebate $128,677 System Owner out of pocket expenses .5117,423 Federal Tax grant $35,227 Net Cost $82,196 Depreciation savings** $40,926 Cost after 6 years $41,270 Payback time Total cost (after 6 yr) $41,270 Electricity Production per year $9,252.12 Payback time: 4.46 years Energy production after 30 yrs*** $440,173.62 * Electricity cost calculation Total monthly bill $1,808.12 Total electricity used 13,6D0 Electricity cost $0.133 Depreciation calculation Project Cost (after Mash Rebate) $117,423 1/2 of Federal tax grant 517,613.47 Depreciation Basis= Pr Cost-1/2 tax gr. $99,BD9.64 Ab-s Depreciation Basis $99,809.6 1st yr 20.00% $19,961.9 41.00% $8,184.39 2nd yr 32.OD% $31,939.1 41.DD% $13,095.02 3rd yr 19.20% $19,163.4 41.00% $7,857.01 4th yr 11.53% $11508.1 41.D0% $4,718.30 5th yr 11.52% $11,498.1 41.00% $4,714.21 Fah yr 5.76% $5,749.0 41.DO% $2,357.10 Total Depreciation after 6 yrs. $40,926.04 36 Garvey Senior Housing Cost Analysis Draft ---Fraar~ Wroduetion after 30 vears Energy Price increase 3% p/year Yr 1 $9,252.12 Yr 2 $9,529.69 Yr 3 $9,815.58 Yr4 $10,110.05 Yr 5 $10,413.35 Yr 6 $10,725.75 Yr 7 $11,047.52 Yr 8 $11,378.94 Yr 9 $11,720.31 Yr 10 $12,071.92 Yr 11 $12,434.08 Yr 12 $12,807.10 Yr 13 $13,191.32 Yr 14 $13,587.06 Yr15 $13,994.67 Yr 16 $14,414.51 Yr17 $14,846.94 Yr18 $15,292.35 Yr 19 $15,751.12 Yr20 $16,223.65 Yr 21 $16,710.36 Yr 22 $17,211.68 Yr23 $17,728.03 Yr 24 $18,259.87 Yr 25 $18,807.66 Yr 26 $19,371.89 Yr27 $19,953.05 Yr 28 $20,551.64 Yr 29 $21,168.19 Yr 30 $21,803.23 Total Production after 30 yrs. $440,173.62 57 Garvey Senior Housing 15 lf} e~ Q ~F 03 {'d (f} V O 0 °o 0 0 O ,h D N D Y m Y N Y b } N u Y N - P1 Y rv c } N m } N N Y N ~ H Y N Y N ci Y .-1 } N Y e^-I } H Y ti > ti m Y ~y N } N Y y O Y` w i i u i L~ i c i m N Y H } C O O F `m O U N m 75 F_ V G 0 V 0 a c `m 0 ~[p I ❑ h 1 5° O O O O O O O C C O O O O D O O O O c O 0 0 0 0 0 0 0 o c o 0 o c o 0 0 o c c 'h 0 0 0 C 0 C o c c Ln 0 0 0 0 0 0 0 0 1 O ~/l D N O ~ O L1 C Q m m N N H N U1 vl Ll +n v1 'h :n Cost Anolysis Draft Cost/Benefit Analysis Ab!;o Solar System Production Solar Energy Production accumulated Cost amortization Yr 1 $9,252.12 $9,252.12 $74,011.78 Yr 2 $9,529.69 $18,781.81 $61,716.76 Yr 3 $9,815.58 $28,597.39 $54,659.74 Yr4 $10,110.05 $38,707.43 $50,741.44 Yr5 $10,413.35 549,120.78 546,827.23 Yr 6 $1D,725.75 $59,846.53 $45,270.13 Yr 7 $11,047.52 $70,894.05 $SOO.DO Yr 8 $11,378.94 582,272.99 $800.DD Yr 9 $11,720.31 $93,993.30 $500.00 Yr 10 512,071.92 $106,065.23 $800.00 Yr 11 $12,434.08 $118,499.31 $800.00 Yr 12• $12,807.10 $131,306.41 $800.OD Yr 13 $13,191.32 $144,497.73 $800.00 Yr 14 $13,587.06 $158,084.78 $800.00 Yr15 $13,994.67 $172,079.45 $SOD.00 Yr 16 $14,414.51 $186,493.95 $8DD.OD Yr 17 $14,846.94 5201,340.90 580D.DD Yr 18 515,292.35 $216,633.25 WO.OD Tr 19 $15,751.12 $232,384.37 $800.DO Yr 20 $16,223.65 5248,608.02 $SDO.OO Yr 21 $16,710.36 $265,318.39 $800.OD Yr 22 517,211.68 5282,530.06 $800.00 Yr 23 $17,728.03 $3DD,258.09 $80D.OD Yr 24 $18,259.87 $318,517.95 $800.00 Yr25 $18,807.66 $337,325.61 $SDO.00 Yr 26 519,371.89 5356,697.51 $90D.DO Yr27 519,953.05 $376,650.55 $SOO.DO Yr 28 $20,551.64 $397,202.20 $800.DD 'Yr 29 $21,168.19 $418,37038 $80100 Yr30 $21,503.23 5440,173.62 $800.00 59 Garvey Senior Housing L G 0 F I I m ~ f of I i I I I I ~ I n I Y 1 ti ~ ~ I N I Y I ~ Y N ~ l Mill ffl N- } Q IFS , N. 4 Y h N' I }i I N. N O ! cu Y 11r? l wl',NMMF ~ I } Q~ . Y L d I ~ Y V~ I V; l L i I Y: H T1 L YI I ® N W } i+ C LL ~ } O CO Y1 - . .s ` Y I i ' Y ' I ~ I Y , N }I Y I L Ll a° c\° c1°. \ a ' O L1 O Ll Ll 1 O O P1 O N O I- N ri '-I e-I ei N N :Y1 a 0 N h 0 60 Cost Analysis Draft [ruternM Rate of Return before Depreciatton Investment -$82,196 VRR Yrl $9,252.12 Yr2 $9,529.69 Yr3 $9,815.58 Yr4 $10,110.D5 -24.28% Yr5 $10,413.35 -14.79%. Yr6 $10,725.75 -8.20% Yr7 $11,047.52 -3.47% YrS $11,378.94 0.02% Yr9 $11,720.31 2.66% Yr10 $12,071.92 4.70% Yrll $12,434.08 6.30% Yrl2 $12,807.10 7.57% Yr13 $13,191.32 8.60% Yr14 $13,587.06 9.44% Yr15 I $13,994.67 10.13% Yrl6 $14,414.51 10.71% Yrl7 $14,846.94 11.19% Yrl8 $15,29235 11.60% Yr19 515,751.12 11.94% Yr20 $16,223.65 12.24% Yr21 $16,710.36 12.49% Yr22 517,211.68 12.70% Yr23 517,728.03 1189% Yr24 $18,259.87 13.05% Yr25 $18,807.66 13.19% Yr26 $19,371.89 13.31% Yr27 $19,953.05 13.42% Yr28 $20,551.64 13.529/o Yr29 $21,165.19 13.60% Yr30 $21,803.23 13.67% 61 Ab-sc lute lu S,n.l ar Garvey Senior Housing F D C. L~ Q Z 1D C L 7i L Q~ I O vt m N O N vt O r-I Vt 62 i i i i i i i + l i I + + I a m r T } } m ! > I N ~ ei a O 0 c ~n 0 l7 CostAnatysis Drab internal Rate of Return with Depreciation Investment -$41,270 iRR Yrl $9,252.12 Yr2 $9,529.69 Yr3 $9,815.58 Yr4 $10,110.()5 -2.48% Yr5 $10,413.35 5.97% Yr6 $10,725.75 11.45% Yr7 $11,047.52 15.14% Yr8 $11,378.94 17.72% Yr9 $11,720.31 19.56% Yr1D $12,071.92 2D.90% Yrll $12,434.08 21.91% Yr12 $12,807.10 22.66% Yr13 $13,191.32 23.24% Yr14 $13,587.D6 23.69% Yr15 $13,994.67 24.04% Yr16 $14,414.51 24.31% Yr17 $14,846.94 24.53% Yr18 $15,292.35 24.70% Yr19 $15,751.12 24.84% Yr20 $16,223.65 24.95% Yr21 $16,710.36 25.04% Yr22 $17,211.68 25.11% Yr23 $17,728.03 25.17% YrZ4 $18,259.87 25.21% Yr25 $18,807.66 25.25% Yr26 $19,371.89 25.28% Yr27 $19,953.05 25.31% Yr28 $2D,551.64 25.33% Yr29 $21,168.19 25.34% Yr3D $21,803.23 25.36% 63 Aj7 o lu Garvey Senior Housing . 43 r J a t ! r' ~ 6 , F a n C rf4 ~ Coy ~ r F ~ • ~ ' V C • 9 r 6 L N C r ' ~ n c i~~t A'r, d " a r 6,. 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Y V e4 i+ V W 0 T w Y V 7 i~ T, Q T 0 m m > r O L7 Q M N C N p N dl m a _LD Q 96 N O 0 co 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0° 0 0 0 0 0 0 tD O L7 O Ll~ ° L'J ° Lh QH H E9 H N N H H H 0 0 0 ° o 0 O O O O O H L7 O tr O L H H 63 f9 H Solar City, Sample Contract 97 Solar Power Purchase Agreement (Commercial CA COI0R) This Solar Power Purchase .Agreement (this `:agreement') is entered into by the panes listed below (each a "Putt}'" and collectively the `Parties") as o: the date signed by Seller below (the "Effective Bate"). I Seller: Purchaser: I Name Levine Management Group, Inc. Name SoizrCirv Corporation 822 S Robertson Blvd and 393 Vintage Park Drive, Suite 140 and CA 90035 Los Angeles Address Foster CITY.. CA 94404 Address , Attention: Jeff Levine Attention: Contract Adminis rMon Phone 310-358-3489 I Phone (650)638-1028 Fax 310358-3494 Fax I (650) 638-1029 E-mail I Contra,Tadminisj-azorCasolarci v com E-mail I Contractors License Numbers Purchaser X❑ owns the Facility CA: CSLB 888104 (cbeck one) leases the Facility OR: CCB 180498 This Agreement sets forth the terms and conditions of the purchase and sale of Solar generated electnc energy from the solar panel system described in Exhibit 2 (the "System") and installed at the Purchaser's faciliy described in Exhibit 3 (the `Facility" Tin exhibits listed below are incorporated by reference and made part of this .Agreement. Exhibit 1 Pricing Attachment Exhibit 2 System Description; Delivery Point and License Area Exhibit 3 Memorandum of License Exhibit 4 Credit Information Exhibit 5 General Terms and Conditions (Revised December 11, 2009) Purchaser: SolarCity Corporation Signatue: Printed Name: Title: Daze: Signature: Printed Name: Lyndon Rive Title: CEO Date: Solar Power Purchase Ageemenrv. 20091211 (CAICVOR) 1. Term: Eighteen (18) }'ears, beginning on the Commercial Operation Daze. 2. Additional Terms: Up to Zero (0) additional Terms of Zero (0) years each. 3. Environmental incentives and E,uvironment Attributes Accrue to SeIIer. 4. Conti'act Price: YEAR CONTRACT PRICE PER K'?4`H 1 50.0500 2 50.0500 3 50.0500 4 50.0500 5 S0.0500 6 50.0500 7 $0.0500 g S0.050D 9 50.0500 10 $0.0500 11 50.0500 12 50.0500 13 50.0500 14 50.0500 15 SO.O500 16 $0.0500 77 50.0500 18 $0.0500 Includes ACH invoicing. If manual mv0icing is required, a S25 handling charge will be added to each invoice. 5. Condition Satisfaction Date: December 31. 2010 6. Anticipated Commercial Operation Date: February 28, 2011 7. Outside Commercial Operation Date: May 31,'_011 8. Purchase Option YEAR PURCHASE PRICE* 6 594.438 10 584.744 18 I& Market Value *3uver shill have the right to purchase the System at the ueate: of The price set forth above and the rhm current fair market value. 9. Termination Value: YEAR TERMPiATION VALUE 1 5346,128 2 5304.165 3 5249.592 4 5206,237 5 5169.611 Poway P=hew A4 =Ment Commercial u'orl~ine Version (C.M'CO/OR) 99 S120,3s2 8 5113,690 9 5106.992 10 5700287 11 593,574 12 566.654 13 s60,126 14 573.390 15 666,644 16 $59.899 17 653.123 18 539.560 F Rebate Varimce. All prices in this Agreement are calculated based on a rebate of mash rebaze at 5113,401.00/Systrm. H the actual rebaze is lower than calculated. prices will be adjusted pro-rata to reflect the actual rebate received. Power P=hz a Auttmen[ CODlm=ela) Wod~ng Verion (C.4/CO/OR) 100 Z. z, 3. 4. 5. 6. 7. 9. 9. System Descrlption, Delivery Point and License Area System Location: 4051 Candlewood St Lakewood, CA 90712 System Size (DC kW4): 39.560 Expected First Year Energy Production: 54,222 Expected M-odule(s): QU.4N°FITS' I tvlAIa I MOIDEL I STC WATTS I PTC R'ATTS 184 I P.YOCERA SOLAR KD215OX-LPU 215-O v, 194.4 W Expected Inverter(s): QII.ANTM MAIM I MODEL I RATED POWDER I EMCIENCY 7 I SatCon Technolom' PN/S-30 (240 130.00 kA' 95.0% Expected Structure: Roof Mount Includes: Turn key installation: rebate processing, site audit, engineering and design, plan check, permitting, inspections, inter connection. SOIarCiiy Limited Warranty Excludes: Upgrades to electrical, roofing, structural enhancements, and trmchina. Delivery Point and License Area: SolarCity shall attach a schematic that contains the: (i) array; (ii) Delivery Point; and access points needed to install and service System (bldg access, electrical room, stairs etc.) Pawc-AveveAut:m~-t Commercial A'orkine Vcmon(CA1C0/OR) 101 Memorandum of License RECORDING REQUESTED BY.h-N-D R°HEN RECORDED RETURN TO: SOlarCiq' Corporation 393 Vintage Park Drive, Suite 140 Foster City, CA 94404 Attention: Lcase/License Administ aior (space above this line reserved for NIEMOR NDI3M OF LICENSE s use) THIS NjF1 0RANDUM OF LICENSE is made and entered into this M day of 20L&, (ibe "Effective Date") by and between Levine Managemei Group, Inc., whose address is 822 S Roberson Blvd Los Angeles, CA 90035 (`Licensor'), and SOL.ARCITY CORPORATION, whose address is 393 Vintage Park Drive, Suite 140. Foster City, CA 94404 (`Licensee"). A. Licensor is the owner of certain real property ("Premises"), located in the County of LOS .ANGELES, State of Califortia, attached to this License as Exhibit A and incorporated herein by reference. 3. Licensor and Licensee have entered into a solar Power Purchase Agreement dated on or about the Effective Date (the "Agreement") under which Licensee is selling enerRv generated by a photovolaic elecnic generating system (the "System") to Licensor. The Agreement is for a term of Eighteen (19) years; beginning on the Effective Date and ending on the Eighteen (1S) year anniversary of the Commercial Operation Date with an option to extend the Agreement for up to Zero 0 extended terms of Zero (0) years each. Pursuant to the .Agreement, Licensor has granted Licensee an irrevocable, non-exclusive license (`License over the Premises for the purposes and on the terms set forth in the Agreement. Licensor and Licensee agree as follows: 1.. Licensor hereby grants to Licensee the License over the Premises on and subject w the terms and conditions set forth in the Agreement which is incorporated herein by reference. 2. The term of the License begins on the Effective Date and continues until one hundred and twenty (120) days afer the termination of the Agreement. 3. This Memorandum of License shall not be deemed to modify, alter or amend in any wav the protisions of the License or the Aueement. In the event of any conflict between the terms of the License and/or the Agreement and this Memorandum, the terms of the License and/or the Agreement' as applicable; shall control. The undersigned have executed this Memorandum of License as of the date first written above. LICENSOR LICENSEE Leone Management Group, Inc. SOLARCITY CORPORATION By: ?Fame. Title: a.. Name: Lyndon Rive Title: CEO [REr1AAAvDER OF PAGE INTENTIONALLY LEFT BLANK NOT_ARY.ACKNOP✓LEDGEDgNT PAGE FOLLOWS] c,..,,.,?„rrhzs_ Ae; cement CQ=trBla] Gbrhne Version (CA/CO/OR) 102 STATE OF CALIFORN A) -OLNTY OF LOS ANGELES On , before me, . Notary Public, peronally appeared : who oroved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acImowledged to me that he/shehhey executed the same in his/herhheir authorized capacity(ies.1 and That by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executer] the instument. I cv-dN under PENALTY OF PERJURY under the laws of the state of Californiahat the foregoing pa az aph is the and correct. W7TNTESS my hand and official seal. Signature of Notary Public STATE OF CALIFORNIA COUNTY OF SAN l 4ATEO ) ss. On . before me, : Notary Public, persona➢y appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/shehhey executed the same in hs/her/tbeir authorized capaciTy(ies), and that by his/herhbeir signature(s) on the instrument the person(s); or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. RTTNF.SS my hand and official seal. Si gnature of Notary Public Power ?=chase Ageoment Commercial Worldnz Version (CPJCO/OR) 103 Erldbit A Leeal Descripton of Premises Tnat terrain real properq' located in the Count' of LOS A'~NGELES, State of Califomia described as follows: Power P=hn, Aereement CO=Mial Woridng Version (CA/COIOR) 104 ErMbit 4 Credmt IODrotation ution of this Agreement Purchaser shall supply SolarCit<' with le following credit information: h e exec Promptly following t - Z.wr-+'nc '::l, _ 7NEORTI.~TIONE APPLIC: NT3 . Tax ED: I Name: Levine Management a0la)- inc. Previous & CYher Names: I Webslre: Corporate Address: 812 S Robison Blvd City, State, Zip Los Angeles, CA 9DD3- Phone Number Fax Number Euv y Type S-Corp C-Carp Partnarship Suit Prop LLC LLP I Otter Check Ooe: I property -Address for Solar Installation: State: Zip Code: owner Occupied I c YES o NO insurance Ageut Name .Agents Phone: Name of Landlord if Not Owner Occupied Properm Type I . , . . ~ - ` ~ - - formabi;li Requested F , . , , o - Conorate Records Partnership Agreement FlctitioLs Name Statement or Organizational formation f Articles of incorporation C , opy o ❑ DDCUMM*s (if applicable). Financial Statements compiled statements (Balance Sheet, Income Statement, Cash Flow). reviewed f CPA audited , , ❑ Last two (2) years o and am• information attached is -Wished to Sola-Cin• and its affiliates ("Lender in connection with im .Appli; mot, o` crin for whic'.^. von may matur i f b or ove n The a the Lender is reh•ina on this information in deciding m grant or conanue credit ce to accept a You ac}moa•L^dea and understand mat ntee . apply o: credit you may guara and that the infonumon provided h^in is tug, coact and complete. Tne Lender is authorized to make all inquires gummatc of credit You represent wany to verify the accuracy of the information contained heroin and to determine your cr 5jrt rt: iness. You authorize any person or co. sumer-reportimg cessa t t d b d S ne ry jec o any eeme u y information it may have about you- You author's the L rode; to answer questions about its credit emoenence with you. ive the Leader ar to ' t g agency s prop-,. non-disclosure agreement between you and Lender, this form and any other information given to The Lender shall be the Lender dit is denied you have the right to a wnttn statement of tit specific reason for the de:ual. To ooam the statement please contact i ness cre If your application for bus within 60 days from data you are notified of our decision- We will send you a wnur SolarCi:y w (650) 639-1028, FosT r City, CA 94404. You must contact us statement of reasons for the denial wdthin 30 days of receiving your request. NOTICE: Tae Federal Equal Opportunity Am prohibits creditors horn discriminating against credit applicants on the basis of race, color, religion, national ongin, sex licants income derives from any public f the a pp marital Batts or age (prodded the applicant has the capacity to entr into a binding contact); because all or pan o nder in- Consumer Credit Protection An The federal agency that admirusnet s ht i u g assistance programs; or because the applicant has in good faith exercised any r 025ce of the Commmller of the Currency, Customer Assistance Unit 1301 McKmcy Sucat Suite 3450, h i s t e compliance viTh this 'taw con:°..mmg this creditor Houston, Teas 77010-9050. Sclat-CiTy is an equal opportunity lender. 'title Data Signature s, %7.,;,,n rc,krcoioR) 105 Power Parches- her v'1„ Exhibit 5 Soper Power Purchase 4ereement General Terms and Conditions P~ased IJecember 11. 2009 1. Definitions and Interpretation: Unless otherwise defined or required by the context in which any term appears: (a) the sing'.ilar includes the plural and vice versa: (b) the words "herein." `'hereof' and "hereunder" refer to this Agreement as a whole and not to any particular section or subsection of this Agreement; (c) references to any agreement aocument or instnrment mean such agreement document or instrument as amended, modified, supplemented or replaced from time to time: and (d) the words "include," "includes" and "including" mean include. includes and including "w'ithout limitation." The captions or headings in this Agreement are strict, for convenience and shall not be considered in interpreting this Agreement. Purchase and Sale of Electricity. Purchaser shall purchase from Seller, and Seller shall sell to Purchaser, all of the electric energy generated by the System,during the Initial Term and any Additional Term (as defined in Exhibit 1, and collectively the "Terri'). Electric enery generated by the System will be delivered to Purchaser at the deliver, point identified on Exhibit 3 (the "Delivery Point"). Purchaser shall take title to the electric energy generated by the System at the Deliver, Point and risk of loss will pass from Seller to Purchaser at the Deliver), Point. Purchaser may purchase electric energy for the Facility; from other sources if the Purchasers elecuic requirements at the Facility exceed the output of the System. 3. Term and Termination a. Initial Term. The initial term ("Initial Term") of this Agreement shall commence on the Commercial Operation Date (as defined below) and continue for the length of time specified in Exhibit 1, unless earlier terminated as provided for in this Agreement. The "Commercial Operation Date" is the date Seller gives Purchaser written notice that the System is mechanically complete and capable of providing electric energy to the Delivery, Point. Upon Purchasers request, Seller will give Purchaser copies of certificates of completion or similar documentation from Seller's contractor and the interconnection or similar agreement with the Utility. This Agreement is effective as of the Effective Date and Purchasers failure to enable Seller to provide the electric energy by preventing it from installing the System or omerNise not performing shall not excuse Purchaser's Obligations to make payments that otherwise would have been due under this Agreement. h. Additional Terms. If Purchaser has not exercised its option to purchase the System by the end of the Initial Term, either Perry may give the other Party written notice of its desire to extend this Agreement on the terms and conditions set forth herein for the number and length of additional periods specified in Exhibit 1 (each an `:additional Terra'). Such notice shall be given, if at all, not more than one hundred twenty (120) and not less than sixty (60) days before the last day of the himal Term or the then cu.-rent Additional Term, as applicable. The Party receiving the notice requesting an Additional Term shall respond positively or negatively to that request in writing within thirty (30) days after receipt of the request Failure to respond within such thirty (30) day period shall be deemed a reiection of be offer for an Additional Term. If both Parties agree to an Additional Term, the Additional Term shall begin immediately upon the conclusion of the Initial Term or the then current term on the same terms and conditions as set forth in this Aareement. If the Party receiving the request for an Additional Term rejects or is deemed to reject the first Party's offer, this Agreement shall terminate at the end of the Initial Term (if the same has not been extended) or the then current Additional Term. 4. 3iffiniz and Payment. R. Monthly Charries. Purchaser shall pay Seller monthly for the electric energy generated by the System and delivered to the Delivery Point at the S/kWh rate shown in Exhibit I (the "Contract Price"). The monthly payment for such energy will be equal to the applicable SlkWlr rate multiplied by the number of k`it'h of energy generated during the applicable month, as measured by the System meter. _ b. Monthly Invoices. Seller shall invoice Purchaser monthly, either manually or through ACH. Such monthly invoices shall state (i) the amount of elecurc energy produced by the System and delivered to the Delivery Point, (ii) the rates applicable to, and charges incurred by, Purchaser under this Agreement and (iii) the total amount due from Purchaser. C. Taxes. Purchaser shall either pay or reimburse Seller for any and all taxes assessed on the generation, sale, delivery or consumption of electric energy produced by the System or the interconnection of the System to the Uffiity's electric distribution system, including property taxes on the System; provided . however. Purchaser will not be required to pay or reimburse Seller for any taxes during periods when Seller fails to deliver electric energy to Co..=-Tcial Worh mg Vomon (C.4ICO/OR) 106 Purchaser for reasons other than Fore Niajeur e. For purposes of this Section 4(c) . "Taxes"means any federal; stag _ other taxes. re_eulatory fees; surchwaes or other similar cbarges. but shall not include an), income taxes or similar taxes imposed on Seller's revenues due to the sale of energy under this Agreement- which shall be Sellers responsibility. d. Payment Terms. All amounts due under this Agreement shall be due and payable net twenty (20) days from receipt of invoice. Any undisputed portion of The invoice amount not paid Within the twenty, (20) day period shall accrue interest at the annual ,-ate of Two and one-half ner cent (2.5%) over the Prime Rate (but not to exceed the maximum rate permitted by law). 5. Environmental Attributes and Environmental Incentives. Unless otherwise specified on Erhibit i, Seller is the owner of all Environmental Attributes and Environmental Incentives and is entitled to the benefit of all Tax Credits. and Purchaser `s purchase of electricity under this Agreement does not include Environmental .Attributes, Environmental Incentives or the right to Tax Credits or any other attributes of ownership and operation of the System, all of which shall be retained by Seller. Purchaser shall cooperate with Seller in obtaining; securing and transferring all Environmental Attributes and Environmental Incentives and the benefit of all Tax Credits. including by using the electric energy acnerated by the System in a manner necessary o qualify for such available Environmental Attributes, Environmental Incentives and Tax Credits. Purchaser shall not be obligated to incur any out-of--pocket costs or expenses in connection with such actions unless reimbursed by Seller. If any Environmental Incentives are paid directly to Purchaser, Purchaser shall immediately pay such amounts over to Seller. To avoid any conflic-s with fair trade rules regarding claims of solar or renewable energy use, Purchaser, if engaged in commerce and/or trade, shall submit to Seller for approval any press releases regarding Purchasers use of solar or renewable energy and shall not submit for publication any such releases without the written approval of Seller. Approval shall not be unreasonably withheld, and Seller's review and approval shall be made in a timely manner to permit Purchaser's timely publication. "Environmental Attributes " means any and all credits, benefits, emissions reductions; outsets, and allowances: howsoever entitled._ attributable to the System, the production of electrical energy from the System and its displacement of conventional enerw generation, including (1) any avoided emissions of pollutants to the air: soil or water such as sulfur oxides (SOx), nitrogen oxides Gl Ox), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (C02), methane (CH41 nitrous oxide, bydrofluorocarbons, per-luorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the united Nations Intergovernmental Panel on Climate Change. or otherwise by law, to contribute To the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; and (3) the reporting rights related to these avoided emissions, such as Green Tag Reporting Rights and Renewable Energy Credits. Green Tag Reporting Rights are the right of a part), to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party; and include Green Tag Reporting Righs accruing under Section 1605(b) of The Energy Policy Act of 19,92 and any present or future federal, state; or local law, regulation or bill, and international or foreign emissions trading protnam. Environmental Attributes do not include Environmental Incentives and Tax Credits. Purchaser and Seller shall file all tax returns in a manner consistent with this Section 5. Without limiting the generalhy of the foregoing; Environmental Attributes include carbon trading credits, renewable energy credits or certificates, emissions reduction credits. investment credits, emissions allowances, green teas. tradeable renewable credits and Green-e® products. `"Environmental Incentives" means any and credits, rebates, subsidies; payments or other incentives that relate W self- generation of electricity, the use of technology incorporated into the System; environmental benefits of using the System, or other similar programs available from the Utility, any other regulated entity, the manufacturer of any part of the System or any Governmental Authority. `-tovernmentai Authority' means any national. -state or local government (whether domestic or foreignany political subdivision thereof or any other governmental, quasi-eovemmen*ml, judicial, public or sttatutory instrumentality, authority. body. agency, bureau or entity (including the Federal Energy Regulatory Commission or the California Public Utilities Commission), or any arbitrator with authority to bind a party at law. "Tax Credits" means any and all (i) investment tax credits, (ii) production tax credits and (iii) similar tax credits or grants under federal, state or local law relating to the mnsuvction, ownership or production of energy from the System. Conditions to Obligations. Z. Conditions to Seller's Obligations. Power Pvmhs_ Am-eommt Commercial Worline Version (CAICO/OR) 107 Sellers obligations under this Agreement are conditioned on the completion of the f0lloWing conditions to Seller s i. Completion of a physical inspection of the Facility and the property upon which the Facility is located (the "Premises") including, if applicable, gemechnical work, and real estate due diligence to confirm the suitability of the Facility and the Premises for the System; ii. Approval of (A) this Agreement and (3) the Concoction Agreement (if any) for the System by Seller s Financing Parries. `Construction AD eemenf' as used in this subsection means an agreement between SolarCity and a subcontractor to install the System; iii. Confirmation that Seller will obtain all applicable Environmental Incentives and Tar: Credits iv. Receipt of all necessary zoning, land use and building permits; v. Execution of all necessary agreements with the Utility for interconnection of the System to the Utility's electric distribution system; and vi. Prior to Seller commencing construction and installation of the System, Purchaser shall give Seller proof of insurance for all insurance required to be maintained by Purchaser under this Agreement b. Conditions to Purchaser's Obligations. Purchaser's obligations under this .Agreement are conditioned on the occurrence of the Commercial Operation Date for the System on or before the Outside Commercial Operation Date (See Exhibit 3). C. Faaiure of Conditions. if any of the conditions listed in subsections a or b above at, not satisfied by the applicable dates specified in those subsections, the Parties will attempt in good faith to negotiate new dates for the satisfaction of The failed conditions. If the parties are unable to negotiate new dates then the Parr), that has not failed to meet an obligation may terminate this Agreement upon ten (10) days written notice to the other Party without liability for costs or damages or triggering a default under this Agreement. Seller's Rights and Obligations. a. Permits and Approvals. Seller, with Purchaser's reasonable cooperation, shall use commercially reasonable efforts to obtain, at its sole cost and expense: i. any zoning, land use and building permits required to construct, install and operate the System; and ii. any agreements and approvals from the Utility necessary in order to interconnect the System to the Utility's electric distribution system. Purchaser shall cooperate with Sellers reasonable requests to assist Seller in obtainiag such agreements, permits and approvals. b. Standard System Repair and Maintenance. Seller shall construct and install the System at the Facility. During the Term, Seller will operate and perform all routine and emergency repairs to, and maintenance of, the System at its sole cost and expense, except for any repairs or maintenance resulting from Purchasers negligence, willful misconduct or breach of this Agreement or the Site Lease (if applicable). Seller shall not be responsible for any work done by others on any part of the System unless Seller authorizes that work in advance in writing. Seller shall not be responsible for any loss, damage, cost or expense arising out of or resulting from improper environmental controls or improper operation or maintenance of the System by anyone other than Seller Or Seller's contractors. If the System requires repairs for which Seller is not responsible, Purchaser shall pay Seller for diagnosing and correcting the problem at Seller or Seller's contractors' then current standard rates. Seller shall provide Purchaser with reasonable notice prior to accessing the Facility to make standard repairs. C. Non-Standard System Repair and