ITEM 52

CITY MANAGERSREPORT

NOVEMBER 3 2014 CITY COUNCIL MEETING

ITEM SOLAR ENERGY PROJECT CIP GG 1214

RECOMMENDATION Hold Public Hearing Pursuant to GovernmentCode Section 421712 to Consider AnticipatedEnergy Cost Savings and Adopt a ResolutionApproving a Solar Power Purchase Agreementand Site Agreement with Lathrop Solar I LLCan Entity Established by Borrego Solar for thisProject and the Filing of the CEQA Notice ofExemption

SUMMARY

In 2012 City Council approved the creation of the Solar Energy Project CIP GG 1214 to fulfill a longstanding City goal to conserve energy and produce future costsavings for the Citys general fund and utility ratepayers Soon after City Councilhired TerraVerde Renewable Partners LLC at no upfront cost to the City to developand evaluate optimum locations size configurations costs and savings for solararrays at City Facilities

TerraVerdes feasibility study recommended a solar program that could save aminimum of20000 annually on the Citys electricity bill on four City sites City HallCommunitySenior Center Corp YardWater Treatment Plant and the South HarlanRoad Storm Drain Basin see Attachment 2

The study also recommended that the most appropriate financial mechanism for theCity was a Power Purchase Agreement PPA with an independent Solar PowerProvider selected through a competitive process pursuant to State enablinglegislation California Government Code Section 421712 which grants authority topublic agencies including cities to enter into energy service contracts This methoddid not require any City investment and provided the optimal method to deliver andfinance the solar power

City Council authorized TerraVerde to conduct a competitive bid process for solarproject installation procurement and financing with a minimum cost savingthreshold of 20000 annually After extensive qualitative and technical evaluationsof the three proposals received by Borrego Solar Cupertino Electric and PCITerraVerde determined that the City should consider Borrego Solars1046 megawattMW system see Attachment 3 based on

1 Lowest power price cost which equates to a 1 years cost savings of79816and4456870 for the 25 year projected life of the installation

2 Lowest power price escalator at 295

3 System buyout cost of3020858 in Year 6

4 Borrego Solars project execution capability5 Borrego Solars bid meets the Minimum Bid Criteria and the requirements of

California Government Code Section 421712

CITY MANAGERS REPORT PAGE 2

NOVEMBER 3 2014 CITY COUNCIL MEETINGSOLAR ENERGY PROJECT CIP GG 1214

City staff and TerraVerde have concluded their review and discussions of theagreements with Borrego Solar and are now recommending the City Council take thefollowing actions

1 Hold a public hearing pursuant to California Government Code Section 421712

2 Adopt a Resolution to

Determine that it is in the best interest of the City to enter into a PowerPurchase Agreement PPA with Lathrop Solar I LLC an entityestablished by Borrego Solar for this project pursuant to CaliforniaGovernment Code Section 421712

Find that the anticipated solar energy cost will be less than what theCity will pay in the absence of the projectAuthorize the City Manager to complete final negotiations and executethe PPA with Lathrop Solar I LLC an entity established by Borrego Solarfor this project and the Site Agreement see Attachments 4 and 5Find that this project is exempt from the California Environmental

Quality Act CEQA pursuant to Class 11 exemption and Public ResourceCode 2108035 and direct staff to file the CEQA Notice of Exemption

see Attachment 6

BACKGROUND

In 2012 City Council approved the creation of the Solar Energy Project CIP 1214 tofulfill a longstanding City goal to conserve energy and produce future cost savingsfor the Citys general fund and utility ratepayers In February 2013 City Council hiredTerraVerde Renewable Partners LLC at no upfront cost to the City to develop andevaluate optimum locations size configurations costs and savings for solar arraysat City Facilities

TerraVerdesfeasibility study in consultation with City staff concluded that the Citycould see at leasta20000 annual savings in electricity costs by installing andproducing solar energy at four City facilities City Hall Community CenterSeniorCenter Corp YardWater Treatment Plant and the South Harlan Rd Storm DrainageBasin

The feasibility study further recommended that the most appropriate financialmechanism for the City was a PPA with an independent Solar Power Provider selectedthrough a competitive selection process pursuant to State enabling legislation CalifGovt Code Section 421712 which grants authority to public agencies includingcities to enter into energy service contracts This method did not require any Cityinvestment and provided the optimal method to deliver and finance the solar powerSection 421712 also requires a public agency to make a determination that this is inthe best interest of the public agency after considering public comments at ascheduled public hearing

Item 5.2

CITY MANAGERS REPORT PAGE 3

NOVEMBER 3 2014 CITY COUNCIL MEETINGSOLAR ENERGY PROECT CIP GG 1214

A PPA allows the City to pay for electricity that is generated by the solar powerprovider at a fixed price with an escalator over the term of the PPA 25 years Thebenefits of a PPA include no upfront costs no capital outlay required no debtmaintenance costs and responsibilities are covered by the system provider and anoption to buyout the Solar Power Provider after 6 years

On October 13 2013 City Council authorized TerraVerde to conduct a competitivebid process for solar project installation procurement and financing and adopted aMinimum Bid Criteria of20825 for Year 1 116524 after Years 15 and1001452after 25 years Further City Council amended the TerraVerde contract to payTerraVerde a development fee only if the City entered into a PPA

In June of this year TerraVerde issued a Request for Proposal RFP pursuant toGovernment Code Section 421712 for installation procurement and financing forthe four previously approved City facilities City Hall Community CenterSeniorCenter Water Treatment Plant and the South Harlan Road Storm Drain Basin TheRFP included the following evaluation criteria suitability and creativity cost andvalue client references financial wherewithal project team construction site safetyplan project management and execution corrective maintenance warranties andclarity completeness

After extensive qualitative and technical evaluations and a valuable engineeringreview of the three respondents proposals Borrego Solar Cupertino Electric andPCI TerraVerde recommended that the City should consider Borrego Solars1046MW system based on

1 Lowest power price cost which equates to a ist years cost savings of 79816and4456870 for the 25 year projected life of the installation

2 Lowest power price escalator at 2953 System buyout cost of3020858 in Year 6

4 Borrego Solars project execution capability5 Borrego Solars bid meets the Minimum Bid Criteria and the requirements of

California Government Code Section 421712

City stafF concurred with TerraVerdesevaluation and review of the proposals andwith TerraVerdes assistance entered into discussions with Borrego Solar on theterms and conditions of the PPA and the Site Agreement City stafF and TerraVerdehave concluded their review and discussions of the agreements with Borrego Solarand are now ready to present the agreements for consideration by the City Council

In addition City staff has evaluated this project pursuant to the CaliforniaEnvironmental Quality Act CEQA and is recommending that this project beconsidered exempt from the requirements of CEQA pursuant to Public ResourcesCode section 2108035 for installation of a solar energy system and pursuant toCEQA class 11 exemption

Item 5.2

CITY MANAGERSREPORT PAGE 4

NOVEMBER 3 2014 CITY COUNCIL MEETINGSOLAR ENERGY PROECT CIP GG 1214

REASON FOR RECOMMENDATION

In 2012 City Council approved the creation of the Solar Energy Project CIP 1214 tofulfill a longstanding City goal to conserve energy and produce future cost savingsfor the Citys general fund and utility ratepayers This project will be the first majorstep to fulfill this goal

COUNCIL GOALS ADVANCED BY THIS AGENDA ITEM

This item furthers CouncilsGoals of

1 A Feeling of Safety by significantly reducing the Citys energy costs whichhelps safeguard our financial solvency

2 Economic Growth by implementing an important City Capital ImprovementProject

3 Promote Community Values by significantly reducing costs to the GeneralFund and the Citys utility ratepayers

FISCAL IMPACT

All City costs associated with this project including but not limited to legalinspectfons contingencies labor compliance and TerraVerdesfees are reimbursedby the Solar Power Provider through the Power Purchase Agreement Furthermorethis project anticipates generating fiscal savings to the Citys funds and rate payersin the amount of approximately 79816 annually

ATTACHMENTS

1 Resolution Approving a Solar Power Purchase Agreement and Site Agreement withLathrop Solar I LLC an Entity Established by Borrego Solar for this Project andthe Filing of the CEQA Notice of Exemption

2 Site Layouts3 Solar Project ProForma4 Solar Power Purchase Agreement with Lathrop Solar I LLC an Entity Established

by Borrego Solar for this Project5 Site Agreement6 CEQA Notice of Exemption

Item 5.2

CITY MANAGERS REPORT PAGE 5

NOVEMBER 3 2014 CITY COUNCIL MEETINGSOLAR ENERGY PROECT CIP GG 1214

APPROVALS

J

41IPatric Flynr Date

Director of ublic Works

iajCari James Date

Finance Dir t r

pzSalvador Navarrete Date

City Attorney

fD299Ste alvatore Date

f anager

Item 5.2

RESOLUTION NO 14

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LATHROPAPPROVING A SOLAR POWER PURCHASE AGREEMENT AND SITE

AGREEMENT WITH LATHROP SOLAR I LLC AN ENTITY ESTABLISHED BYBORREGO SOLAR FOR THIS PROECT AND THE FILING OF THE CEQA

NOTICE OF EXEMPTION

WHEREAS in 2012 City Council approved the creation of the Solar EnergyProject CIP GG 1214 to fulfill a longstanding City goal to conserve energy andproduce future cost savings for the Citys general fund and utility ratepayers Soonafter City Council hired TerraVerde Renewable Partners LLC at no upfront cost tothe City to develop and evaluate optimum locations size configurations costsand savings for solar arrays at City Facilities and

WHEREAS TerraVerde Renewable Partners TerraVerde acting as aconsultant to the City has provided the City with analysis showing the benefits ofimplementing certain energy conservation measures through the installation ofcertain photovoltaic energy generating facilities and TerraVerdes analysisAnalysis recommended a solar program that could save a minimum of 20000annually on the Citys electricity bill on four City sites City Hall CommunitySeniorCenter Corp YardWater Treatment Plant and the South Harlan Road Storm DrainBasin and

WHEREAS the City proposes to enter into an Power Purchase Agreementand related contract documents Power Purchase Agreement with Lathrop SolarI LLC an entity established by Borrego Solar for this project Borrego pursuantto which Borrego will design construct and install on City property certain energysaving improvements consisting of solar photovoltaic facilities and arrange with thelocal utility for interconnection of the facilities which will generate energy for thesite on which such facilities are located ProjecY and

WHEREAS the Analysis includes data showing that the anticipated cost tothe City for the electrical energy provided by the Project will be less than theanticipated cost to the City of electrical energy that would have been consumed bythe City in the absence of such measures and

WHEREAS the Council proposes to enter into the Power PurchaseAgreement substantially in the form presented to this meeting subject to suchchanges insertions or omissions as the City Manager reasonably deems necessaryfollowing the Councils adoption of this Resolution and

WHEREAS pursuant to Government Code section 421712 this Council hasheld a public hearing public notice of which was given at Ieast two weeks inadvance to receive public comment and

WHEREAS the Citys proposed approval of the Power Purchase AgreementisaProject for purposes of the California Environmental Quality Act CEQAand

Item 5.2

WHEREAS the Guidelines for the California Environmental Quality ActCEQA California Code of Regulations Title 14 Chapter 13 State CEQAGuidelines exempt certain projects from further CEQA evaluation includingprojects consisting of the construction or placement of minor accessory structuresto existing facilities Class 11 Exemption Cal Code Regs tit 14 15311 andthe Project is categorically exempt under such exemption and

WHEREAS Public Resources Code section 2108035 added by Stats2011c 469SB226 3 statutorily exempts from CEQA evaluation the installation ofa solar energy system including associated equipment on the roof of an existingbuilding or at an existing parking lot

NOW THEREFORE BE IT RESOLVED that the City Council of the City ofLathrop hereby finds determines and orders as follows

1 The terms of the Power Purchase Agreement in the form presented to thismeeting are in the best interests of the City

2 In accordance with Government Code section 421712 and based on dataprovided by the Analysis the Council finds that the anticipated cost to theCity for electrical energy provided by the Project will be less than theanticipated cost to the City of electrical energy that would have beenconsumed by the City in the absence of the Project

3 The Council hereby approves the Power Purchase Agreement in accordancewith Government Code section 421712

4 The City Manager is hereby authorized and directed to negotiate any furtherchanges insertions and omissions to the Power Purchase Agreement andSite Agreement as he reasonably deems necessary and thereafter toexecute and deliver the Power Purchase Agreement following the Councilsadoption of this Resolution The City Manager is further authorized anddirected to execute and deliver any and all papers instruments opinionscertificates affidavits and other documents and to do or cause to be doneany and all other acts and things necessary or proper for carrying out thisresolution and said agreements

5 The Project hereby found to be exempt from the requirements of CEQApursuant to the Class 11 Exemption as described above

6 The Project is hereby found to be exempt from the requirements of CEQApursuant to Public Resources Code section 2108035 added by Stats2011c 4695B226 3 as described above

7 City staff are hereby authorized and directed to file and process a Notice ofCEQA Exemption for the Project in accordance with CEQA and the State CEQAGuidelines and the findings set forth in this resolution

Item 5.2

The foregoing resolution was passed and adopted this 3d day ofNovember 2014 by the following vote of the City Council to wit

AYES

NOES

ABSTAIN

ABSENT

Sonny Dhaliwal Mayor

APPROVED AS TO FORM ATTEST

Salvador Navarrete City Attorney Mitzi Ortiz City Clerk

Item 5.2

10232014

ATTACHMENT 2

City Hall 223 kW Solar Panels Community Senior Center 78 kW Solar Panels

I gu r

Jslt

i

i j rU

rttIt 1 f1

y

wx I T

re

L n cl ti

Corp YardWater Treatment Facility 318 kW Solar S Harlan Road Storm Drain Basin Solar Panels

Panels up to 427 kW

11

j

II YL YIIIIIIYIIYUI1 Ie

ii

lI9 i

I

ly i B Ir

L

1

Item 5.2

ATTACHMENT 3

Project Qualification Model

TerraVerdecoesnee

Renewable Partners

City of Lathrop

r A

i

1

SFD

Solar Project Pro Forma4217 Exhibit A

io16zoia

Scenarios Included in this Pro Forma

Scenario 1 Power Purchase Agreement PPA 4217

TerraVertle Renewable Partners LLC 10163034 PROIEQION

Item 5.2

IProject Qualification Model

TerraVerdeSummary of ResultsRenewablP Partnef5

Project City latirop

PowerPurchase AgreementPPA4217 01430 295 579816 5458053 4456870

12112 E Loui AveWat Y 854166 622053 318 501

2390 Towne CentreDr V 412954 354831 223 02

315557 SThStSAID038386137 Y 115918 88113 55 02458

415707 SThStSAID383861917 Y 48547 4160 23 02809

5 RES BCT Meer Y 1403965 800388 427 01541

Portfolio Totals active sites only 2835549 1906986 1046 01849

Disclaimer Assumptions

1 Projections of future Avoided Cost are calculated based on paterns of previous electricity usage or simulated usage and assume hat historical usage patterns hold at thesame level over the next 25 years