Maintenance. If Seller incurs incremental costs to maintain the System due to conditions at the Facility or due to the inaccuracy of any information provided by Purchaser and relied upon by Power Pi,hrse. uttmr:tCo=, nrcial l6'orlane Version(C.NCOIOR) 108 Seller, the pricing. schedule and other terms of this Agreement will be equitably adjusted to compensate for any negotiate such equitable adjustment in -Rood faith. d. Breakdown ]Notice. Seller shall noun' Purchaser within rwenfi-four (24) hours following Seller's discovery of (i) any material malfunction in the operation of the System or (ii) an irate-option in the supply of electrical ener gv from the System. Purchaser and Seller shall each designate personnel and establish procedures such that each Party may provide notice of such conditions requiring Sellers repair or alteration at all times, twenty-four (24) hours per day, includina weekends and holidays. Purchaser shall notify Seller immediately upon the discovery of an emergency condition affecting the System. e. Suspension. Notwithstanding anything to the contrary herein. Seller shall be entitled to suspend delivery of electricity from the System to the Delivery Point for the purpose of maintaining and repairing toe System and such suspension of service shall not constitute a breach of this Agreement; Qovided. that Seller shall use commercially reasonable efforts to minimize any interruption in service to the Purchaser. f. Use of Contractors and Subcontractors. Seller shall be permitted to use contractors and subcontractors to perform its obligations under this Agreement However, Seller shall continue to be responsible for the quality of the work performed by its contractors and subcontractors. If a list of pre-approved contractors and subcontractors is desired, such list shall be scheduled on an appendix to this Exhibit. All contractors and subcontractors, other than those that may be scheduled on an appendix to this Exhibit, shall be subject to Purchaser's prior written consent not to be unreasonably withheld. g. Liens and Payment of Contractors and Suppliers. Seller shall pay when due all valid charges from all contractors, subcontractors and suppliers supplying goods or services to Seller under this Agreement and shall keep the Facility free and clear of any liens related to such charges, except for those liens which Seller is permitted by law to place on the Facility following non-payment by Purchaser of amounts due under this Agreement. Seller shall indemnify Purchaser for all claims, losses, damages, liabilities and expenses resulting from any liens filed against the Facility or the Premises in connection with such charges; rovide however that Seller shall have the right to contest any such lien. so long as it provides a statutory bond or other reasonable assurances of payment that either remove such lien from title to the Facility and the Premises or that assure that any adverse judamem with respect to such lien will be paid without affecting title to the Facility and the Premises. h. No R'arranty. NO WARRANTY OR REIA DY, WHETTER STATUTORY, A, WTTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE SHALL APPLY. The remedies set forth in this Agreement shall be Purchaser's sole and exclusive remedies for any claim or liability arising out of or in connection with this Agreement, whether arising in contract tort (including negligence), strict liability or otherwise. The Limited Warranty Solar-City will provide Purchaser with is a separate contract from this Agreement. No rights provided to Purchaser by the Limited Warranty may be asserted under this Agreement. No wa-r ty is made in this Agreement. Therefore, any warranty claim must be made independently of this Agreement and will not affect Purchaser's obligations under this Agreement 8. Purchasers Riabts and Obligations a. Facility Access Rights. Purchaser grants to Seller and to Scller s agents, employees and contractors an irrevocable non-exclusive license running with the Premises (the "License") for access to, on, over, under and across the Premises as more particularly described in Exhibit A to Exhibit 3 (the "License Area") for the purposes of (a) installing, constructing, operating, owrin-R, maintaining, accessing: removing and replacing the System; (b) performina all of Seller's obligations and enforcing all of Seller's rights set forth in this Agreement; and (c) installing, using and maintaining electric lines and equipment, including inverters and meters, necessary to interconnect the System to Purchasers electric system at the Facility and/or to the Utility's electric distribution system or that otherwise may from time to time be useful or necessary in connection with the construction, installation, operation, maintenance or repair of the System. Seller shall notify Purchaser prior to entering the Facility except in situations where there is imminent risk of damage to persons or property. The term of the License shall continue until the date that is one hundred and twenty (120) days following the date of expiration or termination of this Agreement (the "License Terse"). During the License Term, Purchaser shall ensure that Seller's rights under the License and Seller's access to the License Area are preserved and protected and shall not interfere with or permit any third parties to interfere with such rights or access. The grant of the License shall survive termination of this agreement by either Party. Purchaser agrees that Seller may record a memorandum of license in substantially the same form attached hereto as Exhibit 3 in the land records respecting The License. Power Pwchse Azre- nt COn==cial VVOT"1e Yersioa (C.QCO/OR) 109 _ b. OSg4 ComvhRn:.e. Both parties shall ensure that all Occupational Safery and Health Ac-. (OSHA) requirements c, N421ntenance of FacUinv. Purchaser shall. at is sole cost and expense; maintain the Facility in good condition and repair. Purchaser will ensure that the Facility remains interconnected to the local utility grid at all times and will not permit cessation of electric service to the Facility from the local utility. Purchaser is fully responsible for the maintenance and repair of the Facility's electrical system and of all of Purchaser's equipment that utilizes the System's outputs. Purchaser shall properly maintain in full woridng order all of Purchaser's electric supply or generation equipment that Purchaser may shut down while utilizing t'ne System. Purchaser shall promptly notify Seller of any matters of which it is aware pertaining to any damage to or loss of use of the System or that could reasonably be expected to adversely affect the System. d. No Alteration of Facility. Purchaser shall not make any alterations or repairs to the Facility which may adversely affeot the operation and maintenance of the System without Seller's prior written consent If Purchaser wishes to _ make such alterations or repairs, Purchaser shall give prior written notice to Seller, setting forth the work to be undertaken (except for emergency repairs, for which notice may be wen by telephone), and give Seller the opportunity to advise Purchaser in making such alterations or repass in a manner that avoids damage to the System but, notwithstanding any such advice, Purchaser shall be responsible for all damage to the System caused by Purchaser or its contractors. To the extent that temporary disconnection or removal of dte System is necessan, to perform such alterations or repairs, such work and any replacement of the System after completion of Purchaser's alterations and repairs, shall be done by Seller or its contractors at Purchaser's cost Al of Purchasers alterations and repairs will be done in a good and workmanlike manner and in compliance with all applicable laws, codes and permits. e. Ontaaes. Purchaser shall be permitted to be off I!-)e for two (2) full twenty-four (24) hour days (each; a "Scheduled Outage") per calendar year during the Term, during wh ch days Purchaser shall not be obligated to accept or pay for electricity from the System; provided. however. that Purchaser must notify Seller in writing of each such Scheduled Outage at least fogy-eight (48) hours in advance of the commencement of a Scheduled Outage. In the event that Scheduled Outages exceed two (2) days per calendar year or there are unscheduled outages, in each case for a reason other than a Fore Majeure event Seller shall reasonably estimate the amount of electricity that would have been delivered to Purchaser during such excess Scheduled Outages or unscbeduled o1razes and shall invoice. Purchaser for such amount in accordance with Section 4. f. Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or allow to exist any morngage, pledge, lien, charge, security interest, encumbrance or other claim of any nature on or with respect to the System or any interest therein. Purchaser shall immediately notifv Seller in writing of the. existence of any such mortgage, pledge, lien; charge, security interest, encumbrance or other claim, shall promptly cause the same to be discharged and released of record without cost to Seller, and shall indemnity Seller against all costs and expenses (including reasonable attorneys' fees) incurred in discharging and releasing any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim. g. SecurhN. Purchaser shall be responsible for maintaining the physical security of, the Facility and the System. . Purchaser will not conduct activities on, in or about the License Area m the Facility that have a reasonable likelihood of causing damage, impairment or otherwise adversely affecting the System. . h. Insulation. Purchaser understands that unobstructed access to sunlight ("Insolation') is essential to Seller s performance of its obligations and a material term of this Aereement. Purchaser shall not in any way cause and, where possible; shall not in any way permit any interference with the Systems Insulation. If Purchaser becomes aware of any activity or condition that could diminish the Insolaton of the System, Purchaser shall notify Seller immediately and shall cooperate with Seller in preserving the System's existing Insulation levels. The Parties agree that reducing I1315Dlatinn would irreparably injure Seller, that such injury may not be adequately compensated by an award of money damages, and that Seller is entitled to seek specific enforcement of This Section S(h) against Purchaser. 1. Data Line. Purchaser shall provide Seller a high speed Internet data line during the Term to enable Seller to record the electric energy generated by the System. If Purchaser fails to provide such high speed internet data line, or if such line ceases to function and is not repaired. Seller may reasonably estimate the amount of electric energy that was generated and invoice Purchaser for such amount in accordance with Section 4. j. Breakdown Notice. Purchaser shall notify Seller within ,wenw-four (24) hours following the discovery by it of (A) any material malfunction in the operation of the System; or (B) any occurrences that could reasonably be expected Power Pschzs_ APeenent Commercial Worline Version (C.4iCO/OR) 110 to adversely meet the System. Purchaser shall nouiv Seller immediately upon (A) an interruption in the supply of and Seller shall each designar_= personnel and establish procedures such that each Party may provide notice of such conditions requiring Seller's repair or alteration at all tunes. twenty-four (24) hour per day, including weekends and holidays. 9. Change in Law. `:Change an Law' means (i) the enacunent, adoption, promulgation, modification or repeal after the Effective Dar- of any applicable law or regulation; (ii) the imposition of any material conditions on the issuance or renewal of any applicable permit after the Effective Date of this Agreement (notwithstanding the general requirements contained in any applicable Permit at the time of application or issue to comply with future laws; ordinances, codes, rules, regulations or similar legislation), or (iii) a change in any utility rate schedule or tariff anproved by any Governmental Authority which in the case ing, operating or of any of (i), (ii) m (iii): establishes requirements affecting owning. supp]}ing: conscucting. insrall maintsinine the System, or other performance of the Seller's obligations hereunder and which has a material adverse effect on the con to Seller of performing such obligations; provided. that a change in federal: state, county or any other tax law after the Effective Date of this Agreement shall not be a Chanee in Law pursuant to this Agreement. If any Change in Law occurs that has a material adverse effect on the cost to Seller of performing its obligations under this Agreement, then the Parties shall, within thirty (30) days following receipt by Purchaser from Seller of notice of such Change in Law, meet and attempt in good faith to negotiar- amendments to this Agreement as are reasonably necessary to preserve the economic value of this Agreement to both Parties. If the Parties are unable to agree upon such amendments Within such thirty (30) day period, then Seller shall have the right to terminate this Agreement without further liability to either Party except With respect to payment of amounts accrued prior to termination. 10. Reiocation of System. If purchaser ceases to conduct business operations at and/or vacates the Facility or is prevented from operating the System at the Facility prior to the expiration of the Temt, Purchaser shall have the option to provide Seller With a mutually agreeable substitute premises located within the same utility district as the terminated System or in a location With similar Utility rates and Insulation. Purchaser shall provide written notice at least sixty (60) days but not more than one hundred eighty (ISO) days prior to the date that it wants to make this substitution. In connection With such subsdtution, Purchaser shall execute an amended agreement that shall have all of the same terms as this Agreement except for the (i) Effective Date; (ii) License, which will be amended to grant rights in the real property where the System relocated to; and (iii) Term, Which Will be the remainder of the Term of this Agreement and such amended agreement shall be deemed to be a continuation of this Agreement without termination. Purchaser shall also provide any new Purchaser, owner; lessor or mortgagee consents or releases required by Seller or Sellers Financing Parties in connection with the substitute facility. Purchaser shall pay all costs associated With relocation of the System, including all costs and expenses incurred by or on behalf of Seller in connection with removal of the System from the Facility and installation and testing of the System at the substitute facility and all applicable interconnection fees and expenses at the substitute facility, as well as costs of new, title search and other out-of-pocket expenses connected to preserving and refiline the security interests of Sellers Financing Parties in the System. Seller shall remove the System from the vacated Facility prior to the termination of Purchaser's ownership, lease or other rights to use such Facility. Seller Will not be, required to restore the Facility to its prior condition but shall promptly pay Purchaser for any damage caused by Seller during removal of the System, but not for normal wear and tear. If the substitute facility has inferior Insolation as compared to the original Facility, Seller shall have the right to make an adjustment to Exhibit 1 such that Purchaser's payments to Seller are the same as if the System were located at the original Facility. If Purchaser is unable to provide such substitute facility and to relocate the System as provided, any early termination will be treated as a default by Purchaser. I1. Removal of Svstem at Expiration. Upon the expiration or earlier termination of this Agreement (provided Purchaser does not exercise its purchase option), Seller shall, at its expense, remove all of its tangible property comprising the System from the Facility on a mutually convenient date, but in no event later than niney (90) days after the expiration of the Term. Excluding ordinary wear and tear, the Facility shall be returned to its original condition including the removal of System mounting pads or other support structures. In no case shall Seller's removal of the System affect the integrity of Purchaser's roof. Which shall be as leak- proof as it was prior to removal of the System and shall be flashed and/or patched to existing roof specifications. Seller shall leave the Facility in neat and clean order. If Seller fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public Warehouse and restore the Facility to its original condition (other than ordinary wear and tear) at Seller's cost. Puchaser shall provide sufficient ?ower P=hase Ameemcm Commercial Woaring vesioa (CACo/op) I I I space for the tempo-arv storage and staging of tools, materials and equipment and for the parking of construction crew 12. Measurement. Electricin' delivered to the Facility shall be measured by the SOlarGuard monitoring syst°m installed and maintained by Seller as part of the System. 13. Default. Remedies and Damages, a. Default. Any Pam' that fails to perform its responsibilities as listed below or experiences any of the circumstances listed below shall be deemed a "Defaulting Party" and each event of default shall be a "Default Event": (1) failure of a Pam' to pay any amount due and payable under this Agreement, other than an amount that is subject to a good faith dispute, within ten (10) days following receipt of written notice from the other Party (the "Non-Defaulting Party") of such failure to pay ("Payment Default (2) failure of a Parry to substantially perform any other material obligation under this Agreement within thirty (30) days following receipt of written notice from the Non-Defaulting Pary demanding such cure; provided. that such thirty (30) day cure period shall be extended (but not beyond ninety (90) days) if and to the extent reasonably necessary to cure the Default Event, if (i) The Defaulting Park' initiates such cure witb the thirty (30) day period and continues such cure to completion and (ii) there is no material adverse affect on the Non-Defauhing Pam' resulting from the failure to cure the Default Event; (3) if any representation or warranty of a Party proves at any time to have been incorrect in any material respect when made and is material to the transactions contemplated hereby, if the effect of such incorrectness is not cured within thirty (30) days following receipt of written notice from the Non-Defaulting Parry demanding such cure; (A) Purchaser loses its rights to occupy and enjoy the Premises: (5) a Party, or its guarantor, becomes insolvent or is a party to a bankruptcy; reorganization, insolvency, liquidation, ,receivership; dissolution, winding-up or relief of debtors. or any general assignment for the benefit of creditors or other similar arrangement or any event occurs or proceedings are taken in any jurisdiction with respect to the Parry which has a similar effect; o- (6) Purchaser prevents Seller from installing the System or otherwise failing to perform in a way that prevents the delivery of electric energy from the System. Such Default Event shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement. b. Remedies. (1) Remedies for Payment Default. If a Payment Default occurs, the Non-Defaulting Patty' may suspend performance of its obligations under this Agreement. Further, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement, upon five (5) days prior written notice to the Defaulting Party following the Payment Default. (2) Remedies for Ocher Defaults. On the occurrence of a Default Event other than a Payment Default, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement or suspension of performance of is obligations under this Agreement, upon five (5) days prior written notice to the Defaulting Party following the occurrence of the Default Event. Nothing herein shall limit either Party's right to collect damages upon the occurrence of a breach or a default by the other Party that does not become a Default Event. If Purchaser terminates this contract without cause prior to System Installation a 55,000 design cancellation fee shall also apply in addition to any other remedy available to Seiler. Power?wchase .Sereamear Coamercial R'oddne Vesion (C-NCO/OR) (3) Dama es Unon Termination by Default{ Upon a termination of this Agreement by the Non- _ 1-1.,.114- pay a Termination Payment to the Non-Defaulting Pan' determined as follows (the "Termination Payment" A. Purchaser. If Purchaser is the Defaulting Pary and Seller terminates this Agreement the Termination Payment to Seller shall be equal to the sum of (i) the termination value set forth in Exhibit 1 (the "Termination valve") for such Contract Year, (ii) removal costs as provided in Section 13(b)M(C) and (iii) any and all other amounts previously accrued under this Agreement and then owed by Purchaser to Seller. The Parties agree that actual damages to Seller in the event this Agreement terminates prior to the expiration of the Term as the result of an Default Event by Purchaser would be difficult to ascertain, and the applicable Termination Value set forth in Exhibit 1 is a reasonable appro)dmation of the damages suffered by Seller as a result of early termination of this Agreement. The Termination Payment shall not be less than zero. B. Seller. If Seller is the Defaulting Parr' and Purchaser terminates this Agreement, the Termination Payment to Purchaser shall be equal to the sum of -(i) the present value (using a discount rate of 9.5%) of the excess, if any, of the reasonably expected cost of electric energy from the Utility over the Contract Price for the reasonably expected production of the System for the remainder of the Initial Term or the then current Additional Term; as applicable; (ii) all costs reasonably incurred by Purchaser in re- converting its electric supply to service from the Utility; (iii) any removal costs incurred by Purchaser, and (iv) any and all other amounts previously accrued under this Agreement and then owed by Seller to Purchaser. The Termination Payment shall not be less than zero. C. Obligations Following Termination. If a Non-Defaulting Parry terminates this Agreement pursuant to this Section 13(b). then t'ollowina such termination; Seller shall, at the sole cost and expense of the Defaulting Patty, remove the equipment (except for mounting pads and support structures) constimtin. the System. The Non-Defaulting Pam' shall take all commercially reasonable efforts to mitigate its damages as the result of a Default Event. 14. Renresentations and Warranties. a. General RenresentationS and Warranties. Each Pam. rep,esents and warrants to the other the following: (1) Such Pero, is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation: the execution, delivery and performance by such Pan' of this Agreement have been duly authorized by all necessary corporate, partoership or limited liability company action, as applicable, and do not and shall not violate any law; and this Agreement is valid obligation of such Patty, enforceable against such Pam, in accordance with its terms (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditor' rights generally). (2) Such Party has obtained all licenses, authorizations, consents and approvais required by any Governmental Authority or other third party and necessary for such Party to own its asses, carry on its business and to execute and deliver this Agreement and such Pan' is in compliance with all laws that relate to this Agreement in all material respects. b. Purchaser's Renresentations and Warranties. Purchaser represents and warrants to Seller the following: (1) License. Purchaser has the full right power and authority to grant the License contained in Section 8(a). Such grant of the License does not violate any law, ordinance, rule or other eovernmental restriction applicable to Purchaser or the Facility and is not inconsistent with and will not result in a breach or default under any agreement by which Purchaser is bound or that affects the Facility. (2) Other Agreements. Neither the execution and delivery of this Agreement by Purchaser nor the performance by Purchaser of any of its obligations under this Agreement conflicts with or will Power Purchase Au=nt Coaunercial working Version (C.UCO/OR) 1 ] j result in a breach or default under any agreement or obligation to which Purchaser is a paw' or by (3) Accuracy of Information. All information provided by Purchaser to Seller, as it pertains to the Facility's physical configuration. Purchaser's planned use of the Facilinl, and Purchaser's estimated electricity' requirementr, is accurate in all mateval respects. (4) Purchaser Status. Purchaser is not a public utility or a public utility bolding company and is not subject to regulation as a public utility or a public utility holding company. (5) No Pool Use. No electricity generated by the System will be used to heat a swimming pool. (6) Oregon Only: The electricity generated by the System MU be used solely for commercial and business purposes. No portion of the elevic , eencrated will be used for personal, family, household or agricultural purposes. 15. Svstem and FacWty Damage and Insurance. a. Svstem and Facilitv Damage. (1) Seller's Obligations. If the System is damaged or destroyed other than by Purchaser's gross negligence or willful misconduct, Seller shall promptly repair and restore the System to its pre- existing condition; provided. however that if more than fifty percent (50%) of the System is destroyed during the last five (5) years of the Initial Term or during any Additional Term, Seller shall not be required to restore the System, but may instead terminate this Agreemeut, unless Purchaser agrees (i) to pay for the cost of such restoration of the System or (ii) to purchase the System "AS-IS" at the greater of (A) then current fair market value of she System and (B) the sum of the amounts described in Section 13.b(3)A1(i) (using the date of purchase to determine the appropriate Contract Year) and Section I3.b(31A)(iii). (2) Purchaser's Obligations. If the Facility is damaged or destroyed by casualty of any Idnd or any other occurrence other than Seller's gross negligence or mrill$rl misconduct, such that the operation of the System and/or Purchaser's ability to accept the electric energy produced by the System are material]), impaired or prevented, Purchaser shall promptly repair and restore the Facility to its pre-existing condition; orotided. however. that if more than 50% of the Facility is destroyed during the last five years of the Initial Term or during any Additional Term, Purchaser may elect either (i) to restore the Facility or (ii) to pay the Termination Vaiue set forth in Ex:hjbit I and all other costs previously accrued but unpaid under this Agreement and thereupon terminate this Agreement. b. Insurance Coverage. At all times during the Term, Seller and Purchaser shall maintain the following insurance: i. Sellers Insurance. Seller shall maintain (i) property insurance on tbu System for the replacement cost thereof, (ii) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (iii) employers liability insurance with coverage of at least $1,000,000 and (iv) worker's compensation insurance as required by law. ii. Purchaser's Insurance. Purchaser shall maintain (i) comprehensive general liability insurance with coverage of at least 51,000 000 per occurrence and 52,000,000 annual aggregate, (d) employer's liability insurance with coverage of at least 51,000,000 and (iii) workers compensation insurance as required by law. C. Policv Provisions. All insurance policies provided hereunder shall (i) contain a provision whereby the insurer agrees to give the party not providing the insurance thirty (30) days (ten (10) days in the event of non-payment of premiums) written notice before the insurance is cancelled, terminated or materially altered, (ii) be written on an occurrence basis, (iii) with respect to the liability insurance policies, include the other Party as an additional insured as its interest may appear, (iv) include waivers of subrogation; (v) provide for primary coverage without right of contribution from any insurance of the other Party; and (vi) be maintained with companies either rated no less than A- as to Policy Holder's Rating in the current edition of Best's Insurance Guide or otherwise reasonably acceptable to the other party. Power Purchase Asreemmt Comtnercisl W orldne Vesion (C.4/CO10R) d. Certificates. Within thirty (30) days after execution of this Agreement and upon the other Party's request, and coverage. A Party's receipt review' or acceptance of such cerdfcaze shall in no way limit or relieve the other Yan' of the duties and responsibilities to maintain insurance as set forth in this Agreement Deductibles. Unless and to the extent that a claim is covered by an indemnity set forth in this Agreement, each Pan' shall be responsible for the payment of its own deductibles. 