2 Customer Usage reflects usage from 38 RES BCT accounts

TerraVerde Renewable Partners LLC 10162014 PROJECTION

Item 5.2

Project Qualification Model

TerraVerdeProject Name City of LathropScenario 1 Renewable Partners

Scenario Pow 217

Tota Project Size MW DC 105 M Gross Project Benefit 13693933YikWhkWyr 182312 Total Initial Projec Cost naYea Solar Production kWh 1906986 Operating Expenses naSystem Cost na Power Purchase Payments PPA 9237064Annual Degradation Factor 050 Total Net Benefit 4456870Number of Sites 5

Savings Years 1 57Avoided Cost of Current Electricityk 01849 Cost Avoidance Years 1 5 458053Estimated Utility Cost Escalator 400 Cost Avoidance Years 1 25 4456870

PPA Rate 01430 Sulfur Dioxide S02 12

PPA Annual Escalator 295 Oxides of Nitrogen NOX 228 Ibs

Particulate Matter PM10 801bs

Carbon Dioxide CO2 25629

Volatile Compound VOCs 2001bs

Water H20 gallons 1501751

Disclaimer Assumptions

1 Systemsatistics such as Yield and Avoided Cost are based on blended values for the NEM and RES BCT Arrays

TerreVerde Renewable Partners LLC 10162014 PROJECTION

Item 5.2

Project Qualification ModelProjectName CityofLathrop TerraVerdeScenario kl Power Purchase Agreement PPA 4217 Renewable Partner5

Annual RES NEM RES BCT

Annual5olar AnnuaINEM BCT Savings Savings Savings AvoidedCost Subtotal Subrotal umulative

Production Production Production PerkWh PerkWh PerkWh from5olar AnnualSOlar PPA Financing NetOperating NetOperatingYear kWh kWh kWh Produced Pmduced Produced Generation Benefit Payments Vaymens CostSavings CosSavings

1 1906986 1106597 800388 01011 01541 01849 352515 352515 272699 5zz699 79816 798162 1897G51 1101064 796386 02154 01602 01922 364782 36478 279340 5279340 85443 1652583 1887963 1095559 792400 02240 01666 01999 377477 377477 286142 5286142 91334 I56593G 1878524 1090081 788Ad2 01330 01733 01079 390613 390613 5293111 293111 97502 5354W55 1869131 1084631 784500 02423 01802 02163 400206 404206 5300249 53002a9 303958 4580536 1859785 1079208 780578 02520 01874 02249 418273 418I73 5307561 307561 110712 5687657 1850486 1073812 776675 502621 01949 502339 5432829 432829 15315050 5315050 5717778 56865438 1841234 1068443 7R791 02726 02W7 01433 447891 447891 5322R3 5322723 125168 8117119 1832028 1063300 768927 502835 02309 502530 463478 463478 5330582 5330582 5132896 594160710 1822868 1057765 765083 02948 02193 01631 479607 479607 5338632 5338632 140974 108558211 1813753 1052496 761257 03066 02281 OD36 496297 496297 5346879 346879 169418 123500012 1804685 1047233 757451 03189 02372 02846 513568 513568 5355326 355326 158242 5139324213 1795661 1061997 75366G 03316 02467 02960 531440 531440 IS363979 5363979 167461 15607031G 1786683 1036787 7A9896 03449 02565 03078 549934 549934 5372843 5372843 177091 173779415 1777749 1031603 746146 03587 01668 03201 5569OR 569072 5381923 381923 1871A9 192494316 1768861 10264C5 742415 03730 02775 03329 588876 588876 5391223 391223 197652 21225ll 1760016 1021313 A8703 03879 502886 503a62 56W369 5609369 SaQ0751 5400751 5208618 233121418 1751216 1016207 735030 04035 0001 03W3 630575 630575 5410510 410510 220065 255127819 1742460 1011125 731335 04196 503121 SOd745 5652519 5652519 15420507 620507 5232012 5278329020 1733748 1006070 R7678 504364 03246 03895 675226 675226 5430747 430747 744479 302776921 1725079 1001040 724040 504538 503376 504050 5698724 5698724 5441237 5441237 5257a87 S3z8525622 1716454 996034 720419 04720 03511 04212 723040 723040 451982 451982 271057 355631423 1707871 991OSG 716817 04909 03651 04381 748202 768202 462989 462969 285212 38415262G 1699332 986099 713233 05305 03797 04556 5777239 774239 5474264 a74264 299975 414150125 1690835 981168 709667 05309 03949 04738 801183 801183 485814 085810 315369 4456870

Totais 44920859 26066952 18853907 na na na 13693933 13693933 9237064 59237064 4456870 4456870

Total Project Size MW DC 104 MW

EstimatedUtiliryCOStBcalator qpp9

PPA Rate 01430PPA Annual Escalator 295

I

7erraVerde Renewa6le Partners LLC 10162014 PROIECTION

Item 5.2

ATTACHMENT 4

SOLAR POWER PURCHASE AGREEMENT

by and between

LATHROPSOLARILLC

and

CiTY OF LATHROP

dated

November 3 2014

i

Item 5.2

TABLE OF CONTENTS

Pase

1 Definitions2

2 Term2

3 Purchase and Sale of Output34 Construction Operation Maintenance4

5 Commercial Operation Date Conditions Precedent Notice to Proceed56 Ownership of Solar Facilities OutptGreen Attributes and

Environmental Financial Incentives8

7 Payment98 Purchase Option99 Early Termination1010 Delivery Risk of Loss11 Metering1312 Representations Warranties and Covenants1413 Default and Remedies15

15 Taxes Liens16

16 Liability and ndemnity Insurance1717 Limitation of Liability1918 Assignment1920 Legal Effect and Status of Agreement2121 Environmental Compliance2122 Miscellaneous22

Exhibit A Definitions

Exhibit B Pwer Price

Exhibit C Termination Value

Exhibit D Purchase Option ValueExhibit F Description of Solar Facility

ii

Item 5.2

SOLAR POWER PURCHASE AGREEMENT

This Solar Power Purchase Agreement Agreement or PPA is made and entered intoas of this 3rd dav of November 2014 Effective Date between LATHROP SOLAR I LLCProvider xnd the City ofLathro City City and Provider are collectively referred to hereinas Parties and individually as Party

RECITALS

WHEREAS Provider is in the business of installing and operating solar power facilities andselling electric energy generated from such facilities

WHEREAS Government Code section 421710 et seq provides that public agecies mayenter into agreements including buC not limited to leaseaeements for real property upon whichalternative energy facilities may be constructed so that the public agency may purchase the energygenerated from the facilities constructed on the real property under a power purchase agreement and

WHEREAS the governing body of the City has made those findings required by Section421712 of the Government Code that 1 The anticipated cost to the City for electrical energyservices provided by the solar panel system under this Agreement will be less than the anticipatedmarginal cost to the City of electrical energy that would have been consumed by the City in theabsence of those purchases and 2 The difference if any between the fair market value of the SiteAgreemet to access and occupy the real property subject to this Agreemetand related paymentsunder this Agreement if any is anticipated to be offset by belovmacket enexgy purchases or otherbenefits provided under this Agreement and

WHEREAS City desires to reduce its energy wsts as well as its dependence on fossil fuelelectric generating resources and to promote the generation of electricity from solar photovoltaicfacilities ad

WHEREAS concurrent herewith City desires to enter into a site agreement with Providerfor the purposes of installing operaCing mainCaining and repairing a photovoltaic electrical powergenecating system Site Agreement and

WHEREAS Provider desires to design insall own or leaseleaseback operate thephotovoltaic system solar panels on the Site and sell the output from the system to City at those ratesset forth herein ProjecY and

WHREAS Provider has developed an ownership and financing structure for solar systemwhich facilitates the use of certain renewable energy credits tax incentives and accelerateddepreciation to reduce the expected investment returns of its investors and which benefiCs City byoffering a competitive Solar Energy Price as defined herein and

WHEREAS City desires to provide Provider a site agreement as set forth in a separateagreement for the sole purpose of installing operating maintaining and repairing a photovoltaicsystem and

Item 5.2

WHEREAS as part of this PPA and in consideration of the Site Agreement Provider andCity intend that Provider would obtain tiUe an ownership interest and retain all environmental creditsgreen tags carbQn etedits pollution credits and all other financial incentives and tax benefitsgenerated by the solar panel system and associated with the development of solar photovoltaic systemincluding the installatio ownership and operalion of the solar panel system and the sale of energyfrom the system to the City and

NOW THEREFORE in consideration of the promises and the mutual benefis from thecovenants hereinafter set forth the receipt and sufficiency of which are hereby acknowledged andintending to be legally bound Provider and City hereby agree as follows

AGREEMENT

1 Definitions

Capitalized terms used in this Agreement shall have the meaings ascribed to them hereinor in the attached Exhibit A

2 Term

A Term The Term of this Agreement shall commence upon the Effective Date andtermiate automatically on the Expiration Date The Parties may agrae in a writing signed byboth Parties to renew fhis Agreement for up to two 2 fiveyear renewal terms Parties ThisAgreement shall terminate automatieally and concurrently with xny terminatio of the SiteAgreement

B Removal of Solar Facilities Within ninety 90 days after the expiration of theTerm or any termination of this Agreement and the Site Agreement for Provider default unlessCity has i purchased the Solar Facilities under the terms of this Agreement or ii Provider is idefault of this Agreement or otherwise required to remove the Sola Facilitics Pcovidc may issuewritten notice to the City notifying of Providersintent to recover Solar Facilities If Provider failsto issue such notice within ninety 90 days the City may provide written notice to Provider ofsuch failure which notice shall inform Provider of the Citys intent to deem the Solar Facilitiesabandoned If Provider fails to respond to the Citys notice within thirty 30 days from receipt ofsuch notice the Solar Facilities shall be deemed abandoned by Provider and shall become theproperty of the City unless alternate written agreement is in place between PartiesNotwithstanding the foregoing nothing contained herein shall affect or in any way diminish anyright of a party providing any financing arrangement with respect to the Solar Facilities If Cityreceives such written otice City shall within one hundred and eighty 180 days and incoordinatio with Provider and at Citys sole cost and expese remove the Solar Facilities andreasonably store the Solar Facilities Eor collection by Provider for up to ninery 90 days Providershall pay for the storage of the Solar Facilities if storage is required beyond ninety 90 daysfollowing Citys notice to Provider that the Solar Facilities or any portion thereof have beenremoved The parties shall reasonably coordinate all such removal and pickup activities IfProvider fails to collect Solar Facilities i storage within one hundred and eighty 180 days SolarFacilities shall be deemed property of the City unless alternate written agreemet is in placebetween Parties

2

Item 5.2

C Removal of Solar Facilities by Provider To the extent Provider is required by thisAgreement to remove the Solar Facilities and restore the Sites such removal shall occur withinone hundred eighty 180 days of the termination or other event requiring Provider to remove theSlar Facilities Removal of the Solar Facilities shall include all installed equipment includingbut not limited to the Solar Facilities and all tangible and structural support materials as well asalI appurtenant equipment above and below ground except for empty conduits Provider shalladditionally restore the Sites to a condition substantially similar to the preinstallation conditionof the Sites excluding ordinary wear and tearthrough reasonable efforts Providersrestorationof the Sites shall idude but is not Iimited to any refinishing landscaping hardscapingpainting or other finish work and cleaning Provider shall undertake any repain necessary as aresut of such removxl and restoration including but not limited lo any required roof restorationto preventleaking and to secure structural integxity City shall designate reasonable dates andtimes for such removal and restoration Provider shall not be required to restore the Site to itsoriginal grade

If Provider fails to comply with this Section within such onebundred and eighty 180 dayperiod City shall have the right but not the obligation Yo remove the Solar Facilities and restorethe Sites and charge Provider for the cost incurred by Cily which cost shall include a twentypercent 20 administrative fee The Parties shall reasonably coordiate all such removal andpickup activities In the event that the Provider does not remove the SoLar Facilities as specifiedherein City shall also have the option of eondnuing to receive Output from the Solar Facilities atno cost to City until the Solar Facilities are moved by either Provider or City Except for amountsowed as a part of the Early Termination Fee City shall have no obligation to pay for Outputdelivered under this Agreement after the Expiration Date of this Agreement or the earlytermination thereof

3 Purchase and Sale of Output

A Purchase and Sale of Output Beginning on the Commercial Operation Date andthrough the remainder of the Term Provider agrees to sell end City agrees to buy all of the Outputfrom the Solar Facilities at the applicable Power Price

B Power Price The Power Price is set forth in Exhibit B The Power Price shall be

escalated on each annual aniversary of the Commercial Operation Date at the Annual EscalationRate as set forth in Exhibit B

C Profit Sharine If at any time during the term of this Agreement City reduces itsdemand load requirements for Output or otherwise detennines that the Distributio Utility or anyother purchaser is willing to purchase Output from the Solar Facilities at a rate in excess of PowerPrice City at its option may sell Otput to the Distribution Utility or any other purchaser Ifapplicable and required by law City may also request that Provider enter into negotiations withCity to pursue a thirdparty sale agreement Upon such request Provider and City shall negotiatein good faith regarding the terms and conditions oP the thirdparty sale agreement but nothing setfarth herein shnll require either Party to agree to a third party sale agreement unless mutuallyagreed to in a writing signed by both Parties

3

Item 5.2

D Output Guarantee Beginig from the condusion of the first anniversary of theCommercial Operaion Deadline Provider guarantees that the Solar Facility shall produce anddeliver to City as measured by the Meters at least ninety percent 90 of its projected annualOutput as set forth in Exhibit E over each two 2 consecutive years of the Term ie years 123456 etc the Output Guarantee as reconciled for expected kWh during a fypical weatheryear with the Actual Insolation Conditions measured onsite provided that any electrical powerthat the Solar FaciliCy cannot produce as a result of i a Cityrequested relocation of one or moreSolar Facilities pursuant to Section 10C ii a temporary suspension in accordance with Sections10D or 10E or iii an Excuse Eveot shall be deemed to be Output for purposes of determiningwhether the Output Guarantee is satisfied In the event of any failure to meet the Output GuaranteeProvider shall owe City liquidated damages not as a penalty for every kWh shortfal in meetingthe Output Guarantee Output LDs at the amount per kWh as set forth in Exhibit B Providershall credit any Output LDs it owes to City against future invoices submitted to City

4 Construction Operation Maintenance

A Providers Contractor Provider shx11 ensure that any Party contracting withProvider for any engineering procurement design installation or construction of the SoiarFacilities shall possess sufficient knowledge experience expertise and financial capacity andcreditworthiness necessary for satisfactory completion of Providers obligations under thisAgreement The contractor performing the construction work on the Project shall possess a ClassB or C10 California Contractor State License prior to performing any work on the ProjectProvider represents and warrants that it has the financial capacity creditworthiness and bondingsufficient to satisfy all of Providersobligations under this Agreement including but not limitedto any instance of default or other failure by Providerscontractor to complete the work requiredto satisfy Providers obligations in this Agreement Prior to contracting with xny such PartyProvider shall obtain and review the qualification of such Party

B Permits Provider shall be solely responsible for ensuring that the Solar Facilitiesare constructed in compliance with aIl applicable laws regulations and Permits and in accordancewith the standards set by any governmentel program providing funding for the Soldr Fncilitiesincluding but not limited tq all improvements required for compliance with the CaliforniaEnvironmental Quality Act CEQA and the Americans with Disabilities Act ADAProvider shxll at Providers sole cost aod expense obtain from authorities havig jurisdictioAHJ over the Project all necessary governmental approvals and other Permits and approvalsrequired for the installation and operation of the Solar Facilities including but not limited to firesafety California Occupational Safety and Health Administration OSHA utilityinterconnection rightofway permits easement agreements and other codes and best practicesTo the extent action is required by City City shall upon the tequest of Provider use reasonableefforts to assist Provider in obtaining and retaining Permits liceses releases and other approvalsnecessary for the design construction engineering installation operation and maintenance of theSolar Faeilities except that as a pennitting authority City shall not be required to afford Providerwith special or expedited services that would otherwise be provided to a private project Providershall reimburse City for costs reasonably incurred by City in assisting the Provider under thisSection Provider shall be responsible for all costs expenses and improvements to the extentrequired to obtain or comply with any permits governmetapprovals or other requirement understate or federal law made necessary as a result of the Solar Facilities installation operation and

4

Item 5.2

maintenance Specifically the Provider is required to obtain and submit all documents to closeout the Project with the AHJ over the Project In addition to stamped and approved plans Provideris required to provide the installation compliance confirmatiQn letter from AHJ

C Notice of Output Interruptions Each Party shall notify the other Party as soon asreasonably practicable following its discovery of any matcrial malfunction of any Solar Facilitiesor interruption in the supply of electricity from any Solar Facilities Each Party shall designateand advise the other Pxrty of personnel to be notified in the event of such a malfunction orinterruption Provider shall correct or cause to be corrected the conditions that caused themalfunction or interruption as soon as reasonably practicable in light of the circumstancesfollowing receipt of notice or upon discovery of such malfunction or interruption

D Scheduline Provider shall accommodate Citys scheduling requests for purposes ofall activities conducted on the Sites pursuant to this Agreement in order to prevent anyureasonabledisturbance or interruption of Citys activities

E Ooeration and Maintenance of Solar Facilities Provider shall be responsible for alloperations maintenance and repair of the Solar Facilities except to the extent that any maintenaoceor repair is made necessary by the sole negligent acts or omissions or willful misconduct oP the CityAll maintenaoce repairs and operations shall be conducted in the manner set forth in this Agreementand Provider shall reasonably accommodate and cooperate with the City to ensure the Citysactivities facility uses and scheduling requirements are not unreasonably impeded

F Prevailing Wa This Project is subject to compliaoce with the prevailing wageprovisions of he Cxlifornia Labor Code and the prevaiting wage rate determinations of theDepartment of Industrial Relations These rates may be obtained online athttpwwwdircxgovdsrA copy of these rates shall be posted at the job sile Provider ad allcotractors and subcoutractorsuder it shall comply with all xpplicable Labor Code provisions which include but are not limitedto the payment of not less than the required prevailing rates to all workers employcd by them in theexecution of this PPA and the employment of apprentices Provider hereby agrees to indemnify andhold harmless the City its officials officers agents employees and authorized volunteers from andagainst any and all claims demands losses or liabilities of any kind or neture which the City itsofficials officers agents employees and authorized volunteers may sustain or incur fornoncompliance with any applicable Labor Code provisions arising out of or in connection with theProject

5 Commercial Operation Date Conditions Precedent Notice to Proceed

A Conditions Precedent to Coustruction The following conditions shall constituteconditions precedent to Providers obligations to commece constructio of the Solar FacilityConstruction Conditions PrecedenY Provider and the City where applicable shall usecommercially reasonable efforts to complete preconstruction activities relating to the SolarFacilities within the time frames set forth below

1 No later than ten 10 days after the Effective Date the Parties shall execute the SiteAgreement

5

Item 5.2

2 Within one hundred and five 105 days after the Effective Date Provider shall haveobtained and secured sufficient financing in Providers solc judgment to fundProvidersobligations under this Agreement Provider may upon notice to the Citywaive this Construction Condition Precedent and construct the Solar Facilityutilizing its own funds

3 Within one hundred and five 105 days after the Effective Datc Provider shallsubmit to City the final form of any and all contracts for the engineeringprocurement andor construction of the Solar Facilities

4 Within seventy five 75 days following the Effective Date Provider shall haveperformed geotechnical analyses on the Site and shall have submited to the Cityfar approval a compleCed design of the Solar Facilities and a construction andinstallation schedule completed documetation of which shall be provided to CityProvidecsconstruction and installatio schedule shall include start and completiondates for all categories of work on the Sites including but not limited to installationof major equipment and anticipated SiCes deliveries and all required submittal andprocurement documentation Following submittal of the completed design andinstallation schedule the City shall review and approve such submittal withinfifteen 15 days following receipt thereof

5 Within one hundred aud five 105 days after the Effective Date as may be extendeddue to Extensiou Causes or delays outside of the Providerscontrol which could nothave been reasonably anticipated or mitigated Provider shall have obtained orcause to be obtained all necessary Permits entitlemeots contracts and agreementsrequired for the installation of the Solar Facilities and the sale and delivery ofOutput to City The City shall have approved such design and installation scheduleprior to the Construction Start Date

6 Within fortyfive 45 days after the Effective Date Provider shall have assessedthe capacity of the Distribution Utility facilities including but not limited Lo theapplicable transformersand conductorsand provide a written assessment of suchto the City

The date that is one hundred and five 105 days as extended for Extension Causes or undersubsectio 5 above after Che Effective Date shall be the Construction Start Target Date IfProvider is unable to timely complete any of the Construction Conditions Precedent by theConstruction Start Target Date Ciry may but is uot required to either 1 waive or extend suchrequirements in a wrilten notice to Provider or 2 terminate this Agreement without lriggeringthe default provisions of this Agreement or any other City or Provider liability Upon Providerstimely satisfaction of aVl Coastruction Conditions Precedent City shall issue a notice to proceedto Provider Notice to Proceed informing Provider that it may commence the construction ofthe Solar Facilities on the Sites Provider shall not proceed with construction of the SolarFacilities until it has received the Notice to Proceed Provider shxll promptly provide City withcopies of all forms documents and communications received or generated by Provider inconnection with this Agreement

6

Item 5.2

B Commercial Operation The Commercial Operation Date shall be the date o whichProvider notifies City that the Solar Faciliues ace mecfianically complete and operating and providingOutput through Meters to the Delivery Points under approved and executed Distribution Utilityinterconnection agreemenCs Provider shall cause the Commercial Operation Date to occur on orbefore the Commercial Operation Deadline

C Constructio Commercial O eration Promptly upon receipt of the Notice to Proceedfrom City Provider shall commece construction of the Solar Facilities and shall cause completeinstallation and startup of commercial operation thereof on or before the date which is two hundredand sixty 260 days following the Notice to Proceed the Commercial Operation Deadline Priorto the Commeccial Operation Deadline Provider shall

1 Effect the execution in coordination with the City of all agreements required forinterconnection of the Solar Facilities witt the Distribution Udlity including withoutlimitation the interconnection agreements and net metering agreements ifapplicable and

2 Ensure that all necessary connections and equipment are in full and complete operatioand

City shall confirm that iC has procured and effectively installed all necessary equipmentto enable delivery of Output from the Delivery Poiuts to Citysfacilities provided thatProvider shall notify City of any necessary improvements and shall perform necessaryinstallation and retrofits of the Citys facilities The City and Provider shnll egotiatein good faith following the Effective Date to identify required retrofits to the Citysfacility and to determine the cost thereof Provider shall invoice the Ciry on time andmaterial basis within lhirty 30 days of performing the installations and retrofits TheCity intends to utilize the contigency funds which were included as part of the FixedCosts paid by Provider to the City hereunder to pay fot xll or a portion of the costs ofthe required retrofiGS

If commercial operation has not commenced on or before the Commercial Operation Deadline asextended for Exlension Causes the City shall provide up to three 3 thirty 30 day extensions tothe Commercia Operatio Deadline as extended for Extension Causes upo Providerswritteten 10 days notice that Provider will ot meet the Commercial Operation Deadline as extendedfor Extension Causes as set forth in Section 5D below

If commeroial operatio has not commenced on or before the ninetieth 9Uth day following theCommercial Operation Deadline as extended for Extension Causes City may but shall not berequired to terminate this Agreement without triggering lhe default provisions of this Agreementas to City or incurring any other City liability Upon any such termination of this Agreementpursuant to this Section Provider at Providers sole wst and expense shall dccommission andremove the Solar Facilities and restore the Sites in accordance with Section 2B

D Extension of Commercial Operation Deadline Providersrequest for an extensionof the Commercial Operation Deadline as extended for Extension Causes as described abovemust be accompanied by the reason for such confirmation that commercial operation shallcommence within the requested extension time and Providersappllcation must also state the dxte

7

Item 5.2

on which Provider rcasonably believes Commercial Operation will be achieved following suchextension Provider shall within thirty 30 days of the Commercial Operation Deadline asextended for Extension Causes pay to City a nonrcfundable extension fce ofSOOQ for each 30day period of extended time prorated on a daily basis to the actual numbcr of days of extensionbeyond the Commercial Operation Deadlinc up to a total cap not to exceed 15OOU

E Fixed Costs Provider shall provide for the payment of Citysupfront fixed costs ofentering into his Agreement which costs shll be duc in each cse only so long as this Agreementremains in full force and effect as of the date specificd below end shall timcly mahe such nonrefundable payments to City in the amounts and in the mxnner set forth below

1 Upon the earlier of i the datc which is one hundred and fivc l05 days after thcEffective Date provided that such date shall be extendcd on a dayforday basis in the event the Cityfails to approved Providersdesign submittal and issue the Permit within thirty 3U days from thedesign submittal by Provider or ii succcssful completion of Construction Condition Precedent asdescribed inSA5Provider shall pay to City1H1OOU1346Sof Fixed Costs

2 On or before the date on which City issucs to Provider a Notice to Procced Providershall pay to City5688278076544of Fixcd Costs in addition to paying Cityhe tme costs of all legal expenses which shall not excced15000UU2i of Fixed Costsincurred by City and

3 On or before the Commercial Operation Date Provider shall pay to City743142010009 of Fixcd Costs

F If City filed CSI reservations and paid appropriate CSI application fce deposits prior to theexecution of this Power Purchase Agreement Provider tihall reimburse City for such dcposits withintcn 10 days of receipt of funds from the Distribution Utility in the event thc fce deposits are issuedto the Provider

6 Ownership of Solar Facilities Output Green Attributes and EnvironmentalFinancial Incentives

A Ownership of Solar Facilitics Tidc to the Solar Facilities shall remai withProvider during the Tcrm unless and until City exercises its option to purchase the Solar Fxcilitiesas set forth herein None of the Solar Facilities including but not limited to any componcntsthereof may be sold leased assigned mortgaged pledged or olherwise alienated or encumbercdby City Cit shall not cause or permit the Solar Facilities or any part thereof to become subjectto any lien encumbrancc pledge levy or attachment arising by under or lhrough City Providersheli bear all risk of loss with respect to the Solar Facilities except for losses arising from willfulacts or omissions or negligence by City or its agents or employees Provider shall be solelyresponsible for the Solar Fxcilities operation and maintennce in compliance wih all applicablelaws regulations and Permits Provider shall not be responsible for the cost or expense of anymaintenance required as a direct result of the Citys negligence or willful misconduct

8

Item 5.2

B Ownership of Green Attributes and Environmental Financixl lncentive5 Provideris the exclusive owner of the Environmental Financial Incentives associaled with the constructionownership and operation of the Solar Facilities City will assign its interest if any in all suchcredits and other financial incentives to Provider Provider is the exclusive owner of and mayassign or sell in its sole discretion all Green Attributes including but not limited to RenewableEnergy Certificates REC and REC Reporting Rights attributable Lo the Solax Facilities andthe Output therefrom whether existing now or crcated in the future Without additional charge toCity Provider shall take and bear the costs of all steps necessary to secure and perfect any interestiu the Green Attributes including but not limited to registering the RECs with WREGIS TheParties agree to subsequently negotiate in good faith the ownership of any additional benefit orincentive associate with this Agreement which did not exist at tbe time this Agreement was enteredinto

C No Impairment Neither Party shall take any actio or knowingly suffer anyomission Yhat would have the effect of impairing the value of the Gree Attributes RECs RECReporting Rights or Environmental Financial Incetives including without limitation claimingownership or claiming any grant of assignment of the Green Attributes or Environmental FinancialIncentives without notice to and consultation with the other Party as necessary to preventimpairment of the value of Green Attributes and Environmental Financial Incentives

7 Payment

A Invoices Provider shall provide a consolidated invoice to City on a monthly basisby the 15th business day of each calendar month following the Commercial Operation Date Theinvoice will set forth i the Output delivered to City io the preceding month ii the Power Pricefor such month iii the total amount to be paid by City to Provider for Output delivered in thepreceding month and iv an indication of the date aod time when the next increase in the PowerPrice due to the Annual Escalation Rate will become effective

B Due Date The Power Price and all other payments shall be in US Dollars and paidby wire transfer check or automated check handling ACH payment delivered to Provider at theaddress specified herein within thirty 30 days of the date the invoice is received by the City DueDate If the Due Date is a weekend or a bank holiday payment will be due the next followingbusiness day Late paymensshall accrue interest at a per annum rate equal to the lesser of oneper cent or the maximum rate permissible under applicable law

C Pavment Disputes In the event a Party disputes all or a portion of an invoice orany other claim or adjustment arises such disputes shall be resolved pursuant to Section 14

8 Purchase Option

A Purchase of Solar Facilities Unless City is in default of its obligations under thisAgreement City shall have the option to purchase ali of Providersright title and interest in andto the Solar Facilities on the sixth 6th tenth lOth and fifteenth 15th anniversaries of theCommercial Operation Date or upon Expiration Date Purchase Option If City wishes toexercise its Purchase Option i1 must provide notice to Provider at least ninety 90 days in advanceof any such anniversary or the expiration of the Term The purchase price shall be the greater of1 the Fair Market Value of the Solar Facilities as of the applicable anniversary date or the

9

Item 5.2

expiration of the Term or 2 the applicable Purchase Option Price indicated in Exhibit D Uponthe exercise of the Purchase Option and Purchasers receipt of all amounts then owing by Cityunder this Agreement the Parties will execute all documents necessary for the purchase and saleof the Solar Facilities including but not limited to the delivery of the purchase price the transferof title to the Solar Facilities and to the extent transferable the remaining period if any on allwarranties andEvironmental Financial Incentives and Gree Attributes for the Solar Facilities to

City Provider shxll remove any encumbrances placed or allowed on the Solar Facilities byProvider On the date on which Provider transfers title to the Solar Facilities to City in accordancewith this Section this Agieement and Site Agreement shall terminate without default or penalty toCity