16. OF-nership: Option to Purchase. a. Osrnershin of System. Tbrou grout the Term; Seller shall be the legal and beneficial owner of the System at all times; including all Environmental Attributes, and the System shall remain the personal property of Seller and shall not attach to or be deemed a part of, or fixture to, the Facility or the Premises. Each of the Seller and Purchaser astree that the Seller is the tax owner of the System and all tax filines and reports will be filed in a manner consistent with this Agreement. The System shall at all titres retain the legal status of personal property as defned under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use commercially reasonable efForts to place all parties having an interest in or a mortgage, pledee, lien, charge, security interest encumbrance or other claim of any nature on the Facility or the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or fixture. filing against the Premises which could reasonably be construed as prospectively araching to the System as a foaure of the Premises, Purchaser shall provide a disclaimer or release from such lienholder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing of a disclaimer of the System as a fixture of the Premises in the office wbere real estate records are customarily fled in the jurisdiction wbere the Facility is located. If Purchaser is not the fee owner; Purchaser will obtain such consent from such owner. Purchaser aerees to deliver to Seller a non-disturbance agreement in a form reasonably acceptable to Seller from the owner of the Facility (if the Facility is leased by Purchaser); any mortgagee with a lien on the P, emiscs, and other Persons holding a similar interest in the Premises. b. Option to Purchase. At the end of the sixth (6th) and tenth (10th) Contract fears and at the end of the Initial Term and each Additional Terry so ]one as Purchaser is not in default under this Aereemeni_ Purchaser may purchase the System from Seller on any such date for a purchase price equal to (i) with respect to an option exercised at the end of the sixth (6-1) or tends (10th) Contract fears the v"eater of (A) the amount set faith at such time in the Purchase Option Price schedule in Exhibit 1, and (B) the Fair Market Value of the System, and (ii) with respect to an option exercised at the end of the Term or an Additional Term, the Fair Market Value of the System The "Fair Market Value" of the System shall be determined by mutual agreement of Purchaser and Seller, nrovided. however. if Purchaser and Seller cannot agree to a Fair Market Value within thirty (30) days after Purchaser has exercised its option, the Parties shall select a nationally recognized independent appraiser with experience and expertise in the solar photovoltaic industry to determine the Fair Market Value of the System. Such appraiser shall act reasonably and in good faith to determine the Far Market Value of the System on an installed basis and shall set forth such determination in a written opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parries in the absence of fraud or manifest error. The costs of the appraisal shall be home by the Parties Equally. Purchaser must provide a notification to Seller of its intent to purchase at least ninety (90) days and not more than one hundred eighty (180) days prior to the end of the applicable Contract Year or the Initial Term or Additional Term, as applicable, and the purchase shall be complete prior to the end of the applicable Contract Year or the Initial Term or Additional Term, as applicable. Upon purchase of the System, Purchaser will assume complete responsibility for the operation and maintenance of the System and liability for the performance of the System, and Seller shall have no further liabilities or oblieations hereunder. 17. Indemnification and Limitations of Liability z. General. Each Party (the "Indemnifying Parts'') shall defend, indemnify and hold harmless the other Parry and the directors, officers, shareholders, parmcrs, members, agents and employees of such other Party, and the respective affiliates of each thereof (collectively, the 'Indemnified Parties"), from and against all loss, damage, expense, liability and other claims, including court toss and reasonable attorneys' fees (collectively. "Liabilities") resulting from any third party actions relating to the breach of any representation or warranty set fords in Section 14 and from injury to or death of persons, and damage to or loss of property to the extent caused by or arising out of the negligent acts or omissions of. or the willful misconduct of, the Indemnifying Party (or its contractor, agents or employees) in connection with this .Agreement; provided however that noshing herein shall require the Indernnirying Party to indemnify the Indemnified Party for any Liabilities to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of. the Indemnified Party. This Section 17(a) however, shall not apply to liability arising from any form of hazardous substances or other environmental contamination; such matters being addressed exclusively by Section 17(c). Power Pumnrse AEi ecmem Commercial Worlziae Version (C.51CO.YOR) 115 e. Notice and Particiaation to Third Patty Ciaims. The Indemnified Parry shall give the Indemnfing Party written .1; .,airy asge=;ea by A 10i'174 P=Z" t i?-a=c-poas"hl-,ate-Zh-. info.,oration of any possible Claim or of the commencement of such Claim. The Indemnifying Party may assume the defense of any Claim, at its sole cost and expense. with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. The Indemnified Party may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to the Indemnifying Party. The Indemnifying Part' shall pay the reasonable attome~s` fees incurred by such separate counsel until such time as the need for separate counsel expires. The Indemnified Pam, may also, at the sole cost and expense of the Indemnifying Parry, assume the defense of any Claim if the Indemnifying Parry fails to assume the defense of the Claim within a reasonable time. Neither Pary shall settle any Claim covered by this Section 17(b) unless it has obtained the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. The Indemnifying Parry shall have no liability under this Section 17(b) for any Claim for which such notice is not provided if that the failure w give notice prejudices the Indemnifying Party. C. Environment) Indemnification. Seller shall indemnif},, defend and hold harmless all of Purchaser's Indemnified Parties from and against all Liabilities arising out of or :elating to the existence at- on, above, below or near the License Area of any Hazardous Substance (as defined in Section 17(c)(i)) to the extent deposited, spilled or otherwise caused by Seller or any of its contractors or agents. Purchaser shall mdemnifi,, defend and hold harmless all of Seller's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the Premises of any Hazardous Substance, except to the extent deposited, spilled or otherwise caused by Seller or any of its contractors or agents. Each Party shall promptly notify the other Parry if it becomes aware of any Hazardous Substance on or about the License Area or the Premises generally or any deposit, spill or release of any Hazardous Substance. i. `Ffazardous Substance" means My chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of "hazardous substances," "hazardous wastes." "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," Io;dc pollutants;" WLpollution," "pollutants,' ",regulated substances," or words of similar import under any laws pertaining to the environment health, safety or welfare; (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediarion or cleanup is required by any Governmental Authority. d. Limitations on Liability. i. No Conseauential Damages. Neither Parry nor its directors; officers, sharebolders, partners, members: agents and employees subcontractors or suppliers shall be liable for any indirect; special, incidental, exemplary, or consequential loss or damage of any na`ure arising out of their performance or non- performance hereunder even if advised of such. ii. Actual Damages. Seller's aggregate liability under this Agreement arising out of or to connection with the performance or non-performance of this Agreement shall not exceed the Terser of (A) the total payments made by Purchaser under-this Agreement as of the date that the events that first gave rise to such liability occurred; and (B) the total of the prior twelve (12) monthly payments preceding the date that the events that first gave rise to such liability occurred. The provisions of this Section (1 7)(d)(ii) shall apply whether such liability arises in contract tort (including negligence), strict liability or otherwise. Any action against Seller must be brought within one (1) year after the cause of action actives. Is. Force Ivlaieure. a. "Force Majeure" means any event or circumstances beyond the reasonable control of and without the fault or negligence of the Party claiming Force Majeure. It shall include, without limitation, failure or interruption of the production, delivery or acceptance of electricity due to: an act of god; war (declared or undeclared); sabotage; riot insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out explosion; fire; earthquake; abnormal weather condition or actions of the elements; hurricane; flood; lightning; wind; drought; the binding order of any Governmental Authority (provided that such order has been resisted in good faitb by all reasonable legal means); the failure to act on the part of any Governmental Authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment supplies or products (but not to the exmnt that any such availability of Powe; Pw cse .4e: Bement Co=crcial W o-1dn? Version (C.4IMOR) any of the foregoing results from the Of ibe Pam' claiming Force Ma ewe to have exercised reasonable failure of k. Except as otherwise expressly provided to the contrary in this Ag_*eement if either Pam' is rendered wholly or pa-113 unable to timely perform its obligations under this Agreement because of a Force rIiajewe event that Party shall be excused from the performance affected by the Force Majeure event (but only to the extent so affected) and the time for performing such excused obligations shall be extended as reasonably necessary; provided. that: (i) the Party affected by such Force Majeure event, as soon as reasonably practicable after obtaining Imowledge of the occur, ghee of the claimed Force Majeure went, gives the other Pam, prompt oral notice, followed by a written notice reasonably descnbing The event (ii) the suspension of or extension of tune for performance is of no greavr scope and of no loneer duration than is required by the Force Majeure event: and (iii) the Part), affected by such Force Majeure event uses all reasonable efforts to mitigate or remedy its inability to perform as soon as reasonably possible. Seller shall not be liable for any damage to the System or the Facility resulting from a Force Majeure event. The Term shall be extended day for day for each day performance is suspended due to a Force Majewe event. C. Notwithstanding mvthing herein to the contrary, the obligation to make any payment due under this Agreement shall not be excused by a Force Majeu; e event d. If a Force Majeure event continues for a period of one hundred (ISO) days or more within a mtlve (12) month period and prevents a material part of the performance by a Parry hereunder, the Party not claiming the Force Majeure shall have the right to terminate this Agreement without fault or further liability to either Parry (except for amounts accrued but unpaid). 19. 4ssianment and Financing. a. .hssi~nment. This Agreement may not be assigned in whole or in part by either Parry without the prior written consent of the other Par v. whicb consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Seller may, without the prior written consent of Purcbaser, (i) assism, mortgage, pledge or otherwise collaterally assign its interests in this Agreement to any Financing Party, (ii) directly or indirectly assign this Agreement to an affiliate of Seller, (iii) assign this Agreement to any entih, through which Seller, is obtaining finmoing or capital for the System and (iv) assign this Agreement to any person succeeding to all or substantially all of the assets of Seller (provided that Seller shall be released from liability hereunder as a result of any of the foregoing permitted assignments only upon assumption of Seller's obligations hereunder by the assignee). Purchaser's consent to any other assignment shall not be unreasonably withheld if Purchaser has been provided with reasonable proof that the proposed assignee (x) has comparable experience in operating and maintaining photovoltaic solar systems comparable to the System and providing services comparable to those contemplated by this Agreement and (y) has the financial capability to maintain the System and provide the services contemplated by this Agreement in the manner required by this Agreement. This Agreement shall be binding on and inure to the benefit of the successors and permitted assignees. h. Financing. The Parties aclmowledge that Seller may obtain construction and long-term financing or other credit support from lenders or third parties (`Financing Parties") in connection with the installation; construction, ownership, operation and maintenance of the System. Both Parties agree in good faith to consider and to negotiate changes or additions to this Agreement that may be reasonably requested by the Financing Parties: provided. that such changes do not alter the fundamental economic terms of this Agreement. The Parties also agree that Seller may assign this Agreement to the Financing Parties as collateral, and in connection with any such assignment, Purchaser agrees to execute a consent to assignment in customary form and reasonably acceptable to the Financing Parde_. Pnwer Pw nhnc APaemeat Commercial V,'orki-ne version (C.4/CO/OR) 117 20. Corfidentiaiity and Publicity,. Z. ConfidentiaUty. If either Party provddes confidential information, including business plans, su*aregies, financial information, proprietary, patented. licensed. copyrighted or trademarked information, and/or technical information regarding the design, operation and maintenance of the System or of Purchaser's business ("Confidential luformation") to the other or, if in the course of performing under this Agreement or negotiating this Agreement a Party learns Confidential Information regarding the facilities or plans of the other, the receiving Pam, shall (a) protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary, information, and (b) refrain from using such Confidential Information, except in the negotiation and pa-formance of this Agreement. Notwithstanding the above, a Party may provide such Confidential Information to its, officers, directors, members, managers, employees, agents, contractors and consultants (collectively, "Representatives"), and affiliates, lenders, and potential assignees of this Agreement (provided and on condition that such potential assignees be bound by a written agreement or legal obligation restricting use and disclosure of Confidential Information), in each case whose access is reasonably necessary to the negotiaiion and performance of this Agreement Each such recipient of Confidential Information shall be informed by the Parry, disclosing Confidential Information of its confidential nature and shall be directed to treat such information confidentially and shall agree to abide by these provisions. In any event, each Past), shall be liable (with respect to the other Party) for any breach of this provision by any entity to whom that Party improperly discloses Confidential Information. The terms of this Agreement (but not its execution or existence) shall be considered Confidential Information for purposes of this Section 20(a) except as set forth in Section MCI)). All Confidential Information shall remain the property ofthe disclosing Part), and shall be returned to the disclosing Party or destroyed after the receiving Party's need for it has expired or upon the request of the disclosing Party. Each Party agrees that the disclosing Pam, would be irreparably injured by a breach of this Section 20(a) by the receiving Party or its Representatives or other person to whom the recching Parry discloses Confidential Information of the disclosing Parry and that the disclosing Parry may be entitled to equitable relief, including injunctive relief and specific performance, in the event of a breach of the provision of this Section 20(a). To the fullest extent permitted by applicable law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Section 20(al, but shall be in addition to all other remedies available at law or in equity. b. Permitted Disclosures. Notwithstanding any other provision in this Agreement, neither Party shall be r cauired to hold confidential any information that (i) becomes publicly available other than through the receiving Party, (ii) is required to be disclosed to a Governmental Aurbority under applicable law or pursuant to a validly issued subpoena (but a receiving Part), subject to any such requirement shall promptly noting the disclosing Part), of such requirement to the extent permitted by applicable law), (iii) is independently developed by the receiving Parry or (iv) becomes available to the receiving Pam] without restriction from a third party under no obligation of eon5dentiality. If disclosure of information is required by a Governmental Authority, the disclosing Party shall, to the extent permitted by applicable law, notify the other Party of such required disclosure promptly upon becoming aware of such required disclosure and shall cooperate with the other Party in efforts to limit the disclosure to the maximum extent permitted by law. 21. Goodwill and Publicity. Neither Party shall use any name, trade name, service mark or trademark of the other Pa-y in any promotional or advertising material without the prior written consent of such other Party. The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of this Agreement and each Party shall have the right to promptly review, comment upon and approve any publicity materials, press releases or other public statements by the other Parry that refer to, or that describe any aspect of this Agreement Neither Party shall make any press release or public announcement of the specific terms of this Agreement (except for filings or other statements or releases as may be required by applicable law) without the specific prior written consent of the other Party. Without limiting the generality of the foregoing, all public statements must accurately reflect the rights and obligations of the Parties under this Agreement, including the ownership of Environmental Attributes and Environmental Incentives and any related reporting rights. 22. General Provisions a. Choice of Low. The law of the state where the System is located shall govern this Agreement without giving effect to conflict of laws principles. b. Arbitration and Attoraevs' Fees. Any dispute arising from or relating to this Agreement shall be arbitrated in San Francisco, California The arbitration shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, and judgment on any award may be entered in any court of competent jurisdiction. If the Parties agree, a mediator may be consulted prior to arbitration. The prevailing party in any dispute arising out of this Agreement shall be entitled to reasonable attorneys' fees and costs. Power P=hst Aeeemcni Commercial Vforlane V =ion (C.4/CO/OR) 118 c. Notices. All notices under this Agreement shall be in wrising and shall be by personal delivery. facsimile deemed received upon personal deli very, acknowledgment of receipt of electronic transmission, the promised delivery date after deposit with overnight courier, or five (5) days alter deposit in the mail. Notices shall be sent to the person identified in this Agreement at the addresses set fords in this Agreement or such other address as either party may specify in writing. Eacb parr), shall deem a document faxed, emailed or electronically sent in PDF form to it as an original domlment d. Sunival. Provisions of this Agreement that should reasonably be considered to survive ruination of this Agreement shall survive. For the avoidance of doubt, surviving provisions shall include, without limitation, Section 4 (Representations and Wartanties), Section 7(h) 12Jo Warranty), Section 15(b) (Insurance Coverage), Section 17 (Indemnification and Limits of Liability), Section 20 (Confidentiality and Publicity), Section 22(a) (Choice of Law), Section 22 (b) (Arbitration and Attorneys' Fees), Section 22(c) (Notices). Section 22 (g) (Comparative Negligence), Section 22(h) (Non-Dedication of Facilities), Section 22(i) (Service Contract); Section 22(k) (No Partnership) Section 22(1) (Full Agreement, Modification, Invalidity, Counterpa-rs, Captions) and Section 22(n) (No Third Pam, Beneficiaries). e. Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver anv instruments and documents and to take such otter actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement to give full effect to this Agreement and to carry out the intent of this Agreement. Right of Waiver. Each Parry, in its sole discretion, shall have the right to waive, defer or reduce any of the requirements to which the other Parry is subject under this Agreement at any time; provided, however that neither Parr), shall be deemed to have waived, deferred or reduced any such requirements unless such action is in writing and signed by the waiving Parry. No waiver will be implied by any usage of trade, course of dealing or course of performance. A Pam-'s exercise of any rights hereunder shall apply only to such requirements and on such occasions as such Part), may specify and shall in no event relieve the other Parry of any requirements or other obligations not so specified. No failure of either Parry to enforce any term of this Agreement will be deemed to be a waiver. No exercise of any right or remedy under this Agreement by Purchaser or Seller shall constitute a waiver of any other right or remedy contained or provided by law. _Any delay or failure of a Parry to exercise, or my partial exercise of, its rights and remedies under this Agreement shall not operate to limit or otherwise affect such right= or remedies. Any waiver of performance under this Agreement shall be limited to the specific performance waived and shall not, unless otherwise expressly stated in writing, oonstitute a continuous waiver or a waiver of future performance. g. Comoarative Negligence. It is the intent of the Parries that where negligence is determined to have been joint, contributory or concurrent, each Party shall bear the proportionate cost of any Liability. h. Non-Dedication of Facilities. Nothing herein shall be construed as the dedication by either Parry of its facilities or equipment to the public or any part thereof. Neither Parry shall knowingly take any action that would subject the other Party, or other Parry's facilities or equipment, to the jurisdiction of any Governmental Authority as a public utility or similar entity. Neither Party shall assert in any proceeding before a court or regulatory body that the otber Party is a public utility by virtue of such other Party's performance under this agreement. If Seller is reasonably likely to become, subject to regulation as a public utility. then the Parties shall use all reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interests while ensuring that Seller does not become subject to any such regulation. If the Parties are unable to agree upon such restructuring, Seller shall have the right to terminate this Agreement without further liability, and Seller shall remove the System in accordance with Section 11 of this Agreement, i. Estoppel. Either Party hereto, without charge, at any time and from time to time, within five (5) business days after receipt of a written request by the other party hereto, shall deliver a written instrument, duly executed, certifying to such requesting parry, or any other person specified by such requesting Parry: (i) that this Agreement is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and effect as so modified, and identifying any such modification; (ii) whether or not to the knowledge of any such party there are then existing any offsets or defenses in favor of such party against enforcement of any of the terms, covenants and conditions of this Agreement and, if so, specifying the same and also whether or not to the knowledge of such party the other party has observed and performed 0 of the terms, covenants and conditions on its part to be observed and performed, and if not, specifying the same; and (iii) such other information as may be reasonably requested by the Power P=hase Agreement Commercial Worldne Version (CA/CO/OR) requesting Party. Any written instrument given hereunder may be relied upon by the recipient of such instrument j. Service Contract. The Pardes intend this Agreement to be a "service contract' within the meaning of Section 7701(c)(3) of the Internal Revenue Code of 1986. Purchaser will not take the position on any tar return or in any other filings suggndmz that it is anything other than a purchase of eleccich from the System. k- No Partnership. No provision of this Agreement shall be consorted or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. No Par}' is authorized to act on behalf of the other Pam', and neither shall be considered the agent of the other. Fnli k2reement Modification. lavabdity. Counterparts. Captions. This Agreement together with any Exhibits: completely and exclusively states the agreement of the parties regarding its subject matter and supersedes all prior proposals, agreements, or other communications between the parties, oral or written, regarding is subject matter. This Agreement may be modified only by a writing signed by both Parties. If any provision of this Agreement is found unenforceable or invalid, such =enforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole. In such event. such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law. This Agreement may be executed in any number of separate counterparts and each counterpart shall be considered an original and together shall comprise the same Agreement. The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. in. Forward Contract. The transaction contemplated under this Agreement constitutes a "forward contract' within the meaning of the United States Bankruptcy Code, and the Parties fttrdter acImowledge and agree that each Party is a "forward contract merchant" within the meaning of the United States Bankruptcy Code. a. No Third Partv Beaefichiries. Except as otherwise expressly provided herein, this Agreement and all rights hereunder are intended for the sole benefit of the Parties herem and shall not imply or create any rights on the pan of, or obligations to, any other Person. 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Ti:Jd -.f Arid-X. rpS~ iw .•a y3y .t ~'t .hSYFf ~tl~ !k .~.f~ )h ~ e v tr F ~ > a 4wti. a t k.~ b .c." t'r,y V' y. ~ v ~ •`ta~ ~ tr rr r+t n k`' af+r o a ~ SF r. c Ti. 4 r IFWAIN(; EA A ` I ' II R~ Yx A➢ Sy d- x l rpl q !r h J [ ) t . hLT f ~ a. tr I f tiEQ' ~"S ~ .°f t ~ 1 rF ~9` Y i r r a 't+ f`44 < rr ' 6 a.. o ,4 ,m 4 ,u.es} 3 <a i 4231.`(C M ttL ]1 A`ls 'R l,'Y d 1 { bd 9 ' a eP Fl _ p~ a 't r . c a" r~S # L^ ro h a4 re r r t r a v,~I Y r~~, l ~~y lrt K't~r, xr ...5,,.. r\ f ~ '~a e r .u,( 7 'Yf R, ~ r^p W r~S j o t r{~ ~ u ° i `n~ „P S t p .y e ,y G t<t~(~ `G ~i ~ leb~4 tw'~ 4+,q , ri p` ~3f~ F ° r, i ..i t ~ ix e p-- t "t f-~ r"A tit tS r ` r ~ `Y T u st f r MS, ,Ftl 'r, a f5 # r rrp 'rortl a 't,y h~iQ .i i ,tit 4 t .1'r ct'4.P, aelr +qrn MYt7i ` hej. vS' V \.an" Y„ 51 Y' ~ _ , 4 - 3 A ter T`r -dV 6 b ,y, if.itu 1 9 F S. ~ W r ~R " tir~:.e ~4 ~ v a ~ e s "fib T'• SR,p )6 a rb t ~ '~k w P°P ?1 e~ff 2 ~ df ~ y1. ~ f t roy T 1 4Y~ \t {-i c r H r f t3 .5 r. " L :n7 r r. a Y - 'tll~ k t, 0''7 7h~ ~b a,~t evr ¢ a , ;i~o- r ? tC{k~j,c•- "C ~T, - 4 ~xFS r q , P qq. J r SS~R~ v a 4?a~"x r i t'a3 ° t rtf v S l rt r 4! bC .p S'm°i'~ s{+ u: J7,'4 J A - s ,ft' t rN''7~Gay n u4 r/'Mi'x rt a j~•.. rde~y td It a ~f'ii P r i.; tyy , "v Shut ~ ,:~r.} u°1\ e' i ` ~ yr f P ~•,h ,e/ "i~i~-V*~ - 'r a'A ^ of r i~/'~dr~ i . tt..~F::n~k7:hti,w.,.'♦.7t ~.r R'Fh s. t f'~.` iri r~ d.. Y~\ Tt~ r. 7 .s `.faYS~'V f -rr4Y (.~.fr b-:t \}`~r`":• The financial analyses compares and contrasts the savings obtainable from the Purchase Option and the PPA option for each of the four Levine properties. Originally, the Purchase Option was analyzed under a nventy-five year term. Since the PPA Option was based on an eighteen-year agreement; the Purchase Option was also analyzed under the sane time period. To further the analyses, the internal rate of return for the Purchase Option was computed for several time periods. After reviewing the data received from the vendors and the consultant. it was determined that the amount of savings differed for each option. This -,vas likely due to the alternative methodologies that each of the vendors and the consultant used to compute the savings, as well as the degree to which each was aggressive or conservative. As a result of discussions with the consultant, he revieaved both options and made appropriate modifications so that the savings are the same for each. The purpose of this was to get to the same starting place for each option in making the comparison between the two alternatives. Included in the cost of the systems is a maintenance contract so that the owners will not have to wosy about future repairs with one exception. That exception involves a part called an inverter. It is estimated that this part will require repair between the fifteenth and twentieth year of operation. Originally, it was anticipated that this item would require replacement at considerable cost. It is now understood that only a motor will need to be changed at a cost of between $5;000 and $10;000 for each system. The only other known costs that the owners will have to bare include periodic cleaning of the panels (two to four times per year), and maintaining responsibility for the roof. This involves ensuring that the roof is in good repair prior to construction; and keeping the roof in good condition throughout the term of the agreement. Therefore, it is recommended to have a complete inspection done prior to the installation of the system. If the roof has not had major renovations in a while, significant repairs could be needed. 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Solar Power Purchase Agreement (Commercial OR/CA-JR MASH) This Solar Power Purchase Agreement (this "Agreement") is entered into by the parties listed below (each a "Party" and collectively the "Parties") as of the date signed by Seller below (the "Effective Date"). and Deveconditionslopment of the purchase Name and sale of solar SolarCity Corporation energy from the solar panel system described in Exhibit 2 (the "System") and installed at the Purchaser's facility described in Exhibit 3 (the "Facility"). The exhibits listed below are incorporated by reference and made part of this Agreement. Exhibit 1 Pricing Attachment Exhibit 2 System Description Exhibit 3 Purchaser's Facility Exhibit 4 Delivery Point Exhibit 5 License Area Exhibit 6 Memorandum of License Exhibit 7 General Terms and Conditions (Revised July 21, 2009) Purchaser: SolarCity Corporation Signature: Signature: Printed Name: Gary Taylor Printed Name: Title: President Title: Date: Date: Purchaser: Seller: Name Rosemead Housing and Comoration and Drive, Suite 140 393 Vintage Park Address 8838 E Valley Blvd. Address Foster City, CA 94404 Rosemead, CA 91770 Attention: Lease/License Administrator Attention: Gary Taylor, President Phone 626-569-2100 Phone (650) 638-1028 Fax 626-307-9218 Fax (650) 638-1029 E-mail gtavlor(dcitvofrosemead.org E-mail LeaseAdministrator@solarcity.com Purchaser ® owns the Facility (check one) ❑ leases the Facility electric generated the terms This Agreement sets forth Exhibit 1 Pricing Attachment 1. Term: Twenty (20) years, beginning on the Commercial Operation Date. 2. Additional Terms: Up to Two (2) Additional Terms of Five (5) years each. 3. Environmental Incentives and Environment Attributes Accrue to Seller. 