B Fair Market Value The Fair Market Value of the Solar Facilities shall be the value

thereof as determined by a nationally recognized independent appraiser selected by the Parties withexperience and expertise in the solar photovoltaic industry to value such equipment The Fair MarketValue of the Solar Facilities shall be based upon its fair market vxlue in continued use and includingthe costs of removal shipping and reinstallatio as a cost credit against the value of the SolarFacilities The valuation made by the appraiser shall be binding on the Parties in the absence of fraudor manifest error The costs of the appraisal shall be borne by the Parties equally If the PaRies areunable to agree on the selection of an appraiser such appraiser shall be selected by the two appraiserfirms proposed by each Party

9 Early Termination

A Providers Early Termination Rights Provider shall have thc right but not theobligation to terminate this Agreement without triggeiing the default provisions of this Agreementor any liability ander this Agreement prior to expiration of its Term or as applicxble thetimeframes specifically ouNined below upon the occurrence of

i An unstayed order of a court or administrtive agency or a changein state or fecleral law or regulation imposing a cot regulation or other requirement upon the saleof Output which precludes the Provider from providing Output pursuant to this Agreement in afinancially viable maner and which results in a violatioo of a substantive term or condition ofProvidersfinancing arrangement for the Solar Facilities Such termination shall be conditionedupon Providersproof of the financial impossibility dnd violation of Providers Solar Facilitiesfinancial arrangement to the reasonable satisfaction of the City

ii Condemnation destruction or other materia damage to the Sites thatresults in the termination of the Site Agreement

iii Provider determines at any time after the Effective Date and priorto receipt of the Notice to Proceed that the Site as is is insufFicient to accommodate the SolarFacilities or would materially increase the cost of installation or would adversely affect the Outputas designed and Provider has made commercixlly rcasonable efforts to locate and secure alternativesites at commercially reasonable costs but has not been able to do so

iv There is a material adverse change after the Effective Date in theEnvironmental Financial Incentives of the Solar Fxcilities or the regulatory environment incentiveprogram or federal or state tax code including the expiration of xny incetive program or tax

10

Item 5.2

incentives in effect as of the Effective Date that could reasonably be expecCed to have a materialadverse effect on the economics of the installation for Provider or Providersabiliry to secure ormaintain financing in connection with the Solxr Facility

v Provider has determined after the Effective Date that there has beea material adverse change in the rights of City to the Site or Provider to construct the SolarFacilities on the Site

vi There has been a material adverse change in the Cityscreditworthiness

vii Provider has not received all required approvals or permits fromapplicable govermental authorities including the ioterconnection agreement with theDistribution Utility in a manner timelyeough to allow Provider to commence construction andorsatisfy he Commercial Operation Deadline and Provider has made commercially reasonableefforts to obtain such required approvals or permits

viii Provider ecounters a Latent Condition at the Site which inProvidersjudgnent materially alters the economics of the transaction contemplated under thisAgreement or materially increases the cost of construction installation ownership or maintenanceof the Solar Facility at the Site

In the event Provider exercises its right under this Section Ciry may elect to either a purchase theSolar Facilities at Fair Market Value as of the time of Providers notice or b require Provider toremove the Solar Facilities within one hmidred eighry 180 days at Providerssole cost and expenseand restore the Site as required in Section 2B

B Citys Earlv Termination RighGs f Ciry at ay time ceasea to conduct operations ator vacates a Site City shall be liable to pay to Provider the Termination Value per Watt per ExhibitC for such Site Within one hundred and eighty 180 days of such payment Provider shall removethe Solar Facilities at the Site in accordacewith Section 2

10 Delivery Risk of Loss

A Outut Specifications Provider shall ensure that all energy generated by the SolarFacilities conforms to Distribution Utility specifications for energy being generated and deliveredto the Sitea electric distribution system which shall include the installation of proper powerconditioning and safery equipment submittal of necessary specifications coordination ofDistribution Utility testing and verification and all related costs

B Transfer of Output Provider shall deliver aIl Output generated by the SolarFacilities to Ciry and City shall accept and purchase such Output from Provider beginning on theCommercial Qperation Date until the end of the Term City agrees to puxchase one hundredpercent 100 of the Output generated during the Term Provider shall be responsible for thedelivery of Output to the Delivery Points Provider shall cooperate with the City and take allcommercially reasonable efforts to assess the capacity of the Distribution Utility trasformersand conductors at the Delivery Point and shall arrange for the installation of necessary CityfaciliUes in accordance with Section 5C Provider shall be responsible for all equipment or

l

Item 5.2

facilities located on Providersside of the Delivery Point and the City shall be responsible for alleqnipment or facilities To the extent any subsequent upgrade to such facilities is required and notperformed and funded by the Distribution Utility the party responsible for such Pacilities shallperform such upgrades at its sole cost and expense TiUe and risk of loss of the Output shnll passfrom Provider to Ciry upon delivery of the Output from the Delivery Points to the City City shallbe responsible for arranging delivery of Output from the Delivery Points to City and anyinstallation and operation of equipment on Citys side of any Delivery Point necessary foracceptaceand use of the Output Prior to the start of constructio of the Solar Facilities Providershall use commercially reasonable efforts to assist City in Citys selection of equipmentinstallations on Citys side of any Delivery Point and it is expressly agreed that the Power Pricehas been calculated to include the installation of equipment that may be ecessary under thisSection

C Relocation On or after the seventh 7th anniversary of the Commercial OperationDate City may at its option require that the Solar Facilities be permanenkly relocated eiYher onan existing Site or to another site owed and operated by City at a location with at least equalinsolation to the existing Site and reasonably acceptable to both Parties the Relocation SiteCity shall give Provider at least sixty 60 calendar days ootice of Citys need to move or relocatethe Solar Facilities Following agreement on a Relocation Site the Parties will amend thisAgreement and the Site Agreement to memorialize the required changes in the definition ofSites

City shall pay the reasonable costs arising in connection with the relocation of the Solar Facilitiesicluding removal costs necessary storage costs reinstallntionrecommissioning costs and anyapplicable interconnection fees City shall additionally compensate Provider for any lost revenuerelating to Output Green Attributes Environmeotal Financial Incetives or RECa collectivelyItevenue during the period in which energy cannot be geerated and delivered to City from theSolar Facilities being relocated at the rate as calculated in Section 7 prorxted as needed to applyoo a daily basis below and to the extent such nonenergy generating period exceeds the availabledays allotted and accrued under Citys temporary suspension rights in Section 10D City shallalso execute such coasents or releases reasonably required by Provider or Providers financingparties in connection with the relocation Wilhin thirty 30 days of agreement on a RelQCationSite Provider will provide City with a calculation of the estimated time required for suchrelocation and the total anticipated amount of lost revenues and additional costs to be incrred byProvider as a result of such relocation City will have twenty 20 days to review the calculationand make in wriCing any objecdons to lhe calculation

If an acceptable Relocation Site cannot be located this Agreement shall terminate with respect tothe applicable Site or Sites for which an acceptable Relocation Site cannot be located uponProvidersthirty 30 days writteo notice In the event that an acceptable Relocation Site cannotbe agreed upon City shall pay Provider an amount equal to the Termination Value per Watt perExhibit C In the evenl of a termination occurring under his Secion Provider shall remove theSolar Facilities by a mutually convenient date bul in no case later than one hundred eighty 180days after the date of termination Providerscosts of removal shall be covered by the TerminationValue and City sball incur no additional charges for removal and restoraion of the Site

12

Item 5.2

D Temporary Suspension by City Notwihstanding any other provision of thisAgreement City shall have the right upon writlen notice to Provider to temporarily suspendoperations and facility Output for xny reason for a period not to exceed thirty 30 days in eachoperationai year If City requires temporary suspension of the Solar Facilities City shall pay toProvider an amount equal to its lost Revenue for the period of time durigwhich the Solar Facilitiesare not in Commercial Operation due to the temporary suspension by City provided that the City maytemporarily suspend the Solar Facility in whole or in part by up to three 3 calendar days per yearwithout penalty or charge by Provider

E Temorar Suspension by Provider Provider shall have lhe right upon written noticeto City to temporarily render the Solar Facilities nonoperational for up to three 3 days per yearwithout penalty or charge by City

F Chane in Conditions If City requests an inerease in the Output delivered to the Sitesthe Parties agree to use good faith efforts to increase such capacity If Provider and City xre not ableto reach an agreement for such additional Output City may at its sole discretion obtain the servicesofahird party for such purposes provided that such additional third party provided services and anyassociated site use agreement shall not interfere with Providersright title and interest in the SolarFacilities under this Agreement

11 Metering

A Meter Provider shall provide and maintain a standard revenue grade metering andelectronic data acquisition system at each solar installation coostituting the Solar Facilities eachaMeter collectively Meters to measure the actual amount of electricity supplied to the Cityby the Solar Facilities on a contiuous basis Meters shall be installed and maintained at Providerssole expense and shall be located within no more than ten 10 feet from the point of dclivery

B Meter Testine Provider shall arrage for all Meters to be tested once per year atleast three 3 months prior to the end of City fiscal year The tests shall be conducted byindependent third Parties who are qualified to conduct such tests Provider shall bear all costs andexpenses associated withanual Meter testing City shall be notified ten 10 days in xdvance ofsuch tests and shall have a right to be present during such tests Provider shall provide City withthe detailed results of all Meter tests

In addition the Meters shall be inspected xnd tested for accuracy at such other times as City mayreasonably request but in no eveot more than once every six 6 month period Ciry shall bear thecost of the additionally requested Meter testing unless such test shows that a Meter was inaccurateby more tha two percent 2Io in which case the Provider shall bear the Meter testing costs

C Cost of Meter Repaic If the Meter testing demonsfrafes that a Meler was operatingoutside of its allowable calibration 2 then the Provider will pay for the cost of the repairsor replacement necessary to restore a Meter to proper working order If a Meter is found to beinaccurate by more than two percent 2 Invoices from the prior six 6 months or from the lasttime soch Meter was registering accurately whichever is less shall be adjusted in accordacewithSection 7 except that City shall not be obligated to pay interest on any amount found to be duebecause Meter was operating outside of its allowable calibration 2l0 Provider shall submitany request for an adjustment i a fiscal yeaz to City no later than two 2 months prior to the end

13

Item 5.2

of Citys fiscal year on June 30 and City shall not be obligated to pay any adjustment for a priorfiscal year thal was not submitted to City within two months of the end of such prior fiscal year onJune 30 City may withhold payments to Provider if a Meter has registered production i excessof 2Jo of he Output delivered to City and Provider fails to provide City with the appropriatepayment pursuant to Section 7 for the amount which the City overpaid to Provider as a result ofthe Metermiscalibration

D Meter Data Provider shall gather and maintain the data from a Meter includingbut not limited to interval data registered at least once every fifteen 15 minutes the Meter Dataand shall make such Meter Data available to City or maintain the Meter Data such that the Cityean access the Meter Data remotely through a secure intemet site or such other remote access asthe Parties mutually agree to

E MeCer Data Audit City shall have the right to audit the Invoices andor the MeterData once per calendar year per Solar Facilities If the audit reveals that City has been overchargedby more than two percent 2o Provider shall bear the cost of such audit but in all other casesCity shall bear the cost of such audit

F Maintenance of Meter Data The Parties shall maintain all records related to

Invoices and Meter Data for a period of the greater of i 48 months from the date oP such Invoiceor Meter Data or ii as otherwise required by law Such records shall be available for audit asdescribed in above

12 Representations Warranties and Covenants

A Authorization and Enforceabilitv Each Party represents to the other Parry as of theEffective Date that i such Party is duly organized validly existing and in good standing underthe laws of the state of its formation ii the execution ad delivery by such Party of and Yheperformance of its obligtions under this Agreement has been duly authorized by all necessaryaction does not and will not require any further wnsent or approval of any other Person and doesnot contravene any provision of or constitute a default under such Partys organizaionaldocuments any indenture mortgage or other matcrial agreement binding on such Party or xnyvalid order of any court or regulatory agency or other body having authority to which such Partyis subject and iii this Agreement constitutes the legal and valid obligation of such Partyenforceable against such Party in accordance with its terms excepl as may be limited bybankruptcy reorganization insolvency bank noratorium or similar Iaws relating to or affectingcreditors rights generally and general principles of equity whether such enforceability isconsidered in a proceeding in equity or at law

B Insolation City agrees that access to sunlighl Insolation is essential to Providerand is a material inducement to Provider in entering into this Agreement Accordingly City shallnot permit any interference with Insolation available to the Solar Facilities If City becomes awareof any potential development foliage or trees or other activity on adjacent or nearby propertiesthat will diminish lhe Insolalion to the Sites or the Solar Facilities City shall advise Provider ofsuch information and reasonably cooperate with Provider in reasoable measures taken byProvider in an attempt Co preserve existing levels of Insolatioo at the Sites and the Solar Facilities

14

Item 5.2

C Notice of Damaee Either Party shall promptly notify the other Party of any mattersit is aware of pertaining to any damage to or loss of the use of any Solar Fxcilities or that couldreasonably be expected to adversely ffect any Solar Facilities

D Distribution UtiliCy Electric Service City may take parallel serviee fromDistributio Utiliry at each Site

13 Default and Remedies

A Events of Default In the event of a Partys breach of any performance obligationhereunder or breach of any representatio warranty covenant or term of this Agreement or theSite Agreement the nondefaulting Party shall provide the defaulting Party with written notice ofthe default which notice shall describe the default i reasonable detaiL Following the dxte ofreceipt of written notice of default the defaulting Parry shall have twenty 20 days to cure anypayment default and thirty 30 days to cure ay other breach or default described in thisAgreement provided however that with respect to nonpayment defaults the cure period shall beextended by the number of days not to exceed an additional ninety 90 day period durigwhichan event of Force Majeure is occurring or during which the defaulting Party has begun correctiveaction and continues to diligently pursue using commercially reasonable efforts lhe completionof such corrective action

B Evet of Default In addition to the foregoing with respect to a Party there shallbe an event of default each an Event of Default if

1 such Party fails to timely pay any amount due

2 such Party concedes in witing to its inability to pay its debts generally as theybecome due

3 such Party fies a petitio seeking reorganization or arrangement under the federalbankruptcy laws or ay other applicable law or statute of the United States ofAmerica or any State district or territory thereof

4 such Party makes an assignment for the benefit of creditors in connection withbankrupcty proceedings

5 such Party consents to the appointment of a receiver of the whole or any substantialpazt of its assets

6 such Party has a petition in bankruplcy filed against it and such petilion is notdismissed wilhin 60 days after he filing thereof

7 a court of competentjurisdiction enters an order judgment or decree appointing areceiver of the whole or any subslantial part of such Partys assets and such orderjudgment or decree is not vacated or set aside or stayed within 60 days from thedate of entry thereof

15

Item 5.2

8 under the provisions of eny other law for the relief or aid of debtors any court ofcompetent jurisdiction shall assume custody or control of the whole or anysubstantial part of such Partysassets and such custody or control is not terminatedor stayed within 60 days from the date of assumption of such custody or control

9 such Party ceased ils legal existence or ceases doing business or otherwisedissolves

10 such Party breaches a material term this Agreement or

11 such Party breaches a material term of the Site Agreement

C Provider Remedies If an event of default by City under Sections 13A or 13B hasoccurred and is continuig lhen following the expiration of any applicable cure period Providermay at its discretion i suspend performance under this Agreement ii seek specific performancefrom a court of appropriate jurisdiction pursuant andor iii terminate this Agreement and asProviderssole and exclusive remedy in connection with such termination require City to pay toProvider as liquidated damages and not as a penalty the Terminatio Value for the Solar Facilitiesand any and all amounts then owed Provider for Output delivered to City as of the date of suchtermination pursuxnt to this Agreement In the event of such termination Provider shall removethe Solar Facilities in accordance with Section 2B at Providerssole cost and expense

D Citv Remedies If an event of defxult by Provider under Sections 13A or 13B hasoccurred and is contiuing then following the expiration of any applicaUle cure period City may atits discretion i suspend performance under this Agreement ii seek damages or specificperfonnance from a court of appropriate jurisdiction andlor iii terminate this Agreement In theevent that City terminates this Agreement pursuant to this Section Provider shall promptly removethe Solar Facilities in accordance with Section 2B at Providerssole cost and expense In Che eventthat Provider fails to remove the Solar Fecilities and restore the Sitesas required City may undertakesuch removal storage and restorxtion and seek recovery of the reasondble cost of such from Provider

14 Dispute Resolution The Parties agree to make a good faith attempt to resolve any and allcontroversies claims disagreements or disputes belween the Parties arising out of or related tothis Agreement Dispute In the evenC of any Dispute either Party may give notice of thedispute to the other Party In the event a Party Dispues all or a portion of an invoice or otherpayment the disputing Party shall timely pay any undisputed portion of such amount due TheParties shall first use good faith reasonable diligent efforts to esolve the Dispute within ninety90 days from the date of such notice If the Parties do not resolve their Dispute within ninety90 days of notice then the Parties may upon mutaal agreement submit to mediation before amutually agreed upon mediator In he event the Dispute is not resolved through mediation theParties may pursue their legal rights through any other legally permissible means

15 Taxes Liens

A Taxes Provider shall pay any income taxes imposed ai Provider due to the sale ofenergy under this Agreement City shall pay all real property taxes and assessments applicable to theSites This Agreement may result in the creation of n possessory interest Rev Tax Code 1076

16

Item 5.2

If such a possessory interest is vested in Provider Provider may be subjecYed to the payment ofpersonal property taxes levied on such interest Provider shall be responsible for the payment of adshall pay before becoming delinquent all taxes assessments fees or other charges assessed or leviedupon Provider the Project and the Solar Facilities Provider further agrees to prevent such tasesassessments fees ar other charges from giving rise to any lien against the Sitesor any improvementlocated on or wilhin the Sites Nothing herein contained shall be deemed to prevent or prohibitProvider from contesting the validity or amount of any such tax assessment or fee in the mannerauthorized by law Provider shall be responsible for payment of any personal property taxespossessory interest taxes permit fees busioess license fees and any and all fees and charges of anynature levied against the Solar Facilities and operations of Provider at any time If bills for taxes onSolar Facilities are received by the City City shall remit such bills to Provider

B Liens Provider shall not directly oridirectly cause create incur assume or suffer toexist any liens o or with respect to Che Sites or Citysiterest therein Lf Provider breaches itsobligations under this Section it shall immediately notify the City in wriling shall promptly causesuch lien to be discharged and released of record without cost to City and shall defend and indemnifyCity agxinst all costs and expenses including reasonable attorneys fees and court costs at trial and onappeal incurred in discharging and releasing such lien Ciry shall not directly or indirectly causecreate incur assume or suffer to exist any liens on or with respect to the Solar Facilities or Providersor its financigpartys interest therein If City discovers a lien has been piaced on solar facilities itshall notify Che Provider i writing shall promptly cause such lien to be discharged without cost toProvider and shall defend and indemnify Provider or its financing party against all costs and expensesincluding reasonable attomeys fees and court costs at trial and on appeal incurred in dischargingand releasing such lien

16 Liability and Indemnity Insurance

A Indemnity To the fullest exteot provided for by law exch Party IndemnifyingPartv agrees to indemnify defeod and hold harmless the other Party its directors officersemployees and agents each an 9ndemnified Party from and against any and all claims whetheror not involving a thirdparty claim including demands actions damages loss costs expenses andattorneys fees collectively Indemnity Claims arising out of or resulting from any breachnegligent act error or omission or intentional misconduct by the Indemnifying Party or its trusteesdirectors officers employees contractors subcontractors or agents under the terms of this Agreementar the Site Agreement provided however that the Indemnifying Party will not have any obligatioto indemnify the Indemnified Party from ar against any Indemnity Claims to the extent caused byresulting from relating Lo or arising oul of lhe negligence or intentional misconduct of an IndemnifiedParty or any of its directors officers employees or agents

If an Indemnified Party determines that it is entitled to defense and indemnification under thisSection such Indemnified Party shall proinptly notify the Indemnifying Party in writing of theIdemnity Claim and provide all reasonably necessary or useful information and authority to settleandor defend Indemnity Claim Defense and indemnification provided by the lndemnifying Partyunder this Section shall be provided with legal counsel of the Identified Partys choosing Nosettlement that would unpose costs or expense upon the Indemnified Party shall be made without suchPartyswritten consent

17

Item 5.2

If an Indemnified Pazty determines that it is entided to defensc and indemnification under thisSection such Indemnified Party shall promptly notify the Indemnifying Party in writing of theIndemnity Claim and ptovide all reasonbly nccessary or useful information and authority to setUeandor defend Indemnity Claim Defense xnd indemnification provided Uy the Indemnifying Partyunder this Section shall be provided with legal wunsel of the Identified Partys choosing Nosettlement that would impose costs or expense upon the ndemnified Party shall be mede without suchPartyswritten consent

B Insurance

1 Provider Insurance At all times during the term of the PPA and any necessaryextension thereof for removal of the Solar Fxcilitics from the Property Providcr shall obtain maintainand keep in full force and effect the following insurxnce for coveragc oP alI obligations and associatedactivities under the PPA including but not limitcd to the use and occupancy of the Sites the businessoperated by the City thereon and the construction installation operation maintenxnce and repair ofthe Solar Facilities in the amounts and with the conditions rcyuired as set forth herein Each policyrequired below shall include an additional insurcd endorsemen in favor of he City for ongoing andcompleted operations which endorsemcnt shall specify that such additional insured coveragc isprimary and nonconVibutory as to any other coverage available to the additionel insured Providershall within thirry 30 days of the Effcctive Date of the PPA and annually therenftcr providecertificates of insurance and endorsements demonstrating compliance with the rcquirements of hisScction

1 Workers Compensation Insurance for Providcrsemployecs to the extent ofstatutory limits and Occupational Disexse and EmployersLiability Insurance for not less than1OOOU00

2 Commercial Genernl Liability Insurance or its equivalent including but notlimited to Products and Completed Operations and Contractual Liability as applicable toProvidersobligations under this License nd the PPA with limits not less than

i Peronal Injury coverage at2OU0000 per occurrence and

ii Property Damage coverage at2000000 per occurrence

3 Automobile Liability Insuranec with limits not less than Bodily Injurycoverage at1OOOU00 each accident and Property Damage coverage at1000000 eachaccident

4 Excess Liability Insurancc with an aggregate limit of not less than50011000

2 City Insurance Thc Ciy represents that it maintains and covenxnts thxt it shallmaintain during the Term i insurance sufficient to insure i agxinst loss or destruction of the Sitesincluding losses occasioned by operation of the Solar Facilitics and ii general liability insurnnceincluding bodily injury property dxmege conVactual and personal injury Notwithstanding theforegoing Grantor rescrves he right to self insure

18

Item 5.2

C Waiver of Subroation The City and Providcr shall cause each insurance policyobtained by them to include a waiver oF subrogation or waiver of the transfer of rights of recoveryagainst the other Party to the insurer in connection with any damage covered by any policy

17 Limitation of Liability

FOR BREACH OF ANY PROVISION OF THIS PPA AGREEMENT FOR WHICH AN

EXPRESS REMEDY OR MEASURE OF DAMAGES IS PROVIDED IN THIS AGREEMENTTHE RIGHTS OF THE NONDEFAULTING PARTY AND THEIIABILITY OF THE

DEFAULTING PARTY SHALL BE1IMITED AS SET FORTH IN THIS AGREEMENT ASTHE SOLE AND EXCIUSIVE FULL AGREEDUPON AND LIQUIDATED DAMAGESAND NOT AS A PENALTY AND ALL OTHER DAMAGES OR REMEDIES ARE WAIVED

IF NO REMEDY OR MEASURE OF DAMAGES IS EXPRESSLY PROVIDED OR IF AREMEDY OR MEASURE OF DAMAGES IS EXPRESSLY NONEXCLUSIVE THE NONDEFAULTING PARTY SHALL HAVE THE RIGHT TO EXERCISE ALL RIGHTS AND

REMEDIES AVAILABLE TO IT AT LAW OR IN EQUITY PROVIDED HOWEVER THATTHE LIABILITY OF THE DEFAULTING PARTY SHALL BE LIMTED TO DIRECT

ACTUAL DAMAGES ONLY AND ALL OTHER DAMAGES AND REMEDIES ARE

WANED IN NO EVENT SHALL EITHER PARTY BE1IABLF TO TFE OTHER PARTY

FOR CONSEQUENTIAL INCIDFNTAL PUNITIVE EXEMPLARY OR INDIRECTDAMAGES OR BUSINESS INTERRUPTION DAMAGES BY STATUTE IN TORT

CONTRACT OR OTHFRWISE EXCEPT THAT I THE FOREGOINGLMITATION SHALLNOT AFFECT OR LIMIT THE PARTIES INDEMNFICATON OBLIGATIONS IN

RESPECT OF THIRD PARTY CLAIMS OR II TO THE EXTENT PART OF AN EXPRESSREMEDY OR MEASURE OF DAMAGES SET FORT IN TFIS PPA OR THE SITE

AGREEMENT

18 Assignment

A Assingment This Agreement may not be assigned in whole or in part by eitherPary without the prior written consent uf the othcr Pazty which consent shall not bc unreasonxblywithheld or delayed Notwithstanding the foregoing Provider may without the prior writtenconsent of the City i assign mnrtgage pledge or otherwise collaterally assign its interests in thisAgrcement to xny Financing Party ii directly or indirectly assign this Agreement to an affiliateof Provider iii assign this Agreement to any entity through which Provider is obtaining financingor capita for the System and iv assign this Agrecment to any person succeeding to all orsubstantially all of the asses of Provider provided thal Provider shall be released from liabilityhereunder as a result of any of the foregoing permitted assignments only upon assumption ofProvidersobligations hereunder by the assigncc This Agreement shall be binding on and inureto the benefit of the successors and permitted assignees City may assign its rights and obligatiosunder this Agreement upon prior written conscnt of the Provider which consent shall not beunreasonably withheld to any entity of equal or greater creditworthiness than the CityNowithstanding the forgoing or anything to the contrary in this Agreement City shall have noright to make any assignment of this Agreement to he extent such assignmcnt would result in xchange in the tax treatment of this Agreement Provider any Financing Party or the SolarFacilities

19

Item 5.2

B Financing The Parties xcknowledge that Seller may obtain construction and longterm financing or olher credit support including saleIeasebacktrnsactions Trom lenders or thirdparties including tax equity or similar investors Financing Parties in connection with theinstnllation consruction ownership operation and maintennceof the System Both Parties agreein good faith to consider and to negotiate changes or xdditions to this Agrecment or sepxrateacknowledgements and consents that may be rcasonably requested by the Financing Parties

19 Confidentiality Publicity

A Confidential Information Any financial statistical penonal technical xnd otherdata and information relating to a Partys operations which re made available to the other Partyin order to carry out this Agrecment shall bc reasonably protected b such other Pxrty fromunauthorized use except to the exlent that disclosure thereof is required to comply with applicnblelaw including bu not limited to the California Public Records Act The disclosing Party shallidentify all confidential data and information ut the time it is provided Confidentiality does notapply to information which is known to recciving Party from other sources which is otherwisepublicly available or which is required to be disclosed pursuant to an order or reyuirements of arcgulatory body or a court

B Disclosure Other than under the REC Reporting Rights and except as my berequired by applicable law including but not limited o the California Public Records Act or asoherwise identified above neither Party shall mke any disclosure of any confidential informationrelated to this Agreement without hc specific prior written approval from the other of the contentto be disclosed and the form in which i is disclosed except for such disclosures to the Partiesfinancing sources creditors beneficiaries partners members officers employces agentsconsultants attorneys accountxnts and exchange facilitatorti as may be necessary to permit exchParty to perform its obligations hereunder and as required to comply with applicable laws or rulesof any exchange upon which a Partys shares may bc tradcd Nowihstanding the foregoingnothing contained herein shall be deemed to restrict or prohibi City from complying withapplicable law regarding disclosurc of information including but not limited o the CalifomiaPublic Records Act

C PublicitV The Parties share e common desire to generate favorable publicityregarding the Solar Facilities and their association with it Each of the Parties shall havc the rightdirectly or indirectly without the prior written approval of the other to do engage in any of thefollowing publicity or marketing activities a advertise or otherwise publicize the existence ofthe Solar Facilities any details of the Solar Facilities such Paztys involvement with the SolarFacilities the relationship betwecn the Parties b use any Solar Facilitics dat or informationobtxined or produced in the course of performing its obligations under this Agreement or thetransactions contemplated hereunder for purposes of such publicity or marketing activities c usethe corporate name or xny tradc name logo trademxrk or other service mark or other brxndimagery belonging to the other Party or any of its xffiliates or d file submit offer or consent toany publicity andor press release filing news conference or interview or otherwise respond tomedia inquiries relatcd to the Solar Fxcilities Without limitation of the foregoing Provider agrcesto share with City in digital format xny photogrphsand other schemdtics taken by and belongingo Provider of the Sites and the Solar Facilities and further agrees that City may use suchphotographs and other schematics for the purpose of marketing and promoting Citys operations

20

Item 5.2

Any publicity or marketing efforts initiated by either Purty shall include the other Parts nameandivolvement with the Solar Facilities as set forth below

Cirys rame und involnement chall he usec undchmuctrrized us site host ojdae nume ufsalurprojectj

Providcrsname and involvemenl shctll he used md characterized us J tie jinancier andowner nf die nunteofsolar projec

20 Legal Effect and Status of Agreement

A City Not Operator Neither City nor any Party related to City shxll have the rightor be deemed to operate he Solar Facilitics for purposes of Section 77U1e1Aiof the InternalRevenue Code

B BurdensBenefits of Solar Facilities Ownenhi Notwithstanding any provision tothe contrary der this Agreement neither City nor any Party related to City shall a bear or bedcemed to bexr xny significant financial burden if there is nonperformance by Provider under thisAgreement as he phrase any significant financial burden if there is nonperformance is used inScction 7701e4Aiiof the Internal Revcnuc Code or b be deemed to reccive any significantfinancial benefit if the operating costs of the Solar Facilities are Iess than the standard ofperformence andor operation set orth in this Agreement as the phrase significant financialbenefit if the operaing costs of such facility arc less than the standards of performance oroperation is uscd in Section 7701e4Aiiiof the Intemal Revenue Code