4. Contract Price: YEAR CONTRACT PRICE PER KWH 1 50.0500 2 $0.0500 3 $0.0500 4 $0.0500 5 $0.0500 6 $0.0500 7 $0.0500 8 $0.0500 9 $0.0500 10 $0.0500 11 $0.0500 12 $0.0500 13 $0.0500 14 $0.0500 15 $0.0500 16 $0.0500 17 50.0500 18 $0.0500 19 $0.0500 20 $0.0500 5. Condition Satisfaction Date: December 07, 2010 6. Anticipated Commercial Operation Date: March 07, 2011 7. Outside Commercial Operation Date: May 07, 2011 8. Purchase Option Price YEAR PURCHASE PRICE 5 $22,255 10 $18,184 20 Fair Market Value 9. Termination Value: YEAR TERMINATION VALUE 1 $22,354 2 $21,606 3 $20,831 4 $20,025 Solar Power Purchase Agreement v. 20091015 (JR MASH) 0 2009 SolarCity. All Rights Reserved 5 $19,189 6 518,320 7 $17,416 8 $16,477 9 $15,500 10 $14,482 Il $13,423 12 $12,320 13 SI 1,171 14 $9,973 15 $8,724 16 $7,421 17 $6,061 18 $4,643 19 53,162 20 $0 In addition to the amounts payable by Purchaser stated abo ve Purchaser shall also pay to Seller an amount equal to any recapture of any Environmental Incentives and Tax Credits. 10. Reserved. Solar Power Purchase Agreement v. 20091015 (1R MASH) 0 2009 SolarCity. All Rights Reserved Exhibit 2 System Description 1. System Location: 2417 Angelus Ave Rosemead, CA 91770 2. System Size (DC kW): 27.140 3. Expected First Year Energy Production: 37,310 4. Scope: Tum-Key solar installation * System size (kW): 27.14 kw • I st year kWh production: 37,310 5. Expected Module(s): QUANTITY MAKE MODEL STC WATTS PTC WATTS 118 Yingli Green Energy YL230P-29b 230.0 W 206.6 W 6. Expected Inverter(s): QUANTITY MAKE MODEL RATED POWER EFFICIENCY 2 Fronius USA IG PLUS 11.4-3 DELTA-208 11.40 kW 95.0% 7. Expected Structure: Roof Mount S. Includes: Turn-key installation 9. Excludes: Structural or electrical upgrades and trenching Solar Power Purchase Agreement v.20091002 (1R MASH) Exhibit 3 Purchaser's Facility A PARCEL OF LAND LOCATED IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, WITH A SITUS ADDRESS OF 2417 ANGELUS AVE, ROSEMEAD CA 91770-3666 CURRENTLY OWNED BY ROSEMEAD CITY HAVING A TAX ASSESSOR NUMBER OF 5283-020-908 AND BEING THE SAME PROPERTY MORE FULLY DESCRIBED AS TR=4610'FOR DESC SEE ASSESSOR'S MAPS LOT 11 . Solar Power Purchase Agreement v20091002 (1R MASH) Exhibit 4 Delivery Point Solar Power Purchase Agreement x.20091002 Exhibit 5 License Area Solar Power Purehase Agreement v.20091002 Exhibit 6 Memorandum of License RECORDING REQUESTED BV AND WHEN ) RECORDED RETURN TO: ) SolarCity Corporation ) 393 Vintage Park Drive, Suite 140 ) Foster City, CA 94404 ) Attention: Lease/License Administrator ) (space above this line reserved for recorder's use) MEMORANDUM OF LICENSE THIS MEMORANDUM OF LICENSE is made and entered into this _ day of , 2010, (the "Effective Date") by and between Rosemead Housing Development Corporation, whose address is 2417 Angelus Ave Rosemead, CA 91770 ("Licensor"), and SOLARCITY CORPORATION, whose address is 393 Vintage Park Drive, Suite 140, Foster City, CA 94404 ("Licensee"). A. Licensor is the owner of certain real property ("Premises"), located in the County of LOS ANGELES, State of California, described in Exhibit A attached to and incorporated herein by reference. B. Licensor and Licensee have entered into a Solar Power Purchase Agreement dated on or about the Effective Date (the "Agreement") under which Licensee is selling energy generated by a photovoltaic electric generating system (the "System") to Licensor. The Agreement is for a term of Twenty (20) years, beginning on the Effective Date and ending on the Twenty (20) year anniversary of the Commercial Operation Date with an option to extend the Agreement for up to Two (2) extended terms of Five (5) years each. Pursuant to the Agreement, Licensor has granted Licensee an irrevocable, non-exclusive license ("License") over the Premises for the purposes and on the terms set forth in the Agreement. Licensor and Licensee agree as follows: I. Licensor hereby grants to Licensee the License over the Premises on and subject to the terms and conditions set forth in the Agreement which is incorporated herein by reference. 2. The term of the License begins on the Effective Date and continues until one hundred and twenty (120) days after the termination of the Agreement. 3. This Memorandum of License shall not be deemed to modify, alter or amend in any way the provisions of the License or the Agreement. In the event of any conflict between the terms of the License and/or the Agreement and this Memorandum, the terms of the License and/or the Agreement, as applicable, shall control. The undersigned have executed this Memorandum of License as of the date first written above. LICENSOR LICENSEE Rosemead Housing Development Corporation SOLARCITY CORPORATION Rv Name: Gary Taylor Title: President By: Name: Title: [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK ACKNOWLEDGEMENT PAGE FOLLOWS] Solar Power Purchase Agreement v.20091015 STATE OF CALIFORNIA) COUNTY OF LOS ANGELES ss. On , before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 1 certify under PENALTY OF PERJURY under the laws of the State of Califomiathat the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public STATE OF CALIFORNIA) COUNTY OF LOS ANGELES ) ss. On , before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. correct. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and WITNESS my hand and official seal. Signature of Notary Public Solar Power Purchase Agreement v.20091015 Exhibit A To Memorandum of License Legal Description of Premises That certain real property located in the County of LOS ANGELES, State of California described as follows: A PARCEL OF LAND LOCATED IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, WITH A SITUS ADDRESS OF 2417 ANGELUS AVE, ROSEMEAD CA 91770-3666 CURRENTLY OWNED BY ROSEMEAD CITY HAVING A TAX ASSESSOR NUMBER OF 5283-020-908 AND BEING THE SAME PROPERTY MORE FULLY DESCRIBED AS TR=4610'FOR DESC SEE ASSESSOR'S MAPS LOT 11 . Solar Power Purchase Agreement v.20091015 Exhibit 7 Solar Power Purchase Agreement General Terms and Conditions Revised July 21, 2009 (JR Mash Version) 1. Definitions and Interpretation: Unless otherwise defined or required by the context in which any term appears: (a) the singular includes the plural and vice versa; (b) the words "herein," "hereof' and "hereunder" refer to this Agreement as a whole and not to any particular section or subsection of this Agreement; (c) references to any agreement, document or instrument mean such agreement, document or instrument as amended, modified, supplemented or replaced from time to time; and (d) the words "include," "includes" and "including" mean include, includes and including "without limitation." The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. 2. Purchase and Sale of Electricity. Purchaser shall purchase from Seller, and Seller shall sell to Purchaser, all of the electric energy generated by the System during the Initial Tenn and any Additional Tenn (as defined in Exhibit 1, and collectively the "Term"). Electric energy generated by the System will be delivered to Purchaser at the delivery point identified on Exhibit 4 (the "Delivery Point"). Purchaser shall take title to the electric energy generated by the System at the Delivery Point, and risk of loss will pass from Seller to Purchaser at the Delivery Point. Purchaser may purchase electric energy for the Facility from other sources if the Purchaser's electric requirements at the Facility exceed the output of the System. 3. Term and Termination. a. Initial Term. The initial term ("Initial Term") of this Agreement shall commence on the Commercial Operation Date (as defined below) and continue for the length of time specified in Exhibit 1, unless earlier terminated as provided for in this Agreement. The "Commercial Operation Date" is the date Seller gives Purchaser written notice that the System is mechanically complete and capable of providing electric energy to the Delivery Point. Upon Purchaser's request, Seller will give Purchaser copies of certificates of completion or similar documentation from Seller's contractor and the interconnection or similar agreement with the Utility. This Agreement is effective as of the Effective Date and Purchaser's failure to enable Seller to provide the electric energy by preventing it from installing the System or otherwise not performing shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement. b. Additional Terms. If Purchaser has not exercised its option to purchase the System by the end of the Initial Tenn, either Party may give the other Party written notice of its desire to extend this Agreement on the terms and conditions set forth herein for the number and length of additional periods specified in Exhibit I (each an "Additional Term"). Such notice shall be given, if at all, not more than one hundred twenty (120) and not less than sixty (60) days before the last day of the Initial Term or the then current Additional Term, as applicable. The Party receiving the notice requesting an Additional Term shall respond positively or negatively to that request in writing within thirty (30) days after receipt of the request. Failure to respond within such thirty (30) day period shall be deemed a rejection of the offer for an Additional Term. If both Parties agree to an Additional Term, the Additional Term shall begin immediately upon the conclusion of the then current tern or Additional Term on the same terms and conditions as set forth in this Agreement. If the Party receiving the request for an Additional Term rejects or is deemed to reject the first Party's offer, this Agreement shall terminate at the end of the Initial Term (if the same has not been extended) or the then current Additional Term. 4. Billing and Payment. a. Monthly Charges. Purchaser shall pay Seller monthly for the electric energy generated by the System and delivered to the Delivery Point at the $fkWh rate shown in Exhibit 1 (the "Contract Price"). The monthly payment for such energy will be equal to the applicable $fkWh rate multiplied by the number of kWh of energy generated during the applicable month, as measured by the System meter. b. Monthly Invoices. Seller shall invoice Purchaser monthly. Such monthly invoices shall state (i) the amount of electric energy produced by the System and delivered to the Delivery Point, (ii) the rates applicable to, and charges incurred by, Purchaser under this Agreement and (iii) the total amount due from Purchaser. Solar Power Purchase Agreement v.20091015 C. Utility Invoices. Purchaser shall authorize the Utility to send to Seller duplicates of any bills sent to Purchaser. If Utility does not permit duplicate bills to be sent to Seller, Purchaser shall, promptly upon receipt of each bill, make a photocopy of each bill and mail the copy to Seller. Purchaser shall pay all charges assessed by the Utility to the Facility. e. Taxes. Purchaser shall either pay or reimburse Seller for any and all taxes assessed on the generation, sale, delivery or consumption of electric energy produced by the System or the interconnection of the System to the Utility's electric distribution system, including property taxes on the System; provided, however, Purchaser will not be required to pay or reimburse Seller for any taxes during periods when Seller fails to deliver electric energy to Purchaser for reasons other than Force Majeure. For purposes of this Section 4(c), "Taxes" means any federal, state and local ad valorem, property, occupation, generation, privilege, sales, use, consumption, excise, transaction, and other taxes, regulatory fees, surcharges or other similar charges but shall not include any income taxes or similar taxes imposed on net revenues imposed on Seller due to the sale of energy under this Agreement, which shall be Seller's responsibility. f. Payment Terms. All amounts due under this Agreement shall be due and payable net twenty (20) days from receipt of invoice. Any undisputed portion of the invoice amount not paid within the twenty (20) day period shall accrue interest at the annual rate of two and one-half percent (2.5%) over the Prime Rate (but not to exceed the maximum rate permitted by law). 5. Environmental Attributes and Environmental Incentives. Unless otherwise specified on Exhibit I, Seller is the owner of all Environmental Attributes and Environmental Incentives and is entitled to the benefit of all Tax Credits, and Purchaser's purchase of electricity under this Agreement does not include Environmental Attributes, Environmental Incentives or the right to Tax Credits or any other attributes of ownership and operation of the System, all of which shall be retained by Seller. Purchaser shall cooperate with Seller in obtaining, securing and transferring all Environmental Attributes and Environmental Incentives and the benefit of all Tax Credits, including by using the electric energy generated by the System in a manner necessary to qualify for such available Environmental Attributes, Environmental Incentives and Tax Credits. Purchaser shall not be obligated to incur any out-of-pocket costs or expenses in connection with such actions unless reimbursed by Seller. If any Environmental Incentives are paid directly to Purchaser, Purchaser shall immediately pay such amounts over to Seller. To avoid any conflicts with fair trade rules regarding claims of solar or renewable energy use, Purchaser, if engaged in commerce and/or trade, shall submit to Seller for approval any press releases regarding Purchaser's use of solar or renewable energy and shall not submit for publication any such releases without the written approval of Seller. Approval shall not be unreasonably withheld, and Seller's review and approval shall be made in a timely manner to permit Purchaser's timely publication. "Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the System, the production of electrical energy from the System and its displacement of conventional energy generation, including (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CI14), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; and (3) the reporting rights related to these avoided emissions, such as Green Tag Reporting Rights and Renewable Energy Credits. Green Tag Reporting Rights are the right of a party to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party, and include Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Environmental Attributes do not include Environmental Incentives and Tax Credits. Purchaser and Seller shall file all tax returns in a manner consistent with this Paragraph 5. Without limiting the generality of the foregoing, Environmental Attributes include carbon trading credits, renewable energy credits or certificates, emissions reduction credits, investment credits, emissions allowances, green tags, tradeable renewable credits and Green-e® products. "Environmental Incentives" means any and credits, rebates, subsidies, payments or other incentives that relate to self- generation of electricity, the use of technology incorporated into the System, environmental benefits of using the System, or other similar programs available from the Utility, any other regulated entity, the manufacturer of any part of the System or any Governmental Authority. "Governmental Authority" means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-govemmental, judicial, public or statutory instrumentality, authority, Solar Power Purchase Agreement v.20091015 body, agency, bureau or entity (including the Federal Energy Regulatory Commission or the California Public Utilities Commission), or any arbitrator with authority to bind a party at law. "Tax Credits" means any and all (i) investment tax credits, (ii) production tax credits and (iii) similar tax credits under federal, state or local law relating to the construction, ownership or production of energy from the System. 6. Conditions to Obligations. a. Conditions to Seller's Obligations. Seller's obligations under this Agreement are conditioned on the completion of the following conditions to Seller's reasonable satisfaction on or before the Condition Satisfaction Date: Completion of a physical inspection of the Facility and the property upon which the Facility is located (the "Premises") including, if applicable, geotechnical work, and real estate due diligence to confirm the suitability of the Facility and the Premises for the System; ii. Approval of (i) this Agreement and (ii) the Construction Agreement (if any) for the System by Seller's Financing Parties. "Construction Agreement" as used in this subsection means an agreement between SolarCity and a subcontractor to install the System. iii. Confirmation that Seller will obtain all applicable Environmental Incentives and Tax Credits; iv. Receipt of all necessary zoning, land use and building permits; and v. Execution of all necessary agreements with the Utility for interconnection of the System to the Utility's electric distribution system. vi. Prior to Seller commencing construction and installation of the System, Purchaser shall give Seller proof of insurance for all insurance required to be maintained by Purchaser under this Agreement. b. Conditions to Purchaser's Obligations. Purchaser's obligations under this Agreement are conditioned on the occurrence of the Commercial Operation Date for the System on or before the Outside Commercial Operation Date (See Exhibit I . C. Failure of Conditions. If any of the conditions listed in subsections a) or b) above are not satisfied by the applicable dates specified in those subsections, the Parties will attempt in good faith to negotiate new dates for the satisfaction of the failed conditions. If the parties are unable to negotiate new dates then the Party that has not failed to meet an obligation may terminate this Agreement upon ten (10) days written notice to the other Party without liability for costs or damages or triggering a default under this Agreement. 7. Seller's Rights and Obligations. a. Permits and Approvals. Seller, with Purchaser's reasonable cooperation, shall use commercially reasonable efforts to obtain, at its sole cost and expense: i. any zoning, land use and building permits required to construct, install and operate the System; and ii. any agreements and approvals from the Utility necessary in order to interconnect the System to the Utility's electric distribution system. Purchaser shall cooperate with Seller's reasonable requests to assist Seller in obtaining such agreements, permits and approvals. b. Standard System Repair and Maintenance. Seller shall construct and install the System at the Facility and shall use reasonable efforts to ensure that the System is performing to specifications. During the Term, Seller will operate and perform all routine and emergency repairs to and maintenance of the System at its sole cost and expense, except Solar Power Purchase Agreement v.20091015 for any repairs or maintenance resulting from Purchaser's negligence, willful misconduct or breach of this Agreement or the Site Lease (if applicable). Seller shall not be responsible for any work done by others on any part of the System unless Seller authorizes that work in advance in writing. Seller shall not be responsible for any loss, damage, cost or expense arising out of or resulting from improper environmental controls or improper operation or maintenance of the System by anyone other than Seller or Seller's contractors. If the System requires repairs for which Seller is not responsible, Purchaser shall pay Seller for diagnosing and correcting the problem at Seller or Seller's contractors' then current standard rates. Seller shall provide Purchaser with reasonable notice prior to accessing the Facility to make standard repairs. C. Non-Standard System Repair and Maintenance. If Seller incurs incremental costs to maintain the System due to conditions at the Facility or due to the inaccuracy of any information provided by Purchaser and relied upon by Seller, the pricing, schedule and other terns of this Agreement will be equitably adjusted to compensate for any work in excess of normally expected work required to be performed by Seller. In such event, the Parties will negotiate such equitable adjustment in good faith. it. Breakdown Notice. Seller shall notify Purchaser within twenty-four (24) hours following Seller's discovery of (a) any material malfunction in the operation of the System or (b) an interruption in the supply of electrical energy from the System. Purchaser and Seller shall each designate personnel and establish procedures such that each Party may provide notice of such conditions requiring Seller's repair or alteration at all times, twenty-four (24) hours per day, including weekends and holidays. Purchaser shall notify Seller immediately upon the discovery of an emergency condition affecting the System. e. Suspension. Notwithstanding anything to the contrary herein, Seller shall be entitled to suspend delivery of electricity from the System to the Delivery Point for the purpose of maintaining and repairing the System and such suspension of service shall not constitute a breach of this Agreement; provide d, that Seller shall use commercially reasonable efforts to minimize any interruption in service to the Purchaser. f. Use of Contractors and Subcontractors. Seller shall be permitted to use contractors and subcontractors to perform its obligations under this Agreement. However, Seller shall continue to be responsible for the quality of the work performed by its contractors and subcontractors. If a list of pre-approved contractors and subcontractors is desired, such list shall be scheduled on an appendix to Exhibit 7. All Contractors and subcontractors other than those that may be scheduled on an appendix to Exhibit 7 shall be subject to Purchaser's prior written consent, not to be unreasonably withheld. g. Liens and Payment of Contractors and Suppliers. Seller shall pay when due all valid charges from all contractors, subcontractors and suppliers supplying goods or services to Seller under this Agreement and shall keep the Facility free and clear of any liens related to such charges, except for those liens which Seller is permitted by law to place on the Facility following non-payment by Purchaser of amounts due under this Agreement. Seller shall indemnify Purchaser for all claims, losses, damages, liabilities and expenses resulting from any liens filed against the Facility or the Premises in connection with such charges; provided, however, that Seller shall have the right to contest any such lien, so long as it provides a statutory bond or other reasonable assurances of payment that either remove such lien from title to the Facility and the Premises or that assure that any adverse judgment with respect to such lien will be paid without affecting title to the Facility and the Premises. It. No Warranty. NO WARRANTY OR REMEDY, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE SHALL APPLY. The remedies set forth in this Agreement shall be Purchaser's sole and exclusive remedies for any claim or liability arising out of or in connection with this Agreement, whether arising in contract, tort (including negligence), strict liability or otherwise. Installation Damage. Seller shall repair any damage to the Facility it causes in the preparation, installation, or maintenance of the System. 8. Purchaser Rights and Obligations. a. Facility Access Rights. Purchaser grants to Seller and to Seller's agents, employees and contractors an irrevocable non-exclusive license running with the Premises (the "License") for access to, on, over, under and across the Premises as more particularly described in Exhibit 5 (the "License Area") for the purposes of (a) installing, constructing, operating, owning, maintaining, accessing, removing and replacing the System; (b) performing all of Seller's obligations and enforcing all of Seller's rights set forth in this Agreement; and (c) installing, using and Solar Power Purchase Agreement v.20091015 7 maintaining electric lines and equipment, including inverters and meters, necessary to interconnect the System to Purchaser's electric system at the Facility and/or to the Utility's electric distribution system or that otherwise may from time to time be useful or necessary in connection with the construction, installation, operation, maintenance or repair of the System. Seller shall notify Purchaser prior to entering the Facility except in situations where there is imminent risk of damage to persons or property. The term of the License shall continue until the date that is one hundred and twenty (120) days following the date of expiration or termination of this Agreement (the "License Term"). During the License Term, Purchaser shall ensure that Seller's rights under the License and Seller's access to the License Area are preserved and protected and shall not interfere with or permit any third parties to interfere with such rights or access. The grant of the License shall survive termination of this agreement by either Party. Purchaser agrees that Seller may record a memorandum of license in substantially the same form attached hereto as Exhibit 6 in the land records respecting the License. b. OSHA Compliance. Purchaser shall ensure that all Occupational Safety and Health Act (OSHA) requirements and other similar applicable safety laws or codes are adhered to in its performance under this Agreement. C. Maintenance of Facility. Purchaser shall, at its sole cost and expense, maintain the Facility in good condition and repair. Purchaser will ensure that the Facility remains interconnected to the local utility grid at all times and will not permit cessation of electric service to the Facility from the local utility. Purchaser is fully responsible for the maintenance and repair of the Facility's electrical system and of all of Purchaser's equipment that utilizes the System's outputs. Purchaser shall properly maintain in full working order all of Purchaser's electric supply or generation equipment that Purchaser may shut down while utilizing the System. Purchaser shall promptly notify Seller of any matters of which it is aware pertaining to any damage to or loss of use of the System or that could reasonably be expected to adversely affect the System. d. No Alteration of Facility. Purchaser shall not make any alterations or repairs to the Facility which may adversely affect the operation and maintenance of the System without Seller's prior written consent. If Purchaser wishes to make such alterations or repairs, Purchaser shall give prior written notice to Seller, setting forth the work to be undertaken (except for emergency repairs, for which notice may be given by telephone), and give Seller the opportunity to advise Purchaser in making such alterations or repairs in a manner that avoids damage to the System, but, notwithstanding any such advice, Purchaser shall be responsible for all damage to the System caused by Purchaser or its contractors. To the extent that temporary disconnection or removal of the System is necessary to perform such alterations or repairs, such work and any replacement of the System after completion of Purchaser's alterations and repairs, shall be done by Seller or its contractors at Purchaser's cost. All of Purchaser's alterations and repairs will be done in a good and workmanlike manner and in compliance with all applicable laws, codes and permits. C. Outages. Purchaser shall be permitted to be off line for two (2) full twenty-four (24) hour days (each, a "Scheduled Outage") per calendar year during the Term, during which days Purchaser shall not be obligated to accept or pay for electricity from the System; mop vided, however, that Purchaser must notify Seller in writing of each such Scheduled Outage at least forty-eight (48) hours in advance of the commencement of a Scheduled Outage. In the event that Scheduled Outages exceed two (2) days per calendar year or there are unscheduled outages, in each case for a reason other than a Force Majeure event, Seller shall reasonably estimate the amount of electricity that would have been delivered to Purchaser during such excess Scheduled Outages or unscheduled outages and shall invoice Purchaser for such amount in accordance with Section 4. Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or allow to exist any mortgage, pledge, lien, charge, security interest, encumbrance or other claim of any nature on or with respect to the System or any interest therein. Purchaser shall immediately notify Seller in writing of the existence of any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim, shall promptly cause the same to be discharged and released of record without cost to Seller, and shall indemnify Seller against all costs and expenses (including reasonable attorneys' fees) incurred in discharging and releasing any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim. g. Securitv. Purchaser shall be responsible for maintaining the physical security of the License Area and for any damage or vandalism to the System as a result of failure to maintain such security. Purchaser will not conduct activities on, in or about the License Area or the Facility that have a reasonable likelihood of causing damage, impairment or otherwise adversely affecting the System. Purchaser shall provide and take reasonable measures for security of the System, including commercially reasonable monitoring of the Facility's alarms. h. Insulation. Purchaser understands that unobstructed access to sunlight ("Insolation") is essential to Seller's performance of its obligations and a material term of this Agreement. Purchaser shall not in any way cause and, Solar Power Purchase Agreement v.20091015 8 where possible, shall not in any way permit any interference with the System's Insolation. If Purchaser becomes aware of any activity or condition that could diminish the Insolation of the System, Purchaser shall notify Seller immediately and shall cooperate with Seller in preserving the System's existing Insolation levels. The Parties agree that reducing Insolation would irreparably injure Seller, that such injury may not be adequately compensated by an award of money damages, and that Seller is entitled to seek specific enforcement of this Section 8(h) against Purchaser. L Data Line. Purchaser shall provide Seller a high speed internet data line during the Term to enable Seller to record the electric energy generated by the System. If Purchaser fails to provide such high speed intemet data line, or if such line ceases to function and is not repaired, Seller may reasonably estimate the amount of electric energy that was generated and invoice Purchaser for such amount in accordance with Section 4. j. Breakdown Notice. Purchaser shall notify Seller within twenty-four (24) hours following the discovery by it of (A) any material malfunction in the operation of the System; or (B) any occurrences that could reasonably be expected to adversely affect the System. Purchaser shall notify Seller immediately upon (A) an interruption in the supply of electrical energy from the System; or (B) the discovery of an emergency condition respecting the System. Purchaser and Seller shall each designate personnel and establish procedures such that each Party may provide notice of such conditions requiring Seller's repair or alteration at all times, twenty-four (24) hours per day, including weekends and holidays. 