C No Capital Lease Forward Contract The Partics acknowledge and agree tha foraccounting or ax purposes this Agreement is not and shall not be construed as x capital lease andpursuant to Section 7701e3of the Internal Revenue Code this Agreement is and shall be treatedby each Party as a service contract for the sale to the City of electric energy produced at alternativeenergy Solar Fecilities Eaeh of the Partics xgrecs that it will not dispute that i he transactioncontemplated by this Agreement constitutcsaforward contracP within the meaning of the UnitedStates Bunkruptcy Code and ii each Party isaforward contruc merchant within the mexningof the United States Bankruptcy Code

21 Environmental Compliance

Provider shall complete at Providers sole cost all necessary studies assessments anddocumentation required for compliance with the Californix Environmental Quality Act to theextent any work required by this Agreement necessitates at any point during thc term of thisAgreement a negativc declaration mitigutcd negative declaration or environmental impact reportProvider shall prompdy provide notice to City upon becoming aware of any conditio orcircumstances arising under this Agrcement or the work contemplated hereunder that may requireaction for CEQA compliance or may othcrwisc have a significant eCfect o thc environmentProvider and City shall cooperale and provide to eacli other any reasonably reyuireddocumentxtion noice assurance or approval for purposes of complying with CEQA Nothingsct forth herein shall be interpreted to requirc either Party to undertakc cnvironmental remediationunder this Agrecment if mandated by Ixw rcgulation or as a condition of regulatory approval priorto the construction of the Solar Facilities The City Counci shall be the Iead agency far the

21

Item 5.2

purposes of filing any and all required documents and obtaining the relevant approvals includingbut not limited ro any noice of exemption The City shell bear its own costs incurred as the leadagency and for review of environmental compliance

22 Miscellaneous

A Amendments This Agrecment mny be amended only in a writing signed by bothProvider and City or their respective successors in interest

B Noices Any notice rcyuired or permitted lo be given in writing under thisAgreement shall be mailed by certified mail postage prepaid rcturn receipt requcsted or sent byovemight courier service or personally dclivered to a representetive of the receivin Party or sentby facsimile or email provided xn identical notice is also sent simultaneously by mail overnightcourier or personal delivery as otherwise provided in this Section All such communicationsshall be mailed sent or delivered addressed to the Party for whom it is intcnded at its address setforth below A Party may change its address by providing written notice to the othcr Party inaccordance with this Section

f to Citv If to Provider

City of Lathrop LATHROP SOLAR 1 ILCAttention Pat Flynn Attention CEO

390 Towne Centre Drive 360 22nd Strcet Suite 600

Lathrop CA 95330 Oakland CA 94612Phonc 2U9 9417430 Phone h882i986273

Facsimile 20y 992744y Facsimile K2i23ii367725

Email pflynnwcilathropcaus EmaiL EMALADDRESS

C NonWaiver The failure dely or forbeazance by either Party to exercise any ofits rights or remedies under this Agrecment or to provide written notice of uny default to adefaulting Party will not constitute a waiver of such rights or remedies No Party will be decmedto have waived any right or remedy unless it has made such waiver specifically in writing Thewaiver by either Pxrty of any default or breach of any term condition or provision herein containedshall not Ue deemed to be a waiver of any subsequent breach of the same term condition orprovision or any other term condition or provision contained herein

D No SetOfP Except as othcrwisc set forth herein and in the Site Agrecment cachParty hereby waives all rights to setoffs of amounts due hereunder Thc Parties agrce that allamounts due hereunder are indepcndent obligations nd shall be mede without setoff for otheramounts due or owed hereunder

E Intellectual Propery Nothing in this Agreement shall be conslrued to convey toCity a license or other righ to trademarks copyrights technology or other intellcctual property ofProvider

F Severabilitv Should any provision of this Agrecment for any reason bc declaredinvalid or unenforceable by final and nonappcalable order of xny court or regulatory body havingjurisdiction such decision shall not aftect the velidity of the remaining portions and the remainingportions shxll remain in full force and effect as if this Agreement had been executed without theinvalid portion

22

Item 5.2

G Survival Any provision of this Agreement that expressly or by implication comesinto or remains in full force following the terminaionor expirxtion of this Agrccment shall survivethe terminxtion or expiration of this Agreement

H Headines The headings in this Agreement are solely for convenience and ease ofreference and shall have no cffect in interpreting the meaning of any provision of this Agreement

1 Choice of Law This Agrccment shxll be construed in accordance with the laws ofthe State of Cdlifornia without regard to its conflict of laws principles The venue for any disputearising out of or relating to this Agreement shall be in the California county in which the SolarFacilities are located

J Binding EffecL This Agrecment and its rights privileges duties and obligationsshall inure to the benefit of and bc binding upon each of the Parties hereto together with theirrespective successors and permitted assigns

K No Partnershio This Agreement is not intendcd and shali not be construed tocreate any association joint vcnture xgency relationship or parnership between the Parties or toimpose any such obligation or liability upon either Party Neithcr Party shal have any right poweror authority to enter into any agreemcnt or undertaking for or act as or be an agent or representativeof or otherwise bind the othcr Party

L No Third Pary Beneficiaries This Agreement is solel for the benefit of the Partieshereto and no right or cause of action shall accrue by reason hereof for the benefi of any thirdparty no a party hereto other than the Indcmnitees and uny Sccured parties

M Counterparts This Agrecment may be executed in counterpxrts which shallogether consitute one and the same ugreement

N Further Assrances Upon the receipt of a written requcst from a Pary each Partysha exccute such additional documents instruments estoppdti and assurances and take suchadditional actions as are reasonably necessary and desirable to carry out the terms and intenthereof including but not limied to an interconnection agrecment Neithcr Party shall unreasonablywithhold condition or delay its compliancc with any reasonxhle requcst made purtivant to thisScction

O Entire AgrecmenL This instrument xnd the documents refcrenced herein represent thcfull and complete agreement betwecn the Parties hereto with respect to the subjcct matter containedherein and supersedes all prior writlen or oral agrcements between said Parties with respect to saidsubject matter

23

Item 5.2

IN WITNESS WHEREOF the Parties have exccuted this PPA Agreement on Effective Date

CITY

PUBLIC ENTITY

ByName Datc

Title

PROVIDER

LATHROPSOLARILLCByName Dute

Title

2a

Item 5.2

Exhibit A

Definitions

1 Actual Insolation Condilions means the aggregate solar irradiation far the Site as measuredby pyranometer installed at the Site in any applicabic calendar yedr If pyranometer data isnot available at the Site solar irrndiation data shll be collected from third party data providersacceptable to both Parties The cost to collect third party data shall be shared equally betwecnParies

2 Annual Escalation Rate shall mean the rates at which the Base Price shall escalate as setforth on Exhibit B

3 Base Price shall mean the per kWhac rates as set forth on Exhibit B

4 Delivery Point means each energy delivery point within each Sites electrical system onCitys side of the SitesDistribution Utility meter as designated in the xpplicble DistributionUtility interconnection agreement

5 Distribution Utilitv shall be Pacific Gas Electric or its successor utility

6 Environmental Financial Incentives means each of the following financial rebates andincentives that is in effect as of the Effective Date or may come into effect in the future Iproduction energy or investment tax credits associated with the development constructionownership or operation of the So1ar Facilities accelcrted deprecixtion and other financialincentives in the form of credits reductions or allowances associated with the Solar Facilities

or the Green Attributes that may be applied o reduce any stte or federal incometationobligation 2 performancebased incentives under applicable statc or federal law or utilityprograms including without limitation the federal investment tac credit and any paymentsmade to City or its affiliates or any feedin tariffs that may come into effect in the future and3 all other rights credits rebates benetits and entitlemelsof any kind howsoever entitledor named whether arising undcr fedcral state or locnl law intcrnationel trety tradcassociation membership or the like arising from the Solar Facilities or the Oulput or otherwisefrom the development installation or ownership of the Suler Fucilitics or the production sxlepurchase consumption or use of he Output Without limiting the foregoing EnvironmentaFinancial Incentives includes thc right to apply for and enlitlement to receive incentivesunder any demandside management distributed gencration or energy efficicncy programsoffered by a utility company a thirdPuty provider or the State in which the Solar Facilitiesis located any incentive offered pursuant to a renewable energy program or any otherincentive programs offered by or in he State in which the Solar Facilitics are locxted the rightto receive a grant under Section 16U3 of the American Recovery and Reinvestment Act of2U09 and the right to claim federal inaime tax credits under Sections d5 or 4ti of the nternalRevenue Code or any state tax law or income tax deductions with respect to the Solar Facilitiesunder the Internal Revenue Codc or any titate ax lawFnvironmental Finxncial Incentives donotinclude Green Attributes

1

Item 5.2

7 Expiration Date means thc last day of the month thdt follows the twentieth 20th annualanniversary of the Commercial Operation Date

8 Extension Causes means one or more of the following events or circumstances whichaffects Providcrsprocurement or construction of the Solar Facility each of which shall entiUeProvider to an extension to the Commercial Operatiun Deadline

a any or all of the work is delayed or suspended by Ihe City or any of its employees agentscontractors or represenatives or any other person acting by on behalf or through any ofthe foregoing collectively a City Person

b any breach by the City or any City Person of the terms and conditions of this Agreementor the failure by any City Person to timely perform its obligations hercunder or

c the occurrence of a Force Majeure event

9 Force Majeure means any event or circumstance beond thc rcasonable control of the affectedParty that wholly or pazdy prevents or delays performance of xny obligations urising underthis Agreement including without limitation the followingiacts of God including rangcor forest fires floods hurricanes typhoons volcanic eruptions earthquakes tornndos ii actsof sabotage or destruction of the Solar Facility or any portion thereof iii wxr acts of a publiceemy or other civil disturbance iv nationwide or regionnl strikes or lebor disputes vrestraint or acts or omissions of any governmental authority or the Distribution Utility vichanges in law ordinxnce or regulation or Permit or the interpretation or application thereof

10 Green Attributes shall mcan any and Il credits henefits emissions reductions offticts andallowances howsoever entiUed attributable to the generation of Output from the SolarFxcilities and its displacement of conventional energy generation that is in effect s of theEffective Date or may come into effect in the future Green Attributes include but are notlimited to Renewable Energy Certificates as wcll as 1 any avoided emissions of pollutantsto the air soil or water such as sulfur oxidcs SOx nitrogen oxides NOx carbon monoxideCO and other pollutants 2 any avoided emissions of carbon dioxide CO2 methancCH4 nitrous oxide hydrofluorocarbons perfluorocurbons sulfur hexatluoride and othergreenhouse gases GHGs that have been detennined by the United NationslntergovemmetalPanel on Climute Chnge or otherwist by law to contributc to thc actualor potential threat of allering the Exrths climate by trapping heat in the atmosphere and3 thc reporting rights to these avoided emissions such as REC Reporting Rights GreenAttributes do not include i any energy capacity reliability or other power attributes fromthe Solar Facilities ii Environmental Financial Incentives iii fuelrclated subsidies ortipping fees that may be paid to Provider to ccept certain fuels or local subsidies receivedby the generator for the destruction of particular prcexisting pollutxnts or the promotion oflocal environmental benefits or iv emission reduction credits encumbered or used by theSolar Facilities for compliance with local state or fedcral operating andor air quality Permits

11 Excuse EvenP means an event that interrupts or prevents construction or operetion of any SolarFacility that is cxused by or results from Forec Majcure b thc acts or omissions of theDisribution Utility or its personnel so long as Provider is diligent in seeking Distribution Utiliy

Item 5.2

interconnection and approvals c the acts or omissions or Ihe negligence of City or its personnelor any third party including Citys failure to perform any of its obligations under this Agreementor to procure and effectively instll all necessary equipmetto enablc delivery of Output from theDelivery Points to Citys facilities

12 Intemal Revenue Code shall mean the Intcrnal Revenuc Codc of 1986 as amended

13 kWac means kilowatt alternating current

14 kWde means kilowatt direct current

I5 kWhac means kilowathour xlternating current

l6 Latent Condition means any condition at the Sitc that is not disclosed to Provider or is notrcadily apparent from documents provided to Provider prior to commencement ofcostruction that identify such condition or fram the geotechnical smdy performed byProvider or visual observations without performing destructive tcsting or opening conccaledportions of the Site

17 Output means the lotal quantity of all actual clectrical power generated by thc SolarFacilities as measured by a Meter at the Delivery Point mcasured in kWhac Output does notinclude the Green Attributes Environmental Financial Incentives RECs or REC ReportingRights

18 Permits means all governmen permits and approvals regulatory or otherwisc reyuired forIhe construction installation completion and operation of the Solur Facilities

19 Person means any individual corporation pxrtnership joint venure association joint stockcompany wst trustee estate limited liability company unincorporated organization rcalesxte investment trust government or any xgency or poliical subdivision thereof or any otherform oT entiry

20 Project shall have that meaning as set forth in thc Recituls of Ihis Agreement

2L RECs or Renewable Energy Certificates means renewable energy certificates reluted toand representing Grcen Attributes also hnown as green tags renewable energy credits ortradablc renewable certificates which are tredable environmental commoditics in thc UnitedStates and represent 1 megawatthour MWh of electricity generated from an eligiblerenewable energy resource These certificates can be sold and truded and the owner of theREC can claun to have purchsed renewable energy

22 REC Reportinahtsshall mean the right of a REC purchaser to report the ownership ofaccumulated RECs in compliunce with federal or state law if applicable and to a federal orstate agency or any other Party at the REC purchasers discretion and include withoutlimitation hose REC Reporting Rights accruing under Section 16U5bof the Energy PolicyAct of 1992 and any present or future federal state or local law regulation or bill andinternational or foreign emissions trading program

3

Item 5.2

23 Site or Sites eachaSite collectivcly thc Sitcti mcans thc portion of Citys realproperty on which a Solar Facilities are to be located pursuant ro this PPA Agreement an asfurther described in he SiteArcemcnt

24 Site Agreement means the agreement hetwecn the Parties governing Providersuse andaccess of Citys rcal property for purposes of effectuating the Providersobligations underthis PPA Agreement including but not limited ro the installation and operntion of SolarFacilities

25 Solar Faciliv means each solar photovoltaic generation plant together with all necessaryinverters ancillary plant and equipment as defined in Exhibit F with an installation sizcexpressed in kWdc to be installed at the Site

26 Termination Value shall eyual the product of i the capacity in Watts DC of the SolarFacility and ii thc value per Watt duc in n year or at any point within such year as set forthin Exhibit C

d

Item 5.2

EXnnrB

Power Pricc

Annual

Contract Period Escalation

Months Base Price Rate Output LDs

112 01430 kWhac na U0200 kWhac

1324 01472 kWhac 295 00206kWhac2536 U1516 kWhac 2955 Q02 kWhac

3748 01560 kWhac 295 00218kWhac

4960 O1606 kWhac 295i OU225 kWhac

6172 O1654 kWhxc 295ic 00231 kWhac

7384 01703 kWhac 2951c 00238 kWhac

8596 01753 kWhac 295r 00245 kWhac

97108 01804 kWhac 295Yr 00252 kWhac

10912U OISSti lkWhac 2959b 00260 kWhac

121132 01912 kWhac I 295 00267 kWhac

133144 01969 kWh 295ir 00275k

145156 02027 kWh 295 002ti3 kWhac

157168 0211ti7 kWhac 2955 00292 kWhac

169180 12148 kWhac 295r 00300 kWhac

181192 02212 kWhac 295r 00309 kWhac

193204 02277 kWhuc y5 00318 kWhac

205216 O23dd kWhac 95 00328 kWhac

217228 02413 kWhac 295 OU332S kWhac

229240 02484 kWhac 295 00347 kWhxc

Item 5.2

Exhibit C

Termination Value

Contract Period Termination Value

Months er Watt

112 5131283

1324 48816982536 4626325

3748 43645514960 40957086172 36709437384 36386798596 35969t497108 3544934

109120 3481526121132 3405673

133144 3316195

145156 3211815

157168 3091148169180 2952694

181192 2794827193204 2675788

205216 2413670217228 2186410

229240 1931772

Item 5.2

Xnbcn

Purchase Option Pricc

Milestone Value

End of Year 6 3020858

End of Year 02831341

End of Year 15

Expiration Date1281fi87

Item 5.2

Xnnr

Projected Annual Output

Term Yrojected Outputin Years in kWhac

Year I 1906986

Year 2 189745 L07

Year 3 1HH7963iS1

Yeur 4 187852

Year 5 lti6

Year 6 18

Year 7 185U48679

Year 18123436

Year 9 1H320281Year lU 182286804

Year I1 1813753J0

Year 12 lti1684y3

Yea 13 179566151

Year 14 17ti668320

Year l5 1777749J9Year 16 171H6111a

Year l7 176U01673

Year Iti 17512165

Year 19 17424605Year 20 1733742i2fi

Item 5.2

Exhibit F

Description of Solar Facility

See attached site plans

THE REMAIDER OF THIS PAGE IS LEFT I3LANK

Item 5.2

ATTACHMENT 5

SITE AGKEEMENT

by and betwecn

LATHROPILLC

and

CITY OF LATHROP

dated

NOVEMBER 3 2014

Item 5.2

TAI3LE OF CONTENTS

Paee

RECITALSl

l LICENSE PREMSES AND RIGHTS t

2 TERM 2

3 LCENSE FEE 2

4 INSTALLATION OF THE SOLAR FACILITIES 2

5 USE OF LICENSE PREMISES 3

6 COMPLIANCE WITH LAWS 3

7 DEFAULT 3

8 REPRESENTATONS WARRANTIES AND COVENANTS OF GRANTOR 3

9 REPRESENTATIONS WARRANTIES AND COVENANTS OF GRANTEE 4

70 TAXES5

11 INSURANCE 5

12 LIABILITY AND INDEMNITY 6

13 CASUALTY OR CONDEMNATION 6

14 ASSIGNMENT6

15 REMOVAL OF SOLAR FACILITIES 6

16 MISCELLANEOUS7

Exhibit A The Sites Solar Facilities and License PremisesExhibit B Solar Facilities Specifications

Item 5.2

SITE AGRFEMENT FOR SOLAR FACILITIES

This Site Agreement for Solar Facilitics License is made and enlered into as of this3rd day of November 2014 Parties Effective Date between LATHROP I LLC Granteeand the City of Lathrop Grantor Grantor nd Grantee are collcctively nferred to herein asParties and individually as Party

RECITALS

WHEREAS Grantor owns certain real properticti located at ADDRESS Property

WHEREAS Grantee is in the business of installing and operating solar puwer facilitiesand selling electric energy generated from such facilities

WHEREAS Concurrently herewith Grantee and Grantor havic entered into a Solar PowerPurchase Agreement calling for i the instxllation by Grantee of a photovoltaic energy generatingsystem Solar Facilities on Grantorti Property the location of which is set forth in Exhibit Aand ii the sale by Grantee to Grantor of electric energy generated by the Solar Facilities PPAor Agreement

WHEREAS Grantee desires thc right to access ovcr under and along a portion of theProperty as described on ExhibitASites in order to install xnd operatc the Solar Facilities infurtherance of Granteesobligations under the PPA and

WHEREAS Grantor is willing to grant such access in the form of a license on the termsand conditions set forth herein for the purpotie of enabling Grntee to fulfill its obligations underthe PPA

NOW THEREFORE in consideration of the forcgoing and the mutual covenants ndageements herein contained thc Parties hereby agrec as follows

1 License Premises and Rights

A License Premises Granror pursuant to the terms and conditions set forth hereindocs hereby grant convey and Vansfer an irrevocable exclusive royalty or rent free licentie overunder and along the Sites and additional areas of the Property as geogaphically illustrated asExclusive in Exhibit Athe Exdusive License and an irrevocable nonexclusive royulty orrent free license over under and alung thc site and additional areas of the Property asgeographically illustraed in Exhibit Athe NonFxclutiive License and together with theExclusive License the License together with such access is otherwise reasonably requircd byGrantee to perform its obligations under the PPA including but not limited to pathwdys foringress and egress access and temporary use of xreas for construction staging activitics as well asmaintenance and operation of Solar Facilities provided Grantee rcccives prior written epprovalfrom Grantor for such temporary uses License Premises Notwithstanding the grant of theExclusive License to the License Premises Grunor expressly reserve all rights associated withor incidental ro the following

Item 5.2

1 With respect to the Exclusive License to the arca marked as Parking Canopy Areaon Exhibit Athe Parking Canopy Arca to use such Parking Canop Arca for vehicle parkingin he ordinury course of business of Grxntor and for nll other uses necessary or advisable inconnection therewith or incidentxl thercto including the right to repair maintain and secure thcParking Canopy Area and

2 With respect to the Exdutiive License in ull other Exclusive License Arcas the rightto maintain the security perimeter of the Property and all rights necessary or ndvisable inconnection with or incidental thereto

Provided however that any use by Granror of the Exclusive License areas contemplatedin 1 or 2 abovc shall not interfere with the SolrFcilities or the operation or maintenancethercof shall not obstruct the Solar Facilities uccess to sunlight and shall not relieve Grantor fromits obligalions under the PPA

B Access to License Premises Within fifteen IS days of the Effcetivc Date Cranteeshall provide suggcsted terms consistent with the PPA governing Grantcesaccess and use of theLicense Premises including bul not limited to matters such us work days hours holidays andfoteseen conflicts xs well as any other reasonable restrictions or coordinative efforts required tofacilitate Granteessatisfactory performnce of its obligations under thc PPA Within fiftccn 15days of Grantors reccipt of Grantees suggested terms Grantor will make such reasonablcadjustments addiions deletions and other amendments ro Granteessuggcsted terms as may berequired for Granrorsongoing use of the Sitcs and providc Grantec with the final terms SitcsAccess Rcquirements Granor further reserves the right ro reasonably deny any und ull accessro Ihe Property at any time except for emergency access as otherwise permitted by this Licenseunless such access is part of the Grantees reesonable use of the Licensed Prcmises for theinstallation construction operation or maintenance of the Solar Facilities

All rights of access and use under the License xre restricted to Grantees officcrs employeesagents andor contractors retained by Grantee and approved in writing by Granor and such Partiesshall be reyuired to show identification prior to the reyuested ccess In the event of emergencyand at Grantees sole risk Grantee is permitted to access theIicense Premises twentyfour 24hours per day seven 7 days per week Acccss to the License Premises by construction workersmateria providers vendors or agents of Grantce during construction shall be conducted so as tominimize interference with the operations and ectivities of Grantor Gratee shall comply with allapplicable law regarding access to Grantorspremises including but ot limited to any requiredinspections of the Solar Fucilities or related work or background checks or fingerprinting of anyGrantee employee agent or contractor Grantor rescrves thc right after notice und discussionwith the Grantee to revoke acccss privileges to any person employcd or contracted by Granteethet the Grantor rcasonably deems ro bc disruptive intcmperale unsafe or who violates any lawor unreasonably disobeys any Grantor written directive or policy which is generally applicable toall of Grantorsemployees or invitces and is made known to the Grance

2 Term The term of this License Term shall commence as of the Effective Date andshall automatically terminate upon the carliest date of any expiraion or termination of the PPAregardless of the cause hereof but not prior to the end of any period of timc provided in the PPAfor Grantces elecled or required removal of the Solar Facilities

Item 5.2

3 License Fee Grantee shall pay Grantor IOI per ycar for the Tcrm payable in advanceon the first dxy of the Term and which may be offsct against Grmtor payments duc under thePPA

4 Installation of the Solar Facilities

A Grantor Consent Grantor hereby con5ents to Granteesconstruction installationoperation maintenance repair and replacement of the Solar Facilities on the License Premisespursuant to the terms and conditions of the PPA including but not limited o all reyuiredequipment materials xnd structures eccording to specifications attached xs Exhibit B Duringconstructio and installation Grantor upon reasondble request from Grantee will provideadequatc additional space within the Property on a temporary basis for Ixy down areas Gruntoracknowledges and ugrees that the installation of the Solsr Facilities will reyuirc physicxllymounting and adhering the Solar Facilities to the Sites and other portions of the License Premisesand he Property

B GraneesOwnership of Solar Faciliies and Outpu

The Solar Facilities is personal property whether or not Ihe same is deemed real or personalproperty under Applicable Law and shll not attach to or he decmed e part of or a fixure to Ihe LicensePremises or Property Grantee shall be thc legal and beneficial owner of the SolnrFcilities at all timesand Grantor shall have no righ title or interest in Ihe Solair Fxcilities or xny componcnt thereofnotwithstanding tht any such Solar Facilities may be physiclly mounted or adhcrcd to the LicensePremises or Property Grantor covenants Iha it will use commercially reasonable cTforts to place allprties having m interest in or lien upon the Property on notice of the ownership of the Solar Facilitiesand the legal status or classificaionof the Solar Fncilities xs personal property If thcre is tmy mortgageor fixture filing against the Property or License Premises which could reasonxbly be construed xtiatxchingto the Solar Facilities as a fixture of the Property or Licensc Premises Grantor shll provide a disclaimeror release from such lien holdec Grantor as the fee owner of the Property consents to lhe filing byGrxntee on behalf of Grantor of a disclaimcr of Ihe Solar Facilities as fixture of the Property or LiccnsePremises in the office where rexl estate records are customarily filed in Ihe jurisdiction of the Property

5 Use of License Premises Grantec shall have the right during the Term to use the LicensePremiscs for the construction installation operntion maintenance repair and replaccment of theSolar Facilities Grantees use of the Liccnse Premiseti for thc above limited purpose subject toall terms conditions and restrictions contained in this Liccnse the PPA and the Sites Access

Requirements includes but is not strictly limited to i activilies related to the operatioumonitoring maintenance cleaning repairing replacing and dispoing of all or part of the SolarFacilitics ii addition andor removal of equipment required for the repair replucement orremoval of the SolarFxcilities iii site visits of the License Premises with Grantees guests forpromotional purposes with prior written approval of Grantor during times reasonably acceptableto Grantor and iv performance through its own cmployees or through other agents orcontractors of any and xll tasks necessary or convenicnt to carry out the above activities

6 Compliance with Laws Grantee shall perform its obligations under this License inaccordance with all applicaUle laws rules regulations codes ordinances and Grutor policies

1

Item 5.2

7 Default In the event a Party breaches any obligation representxtion warranty covenantor term of this License the nondefaulting Party shll provide writtcn notification to the defaultingPazty indicating that they are in default of this License and describing the default in rexsonabledetail The defaulting Party upo reccipt of writton noticc of default shall have thirty 30 dxysto cure any payment default and fortyfive 45 days to cure any other breach or default Exceptfor nonpayment related defaults the cure period may be extended for up to 90 days where thedefaulting Party has begun and continues to diligently pursue rexsonable curative action or whereforce majeure is occurring and preventing curativc action If an event of default ha occurred andis coninuing then following the expiration of an applicable cure period the nondcfuulting Purtymay at its discretion a seek damages or specific performance from a court of appropriatejurisdiction andor b terminate this License

8 Representations Warranties and Covenants of Grantor

A Authorization and Enforcexbilitv Upon pproval or ratification by Grantorsgoverning body and the execution and delivery by Grantor this License shall have been dulyauthorized by all necessary action and Ihis License constitutes a valid and legal obligation ofGrantor enforceable against Grantor in accordance with its erms except as may be limited bybankruptcy reorganization insolvency bank moratorium or similar laws relating to or affectingcreditors rights generlly and general principles of equity whether such enforceability isconsidered in a proceeding in cyuity or at law

B Title to Property Grantor represents and warrants that Grntor holds lawful fcetitle to the Property and the License Prcmises xnd the right to enter into this License Grantorrepresents and warrants to Grantee that us of the dute hereof therc are no known munetary licnsor leses encumbering the Property or other encumbranccs on the Property that limit Granlorsability to enter into this License or prevent the construction installation operaion or maintenanceof the Solar Facilities within theIicensc Premises

C Station Power Grantor shall provide Grntec with access to utilitics includingwater and electric energy distinct from thc Solar Fxcilitics Output at the License Premises forGrantees reasonnble consumption in the startup dnd operation of the Solar Facilities SttionPower Grantce shxll reimburse Grxntor for the cost of all such utilities in excess of one hundredfifteen percent 1151c of the cost of the same utility at the Site or comparable Site used in hesame month during the prior year where Station Power is the probable causes of such excess

D No Interference with and Proection of Solur Facilitics Grantee acknowlcdgesLicense Premises is a public facility accessible to the public and in the case of shade structuresused for parking purposcs Grantor will not conduct xctivitics on in or about the Property that havea reasonable likelihood of damaging impairing or otherwise adversel affecting the SolarFacilities or access to insolation Grantor shall takc all resonable steps to limit third Party accessto the License Premises in order to minimize unnecessary risk ofdmage or destruction of theSolar Facilitieti Grantor shall implement and maintain rcasonable and appropriate securitymeasures on thc Property to prevent Grantorsemployees invitees agents and representatives andother unrelaed thirdParties from unreasonably impairing Grantees performance of itsobligations undcr thisIicense and the PPA on theIicensc Prcmises otherwise adverscl affecingthe Solar Facilities Grantee has reviewed Grantorsexising security measures al lhe Sites and

4

Item 5.2

affirms thet such measures satisfy Grantorsobligutions under this Section provided that Granteereserves the right to implement xdditional security measures to protect thc Solar facilitics in itsreasonable discretion upon notice to Grantor Grantce shall be solcly responsible tbr fencing andsecuring Granteeswork storage and staging areas on theIicense Premiscs as well as fencing andsecuring the Solar Facilities and providing such additionxl sccurit measures as arc required bythe PPA

E Hazardous Materials To thc hest of Grantorsknowledge thcre arc no substanceschemicals or wastes identified as hazardous toxic or dangerousmterials in any applicable lawor regulation present on in or under he Property in violation of any applicable law or regulutionNeither Grantor nor Grantec shall not introducc or use xny hazardous toxic or dangerous materialson in or under the Property in violation of any applicable law or rcgulation f Grantor or Grntecbecomes awure of any such hazardous toxic or dangerous materils Grantor or Grantec shxllprompdy notify the other Pxrty in writing of the ype und location of such matcrials Grantorassumes responsibility for any liability or cicaup obligations for any contamination or pollutionor breach of cnvironmental laws relatcd to the Property including the License Premises unlessdireclly attributable to the Solar Facilities or the acts or omissions of Grantee in which case Ciranteeshall be liable and responsible as set forth in Section 9b below