9. Reserved. 10. Relocation of Svstem. If Purchaser ceases to conduct business operations at and/or vacates the Facility or is prevented from operating the System at the Facility prior to the expiration of the Term, Purchaser shall have the option to provide Seller with a mutually agreeable substitute premises located within the same Utility district as the terminated System or in a location with similar Utility rates and Insulation. Purchaser shall provide at least sixty (60) but not more than one hundred eighty (180) days prior written notice prior to the date that it wants to make this substitution. In connection with such substitution, Purchaser shall execute an amended agreement that shall have all of the same terms as this Agreement except for the (i) Effective Date; (ii) License, which will be amended to grant rights in the real property where the System relocated to; and (iii) Term, which will be the remainder of the Term of this Agreement and such amended agreement shall be deemed to be a continuation of this Agreement without termination. Purchaser shall also provide any new Purchaser, owner, lessor or mortgagee consents or releases required by Seller or Seller's Financing Parties in connection with the substitute facility. Purchaser shall pay all costs associated with relocation of the System, including all costs and expenses incurred by or on behalf of Seller in connection with removal of the System from the Facility and installation and testing of the System at the substitute facility and all applicable interconnection fees and expenses at the substitute facility, as well as costs of new title search and other out-of-pocket expenses connected to preserving and refiling the security interests of Seller's Financing Parties in the System. Seller shall remove the System from the vacated Facility prior to the termination of Purchaser's ownership, lease or other rights to use such Facility. Seller will not be required to restore the Facility to its condition at the time the System was installed but shall promptly pay Purchaser for any damage caused by Seller during removal of the System, but not for normal wear and tear. If the substitute facility has inferior Insolation as compared to the original Facility, Seller shall have the right to make an adjustment to Exhibit I such that Purchaser's payments to Seller are the same as if the System were located at the original Facility. If Purchaser is unable to provide such substitute Facility and to relocate the System as provided, any early termination will be treated as a default by Purchaser. it. Removal of System at Expiration. Upon the expiration or earlier termination of this Agreement (provided Purchaser does not exercise its purchase option), Seller shall, at its expense, remove all of its tangible property comprising the System from the Facility on a mutually convenient date but in no event later than ninety (90) days after the expiration of the Term. The Facility shall be returned to its original condition, except for System mounting pads or other support structures, which may be left in place, and ordinary wear and tear. In no case shall Seller's removal of the System affect the integrity of Purchaser's roof, which shall be as leak proof as it was prior to removal of the System. Seller shall leave the Facility in neat and clean order. If Seller fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Facility to its original condition (other than System mounting pads or other support structures and ordinary wear and tear) at Seller's cost. Purchaser shall provide sufficient space for the temporary storage and staging of tools, materials and equipment and for the parking of construction crew vehicles and temporary construction trailers and facilities reasonably necessary during System removal. 12. Measurement. Solar Power Purchase Agreement v.20091015 Electricity delivered to the Facility shall be measured by the SolarOuard monitoring system installed and maintained by Seller as part of the System. 13. Default. Remedies and Damages. a. Default. Any Party that fails to perform its responsibilities as listed below or experiences any of the circumstances listed below shall be deemed a "Defaulting Party" and each event of default shall be a "Default Event": (1) failure of a Party to pay any amount due and payable under this Agreement, other than an amount that is subject to a good faith dispute, within ten (10) days following receipt of written notice from the other Party (the "Non-Defaulting Party") of such failure to pay ("Payment Default"); (2) failure of a Party to substantially perform any other material obligation under this Agreement within thirty (30) days following receipt of written notice from the Non-Defaulting Party demanding such cure; provided, that such thirty (30) day cure period shall be extended (but not beyond ninety (90) days) if and to the extent reasonably necessary to cure the Default Event, if (i) the Defaulting Party initiates such cure with the thirty (30) day period and continues such cure to completion and (ii) there is no material adverse affect on the Non-Defaulting Party resulting from the failure to cure the Default Event; (3) if any representation or warranty of a Party proves at any time to have been incorrect in any material respect when made and is material to the transactions contemplated hereby, if the effect of such incorrectness is not cured within thirty (30) days following receipt of written notice from the Non-Defaulting Party demanding such cure; (4) Purchaser loses its rights to occupy and enjoy the Premises; or (5) a Party, or its guarantor, becomes insolvent or is a party to a bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or any general assignment for the benefit of creditors or other similar arrangement or any event occurs or proceedings are taken in anyjurisdiction with respect to the Party which has a similar effect. (6) Purchaser prevents Seller from installing the System or otherwise failing to perform in a way that prevents the delivery of electric energy from the System. (Such Default Event shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement.) b. Remedies. (1) Remedies for Payment Default. If a Payment Default occurs, the Non-Defaulting Party may suspend performance of its obligations under this Agreement. Further, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement, upon five (5) days prior written notice to the Defaulting Party following the Payment Default. (2) Remedies for Other Defaults. On the occurrence of a Default Event other than a Payment Default, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement or suspension of performance of its obligations under this Agreement, upon five (5) days prior written notice to the Defaulting Party following the occurrence of the Default Event. Nothing herein shall limit either Party's right to collect damages upon the occurrence of a breach or a default by the other Party that does not become a Default Event. (3) Damages Upon Termination by Default. Upon a termination of this Agreement by the Non- Defaulting Party as a result of a Default Event by the Defaulting Party, the Defaulting Party shall pay a Termination Payment to the Non-Defaulting Party determined as follows (the "Termination Payment"): A. Purchaser. If Purchaser is the Defaulting Party and Seller terminates this Agreement, the Termination Payment to Seller shall be equal to the sum of (i) the termination value set Solar Power Purchase Agreement v.20091015 10 forth in Exhibit 1 (the "Termination Value") for such Contract Year, (ii) removal costs as provided in Section I3(b)(3)(C) and (iii) any and all other amounts previously accrued under this Agreement and then owed by Purchaser to Seller. The Parties agree that actual damages to Seller in the event this Agreement terminates prior to the expiration of the Tenn as the result of an Default Event by Purchaser would be difficult to ascertain, and the applicable Termination Value set forth in Exhibit 1 is a reasonable approximation of the damages suffered by Seller as a result of early termination of this Agreement. The Termination Payment shall not be less than zero. B. Seller. If Seller is the Defaulting Party and Purchaser terminates this Agreement, the Termination Payment to Purchaser shall be equal to the sum of (i) the present value (using a discount rate of 9.5%) of the excess, if any, of the reasonably expected cost of electric energy from the Utility over the Contract Price for the reasonably expected production of the Facility for the remainder of the Initial Term or the then current Additional Tenn, as applicable; (it) all costs reasonably incurred by Purchaser in re- converting its electric supply to service from the Utility; (iii) any removal costs incurred by Purchaser, and (iv) any and all other amounts previously accrued under this Agreement and then owed by Seller to Purchaser. The Termination Payment shall not be less than zero. C. Obligations Following Termination. If a Non-Defaulting Party terminates this Agreement pursuant to this Section 13(b)(3)(C), then following such termination, Seller shall, at the sole cost and expense of the Defaulting Party, remove the equipment (except for mounting pads and support structures) constituting the System. The Non-Defaulting Party shall take all commercially reasonable efforts to mitigate its damages as the result of a Default Event. 14. Representations and Warranties. a. General Representations and Warranties. Each Party represents and warrants to the other the following: (1) Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; the execution, delivery and performance by such Party of this Agreement have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not and shall not violate any law; and this Agreement is valid obligation of such Party, enforceable against such Party in accordance with its terms (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally). (2) Such Party has obtained all licenses, authorizations, consents and approvals required by any Governmental Authority or other third party and necessary for such Party to own its assets, carry on its business and to execute and deliver this Agreement; and such Party is in compliance with all laws that relate to this Agreement in all material respects. b. Purchaser's Representations and Warranties. Purchaser represents and warrants to Seller the following: (1) License. Purchaser has the full right, power and authority to grant the License contained in Section 8(a). Such grant of the License does not violate any law, ordinance, rule or other governmental restriction applicable to Purchaser or the Facility and is not inconsistent with and will not result in a breach or default under any agreement by which Purchaser is'bound or that affects the Facility. (2) Other Agreements. Neither the execution and delivery of this Agreement by Purchaser nor the performance by Purchaser of any of its obligations under this Agreement conflicts with or will result in a breach or default under any agreement or obligation to which Purchaser is a party or by which Purchaser or the Facility is bound. (3) Accuracy of Information. All information provided by Purchaser to Seller, as it pertains to the Facility's physical configuration, Purchaser's planned use of the Facility, and Purchaser's estimated electricity requirements, is accurate in all material respects. Solar Power Purchase Agreement v.20091015 I 1 (4) Purchaser Status. Purchaser is not a public utility or a'public utility holding company and is not subject to regulation as a public utility or a public utility holding company. (5) No Pool Use. No electricity generated by the System will be used to heat a swimming pool. (6) Oregon Only: The electricity generated by the System will be used solely for commercial and business purposes. No portion of the electricity generated will be used for personal, family, household or agricultural purposes. 15. System Damage and Insurance. a. System Damage. (1) Seller's Obligations. If the System is damaged or destroyed other than by Purchaser's negligence or willful misconduct, Seller shall promptly repair and restore the System to its pre-existing condition; row vided, however, that if more than fifty percent (50%) of the System is destroyed during the last five (5) years of the Initial Term or during any Additional Term, Seller shall not be required to restore the System, but may instead terminate this Agreement, unless Purchaser agrees (i) to pay for the cost of such restoration of the System or (ii) to purchase the System "AS-IS" at the greater of (A) then current fair market value of the System and (B) the sum of the amounts described in Section 13.b(3)A)(i) (using the date of purchase to determine the appropriate Contract Year) and Section 13.b(3)A)(iii). (2) Purchaser's Obligations. If the Facility is damaged or destroyed by casualty of any kind or any other occurrence other than Seller's negligence or willful misconduct, such that the operation of the System and/or Purchaser's ability to accept the electric energy produced by the System are materially impaired or prevented, Purchaser shall promptly repair and restore the Facility to its pre-existing condition; provided, however, that if more than five Percent (5%) of the Facility is destroyed Purchaser may elect either (i) to restore the Facility or (ii) to pay the Termination Value set forth in Exhibit I and all other costs previously accrued but unpaid under this Agreement and thereupon terminate this Agreement and take title to the System. b. Insurance Coverage. At all times during the Term, Seller and Purchaser shall maintain the following insurance 1. Seller's Insurance. Seller shall maintain (i) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (ii) employer's liability insurance with coverage of at least $1,000,000 and (iii) worker's compensation insurance as required by law. ii. Purchaser's Insurance. Purchaser shall maintain (i) "all risk" property insurance on the System for the full replacement cost thereof and name Seller as a loss payee, (ii) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (iii) employer's liability insurance with coverage of at least $1,000,000 and (iv) worker's compensation insurance as required by law. C. Policy Provisions. All insurance policies provided hereunder shall (i) contain a provision whereby the insurer agrees to give the party not providing the insurance thirty (30) days (ten (10) days in the event of non-payment of premiums) written notice before the insurance is cancelled, terminated or materially altered, (ii) be written on an occurrence basis, (iii) with respect to the casualty insurance policies, name Seller as loss payee thereunder, (iv) with respect to the liability insurance policies, include the other Party as an additional insured as its interest may appear, (iv) include waivers of subrogation, (v) provide for primary coverage without right of contribution from any insurance of the other Party, and (vi) be maintained with companies either rated no less than A- as to Policy Holder's Rating in the current edition of Best's Insurance Guide or otherwise reasonably acceptable to the other party. d. Certificates. Within thirty (30) days after execution of this Agreement and upon the other Party's request and annually thereafter, each Party shall deliver the other Party certificates of insurance evidencing the above required coverage. e. Deductibles. Unless and to the extent that a claim is covered by an indemnity set forth in this Agreement, each Party shall be responsible for the payment of its own deductibles. Solar Power Purchase Agreement v.20091015 12 16. Ownership; Option to Purchase. a. Ownership of System. Throughout the Term, Seller shall be the legal and beneficial owner of the System at all times, including all Environmental Attributes, and the System shall remain the personal property of Seller and shall not attach to or be deemed a part of, or fixture to, the Facility or the Premises. Each of the Seller and Purchaser agree that the Seller is the tax owner of the System and all tax filings and reports will be filed in a manner consistent with this Agreement. The System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use commercially reasonable efforts to place all parties having an interest in or a mortgage, pledge, lien, charge, security interest, encumbrance or other claim of any nature on the Facility or the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or fixture filing against the Premises which could reasonably be construed as prospectively attaching to the System as a fixture of the Premises, Purchaser shall provide a disclaimer or release from such lienholder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction where the Facility is located. If Purchaser is not the fee owner, Purchaser will obtain such consent from such owner. Purchaser agrees to deliver to Seller a non-disturbance agreement in a form reasonably acceptable to Seller from the owner of the Facility (if the Facility is leased by Purchaser), any mortgagee with a lien on the Premises, and other Persons holding a similar interest in the Premises. b. Option to Purchase. At the end of the fifth (5th) and tenth (I Oth) Contract Years and at the end of the Initial Term and each Additional Term, so long as Purchaser is not in default under this Agreement, Purchaser may exercise an option to purchase the System from Seller for a purchase price equal to (i) with respect to an option exercised at the end of the fifth (5th) or tenth (10th) Contract Years or at the end of the Initial Term, the greater of (A) the amount set forth at such time in the Purchase Option Price schedule in Exhibit 1, and (B) the Fair Market Value of the System, and (ii) with respect to an option exercised at the end of an Additional Term, the Fair Market Value of the System. The "Fair Market Value" of the System shall be determined by mutual agreement of Purchaser and Seller; row vided, however, if Purchaser and Seller cannot agree to a Fair Market Value within thirty (30) days after Purchaser has exercised its option, the Parties shall select an independent appraiser with experience and expertise in the solar photovoltaic industry in the County where the Facility is located to determine the Fair Market Value of the System. Such appraiser shall act reasonably and in good faith to determine the Fair Market Value of the System and shall set forth such determination in a written opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parties in the absence of fraud or manifest error. The costs of the appraisal shall be home by the Parties equally. Seller shall notify Purchaser of window for exercising the purchase option not less than thirty (30) days nor more than ninety (90) days prior to the start of the option period. Purchaser must then provide a notification to Seller of its intent to purchase at least ninety (90) days and not more than one hundred eighty (180) days prior to the end of the applicable Contract Year or the Initial Term or Additional Term, as applicable, and the purchase shall be complete after the end of the Contract Year but not later than 180 days after the end of the Contract year. Upon purchase of the System, Purchaser will assume complete responsibility for the operation and maintenance of the System and liability for the performance of the System, and Seller shall have no further liabilities or obligations hereunder. If the Parties are unable to agree on a negotiated System value and Purchaser determines that the appraised value is in excess of the amount that Purchaser desires to pay for the System, Purchaser may withdraw the notice to exercise the purchase option without further obligation and such withdrawal shall have no effect on any future purchase option rights. 17. Indemnification and Limitations of Liability. a. General. Each Party (the "Indemnifying Party") shall defend, indemnify and hold harmless the other Party and the directors, officers, shareholders, partners, members, agents and employees of such other Party, and the respective affiliates of each thereof (collectively, the "Indemnified Parties"), from and against all loss, damage, expense, liability and other claims, including court costs and reasonable attorneys' fees (collectively, "Liabilities") resulting from any third party actions relating to the breach of any representation or warranty set forth in Section 14 and from injury to or death of persons, and damage to or loss of property to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of, the Indemnifying Parry (or its contractors, agents or employees) in connection with this Agreement; provided, however, that nothing herein shall require the Indemnifying Party to indemnify the Indemnified Party for any Liabilities to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of, the Indemnified Party. This Section 17(a) however, shall not apply to liability arising from any form of hazardous substances or other environmental contamination, such matters being addressed exclusively by Section 17(c). b. Notice and Participation in Third Party Claims. The Indemnified Party shall give the Indemnifying Party written notice with respect to any Liability asserted by a third party (a "Claim"), as soon as possible upon the receipt of Solar Power Purchase Agreement v.20091015 13 information of any possible Claim or of the commencement of such Claim. The Indemnifying Party may assume the defense of any Claim, at its sole cost and expense, with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. The Indemnified Parry may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to the Indemnifying Party. The Indemnifying Party shall pay the reasonable attorneys' fees incurred by such separate counsel until such time as the need for separate counsel expires. The Indemnified Party may also, at the sole cost and expense of the Indemnifying Party, assume the defense of any Claim if the Indemnifying Party fails to assume the defense of the Claim within a reasonable time. Neither Party shall settle any Claim covered by this Section 17(b) unless it has obtained the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall have no liability under this Section 17(b) for any Claim for which such notice is not provided if that the failure to give notice prejudices the Indemnifying Party. C. Environmental Indemnification. Seller shall indemnify, defend and hold harmless all of Purchaser's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the License Area of any Hazardous Substance (as defined in Section 17(c)(i)) to the extent deposited, spilled, released or otherwise caused by Seller or any of its contractors or agents. Purchaser shall indemnify, defend and hold harmless all of Seller's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the Premises of any I lazardous Substance, except to the extent deposited, spilled, released or otherwise caused by Seller or any of its contractors or agents. Each Party shall promptly notify the other Party if it becomes aware of any deposit, spill or release of any Hazardous Substance on or about the License Area or the Premises generally. "Hazardous Substance" means any chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants," "pollution," "pollutants," "regulated substances," or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority. d. Limitations on Liability. i. No Consequential Damaees. Neither Party nor its directors, officers, shareholders, partners, members, agents and employees subcontractors or suppliers shall be liable for any. indirect, special, incidental, exemplary, or consequential loss or damage of any nature arising out of their performance or non- performance hereunder even if advised of such. ii. Actual Damaees. Seller's aggregate liability under this Agreement arising out of or in connection with the performance or non-performance of this Agreement shall not exceed the lesser of (A) the total payments made by Purchaser under this Agreement as of the date that the events that first gave rise to such liability occurred; and (B) the total of the prior twelve (12) monthly payments preceding the date that the events that first gave rise to such liability occurred. The provisions of this Section (17)(d)(ii) shall apply whether such liability arises in contract, tort (including negligence), strict liability or otherwise. Any action against Seller must be brought within one (1) year after the cause of action accrues. 18. Force Majeure. a. "Force Majeure" means any event or circumstances beyond the reasonable control of and without the fault or negligence of the Party claiming Force Majeure. It shall include, without limitation, failure or interruption of the production, delivery or acceptance of electricity due to: an act of god; war (declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or actions of the elements; hurricane; flood; lightning; wind; drought; the binding order of any Governmental Authority (provided that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any Governmental Authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment, supplies or products (but not to the extent that any such availability of any of the foregoing results from the failure of the Party claiming Force Majeure to have exercised reasonable diligence); and failure of equipment not utilized by or under the control of the Party claiming Force Majeure. Solar Power Purchase Agreement v.20091015 14 b. Except as otherwise expressly provided to the contrary in this Agreement, if either Party is rendered wholly or partly unable to timely perform its obligations under this Agreement because of a Force Majeure event, that Party shall be excused from the performance affected by the Force Majeure event (but only to the extent so affected) and the time for performing such excused obligations shall be extended as reasonably necessary; provided, that: (i) the Party affected by such Force Majeure event, as soon as reasonably practicable after obtaining knowledge of the occurrence of the claimed Force Majeure event, gives the other Party prompt oral notice, followed by a written notice reasonably describing the event; (ii) the suspension of or extension of time for performance is of no greater scope and of no longer duration than is required by the Force Majeure event; and (iii) the Party affected by such Force Majeure event uses all reasonable efforts to mitigate or remedy its inability to perform as soon as reasonably possible. Seller shall not be liable for any damage to the System or the Facility resulting from a Force Majeure event. The Term shall be extended day for day for each day performance is suspended due to a Force Majeure event. C. Notwithstanding anything herein to the contrary, the obligation to make any payment due under this Agreement shall not be excused by a Force Majeure event. d. If a Force Majeure event continues for a period of one hundred (180) days or more within a twelve (12) month period and prevents a material part of the performance by a Party hereunder, the Party not claiming the Force Majeure shall have the right to terminate this Agreement without fault or further liability to either Party (except for amounts accrued but unpaid). 19. Assignment and Financing. a. Assignment. This Agreement may not be assigned in whole or in part by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Seller may, without the prior written consent of Purchaser, (i) assign, mortgage, pledge or otherwise collaterally assign its interests in this Agreement to any Financing Party, (ii) directly or indirectly assign this Agreement to an affiliate of Seller, (iii) assign this Agreement to any entity through which Seller is obtaining financing or capital for the System and (iv) assign this Agreement to any person succeeding to all or substantially all of the assets of Seller (provided that Seller shall be released from liability hereunder as a result of any of the foregoing permitted assignments only upon assumption of Seller's obligations hereunder by the assignee). Purchaser's consent to any other assignment shall not be unreasonably withheld if Purchaser has been provided with reasonable proof that the proposed assignee (x) has comparable experience in operating and maintaining photovoltaic solar systems comparable to the System and providing services comparable to those contemplated by this Agreement and (y) has the financial capability to maintain the System and provide the services contemplated by this Agreement in the manner required by this Agreement. This Agreement shall be binding on and inure to the benefit of the successors and permitted assignees. b. Financing. The Parties acknowledge that Seller may obtain construction and long-term financing or other credit support from lenders or third parties ("Financing Parties") in connection with the installation, construction, ownership, operation and maintenance of the System. Both Parties agree in good faith to consider and to negotiate changes or additions to this Agreement that may be reasonably requested by the Financing Parties; provided, that such changes do not alter the fundamental economic terms of this Agreement. The Parties also agree that Seller may assign this Agreement to the Financing Parties as collateral, and in connection with any such assignment, Purchaser agrees to execute a consent to assignment in customary form and reasonably acceptable to the Financing Parties. Solar Power Purchase AtTeement v.20091015 15 20. Confidentiality and Publicity. a. Confidentiality. If either Party provides confidential information, including business plans, strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information, and/or technical information regarding the design, operation and maintenance of the System or of Purchaser's business ("Confidential Information") to the other or, if in the course of performing under this Agreement or negotiating this Agreement a Party leams Confidential Information regarding the facilities or plans of the other, the receiving Party shall (a) protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information, and (b) refrain from using such Confidential Information, except in the negotiation and performance of this Agreement. Notwithstanding the above, a Party may provide such Confidential Information to its, officers, directors, members, managers, employees, agents, contractors and consultants (collectively, "Representatives"), and affiliates, lenders, and potential assignees of this Agreement (provided and on condition that such potential assignees be bound by a written agreement or legal obligation restricting use and, disclosure of Confidential Information), in each case whose access is reasonably necessary to the negotiation and performance of this Agreement. Each such recipient of Confidential Information shall be informed by the Party disclosing Confidential Information of its confidential nature and shall be directed to treat such information confidentially and shall agree to abide by these provisions. In any event, each Party shall be liable (with respect to the other Party) for any breach of this provision by any entity to whom that Party improperly discloses Confidential Information. The terms of this Agreement (but not its execution or existence) shall be considered Confidential Information for purposes of this Section 20(a), except as set forth in Section 20(b). All Confidential Information shall remain the, property of the disclosing Party and shall be returned to the disclosing Party or destroyed after the receiving Party's need for it has expired or upon the request of the disclosing Party. Each Party agrees that the disclosing Party would be irreparably injured by a breach of this Section 20(a) by the receiving Party or its Representatives or other person to whom the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be entitled to equitable relief, including injunctive relief and specific performance, in the event of a breach of the provision of this Section 20(a). To the fullest extent permitted by applicable law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Section 20(a), but shall be in addition to all other remedies available at law or in equity. b. Permitted Disclosures. Notwithstanding any other provision in this Agreement, neither Party shall be required to hold confidential any information that (i) becomes publicly available other than through the receiving Party, (ii) is required to be disclosed to a Governmental Authority under applicable law or pursuant to a validly issued subpoena (but a receiving Party subject to any such requirement shall promptly notify the disclosing Party of such requirement to the extent permitted by applicable law), (iii) is independently developed by the receiving Party or (iv) becomes available to the receiving Party without restriction from a third party under no obligation of confidentiality. If disclosure of information is required by a Governmental Authority, the disclosing Party shall, to the extent permitted by applicable law, notify the other Party of such required disclosure promptly upon becoming aware of such required disclosure and shall cooperate with the other Party in efforts to limit the disclosure to the maximum extent permitted by law. 21. Goodwill and Publicity. Neither Party shall use any name, trade name, service mark or trademark of the other Party in any promotional or advertising material without the prior written consent of such other Party. The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of this Agreement, and each Party shall have the right to promptly review, comment upon and approve any publicity materials, press releases or other public statements by the other Party that refer to, or that describe any aspect of, this Agreement. Neither Parry shall make any press release regarding or public announcement or the specific terms of this Agreement (except for filings or other statements or releases as may be required by applicable law) without the specific prior written consent of the other Party. Without limiting the generality of the foregoing, all public statements must accurately reflect the rights and obligations of the Parties under this Agreement, including the ownership of Environmental Attributes and Environmental Incentives and any related reporting rights. 22. General Provisions a. Choice of Law. The law of the state where the System is located shall govern this Agreement without giving effect to conflict of laws principles. b. Arbitration and Attorneys' Fees. Any dispute arising from or relating to this Agreement shall be arbitrated in San Francisco, California. The arbitration shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, and judgment on any award may be entered in any court of competent jurisdiction. If the Parties agree, a mediator may be consulted prior to arbitration. The prevailing party in any dispute arising out of this Agreement shall be entitled to reasonable attorneys' fees and costs. Solar Power Purchase Agreement v.20091015 16 C. Notices. All notices under this Agreement shall be in writing and shall be by personal delivery, facsimile transmission, electronic mail, overnight courier, or regular, certified, or registered mail, return receipt requested, and deemed received upon personal delivery, acknowledgment of receipt of electronic transmission, the promised delivery date after deposit with overnight courier, or five (5) days after deposit in the mail. Notices shall be sent to the person identified in this Agreement at the addresses set forth in this Agreement or such other address as either party may specify in writing. Each party shall deem a document faxed to it as an original document. d. Survival. Provisions of this Agreement that should reasonably be considered to survive termination of this Agreement shall survive. For the avoidance of doubt, surviving provisions shall include, without limitation, Section 4 (Representations and Warranties), Section 7(h) (No Warranty), Section 15(6) (Insurance), Section 17 (Indemnification), Section 20 (Confidentiality and Publicity), Section 22(a) (Choice of Law), Section 22 (b) (Arbitration and Attorneys' Fees), Section 22(c) (Notices), Section 22 (s) (Comparative Negligence), Section 22(hl (Non-Dedication of Facilities), Section 226) (Service Contract), Section 22(k) (No Partnership) Section 2201 (Full Agreement, Modification, Invalidity, Counterparts, Captions) and Section 22(n) (No Third Party Beneficiaries). C. Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement. Right of Waiver. Each Party, in its sole discretion, shall have the right to waive, defer or reduce any of the requirements to which the other Party is subject under this Agreement at any time; provided, however that neither Party shall be deemed to have waived, deferred or reduced any such requirements unless such action is in writing and signed by the waiving Party. No waiver will be implied by any usage of trade, course of dealing or course of performance. A Party's exercise of any rights hereunder shall apply only to such requirements and on such occasions as such Party may specify and shall in no event relieve the other Party of any requirements or other obligations not so specified. No failure of either Party to enforce any term of this Agreement will be deemed to be a waiver. No exercise of any right or remedy under this Agreement by Purchaser or Seller shall constitute a waiver of any other right or remedy contained or provided by law. Any delay or failure of a Party to exercise, or any partial exercise of, its rights and remedies under this Agreement shall not operate to limit or otherwise affect such rights or remedies. Any waiver of performance under this Agreement shall be limited to the specific performance waived and shall not, unless otherwise expressly stated in writing, constitute a continuous waiver or a waiver of future performance. g. Comparative Negligence. It is the intent of the Parties that where negligence is determined to have been joint, contributory or concurrent, each Party shall bear the proportionate cost of any Liability. h. Non-Dedication of Facilities. Nothing herein shall be construed as the dedication by either Party of its facilities or equipment to the public or any part thereof. Neither Party shall knowingly take any action that would subject the other Party, or other Party's facilities or equipment, to the jurisdiction of any Governmental Authority as a public utility or similar entity. Neither Party shall assert in any proceeding before a court or regulatory body that the other Party is a public utility by virtue of such other Party's performance under this agreement. If Seller is reasonably likely to become subject to regulation as a public utility, then the Parties shall use all reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interests while ensuring that Seller does not become subject to any such regulation. If the Parties are unable to agree upon such restructuring, Seller shall have the right to terminate this Agreement without further liability, and Seller shall remove the System in accordance with Section I I of this Agreement. Estoppel. Either Party hereto, without charge, at any time and from time to time, within five (5) business days after receipt of a written request by the other party hereto, shall deliver a written instrument, duly executed, certifying to such requesting party, or any other person specified by such requesting Party: (i) that this Agreement is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and effect as so modified, and identifying any such modification; (ii) whether or not to the knowledge of any such party there are then existing any offsets or defenses in favor of such party against enforcement of any of the terms, covenants and conditions of this Agreement and, if so, specifying the same and also whether or not to the knowledge of such party the other party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and if not, specifying the same; and (iii) such other information as may be reasonably requested by the requesting Party. Any written instrument given hereunder may be relied upon by the recipient of such instrument, except to the extent the recipient has actual knowledge of facts contained in the certificate. Solar Power Purchase Agreement v.20091015 17 Service Contract. The Parties intend this Agreement to be a "service contract" within the meaning of Section 7701(e)(3) of the Internal Revenue Code of 1986. Purchaser will not take the position on any tax return or in any other filings suggesting that it is anything other than a purchase of electricity from the System It. No Partnership. No provision of this Agreement shall be construed or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. No Party is authorized to act on behalf of the other Party, and neither shall be considered the agent of the other. Full Agreement, Modification, Invalidity. Counterparts, Captions. This Agreement, together with any Exhibits, completely and exclusively states the agreement of the parties regarding its subject matter and supersedes all prior proposals, agreements, or other communications between the parties, oral or written, regarding its subject matter. This Agreement may be modified only by a writing signed by both Parties. If any provision of this Agreement is found unenforceable or invalid, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole. In such event, such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law. This Agreement may be executed in any number of separate counterparts and each counterpart shall be considered an original and together shall comprise the same Agreement. The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. M. Forward Contract. The transaction contemplated under this Agreement constitutes a "forward contract" within the meaning of the United States Bankruptcy Code, and the Parties further acknowledge and agree that each Party is a "forward contract merchant" within the meaning of the Untied States Bankruptcy Code. n. No Third Party Beneficiaries. Except as otherwise expressly provided herein, this Agreement and all rights hereunder are intended for the sole benefit of the Parties hereto and shall not imply or create any rights on the part of, or obligations to, any other Person. End of Document Solar Power Purchase Agreement v.20091015 18 ATTACHMENT C IWI Sol Oty. Solar Power Purchase Agreement (Commercial OR/CA-JR MASH) This Solar Power Purchase Agreement (this "Agreement") is entered into by the parties listed below (each a "Party" and collectively the "Parties") as of the date signed by Seller below (the "Effective Date"). Purchaser: Seller: Name Rosemead Housing Development Name SolarCity Corporation and Corporation and 393 Vintage Park Drive, Suite 140 Address 8838 Valley Blvd Address Foster City, CA 94404 Rosemead, CA 91770 Attention: Lease/License Administrator Attention: Gary Taylor Phone 626-569-2100 Phone (650) 638-1028 Fax 626-307-9218 Fax (650) 638-1029 E-mail tg_aylor(),citvofrosemead.ore E-mail LeaseAdministrator@solarcity.com Purchaser ® owns the Facility (check one) leases the Facility This Agreement sets forth the terms and conditions of the purchase and sale of solar generated electric energy from the solar panel system described in Exhibit 2 (the "System") and installed at the Purchaser's facility described in Exhibit 3 (the "Facility"). The exhibits listed below are incorporated by reference and made part of this Agreement. Exhibit 1 Pricing Attachment Exhibit 2 System Description Exhibit 3 Purchaser's Facility Exhibit 4 Delivery Point Exhibit 5 License Area Exhibit 6 Memorandum of License Exhibit 7 General Terms and Conditions (Revised Ju1v 21, 2009) Purchaser: SolarCity Corporation Signature: Printed Name: Gary Title: President Date: Signature: Printed Name: Title: Date: Exhibit 1 Pricing Attachment 1. Term: Twenty (20) years, beginning on the Commercial Operation Date. 2: Additional Terms: Up to Two (2) Additional Terms of Five (5) years each. 3. Environmental Incentives and Environment Attributes Accrue to Seller. 4. Contract Price: YEAR CONTRACT PRICE PER KWH 1 $0.0500 2 50.0500 3 $0.0500 4 $0.0500 5 50.0500 6 $0.0500 7 $0.0500 8 30.0500 9 $0.0500 10 $0.0500 11 50.0500 12 $0.0500 13 $0.0500 14 50.0500 15 $0.0500 16 $0.0500 17 50.0500 18 $0.0500 19 $0.0500 20 $0.0500 5. Condition Satisfaction Date: December 07, 2010 6. Anticipated Commercial Operation Date: March 07, 2011 7. Outside Commercial Operation Date: May 07, 2011 8. Purchase Option Price YEAR PURCHASE PRICE 5 $36,966 10 $30,204 20 Fair Market Value 9. Termination Value: YEAR TERMINATION VALUE 1 $38,145 2 $36,869 3 $35,545 4 $34,171 Solar Power Purchase Agreement v. 20091015 (JR MASH) 0 2009 SolarCity. All Rights Reserved 5 $32,743 6 $31,260 7 $29,719 8 $28,116 9 S26,448 10 $24,713 II $22,905 12 $21,023 13 S19,062 14 $17,017 15 $14,886 16 $12,663 17 S10,343 18 $7,922 19 $5,395 20 SO In addition to the amounts payable by Purchaser stated above Purchaser shall also pay to Seller an amount equal to any recapture of any Environmental Incentives and Tax Credits. 10. Reserved. Solar Power Purchase Agreement v. 20091015 (JR MASH) 0 2009 SolarCity. All Rights Reserved Exhibit 2 System Description 1. System Location: 9100 Garvey Ave Rosemead, CA 91770 2. System Size (DC kW): 45.080 3. Expected First Year Energy Production: 63,665 4. Scope: • System size (kW): 45.08 • Ist year kWh production: 63,665 5. Expected Module(s): QUANTITY MAKE MODEL STC WATTS PTC WATTS 196 Yingli Green Energy YL230P-29b 230.O W 206.6 W 6. Expected Inverter(s): QUANTITY MAKE MODEL RATED POWER EFFICIENCY 1 SatCon Technology PVS-50 (240 V) 50.00 kW 95.5 % 7. Expected Structure: Roof Mount & Roof Mount 8. Includes: Turn-key installation SolarCity Limited Warranty 9. Excludes: Structure or electrical upgrades and trenching Solar Power Purchase Agreement v.20091002 (JR MASH) Exhibit 3 Purchaser's Facility A PARCEL OF LAND LOCATED IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, WITH A SITUS ADDRESS OF 9100 GARVEY AVE, ROSEMEAD CA 91770-5300 CURRENTLY OWNED BY REDEVELOPMENT AGENCY OF ROSEMEAD CITY HAVING A TAX ASSESSOR NUMBER OF 5282-028- 911 AND BEING THE SAME PROPERTY MORE FULLY DESCRIBED AS TR=830 THAT POR IN TRA 3645 OF LOT 3 AND DESCRIBED IN DOCUMENT NUMBER 1321428 DATED 08/1989 AND RECORDED 08/17/1989. Solar Power Purchase Agreement v.20091002 (1R MASH) Exhibit 4 Delivery Point Solar Power Purchase Agreement v.20091002 Exhibit 5 License Area Solar Power Purchase Agreement v.20091002 Exhibit 6 Memorandum of License RECORDING REQUESTED BY AND WHEN ) RECORDED RETURN TO: ) SolarCity Corporation ) 393 Vintage Park Drive, Suite 140 ) Foster City, CA 94404 ) Attention: Lease/License Administrator ) ) (space above this line reserved for recorder's use) MEMORANDUM OF LICENSE THIS MEMORANDUM OF LICENSE is made and entered into this _ day of , 2010, (the "Effective Date") by and between Rosemead I lousing Development Corporation, whose address is 8838 Valley Blvd Rosemead, CA 91770 ("Licensor"), and SOLARCITY CORPORATION, whose address is 393 Vintage Park Drive, Suite 140, Foster City, CA 94404 ("Licensee"). A. Licensor is the owner of certain real property ("Premises"), located in the County of LOS ANGELES, State of California, described in Exhibit A attached to and incorporated herein by reference. B. Licensor and Licensee have entered into a Solar Power Purchase Agreement dated on or about the Effective Date (the "Agreement") under which Licensee is selling energy generated by a photovoltaic electric generating system (the "System") to Licensor. The Agreement is for a tern of Twenty (20) years, beginning on the Effective Date and ending on the Twenty (20) year anniversary of the Commercial Operation Date with an option to extend the Agreement for up to Two (2) extended terms of Five (5) years each. Pursuant to the Agreement, Licensor has granted Licensee an irrevocable, non-exclusive license ("License") over the Premises for the purposes and on the terms set forth in the Agreement. Licensor and Licensee agree as follows: 1. Licensor hereby grants to Licensee the License over the Premises on and subject to the terms and conditions set forth in the Agreement which is incorporated herein by reference. 2. The term of the License begins on the Effective Date and continues until one hundred and twenty (120) days after the termination of the Agreement. 3. This Memorandum of License shall not be deemed to modify, alter or amend in any way the provisions of the License or the Agreement. In the event of any conflict between the terms of the License and/or the Agreement and this Memorandum, the terms of the License and/or the Agreement, as applicable, shall control. The undersigned have executed this Memorandum of License as of the date first written above. LICENSOR LICENSEE Rosemead Housing Development Corporation SOLARCITY CORPORATION Rv Name: Gary Taylor Title: President [REMAINDER OFPAGE INTENTIONALLYLEFT BLANK ACKNOWLEDGEMENT PAGE FOLLOWS] By: Name: Title: Solar Power Purchase Agreement v.20091015 STATE OF CALIFORNIA) ) ss. COUNTY OF LOS ANGELES ) On , before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the. person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of Califomiathat the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public STATE OF CALIFORNIA) COUNTY OF LOS ANGELES ) ss. On , before me, , Notary Public, personally appeared , who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature of Notary Public Solar Power Purchase Agreement v.20091015 Exhibit A To Memorandum of License Legal Description of Premises That certain real property located in the County of LOS ANGELES, State of California described as follows: A PARCEL OF LAND LOCATED IN THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES, WITH A SITUS ADDRESS OF 9100 GARVEY AVE, ROSEMEAD CA 91770-5300 CURRENTLY OWNED BY REDEVELOPMENT AGENCY OF ROSEMEAD CITY HAVING A TAX ASSESSOR NUMBER OF 5282-028- 911 AND BEING THE SAME PROPERTY MORE FULLY DESCRIBED AS TR=830 THAT FOR IN TRA 3645 OF LOT 3 AND DESCRIBED IN DOCUMENT NUMBER 1321428 DATED 08/1989 AND RECORDED 08/17/1989. Solar Power Purchase Agreement v.20091015 Exhibit 7 Solar Power Purchase Agreement General Terms and Conditions Revised July 21, 2009 (JR Mash Version) Definitions and Interpretation: Unless otherwise defined or required by the context in which any term appears: (a) the singular includes the plural and vice versa; (b) the words "herein," "hereof' and "hereunder" refer to this Agreement as a whole and not to any particular section or subsection of this Agreement; (c) references to any agreement, document or instrument mean such agreement, document or instrument as amended, modified, supplemented or replaced from time to time; and (d) the words "include," "includes" and "including" mean include, includes and including "without limitation." The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. 2. Purchase and Sale of Electricity. Purchaser shall purchase from Seller, and Seller shall sell to Purchaser, all of the electric energy generated by the System during the Initial Term and any Additional Tenn (as defined in Exhibit I, and collectively the "Term"). Electric energy generated by the System will be delivered to Purchaser at the delivery point identified on Exhibit 4 (the "Delivery Point"). Purchaser shall take title to the electric energy generated by the System at the Delivery Point, and risk of loss will pass from Seller to Purchaser at the Delivery Point. Purchaser may purchase electric energy for the Facility from other sources if the Purchaser's electric requirements at the Facility exceed the output of the System. 3. Term and Termination. a. Initial Term. The initial term (`Initial Term") of this Agreement shall commence on the Commercial Operation Date (as defined below) and continue for the length of time specified in Exhibit 1, unless earlier terminated as provided for in this Agreement. The "Commercial Operation Date" is the date Seller gives Purchaser written notice that the System is mechanically complete and capable of providing electric energy to the Delivery Point. Upon Purchaser's request, Seller will give Purchaser copies of certificates of completion or similar documentation from Seller's contractor and the interconnection or similar agreement with the Utility. This Agreement is effective as of the Effective Date and Purchaser's failure to enable Seller to provide the electric energy by preventing it from installing the System or otherwise not performing shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement. b. Additional Terms. If Purchaser has not exercised its option to purchase the System by the end of the Initial Term, either Party may give the other Party written notice of its desire to extend this Agreement on the terms and conditions set forth herein for the number and length of additional periods specified in Exhibit 1 (each an "Additional Term"). Such notice shall be given, if at all, not more than one hundred twenty (120) and not less than sixty (60) days before the last day of the Initial Tenn or the then current Additional Tenn, as applicable. The Party receiving the notice requesting an Additional Term shall respond positively or negatively to that request in writing within thirty (30) days after receipt of the request. Failure to respond within such thirty (30) day period shall be deemed a reiection of the offer for an Additional Term. If both Parties agree to an Additional Term, the Additional Tenn shall begin immediately upon the conclusion of the then current term or Additional Term on the same terns and conditions as set forth in this Agreement. If the Party receiving the request for an Additional Tenn rejects or is deemed to reject the first Party's offer, this Agreement shall terminate at the end of the Initial Term (if the same has not been extended) or the then current Additional Term. 4. Billimg and Payment. a. Monthly Charges. Purchaser shall pay Seller monthly for the electric energy generated by the System and delivered to the Delivery Point at the $/kWh rate shown in Exhibit I (the "Contract Price"). The monthly payment for such energy will be equal to the applicable $/kWh rate multiplied by the number of kWh of energy generated during the applicable month, as measured by the System meter. b. Monthly Invoices. Seller shall invoice Purchaser monthly. Such monthly invoices shall state (i) the amount of electric energy produced by the System and delivered to the Delivery Point, (ii) the rates applicable to, and charges incurred by, Purchaser under this Agreement and (iii) the total amount due from Purchaser. Solar Power Purchase Agreemene v.2009IM 5 C. Utility Invoices. Purchaser shall authorize the Utility to send to Seller duplicates of any bills sent to Purchaser. If Utility does not permit duplicate bills to be sent to Seller, Purchaser shall, promptly upon receipt of each bill, make a photocopy of each bill and mail the copy to Seller. Purchaser shall pay all charges assessed by the Utility to the Facility. C. Taxes. Purchaser shall either pay or reimburse Seller for any and all taxes assessed on the generation, sale, delivery or consumption of electric energy produced by the System or the interconnection of the System to the Utility's electric distribution system, including property taxes on the System; provided, however, Purchaser will not be required to pay or reimburse Seller for any taxes during periods when Seller fails to deliver electric energy to Purchaser for reasons other than Force Majeure. For purposes of this Section 4(c), "Taxes" means any federal, state and local ad valorem, property, occupation, generation, privilege, sales, use, consumption, excise, transaction, and other taxes, regulatory fees, surcharges or other similar charges but shall not include any income taxes or similar taxes imposed on net revenues imposed on Seller due to the sale of energy under this Agreement, which shall be Seller's responsibility. f. Payment Terms. All amounts due under this Agreement shall be due and payable net twenty (20) days from receipt of invoice. Any undisputed portion of the invoice amount not paid within the twenty (20) day period shall accrue interest at the annual rate of two and one-half percent (2.5%) over the Prime Rate (but not to exceed the maximum rate permitted by law). 5. Environmental Attributes and Environmental Incentives. Unless otherwise specified on Exhibit 1, Seller is the owner of all Environmental Attributes and Environmental Incentives and is entitled to the benefit of all Tax Credits, and Purchaser's purchase of electricity under this Agreement does not include Environmental Attributes, Environmental Incentives or the right to Tax Credits or any other attributes of ownership and operation of the System, all of which shall be retained by Seller. Purchaser shall cooperate with Seller in obtaining, securing and transferring all Environmental Attributes and Environmental Incentives and the benefit of all Tax Credits, including by using the electric energy generated by the System in a manner necessary to qualify for such available Environmental Attributes, Environmental Incentives and Tax Credits. Purchaser shall not be obligated to incur any out-of-pocket costs or expenses in connection with such actions unless reimbursed by Seller. If any Environmental Incentives are paid directly to Purchaser, Purchaser shall immediately pay such amounts over to Seller. To avoid any conflicts with fair trade rules regarding claims of solar or renewable energy use, Purchaser, if engaged in commerce and/or trade, shall submit to Seller for approval any press releases regarding Purchaser's use of solar or renewable energy and shall not submit for publication any such releases without the written approval of Seller. Approval shall not be unreasonably withheld, and Seller's review and approval shall be made in a timely manner to permit Purchaser's timely publication. "Environmental Attributes" means any and all credits, benefits, emissions reductions, offsets, and allowances, howsoever entitled, attributable to the System, the production of electrical energy from the System and its displacement of conventional energy generation, including (1) any avoided emissions of pollutants to the air, soil or water such as sulfur oxides (SOx), nitrogen oxides (NOx), carbon monoxide (CO) and other pollutants; (2) any avoided emissions of carbon dioxide (CO2), methane (CH4), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and other greenhouse gases (GHGs) that have been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth's climate by trapping heat in the atmosphere; and (3) the reporting rights related to these avoided emissions, such as Green Tag Reporting Rights and Renewable Energy Credits. Green Tag Reporting Rights are the right of a party to report the ownership of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party, and include Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Environmental Attributes do not include Environmental Incentives and Tax Credits. Purchaser and Seller shall file all tax returns in a manner consistent with this Paragraph 5. Without limiting the generality of the foregoing, Environmental Attributes include carbon trading credits, renewable energy credits or certificates, emissions reduction credits, investment credits, emissions allowances, green tags, tradeable renewable credits and Green-eg products. "Environmental Incentives" means any and credits,, rebates, subsidies, payments or other incentives that relate to self- generation of electricity, the use of technology incorporated into the System, environmental benefits of using the System, or other similar programs available from the Utility, any other regulated entity, the manufacturer of any part of the System or any Governmental Authority. "Governmental Authority" means any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, public or statutory instrumentality, authority, Solar Power Purchase Agreement v.20091015 body, agency, bureau or entity (including the Federal Energy Regulatory Commission or the California Public Utilities Commission), or any arbitrator with authority to bind a party at law. "Tax Credits" means any and all (i) investment tax credits, (ii) production tax credits and (iii) similar tax credits under federal, state or local law relating to the construction, ownership or production of energy from the System. 