F Nonnisturbxnce Aerecments Cirnntor hxll obtain a nondistufimce agrccment1DAin favor of Grxntee from any third party who now has or may in the future obtain tm interet in the Propertyor License Premises including withuut limiation any lendcrs to Grantor which NDA halL iacknowledge md consent to Ihe Grantceti rightti to the License Premises and the SularFicilitics under IhisLicense ii acknowlcdge that he third party has no inerest in the Solar Facilitics and shall not gain anyinterest in Ihe Solar Fxciliies by virtue of Ihe Parties performance or brcuch of thi Licensc iiiacknowledge hat the hird partys intcrcst in the Licentie Premitiet ifmy is subjcct o Grantee inerestundcr Ihis License iv waivesmylien the third party my hxve in md to Ihe Solar Facilitics and v xgreesnot to disturb Granteespossession of the License Premises

9 Representations Warranties and Covenants of Grantee

A Authorization nd Enforceabilitv The execution and delivery by Grantee of andthe performance of its obligations under this License hxve been duly authorized by all necessaryaction xnd no further consent or approvx of any other person is required Grantee represents andwarrants that its entering and executing this License does not contravene any provision of orconstitute x default under any indenture mortgage or other material agreement binding on Granteeor any valid order of any court or regulatory agency or other body having authority to whichGrantec is subject Grantee represents and warrants that Ihis License constiWtes the legal and validobligation of Grantec enforceable against Grantee in accordance with its terms except as may belimited Uy bankruptcy reorganization insolvency bank moratorium or similar laws relating to oraffecting creditors rights generally and general principles of equity whether such enforceabilityis considered in a proceeding in equity or a law

Item 5.2

B Hazardous Materials Grantee shall not introduce or use any hazardous toxic ordangerous materials on in or under lhe Property in violation of any applicable law or regulationIf Grantee becomes aware of any such hazardous toxic or dangerous malerials Graitee shallpromptly notify Grantor in writing of the type and location of such matecials Grantee assumesresponsibility for any liabiliry or cleanup obligations for any contamination or pollution or breachof environmental laws related to the use of any hazardous toxic or dangerous materials on in orunder the Property the Sites or the License Premises attributable to the Solar Facilities or the actsor omissions of Grantee

10 Taxes

A Grantee Taxes Grantee shall pay all persoual property taxes business or licesetaxes or fees service payments in lieu of such taxes or fees annuai or periodic license or use feesexcises assessments levies fees or charges of any kind which are assessed levied chargedconfirmed or imposed by any public authority against Grantee in connection with Granteesoccupancy and use of the License Premises or the construction installation operationmaintenacerepair or replacement of the Solar Facilities

B Grantor Taxes Grantor shall be responsible for all real property txxes relxting tothe Property all taxes computed upon the basis of the net income of Grantor or payments derivedfrom the License Premises by Grantor and all business or license taxes or fecs service pdymentsin lieu of such taxes or fees annua or periodic license or use fees excises assessments leviesfees or charges of any kind which are assessed levied charged confirmed or imposed by anypublic authority against Grantor in connecion with Grantors grant of the License Premises toGrantee

11 Insurance

A Grantee Insurance At all times during the Term of this License the term of thePPA and any necessary extension thereof for removal of the Solar Facilities from the PropertyGrantee shall obtain maintdin ad keep in full force and effect the followingiisurance forcoverage of all obligations and associated xctivities under this License and the PPA including butnot limited to the use and occupancy of the License Premises the business operated by Grantorthereon and the construction inslallation operation mainCenance ad repair of the Solar Facilitiesin the amounts and with the conditions required as set forh herein Each policy required belowshall include an additional insured endorsement in favor of Grantar for ongoing and completedoperations which endorsement shall specify that such additional insured coverage is primary andnoncontributory as to any other coverage available to the additional insured Grantee shall withinthirty 30 days of the Effective Date of this License and annually therenftcr provide certificalesof insurance and endorsements demostrating compliance with the requirements of this Section

1 Workers Compensation nsurance for Granteesemployees to the extento1statutory limitsand Occupational Diseasc and EmployersLiability Insurance for not less than1000000

2 Commercial Genera Liability Insurance or its equivalent including but not limitedto Products and Completed Operations and Contractua Liability as applicable toGranteesobligatiosuder this License and the PPA with limits not Less than

6

Item 5.2

i Personal Injury coverage at2OOQ000 per occurrence and

ii Property Damage coverage at 000000 per occurrence

3 Automobile Liability Insurace with limits not less than Bodily Injury coverage at1000000 each accident and Property Damage coverage at1000000 eachaccident

4 Excess Liability Insurance with a aggregate Limit of not less than5000000

B Grantor Insurance Grantor represents that it maintains and covenants that it shallmaintain during the Term i insurance sufficient to insure it against loss or destruction of theLicese Premises including losses occasioned by operaCion of the Solar Facilities and ii generalliability insurance including bodily injury property damage contractual and personal injuryNotwithstanding the foregoing Grantor reserves the right to self insure

C Waiver of Subro ation Grantor and Grantee shall cause each insurance policyobtained by them to include a waiver of subrogation or waiver of the transfer of rights of recoveryagainst the other Party to the insurer inconection with any damage covered by any policy

12 Liability and Indemnity

To the fullest extent provided for by law each Party Indemnifying Party agrees to indemnifydefend and hold harmless the other Party its directors officers employees and agents each anIndemnified Party from and against any and all claims whether or not involving a lhirdPartyclaim including demands actions damages loss costs expenses and attorneys feescollectively Indemnity Claims arising out of or resulting from ay breach uegligent act erroror omission or intentional misconduct by the Indemnifying Party or its trustees directors officersemployees contractors subcontractors or agents under the terms of this License providedhowever that the Indemnifying Party will not have any obligation to indemnify the IndemnifiedParty from or against any Indemnity Claims to the extent caused by resulting from relating to orarising out of the negligece or intentional misconduct of an Indemnified Party or any of itsdirectors officers employees or agents

If an Indemnified Party determines that it is entitled to defense and indemnificatio under thisSection such Indemnified Party shall promptly notify the Indemnifying Party in writing of thelndemnity Claim and provide all reasonably necessary or useful information and authority to settleandor defend Indemnity Claim Defense and indemnification provided by the Indemnifying Partyunder this Section shall be provided with Iegal counsel of the Identified Partys choosing Nosettlement that would impose costs or expense upon the Indemnified Party shall be made withoutsuch Parryswritten consent

13 Casualty or Condemnation In the event any Site or Sites is condemned damaged ordestroyed so as to i make the use of the License Premises impractical as determined by a qualifiedengineering consultant retained by Grantor and reasonably acceptable to Grantee and ii withrespect to any damage or destruction of the License Premises qualify asawnstructive total lossunder applicable insurance policies then either Party may elect to terminate this License on notless than thirty 30 days prior otice to the other Party effective as of a date specified in such

7

Item 5.2

notice Lf neither Party elects to terminate this License pursuant to the previous sentence Grantorshall exercise commercially reasonable efforts to repair the damage to the Site or 5ites and returnthe License Premises to its condition prior to such damage or destruction except that Grantor shallin no event be required to repair replace or restore any property of Grantee including but notlimited to the Solar Facilities which replacement or restoration shall be GranteesresponsibilityIn the event of an award related to eminent domain or condemnation of all or part of the Site orSites Grantor shall deliver to Grantee to the extet required by law that portion of such awardattributable to the condemnation value ot the portion of the condemned property of which Granteeholds an interest

14 Assignment The Parties may assign the rights and obligations incurred under this Licensein accordance with the terms and conditions of the PPA

15 Removal of Solar Facilities Upon the expiration or other termination of this License theremoval of the Solar Facilities shall be governed by the terms set forth in the PPA and the Termof this License shall not be extended to allow additional time for such removal unless the PPAexpressly permits such additional time

16 Miscellaneous

A Amendments This License may be amended only by a duly authorized writingsigned by both Grantee and Grantor or their respective successors in interest

B Notices Any notice required or permitted to be given in writing under his Licenseshall be provided in accordance with the terms and conditions of the PPA

C Waiver The failure delay or forbearance by either Party to exercise any of itsrights or remedies under this License or to provide written notice of any default to a defaultingParty will not constitute a waiver of such rights or remedies No Party will be deemed to havewaived any right or remedy resulting unless it has made such waiver specifically in writing Thewaiver by either Party of any default or breach of any term condition or provisio herein containedshall not be deemed to be a waiver of any subsequent breach of the same term coodition orprovision or any other term condition or provision contained herein

D Remedies Cumulative No remedy herein conferred upon or reserved to Grantee orGrantor shall exclude any other remedy herein or by Iaw provided but each shall be cumulativeand in addition to every other remedy given hereunder or now or hereafter existing at law or inequity or bysatute

E Dispute Resoludon The Parties agree to resolve Disputes in accordance withSectioo 14 of the PPA

F HeadinQS The headings in this License are solely for convenience and ease ofreference and shall have no effect in interpreting the meaing of aoy provision of this License

G Survival Any provision of this License that expressly or by implicxtion comes intoor remains in full force following the termination or expiration of this License shall survive theterminatia or expiration of this License

H

Item 5.2

H Severabilitv Should any provision of this License for any reason be declaredinvalid or unenforceable by final and nonappealable order of any court or regulatory body havingjurisdiction such decision shall not affect the validity of the remaining portions and the remainingportions shall remain in full force and effect as if this License had been executed without theinvalid portion

I DeSned Terms Capitalized Terms used but not defined herein shall have themeaning given to them in the PPA

J Choice of Law This License shall be construed in accordance with the laws of the

State oP Califomia without regard to its conflict of laws principles The venue for any disputearising out of or relating to this License shall be in the California county in which the Property islocated

K Bindin Effect This License and its rights privileges duties and obligations shallinure to the benefit of and be binding upon each of the Parties hereto together with tleir respectivesuccessors and permitted assigns

L No Third Party Beneficiaries This License is solely for the benefit of the Partieshereto and no right or cause of action shall accrue by reason hereof for the benefit of any thirdparty not a Party hereto other than the Grantor Indemnitees the Grantee Indemnitees and anyFinancing Party

M Counterparts This License may be executed in counterparts which shall togetherconstitute one and the same agreement

N Further Assuances Upon the receipt of a written cequest from the other Party eaehParry shall make reasonable efforts to execute such additional documenls instruments andassurances and take such additional actions as are reasonably necessary and desirable to carryout the terms and inteit of this License Neither Party shall unreasonably withhold condition ordelay its compliance with any reasonable request made pursuant to this Section

P EntireAreemenL This instrument in conjunction with the PPA represents thefull and wmplete agreement between the Parties hereto with respect to the subject matterconlained hereio and supersedes all prior written or oral agreements between said Partieswith respect to said subject matter

Q Cooperatio with Financing In order lo facilitate financing of the Solar Facilitiesthe Parties agree in good faith to considcr and to negotiate changes or additions to this Liceuse orseparate acknowledgements and consents that may be reasonably requested by the FinancingParties as provided in Section 19B of the PPA

R Notice of License Grantor agrees that Grantee may record this License with theapplicable real esfale recording office in form reasoably acceptable to Grantor Grantor agreesto cooperate with Grantee in executing such documents as are reasonably necessary to protectGranteesrights in or use of the License Premises

9

Item 5.2

IN WITNESS WHEREOF the Parties have duly executed this License on the Effective Date

GRANTOR

City of Lathrop

ByName

Title

Date

GRNTEE

LATHROPILLC

1115 Solar Development LLC its sole memberand manager

Borrego Solar Systems Inc its sole member andmanager

ByName

Title

Date

10

Item 5.2

Exhibit A

The Sites Solar Facilitics and Liccnse Premises

Property address and Property Map indicating License Premises

Exhibit A toIiccnx Pagc 1H09300050kh99fi21

Item 5.2

Exhibit B

Solar Facilities Specifications

See attached site plans

Exhibit B to License Puge 1820930005086895621

Item 5.2

ATTACHMENT 6

Notice Of ExemptionTo Office of Planning and Research From City of Lathrop

PO Box 3044 1400 Tenth Street N222 390 Towne Center Drive

Sacramento CA 958123044 Lathrop CA 95330Attn Patrick Flynn Public Works Director

X County ClerkCounty of San Joaquin

Project Title City of Lathrop Solar Photovoltaic Project

Project Location Specific

The City would install solar photovoltaic arrays at 4 locations 1 Lathrop Community Center15557 5 Street 2 Lathrop City Hall 390 Towne Center Drive 3 the Lathrop Water TreatmentPlant and Corporation Yard 2112 E Louise Avenue and 4 the Crossroads storm drainagedetention basin on South Hartan Road All four locations are within the City of Lathrop 95330The City of Lathrop is located in southern San Joaquin County The City is generally bounded onthe north by Roth Road on west by the San Joaquin River Old River and Paradise Cut on thesouth by SR 120 and on the east by the City of Manteca

Project Location City Lathrop

Project Location County San Joaquin

Description of Nature Purposes and Beneficiaries of the Project

The City proposes to install up to approximately 10 megawatts of photovoltaic solar arrays onexisting developed sites Two of the arrays will be installed as shade structures at existingparking areas the third and fourth installations would involve groundmounted arrays withinpreviouslydeveloped portions of the Citys existing corporation yard and South Harlan RoadDrainage Detention Basin facillties

Name of Public Agency Approving Pvoject City of Lathrop

Name of Person or Agency CarryieyOut Project City of Lathrop Public Works Department

Exempt Status

Ministerial Sec21080b115268Declared Emergency Sec 21080b315269aEmergency Project Sec 21080b415269bc

X Categorical Exemption Class 11 Accessory StructuresX Statutory Exemptions State code number Public Resources Code 2108035

Source California Environmental Qualiry Act Appendix ECEQA Handbook Statutes and Guidelines 2014 Association of Environmental Professionals

Item 5.2

Reasons why project is exempt

Categorical Exemption Class 11 All four elements of the project will involve placement of minorstructures that are appurtenant co existing institutional City of Lathrop facilities including acommunity center parkng area the City Hall parking area the existing City corporation yard andan existing storm drainage detention facility The photovoltaic project sites at the corporationyard and stormwater facilities are previouslydeveloped areas that do not contain sensitiveenvironmental resources or hazards

Statutory Exemption PRC 2108035 The two parking area locations are also exempt fromCEQA by virtue of their location at existing parking facilities

Lead Agency Contact Person Patrick Flynn or Charlie SimpsonAreaCodeTelephoneExtension 2099417200

Signature Date

Patrick Flynn Director of Public Works City of Lathrop

X Signed by Lead AgencySigned by Applicant

Date received for filing at OPR

Source California Environmenta Quality Act Appendix ECEQA Handbook Statutes and Guidelines 2014 Association of Ernironmental Professionals

Item 5.2