6. Conditions to Obligations. a. Conditions to Seller's Obligations. Seller's obligations under this Agreement are conditioned on the completion of the following conditions to Seller's reasonable satisfaction on or before the Condition Satisfaction Date: Completion of a physical inspection of the Facility and the property upon which the Facility is located (the "Premises") including, if applicable, geotechnical work, and real estate due diligence to confirm the suitability of the Facility and the Premises for the System; ii. Approval of (i) this Agreement and (ii) the Construction Agreement (if any) for the System by Seller's Financing Parties. "Construction Agreement" as used in this subsection means an agreement between SolarCity and a subcontractor to install the System. iii. Confirmation that Seller will obtain all applicable Environmental Incentives and Tax Credits; iv. Receipt of all necessary zoning, land use and building permits; and Execution of all necessary agreements with the Utility for interconnection of the System to the Utility's electric distribution system. vi. Prior to Seller commencing construction and installation of the System, Purchaser shall give Seller proof of insurance for all insurance required to be maintained by Purchaser under this Agreement. b. Conditions to Purchaser's Obligations. Purchaser's obligations under this Agreement are conditioned on the occurrence of the Commercial Operation Date for the System on or before the Outside Commercial Operation Date (See Exhibit 1). C. Failure of Conditions. If any of the conditions listed in subsections a) or b) above are not satisfied by the applicable dates specified in those subsections, the Parties will attempt in good faith to negotiate new dates for the satisfaction of the failed conditions. If the parties are unable to negotiate new dates then the Party that has not failed to meet an obligation may terminate this Agreement upon ten (10) days written notice to the other Party without liability for costs or damages or triggering a default under this Agreement. Seller's Rights and Obligations. a. Permits and Approvals. Seller, with Purchaser's reasonable cooperation, shall use commercially reasonable efforts to obtain, at its sole cost and expense: i. any zoning, land use and building permits required to construct, install and operate the System; and ii. any agreements and approvals from the Utility necessary in order to interconnect the System to the Utility's electric distribution system. Purchaser shall cooperate with Seller's reasonable requests to assist Seller in obtaining such agreements, permits and approvals. b. Standard System Repair and Maintenance. Seller shall construct and install the System at the Facility and shall use reasonable efforts to ensure that the System is performing to specifications. During the Term, Seller will operate and perform all routine and emergency repairs to and maintenance of the System at its sole cost and expense, except Solar Power Purchase Agreement v.20091015 for any repairs or maintenance resulting from Purchaser's negligence, willful misconduct or breach of this Agreement or the Site Lease (if applicable). Seller shall not be responsible for any work done by others on any part of the System unless Seller authorizes that work in advance in writing. Seller shall not be responsible for any loss, damage, cost or expense arising out of or resulting from improper environmental controls or improper operation or maintenance of the System by anyone other than Seller or Seller's contractors. If the System requires repairs for which Seller is not responsible, Purchaser shall pay Seller for diagnosing and correcting the problem at Seller or Seller's contractors' then current standard rates. Seller shall provide Purchaser with reasonable notice prior to accessing the Facility to make standard repairs. C. Non-Standard System Repair and Maintenance. If Seller incurs incremental costs to maintain the System due to conditions at the Facility or due to the inaccuracy of any information provided by Purchaser and relied upon by Seller, the pricing, schedule and other terms of this Agreement will be equitably adjusted to compensate for any work in excess of normally expected work required to be performed by Seller. In such event, the Parties will negotiate such equitable adjustment in good faith. d. Breakdown Notice. Seller shall notify Purchaser within twenty-four (24) hours following Seller's discovery of (a) any material malfunction in the operation of the System or (b) an interruption in the supply of electrical energy from the System. Purchaser and Seller shall each designate personnel and establish procedures such that each Party may provide notice of such conditions requiring Seller's repair or alteration at all times, twenty-four (24) hours per day, including weekends and holidays. Purchaser shall notify Seller immediately upon the discovery of an emergency condition affecting the System. e. Suspension. Notwithstanding anything to the contrary herein, Seller shall be entitled to suspend delivery of electricity from the System to the Delivery Point for the purpose of maintaining and repairing the System and such suspension of service shall not constitute a breach of this Agreement; provided, that Seller shall use commercially reasonable efforts to minimize any interruption in service to the Purchaser. L Use of Contractors and Subcontractors. Seller shall be permitted to use contractors and subcontractors to perform its obligations under this Agreement However, Seller shall continue to be responsible for the quality of the work performed by its contractors and subcontractors. If a list of pre-approved contractors and subcontractors is desired, such list shall be scheduled on an appendix to Exhibit 7. All Contractors and subcontractors other than those that may be scheduled on an appendix to Exhibit 7 shall be subject to Purchaser's prior written consent, not to be unreasonably withheld. g. Liens and Payment of Contractors and Suppliers. Seller shall pay when due all valid charges from all contractors, subcontractors and suppliers supplying goods or services to Seller under this Agreement and shall keep the Facility free and clear of any liens related to such charges, except for those liens which Seller is permitted by law to place on the Facility following non-payment by Purchaser of amounts due under this Agreement. Seller shall indemnify Purchaser for all claims, losses, damages, liabilities and expenses resulting from any liens filed against the Facility or the Premises in connection with such charges; provided, however, that Seller shall have the right to contest any such lien, so long as it provides a statutory bond or other reasonable assurances of payment that either remove such lien from title to the Facility and the Premises or that assure that any adverse judgment with respect to such lien will be paid without affecting title to the Facility and the Premises. h. No Warranty. NO WARRANTY OR REMEDY, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE SHALL APPLY. The remedies set forth in this Agreement shall be Purchaser's sole and exclusive remedies for any claim or liability arising out of or in connection with this Agreement, whether arising in contract, tort (including negligence), strict liability or otherwise. Installation Damage. Seller shall repair any damage to the Facility it causes in the preparation, installation, or maintenance of the System. 8. Purchaser Rights and Obligations. a. Facility Access Rights. Purchaser grants to Seller and to Seller's agents, employees and contractors an irrevocable non-exclusive license running with the Premises (the "License") for access to, on, over, under and across the Premises as more particularly described in Exhibit 5 (the "License Area") for the purposes of (a) installing, constructing, operating, owning, maintaining, accessing, removing and replacing the System; (b) performing all of Seller's obligations and enforcing all of Seller's rights set forth in this Agreement; and (c) installing, using and Solar Power Purchase Agreement v.20091015 7 maintaining electric lines and equipment, including inverters and meters, necessary to interconnect the System to Purchaser's electric system at the Facility and/or to the Utility's electric distribution system or that otherwise may from time to time be useful or necessary in connection with the construction, installation, operation, maintenance or repair of the System. Seller shall notify Purchaser prior to entering the Facility except in situations where there is imminent risk of damage to persons or property. The term of the License shall continue until the date that is one hundred and twenty (120) days following the date of expiration or termination of this Agreement (the "License Term"). During the License Term, Purchaser shall ensure that Seller's rights under the License and Seller's access to the License Area are preserved and protected and shall not interfere with or permit any third parties to interfere with such rights or access. The grant of the License shall survive termination of this agreement by either Party. Purchaser agrees that Seller may record a memorandum of license in substantially the same form attached hereto as Exhibit 6 in the land records respecting the License. b. OSHA Compliance. Purchaser shall ensure that all Occupational Safety and Health Act (OSHA) requirements and other similar applicable safety laws or codes are adhered to in its performance under this Agreement. C. Maintenance of Facility. Purchaser shall, at its sole cost and expense, maintain the Facility in good condition and repair. Purchaser will ensure that the Facility remains interconnected to the local utility grid at all times and will not permit cessation of electric service to the Facility from the local utility. Purchaser is fully responsible for the maintenance and repair of the Facility's electrical system and of all of Purchaser's equipment that utilizes the System's outputs. Purchaser shall properly maintain in full working order all of Purchaser's electric supply or generation equipment that Purchaser may shut down while utilizing the System. Purchaser shall promptly notify Seller of any matters of which it is aware pertaining to any damage to or loss of use of the System or that could reasonably be expected to adversely affect the System. d. No Alteration of Facility. Purchaser shall not make any alterations or repairs to the Facility which may adversely affect the operation and maintenance of the System without Seller's prior written consent. If Purchaser wishes to make such alterations or repairs, Purchaser shall give prior written notice to Seller, setting forth the work to be undertaken (except for emergency repairs, for which notice may be given by telephone), and give Seller the opportunity to advise Purchaser in making such alterations or repairs in a manner that avoids damage to the System, but, notwithstanding any such advice, Purchaser shall be responsible for all damage to the System caused by Purchaser or its contractors. To the extent that temporary disconnection or removal of the System is necessary to perform such alterations or repairs, such work and any replacement of the System after completion of Purchaser's alterations and repairs, shall be done by Seller or its contractors at Purchaser's cost. All of Purchaser's alterations and repairs will be done in a good and workmanlike manner and in compliance with all applicable laws, codes and permits. C. Outages. Purchaser shall be permitted to be off line for two (2) full twenty-four (24) hour days (each, a "Scheduled Outage") per calendar year during the Term, during which days Purchaser shall not be obligated to accept or pay for electricity from the System; provided, however, that Purchaser must notify Seller in writing of each such Scheduled Outage at least forty-eight (48) hours in advance of the commencement of a Scheduled Outage. In the event that Scheduled Outages exceed two (2) days per calendar year or there are unscheduled outages, in each case for a reason other than a Force Majeure event, Seller shall reasonably estimate the amount of electricity that would have been delivered to Purchaser during such excess Scheduled Outages or unscheduled outages and shall invoice Purchaser for such amount in accordance with Section 4. L Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or allow to exist any mortgage, pledge, lien, charge, security interest, encumbrance or other claim of any nature on or with respect to the System or any interest therein. Purchaser shall immediately notify Seller in writing of the existence of any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim, shall promptly cause the same to be discharged and released of record without cost to Seller, and shall indemnify Seller against all costs and expenses (including reasonable attorneys' fees) incurred in discharging and releasing any such mortgage, pledge, lien, charge, security interest, encumbrance or other claim. g. Security Purchaser shall be responsible for maintaining the physical security of the License Area and for any damage or vandalism to the System as a result of failure to maintain such security. Purchaser will not conduct activities on, in or about the License Area or the Facility that have a reasonable likelihood of causing damage, impairment or otherwise adversely affecting the System. Purchaser shall provide and take reasonable measures for security of the System, including commercially reasonable monitoring of the Facility's alarms. h. Insulation. Purchaser understands that unobstructed access to sunlight (`Insulation") is essential to Seller's performance of its obligations and a material term of this Agreement. Purchaser shall not in any way cause and, Solar Power Purchase Agreement v.20091015 8 where possible, shall not in any way permit any interference with the System's Insulation. If Purchaser becomes aware of any activity or condition that could diminish the Insolation of the System, Purchaser shall notify Seller immediately and shall cooperate with Seller in preserving the System's existing Insulation levels. The Parties agree that reducing Insolation would irreparably injure Seller, that such injury may not be adequately compensated by an award of money damages, and that Seller is entitled to seek specific enforcement of this Section 8(h) against Purchaser. i. Data Line. Purchaser shall provide Seller a high speed intemet data line during the Term to enable Seller to record the electric energy generated by the System. If Purchaser fails to provide such high speed intemet data line, or if such line ceases to function and is not repaired, Seller may reasonably estimate the amount of electric energy that was generated and invoice Purchaser for such amount in accordance with Section 4. j. Breakdown Notice. Purchaser shall notify Seller within twenty-four (24) hours following the discovery by it of (A) any material malfunction in the operation of the System; or (B) any occurrences that could reasonably be expected to adversely affect the System. Purchaser shall notify Seller immediately upon (A) an interruption in the supply of electrical energy from the System; or (B) the discovery of an emergency condition respecting the System. Purchaser and Seller shall each designate personnel and establish procedures such that each Party may provide notice of such conditions requiring Seller's repair or alteration at all times, twenty-four (24) hours per day, including weekends and holidays. 9. Reserved. 10. Relocation of System. If Purchaser ceases to conduct business operations at and/or vacates the Facility or is prevented from operating the System at the Facility prior to the expiration of the Term, Purchaser shall have the option to provide Seller with a mutually agreeable substitute premises located within the same Utility district as the terminated System or in a location with similar Utility rates and Insolation. Purchaser shall provide at least sixty (60) but not more than one hundred eighty (180) days prior written notice prior to the date that it wants to make this substitution. In connection with such substitution, Purchaser shall execute an amended agreement that shall have all of the same terms as this Agreement except for the (i) Effective Date; (ii) License, which will be amended to grant rights in the real property where the System relocated to; and (iii) Term, which will be the remainder of the Term of this Agreement and such amended agreement shall be deemed to be a continuation of this Agreement without termination. Purchaser shall also provide any new Purchaser, owner, lessor or mortgagee consents or releases required by Seller or Seller's Financing Parties in connection with the substitute facility. Purchaser shall pay all costs associated with relocation of the System, including all costs and expenses incurred by or on behalf of Seller in connection with removal of the System from the Facility and installation and testing of the System at the substitute facility and all applicable interconnection fees and expenses at the substitute facility, as well as costs of new title search and other out-of-pocket expenses connected to preserving and refiling the security interests of Seller's Financing Parties in the System. Seller shall remove the System from the vacated Facility prior to the termination of Purchaser's ownership, lease or other rights to use such Facility. Seller will not be required to restore the Facility to its condition at the time the System was installed but shall promptly pay Purchaser for any damage caused by Seller during removal of the System, but not for normal wear and tear. If the substitute facility has inferior Insolation as compared to the original Facility, Seller shall have the right to make an adjustment to Exhibit 1 such that Purchaser's payments to Seller are the same as if the System were located at the original Facility. If Purchaser is unable to provide such substitute Facility and to relocate the System as provided, any early termination will be treated as a default by Purchaser. 11. Removal of System at Expiration. Upon the expiration or earlier termination of this Agreement (provided Purchaser does not exercise its purchase option), Seller shall, at its expense, remove all of its tangible property comprising the System from the Facility on a mutually convenient date but in no event later than ninety (90) days after the expiration of the Term. The Facility shall be returned to its original condition, except for System mounting pads or other support structures, which may be left in place, and ordinary wear and tear. In no case shall Seller's removal of the System affect the integrity of Purchaser's roof, which shall be as leak proof as it was prior to removal of the System. Seller shall leave the Facility in neat and clean order. If Seller fails to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Facility to its original condition (other than System mounting pads or other support structures and ordinary wear and tear) at Seller's cost. Purchaser shall provide sufficient space for the temporary storage and staging of tools, materials and equipment and for the parking of construction crew vehicles and temporary construction trailers and facilities reasonably necessary during System removal. 12. Measurement. Solar Power Purchase Agreement v.20091015 9 Electricity delivered to the Facility shall be measured by the SolarOuard monitoring system installed and maintained by Seller as part of the System. 13. Default, Remedies and Damages. a. Default. Any Party that fails to perform its responsibilities as listed below or experiences any of the circumstances listed below shall be deemed a "Defaulting Party" and each event of default shall be a "Default Event": (1) failure of a Party to pay any amount due and payable under this Agreement, other than an amount that is subject to a good faith dispute, within ten (10) days following receipt of written notice from the other Party (the "Non-Defaulting Party") of such failure to pay ("Payment Default"); , (2) failure of a Party to substantially perform any other material obligation under this Agreement within thirty (30) days following receipt of written notice from the Non-Defaulting Party demanding such cure; provided, that such thirty (30) day cure period shall be extended (but not beyond ninety (90) days) if and to the extent reasonably necessary to cure the Default Event, if (i) the Defaulting Party initiates such cure with the thirty (30) day period and continues such cure to completion and (ii) there is no material adverse affect on the Non-Defaulting Party resulting from the failure to cure the Default Event; (3) if any representation or warranty of a Party proves at any time to have been incorrect in any material respect when made and is material to the transactions contemplated hereby, if the effect of such incorrectness is not cured within thirty (30) days following receipt of written notice from the Non-Defaulting Party demanding such cure; (4) Purchaser loses its rights to occupy and enjoy the Premises; or (5) a Party, or its guarantor, becomes insolvent or is a party to a bankruptcy, reorganization, insolvency, liquidation, receivership, dissolution, winding-up or relief of debtors, or any general assignment for the benefit of creditors or other similar arrangement or any event occurs or proceedings are taken in anyjurisdiction with respect to the Party which has a similar effect. (6) Purchaser prevents Seller from installing the System or otherwise failing to perform in a way that prevents the delivery of electric energy from the System. (Such Default Event shall not excuse Purchaser's obligations to make payments that otherwise would have been due under this Agreement.) b. Remedies. (1) Remedies for Payment Default. If a Payment Default occurs, the Non-Defaulting Party may suspend performance of its obligations under this Agreement. Further, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement, upon five (5) days prior written notice to the Defaulting Party following the Payment Default. (2) Remedies for Other Defaults. On the occurrence of a Default Event other than a Payment Default, the Non-Defaulting Party may pursue any remedy under this Agreement, at law or in equity, including an action for damages and termination of this Agreement or suspension of performance of its obligations under this Agreement, upon five (5) days prior written notice to the Defaulting Party following the occurrence of the Default Event. Nothing herein shall limit either Party's right to collect damages upon the occurrence of a breach or a default by the other Party that does not become a Default Event. (3) Damages Upon Termination by Default. Upon a termination of this Agreement by the Non- Defaulting Party as a result of a Default Event by the Defaulting Party, the Defaulting Party shall pay a Termination Payment to the Non-Defaulting Party determined as follows (the "Termination Payment"): A. Purchaser. If Purchaser is the Defaulting Party and Seller terminates this Agreement, the Termination Payment to Seller shall be equal to the sum of (i) the termination value set Solar Power Purchase Agreement v.20091015 10 forth in Exhibit 1 (the "Termination Value") for such Contract Year, (ii) removal costs as provided in Section 13(b)(3)(C) and (iii) any and all other amounts previously accrued under this Agreement and then owed by Purchaser to Seller. The Parties agree that actual damages to Seller in the event this Agreement terminates prior to the expiration of the Tenn as the result of an Default Event by Purchaser would be difficult to ascertain, and the applicable Termination Value set forth in Exhibit 1 is a reasonable approximation of the damages suffered by Seller as a result of early termination of this Agreement. The Termination Payment shall not be less than zero. B. Seller. If Seller is the Defaulting Party and Purchaser terminates this Agreement, the Tennination Payment to Purchaser shall be equal to the sum of (i) the present value (using a discount rate of 9.5%) of the excess, if any, of the reasonably expected cost of electric energy from the Utility over the Contract Price for the reasonably expected production of the Facility for the remainder of the Initial Term or the then current Additional Tenn, as applicable; (ii) all costs reasonably incurred by Purchaser in re- converting its electric supply to service from the Utility; (iii) any removal costs incurred by Purchaser, and (iv) any and all other amounts previously accrued under this Agreement and then owed by Seller to Purchaser. The Termination Payment shall not be less than zero. C. Obligations Following Termination. If a Non-Defaulting Party terminates this Agreement pursuant to this Section 13(b)(3)(C), then following such termination, Seller shall, at the sole cost and expense of the Defaulting Party, remove the equipment (except for mounting pads and support structures) constituting the System. The Non-Defaulting Party shall take all commercially reasonable efforts to mitigate its damages as the result ofa Default Event. 14. Representations and Warranties. a. General Representations and Warranties. Each Party represents and warrants to the other the following: (1) Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; the execution, delivery and performance by such Party of this Agreement have been duly authorized by all necessary corporate, partnership or limited liability company action, as applicable, and do not and shall not violate any law; and this Agreement is valid obligation of such Party, enforceable against such Party in accordance with its terms (except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to creditors' rights generally). (2) Such Party has obtained all licenses, authorizations, consents and approvals required by any Governmental Authority or other third party and necessary for such Party to own its assets, carry on its business and to execute and deliver this Agreement; and such Parry is in compliance with all laws that relate to this Agreement in all material respects. b. Purchaser's Representations and Warranties. Purchaser represents and warrants to Seller the following: (1) License. Purchaser has the full right, power and authority to grant the License contained in Section 8(a). Such grant of the License does not violate any law, ordinance, rule or other governmental restriction applicable to Purchaser or the Facility and is not inconsistent with and will not result in a breach or default under any agreement by which Purchaser is bound or that affects the Facility. (2) Other Agreements. Neither the execution and delivery of this Agreement by Purchaser nor the performance by Purchaser of any of its obligations under this Agreement conflicts with or will result in a breach or default under any agreement or obligation to which Purchaser is a party or by which Purchaser or the Facility is bound. (3) Accuracy of Information. All information provided by Purchaser to Seller, as it pertains to the Facility's physical configuration, Purchaser's planned use of the Facility, and Purchaser's estimated electricity requirements, is accurate in all material respects. Solar Power Purchase Agreement v.20091015 I 1 (4) Purchaser Status. Purchaser is not a public utility or a public utility holding company and is not subject to regulation as a public utility or a public utility holding company. (5) No Pool Use. No electricity generated by the System will be used to heat a swimming pool. (6) Oregon Only: The electricity generated by the System will be used solely for commercial and business purposes. No portion of the electricity generated will be used for personal, family, household or agricultural purposes. 15. System Damage and Insurance. a. System Damage. (1) Seller's Obligations, If the System is damaged or destroyed other than by Purchaser's negligence or willful misconduct, Seller shall promptly repair and restore the System to its pre-existing condition; provided, however, that if more than fifty percent (50%) of the System is destroyed during the last five (5) years of the Initial Term or during any Additional Term, Seller shall not be required to restore the System, but may instead terminate this Agreement, unless Purchaser agrees (i) to pay for the cost of such restoration of the System or (ii) to purchase the System "AS-IS" at the greater of (A) then current fair market value of the System and (B) the sum of the amounts described in Section 13.b(3)A)(i) (using the date of purchase to determine the appropriate Contract Year) and Section 13.b(3)A)6ii). (2) Purchaser's Obligations. If the Facility is damaged or destroyed by casualty of any kind or any other occurrence other than Seller's negligence or willful misconduct, such that the operation of the System and/or Purchaser's ability to accept the electric energy produced by the System are materially impaired or prevented, Purchaser shall promptly repair and restore the Facility to its pre-existing condition; provided, however, that if more than five percent (5%) of the Facility is destroyed Purchaser may elect either (i) to restore the Facility or (ii) to pay the Termination Value set forth in Exhibit I and all other costs previously accrued but unpaid under this Agreement and thereupon terminate this Agreement and take title to the System. b. Insurance Coverage. At all times during the Term, Seller and Purchaser shall maintain the following insurance 1. Seller's Insurance. Seller shall maintain (i) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (ii) employer's liability insurance with coverage of at least $1,000,000 and (iii) worker's compensation insurance as required by law. ii. Purchaser's Insurance. Purchaser shall maintain (i) "all risk" property insurance on the System for the full replacement cost thereof and name Seller as a loss payee, (ii) comprehensive general liability insurance with coverage of at least $1,000,000 per occurrence and $2,000,000 annual aggregate, (iii) employer's liability insurance with coverage of at least $1,000,000 and (iv) worker's compensation insurance as required by law. C. Policy Provisions. All insurance policies provided hereunder shall (i) contain a provision whereby the insurer agrees to give the party not providing the insurance thirty (30) days (ten (10) days in the event of non-payment of premiums) written notice before the insurance is cancelled, terminated or materially altered, (ii) be written on an occurrence basis, (iii) with respect to the casualty insurance policies, name Seller as loss payee thereunder, (iv) with respect to the liability insurance policies, include the other Party as an additional insured as its interest may appear, (iv) include waivers of subrogation, (v) provide for primary coverage without right of contribution from any insurance of the other Party, and (vi) be maintained with companies either rated no less than A- as to Policy Holder's Rating in the current edition of Best's Insurance Guide or otherwise reasonably acceptable to the other party. d. Certificates. Within thirty (30) days after execution of this Agreement and upon the other Party's request and annually thereafter, each Party shall deliver the other Party certificates of insurance evidencing the above required coverage. e. Deductibles. Unless and to the extent that a claim is covered by an indemnity set forth in this Agreement, each Party shall be responsible for the payment of its own deductibles. Solar Power Purchase Agreement v.20091015 12 16. Ownership; Option to Purchase. a. Ownership of System. Throughout the Tenn, Seller shall be the legal and beneficial owner of the System at all times, including all Environmental Attributes, and the System shall remain the personal property of Seller and shall not attach to or be deemed a part of, or fixture to, the Facility or the Premises. Each of the Seller and Purchaser agree that the Seller is the tax owner of the System and all tax filings and reports will be filed in a manner consistent with this Agreement. The System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use commercially reasonable efforts to place all parties having an interest in or a mortgage, pledge, lien, charge, security interest, encumbrance or other claim of any nature on the Facility or the Premises on notice of the ownership of the System and the legal status or classification of the System as personal property. If there is any mortgage or fixture filing against the Premises which could reasonably be construed as prospectively attaching to the System as a fixture of the Premises, Purchaser shall provide a disclaimer or release from such lienholder. If Purchaser is the fee owner of the Premises, Purchaser consents to the filing of a disclaimer of the System as a fixture of the Premises in the office where real estate records are customarily filed in the jurisdiction where the Facility is located. If Purchaser is not the fee owner, Purchaser will obtain such consent from such owner. Purchaser agrees to deliver to Seller a non-disturbance agreement in a form reasonably acceptable to Seller from the owner of the Facility (if the Facility is leased by Purchaser), any mortgagee with a lien on the Premises, and other Persons holding a similar interest in the Premises. b. Option to Purchase. At the end of the fifth (5th) and tenth (10th) Contract Years and at the end of the Initial Tetra and each Additional Term, so long as Purchaser is not in default under this Agreement, Purchaser may exercise an option to purchase the System from Seller for a purchase price equal to (i) with respect to an option exercised at the end of the fifth (5th) or tenth (10th) Contract Years or at the end of the Initial Term, the greater of (A) the amount set forth at such time in the Purchase Option Price schedule in Exhibit 1, and (B) the Fair Market Value of the System, and (ii) with respect to an option exercised at the end of an Additional Term, the Fair Market Value of the System. The "Fair Market Value" of the System shall be determined by mutual agreement of Purchaser and Seller; provided, however, if Purchaser and Seller cannot agree to a Fair Market Value within thirty (30) days after Purchaser has exercised its option, the Parties shall select an independent appraiser with experience and expertise in the solar photovoltaic industry in the County where the Facility is located to determine the Fair Market Value of the System. Such appraiser shall act reasonably and in good faith to determine the Fair Market Value of the System and shall set forth such determination in a written opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parties in the absence of fraud or manifest error. The costs of the appraisal shall be home by the Parties equally. Seller shall notify Purchaser of window for exercising the purchase option not less than thirty (30) days nor more than ninety (90) days prior to the start of the option period. Purchaser must then provide a notification to Seller of its intent to purchase at least ninety (90) days and not more than one hundred eighty (180) days prior to the end of the applicable Contract Year or the Initial Term or Additional Term, as applicable, and the purchase shall be complete after the end of the Contract Year but not later than 180 days after the end of the Contract year. Upon purchase of the System, Purchaser will assume complete responsibility for the operation and maintenance of the System and liability for the performance of the System, and Seller shall have no further liabilities or obligations hereunder. If the Parties are unable to agree on a negotiated System value and Purchaser determines that the appraised value is in excess of the amount that Purchaser desires to pay for the System, Purchaser may withdraw the notice to exercise the purchase option without further obligation and such withdrawal shall have no effect on any future purchase option rights. 17. Indemnification and Limitations of Liability. a. General. Each Party (the "Indemnifying Party") shall defend, indemnify and hold harmless the other Party and the directors, officers, shareholders, partners, members, agents and employees of such other Party, and the respective affiliates of each thereof (collectively, the `Indemnified Parties"), from and against all loss, damage, expense, liability and other claims, including court costs and reasonable attorneys' fees (collectively, "Liabilities") resulting from any third party actions relating to the breach of any representation or warranty set forth in Section 14 and from injury to or death of persons, and damage to or loss of property to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of, the Indemnifying Party (or its contractors, agents or employees) in connection with this Agreement; provided, however, that nothing herein shall require the Indemnifying Party to indemnify the Indemnified Party for any Liabilities to the extent caused by or arising out of the negligent acts or omissions of, or the willful misconduct of, the Indemnified Party. This Section 17(a) however, shall not apply to liability arising from any form of hazardous substances or other environmental contamination, such matters being addressed exclusively by Section 17(c). b. Notice and Participation in Third Party Claims. The Indemnified Party shall give the Indemnifying Party written notice with respect to any Liability asserted by a third party (a "Claim"), as soon as possible upon the receipt of Solar Power Purchase Agreement v.20091015 13 information of any possible Claim or of the commencement of such Claim. The Indemnifying Party may assume the defense of any Claim, at its sole cost and expense, with counsel designated by the Indemnifying Party and reasonably satisfactory to the Indemnified Party. The Indemnified Parry may, however, select separate counsel if both Parties are defendants in the Claim and such defense or other form of participation is not reasonably available to the Indemnifying Party. The Indemnifying Party shall pay the reasonable attorneys' fees incurred by such separate counsel until such time as the need for separate counsel expires. The Indemnified Party may also, at the sole cost and expense of the Indemnifying Party, assume the defense of any Claim if the Indemnifying Party fails to assume the defense of the Claim within a reasonable time. Neither Party shall settle any Claim covered by this Section 17(b) unless it has obtained the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. The Indemnifying Party shall have no liability under this Section 17(b) for any Claim for which such notice is not provided if that the failure to give notice prejudices the Indemnifying Party. C. Environmental Indemnification. Seller shall indemnify, defend and hold harmless all of Purchaser's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the License Area of any Hazardous Substance (as defined in Section 17(c)(0) to the extent deposited, spilled, released or otherwise caused by Seller or any of its contractors or agents. Purchaser shall indemnify, defend and hold harmless all of Seller's Indemnified Parties from and against all Liabilities arising out of or relating to the existence at, on, above, below or near the Premises of any I Iazardous Substance, except to the extent deposited, spilled, released or otherwise caused by Seller or any of its contractors or agents. Each Party shall promptly notify the other Party if it becomes aware of any deposit, spill or release of any Hazardous Substance on or about the License Area or the Premises generally. "Hazardous Substance" means any chemical, waste or other substance (a) which now or hereafter becomes defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely hazardous wastes," restricted hazardous wastes," "toxic substances," "toxic pollutants," "pollution;" "pollutants," "regulated substances," or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority. d. Limitations on Liability. 1. No Consequential Damaees. Neither Party nor its directors, officers, shareholders, partners, members, agents and employees subcontractors or suppliers shall be liable for any indirect, special, incidental, exemplary, or consequential loss or damage of any nature arising out of their performance or non- performance hereunder even if advised of such. it. Actual Damaees. Seller's aggregate liability under this Agreement arising out of or in connection with the performance or non-performance of this Agreement shall not exceed the lesser of (A) the total payments made by Purchaser under this Agreement as of the date that the events that first gave rise to such liability occurred; and (B) the total of the prior twelve (12) monthly payments preceding the date that the events that first gave rise to such liability occurred. The provisions of this Section 07)(d)(ii) shall apply whether such liability arises in contract, tort (including negligence), strict liability or otherwise. Any action against Seller must be brought within one (1) year after the cause of action accrues. 18. Force Maicure a. "Force Majeure" means any event or circumstances beyond the reasonable control of and without the fault or negligence of the Party claiming Force Majeure. It shall include, without limitation, failure or interruption of the production, delivery or acceptance of electricity due to: an act of god; war (declared or undeclared); sabotage; riot; insurrection; civil unrest or disturbance; military or guerilla action; terrorism; economic sanction or embargo; civil strike, work stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or actions of the elements; hurricane; flood; lightning; wind; drought; the binding order of any Governmental Authority (provided that such order has been resisted in good faith by all reasonable legal means); the failure to act on the part of any Governmental Authority (provided that such action has been timely requested and diligently pursued); unavailability of electricity from the utility grid, equipment, supplies or products (but not to the extent that any such availability of any of the foregoing results from the failure of the Party claiming Force Majeure to have exercised reasonable diligence); and failure of equipment not utilized by or under the control of the Party claiming Force Majeure. Solar Power Purchase Agreement v.20091015 14 b. Except as otherwise expressly provided to the contrary in this Agreement, if either Party is rendered wholly or partly unable to timely perform its obligations under this Agreement because of a Force Majeure event, that Party shall be excused from the performance affected by the Force Majeure event (but only to the extent so affected) and the time for performing such excused obligations shall be extended as reasonably necessary; Provided, that: (i) the Party affected by such Force Majeure event, as soon as reasonably practicable after obtaining knowledge of the occurrence of the claimed Force Majeure event, gives the other Party prompt oral notice, followed by a written notice reasonably describing the event; (it) the suspension of or extension of time for performance is of no greater scope and of no longer duration than is required by the Force Majeure event; and (iii) the Party affected by such Force Majeure event uses all reasonable efforts to mitigate or remedy its inability to perform as soon as reasonably possible. Seller shall not be liable for any damage to the System or the Facility resulting from a Force Majeure event. The Term shall be extended day for day for each day performance is suspended due to a Force Majeure event. C. Notwithstanding anything herein to the contrary, the obligation to make any payment due under this Agreement shall not be excused by a Force Majeure event. d. If a Force Majeure event continues for a period of one hundred (180) days or more within a twelve (12) month period and prevents a material part of the performance by a Party hereunder, the Party not claiming the Force Majeure shall have the right to terminate this Agreement without fault or further liability to either Party (except for amounts accrued but unpaid). 19. Assignment and Financing. a. Assignment This Agreement may not be assigned in whole or in part by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Seller may, without the prior written consent of Purchaser, (i) assign, mortgage, pledge or otherwise collaterally assign its interests in this Agreement to any Financing Party, (ii) directly or indirectly assign this Agreement to an affiliate of Seller, (iii) assign this Agreement to any entity through which Seller is obtaining financing or capital for the System and (iv) assign this Agreement to any person succeeding to all or substantially all of the assets of Seller (provided that Seller shall be released from liability hereunder as a result of any of the foregoing permitted assignments only upon assumption of Seller's obligations hereunder by the assignee). Purchaser's consent to any other assignment shall not be unreasonably withheld if Purchaser has been provided with reasonable proof that the proposed assignee (x) has comparable experience in operating and maintaining photovoltaic solar systems comparable to the System and providing services comparable to those contemplated by this Agreement and (y) has the financial capability to maintain the System and provide the services contemplated by this Agreement in the manner required by this Agreement. This Agreement shall be binding on and inure to the benefit of the successors and permitted assignees. b. Financing. The Parties acknowledge that Seller may obtain construction and long-term financing or other credit support from lenders or third parties ("Financing Parties") in connection with the installation, construction, ownership, operation and maintenance of the System. Both Parties agree in good faith to consider and to negotiate changes or additions to this Agreement that may be reasonably requested by the Financing Parties; provided, that such changes do not alter the fundamental economic terms of this Agreement. The Parties also agree that Seller may assign this Agreement to the Financing Parties as collateral, and in connection with any such assignment, Purchaser agrees to execute a consent to assignment in customary form and reasonably acceptable to the Financing Parties. Solar Power Purchase Agreement v.20091015 15 20. Confidentialitv and Publicity. a. Confidentiality. If either Party provides confidential information, including business plans, strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information, and/or technical information regarding the design, operation and maintenance of the System or of Purchaser's business ("Confidential Information") to the other or, if in the course of performing under this Agreement or negotiating this Agreement a Party learns Confidential Information regarding the facilities or plans of the other, the receiving Party shall (a) protect the Confidential Information from disclosure to third parties with the same degree of care accorded its own confidential and proprietary information, and (b) refrain from using such Confidential Information, except in the negotiation and performance of this Agreement. Notwithstanding the above, a Party may provide such Confidential Information to its, officers, directors, members, managers, employees, agents, contractors and consultants (collectively, "Representatives"), and affiliates, lenders, and potential assignees of this Agreement (provided and on condition that such potential assignees be bound by a written agreement or legal obligation restricting use and disclosure of Confidential Infonnation), in each case whose access is reasonably necessary to the negotiation and performance of this Agreement. Each such recipient of Confidential Information shall be informed by the Party disclosing Confidential Information of its confidential nature and shall be directed to treat such information confidentially and shall agree to abide by these provisions. In any event, each Party shall be liable (with respect to the other Party) for any breach of this provision by any entity to whom that Party improperly discloses Confidential Information. The terms of this Agreement (but not its execution or existence) shall be considered Confidential Information for purposes of this Section 20(a), except as set forth in Section 20(b). All Confidential Information shall remain the property of the disclosing Party and shall be returned to the disclosing Party or destroyed after the receiving Party's need for it has expired or upon the request of the disclosing Party. Each Party agrees that the disclosing Party would be irreparably injured by a breach of this Section 20(a) by the receiving Party or its Representatives or other person to whom the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be entitled to equitable relief, including injunctive relief and specific performance, in the event of a breach of the provision of this Section 20(a). To the fullest extent permitted by applicable law, such remedies shall not be deemed to be the exclusive remedies for a breach of this Section 20(a), but shall be in addition to all other remedies available at law or in equity. b. Permitted Disclosures. Notwithstanding any other provision in this Agreement, neither Party shall be required to hold confidential any information that (i) becomes publicly available other than through the receiving Party, (ii) is required to be disclosed to a Governmental Authority under applicable law or pursuant to a validly issued subpoena (but a receiving Party subject to any such requirement shall promptly notify the disclosing Party of such requirement to the extent permitted by applicable law), (iii) is independently developed by the receiving Parry or (iv) becomes available to the receiving Party without restriction from a third party under no obligation of confidentiality. If disclosure of information is required by a Governmental Authority, the disclosing Party shall, to the extent permitted by applicable law, notify the other Party of such required disclosure promptly upon becoming aware of such required disclosure and shall cooperate with the other Party in efforts to limit the disclosure to the maximum extent permitted bylaw. 21. Goodwill and Publicity. Neither Party shall use any name, trade name, service mark or trademark of the other Party in any promotional or advertising material without the prior written consent of such other Party. The Parties shall coordinate and cooperate with each other when making public announcements related to the execution and existence of this Agreement, and each Party shall have the right to promptly review, comment upon and approve any publicity materials, press releases or other public statements by the other Party that refer to, or that describe any aspect of, this Agreement. Neither Parry shall make any press release regarding or public announcement or the specific terms of this Agreement (except for filings or other statements or releases as may be required by applicable law) without the specific prior written consent of the other Party. Without limiting the generality of the foregoing, all public statements must accurately reflect the rights and obligations of the Parties under this Agreement, including the ownership of Environmental Attributes and Environmental Incentives and any related reporting rights. 22. General Provisions a. Choice of Law. The law of the state where the System is located shall govem this Agreement without giving effect to conflict of laws principles. b. Arbitration and Attorneys' Fees. Any dispute arising from or relating to this Agreement shall be arbitrated in San Francisco, California. The arbitration shall be administered by JAMS in accordance with its Comprehensive Arbitration Rules and Procedures, and judgment on any award may be entered in any court of competent jurisdiction. If the Parties agree, a mediator may be consulted prior to arbitration. The prevailing party in any dispute arising out of this Agreement shall be entitled to reasonable attorneys' fees and costs. Solar Power Purchase Agreement v.20091015 16 C. Notices. All notices under this Agreement shall be in writing and shall be by personal delivery, facsimile transmission, electronic mail, overnight courier, or regular, certified, or registered mail, return receipt requested, and deemed received upon personal delivery, acknowledgment of receipt of electronic transmission, the promised delivery date after deposit with overnight courier, or five (5) days after deposit in the mail. Notices shall be sent to the person identified in this Agreement at the addresses set forth in this, Agreement or such other address as either party may specify in writing. Each party shall deem a document faxed to it as an original document. d. Survival. Provisions of this Agreement that should reasonably be considered to survive termination of this Agreement shall survive. For the avoidance of doubt, surviving provisions shall include, without limitation, Section 4 (Representations and Warranties), Section 7(h) (No Warranty), Section 15(b) (Insurance), Section 17 (Indemnification), Section 20 (Confidentiality and Publicity), Section 22(a) (Choice of Law), Section 22 (b) (Arbitration and Attorneys' Fees), Section 22(c) (Notices), Section 22 (g) (Comparative Negligence), Section 22(h) (Non-Dedication of Facilities), Section 226) (Service Contract), Section 22(k) (No Partnership) Section 22(1) (Full Agreement, Modification, Invalidity, Counterparts, Captions) and Section 22(n) (No Third Party Beneficiaries). e. Further Assurances. Each of the Parties hereto agree to provide such information, execute and deliver any instruments and documents and to take such other actions as may be necessary or reasonably requested by the other Party which are not inconsistent with the provisions of this Agreement and which do not involve the assumptions of obligations other than those provided for in this Agreement, to give full effect to this Agreement and to carry out the intent of this Agreement. Right of Waiver. Each Party, in its sole discretion, shall have the right to waive, defer or reduce any of the requirements to which the other Party is subject under this Agreement at any time; provided, however that neither Parry shall be deemed to have waived, deferred or reduced any such requirements unless such action is in writing and signed by the waiving Party. No waiver will be implied by any usage of trade, course of dealing or course of performance. A Party's exercise of any rights hereunder shall apply only to such requirements and on such occasions as such Party may specify and shall in no event relieve the other Party of any requirements or other obligations not so specified. No failure of either Party to enforce any term of this Agreement will be deemed to be a waiver. No exercise of any right or remedy under this Agreement by Purchaser or Seller shall constitute a waiver of any other right or remedy contained or provided by law. Any delay or failure of a Party to exercise, or any partial exercise of, its rights and remedies under this Agreement shall not operate to limit or otherwise affect such rights or remedies. Any waiver of performance under this Agreement shall be limited to the specific performance waived and shall not, unless otherwise expressly stated in writing, constitute a continuous waiver or a waiver of future performance. g. Comparative Negligence. It is the intent of the Parties that where negligence is determined to have been joint, contributory or concurrent, each Party shall bear the proportionate cost of any Liability. h. Non-Dedication of Facilities. Nothing herein shall be construed as the dedication by either Parry of its facilities or equipment to the public or any part thereof. Neither Party shall knowingly take any action that would subject the other Party, or other Party's facilities or equipment, to the jurisdiction of any Governmental Authority as a public utility or similar entity. Neither Party shall assert in any proceeding before a court or regulatory body that the other Party is a public utility by virtue of such other Party's performance under this agreement. If Seller is reasonably likely to become subject to regulation as a public utility, then the Parties shall use all reasonable efforts to restructure their relationship under this Agreement in a manner that preserves their relative economic interests while ensuring that Seller does not become subject to any such regulation. If the Parties are unable to agree upon such restructuring, Seller shall have the right to terminate this Agreement without further liability, and Seller shall remove the System in accordance with Section I I of this Agreement. Estoppel. Either Party hereto, without charge, at any time and from time to time; within five (5) business days after receipt'of a written request by the other party hereto, shall deliver a written instrument, duly executed, certifying to such requesting party, or any other person specified by such requesting Party: (i) that this Agreement is unmodified and in full force and effect, or if there has been any modification, that the same is in full force and effect as so modified, and identifying any such modification; (ii) whether or not to the knowledge of any such party there are then existing any offsets or defenses in favor of such party against enforcement of any of the terms, covenants and conditions of this Agreement and, if so, specifying the same and also whether or not to the knowledge of such party the other party has observed and performed all of the terms, covenants and conditions on its part to be observed and performed, and if not, specifying the same; and (iii) such other information as may be reasonably requested by the requesting Party. Any written instrument given hereunder may be relied upon by the recipient of such instrument, except to the extent the recipient has actual knowledge of facts contained in the certificate. Solar Power Purchase Agreement v.20091015 17 Service Contract. The Parties intend this Agreement to be a "service contract" within the meaning of Section 7701(e)(3) of the Internal Revenue Code of 1986. Purchaser will not take the position on any tax return or in any other filings suggesting that it is anything other than a purchase of electricity from the System It. No Partnership. No provision of this Agreement shall be construed or represented as creating a partnership, trust, joint venture, fiduciary or any similar relationship between the Parties. No Party is authorized to act on behalf of the other Party, and neither shall be considered the agent of the other. Full Agreement, Modification, Invalidity, Counterparts, Captions. This Agreement, together with any Exhibits, completely and exclusively states the agreement of the parties regarding its subject matter and supersedes all prior proposals, agreements, or other communications between the parties, oral or written, regarding its subject matter. This Agreement may be modified only by a writing signed by both Parties. If any provision of this Agreement is found unenforceable or invalid, such unenforceability or invalidity shall not render this Agreement unenforceable or invalid as a whole. In such event, such provision shall be changed and interpreted so as to best accomplish the objectives of such unenforceable or invalid provision within the limits of applicable law. This Agreement may be executed in any number of separate counterparts and each counterpart shall be considered an original and together shall comprise the same Agreement. The captions or headings in this Agreement are strictly for convenience and shall not be considered in interpreting this Agreement. M. Forward Contract. The transaction contemplated under this Agreement constitutes a "forward contract" within the meaning of the United States Bankruptcy Code, and the Parties further acknowledge and agree that each Party is a "forward contract merchant" within the meaning of the Untied States Bankruptcy Code. D. No Third Party Beneficiaries. Except as otherwise expressly provided herein, this Agreement and all rights hereunder are intended for the sole benefit of the Parties hereto and shall not imply or create any rights on the part of, or obligations to, any other Person. End of Document Solar Power Purchase Agreement v.20091015 18