PV Risk Reduction Agreement
Exhibit
10.25
This PV
Risk Reduction Agreement (“Agreement”) is made and
entered into as of the 18th day of
December, 2007 by and between FPOC, LLC, a California limited liability company
(“Landlord”), and
Sunpower Corporation, Systems, a Delaware corporation (“Tenant”).
R E C I T A L S
A. Landlord
and Tenant are parties to that certain Standard Multi-Tenant Industrial Lease –
Net dated as of December 15, 2006 (together with the Addendum thereto, the
“Original Lease”) pursuant to which
Tenant leases certain premises (the “Premises”) in that certain
commercial building known as Ford Point (the “Building”) and located at 0000
Xxxxxxx Xxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx. Landlord and Tenant
are parties to that certain First Amendment to Lease dated as of May 24, 2007
(the “First Amendment”) and that certain
Second Amendment to Lease dated as of December 18, 2007 (the “Second
Amendment”). The Original Lease as amended by the First
Amendment and the Second Amendment is hereinafter referred to as the “Lease.”
B. Landlord
and Tenant are parties to that certain Power Purchase Agreement of even date
herewith (the “PPA”)
pursuant to which Landlord intends to sell electricity to Tenant, such
electricity to be generated from solar energy.
C. Pursuant
to that certain System Purchase and Installation Agreement of even date
herewith, Landlord will purchase and install on the roof of the Building a solar
panel array with a 966KW DC (equal to 850KW AC) capacity and also to install
related improvements necessary or appropriate to transmit and provide electrical
power to the Premises (collectively, the “Solar Equipment”), but
Landlord would not make the investment necessary to accomplish the foregoing
without a reasonable assurance of an income stream sufficient to fully amortize
Landlord’s investment.
D. Landlord
and Tenant wish to amend the Lease as more specifically set forth
herein.
A
G
R
E
E
M
E
N
T
NOW,
THEREFORE, in consideration of the foregoing Recitals and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Defined
Terms. All capitalized terms not defined herein shall have the
same respective meanings as are given such terms in the Lease unless expressly
provided otherwise in this Agreement.
2. PV Risk
Reduction Payment. Commencing on January 1, 2013, and subject to the
condition described in Section 3 below, Tenant shall make the following payments
(the “PV Payments”) to
Landlord in accordance with the following schedule:
1
|
Payment
Date:
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Installment
Amount:
|
|
January
1, 2013
|
$150,000.00
|
|
January
1, 2014
|
$150,000.00
|
|
January
1, 2015
|
$150,000.00
|
|
January
1, 2016
|
$150,000.00
|
|
January
1, 2017
|
$150,000.00
|
The
parties hereto acknowledge that the foregoing payment schedule is predicated on
Landlord’s constructing and installing the Solar Equipment with a 966KW DC
(equal to 850KW AC). If the Solar Equipment actually has a smaller
capacity, then the amount of the PV Payments shall be proportionately
reduced. For example, if the Solar Equipment actually constructed and
installed by Landlord has a 10% smaller capacity than 966KW DC (equal to 850KW
AC), then each of the PV Payments shall be reduced by 10%.
3. Extension
of Lease Term. Paragraph 68 of the Lease is hereby modified to
permit Tenant to elect, in lieu of the two (2) five (5) year options described
therein, to extend the Term of the Lease for a period of ten (10) years (the
“New 10-Year Term”) by
delivery of an irrevocable and unconditional written notice of such election to
Landlord on or before January 15, 2012 (the “10-Year Exercise
Notice”). Base Rent for the New 10-Year Term shall be
determined in accordance with Paragraphs 68(c) and 68(d) of the
Lease. Tenant’s obligation to make the PV Payments pursuant to
Section 2 above is subject to the condition precedent that Tenant fails to
timely deliver the 10-Year Exercise Notice to Landlord. Notwithstanding the
provisions of Section 2 above, in the event Tenant timely delivers the 10-Year
Exercise Notice as described above, then Tenant shall have no obligation to make
any PV Payments and Section 2 shall thereafter be of no force or
effect. If Tenant does not elect to extend the Lease Term for the New
10-Year Term as provided in the first sentence of this Section 3, then Tenant
shall still have the right to extend the Term of the Lease for two (2) periods
of five (5) years each as originally set forth in Paragraph 68 of the Lease, but
any such extension(s) shall not excuse or waive Tenant’s obligation to make the
full amount of all PV Payments in a timely manner in accordance with the
schedule set forth in Section 2 above.
4. Lease
Amended. This Agreement shall constitute an amendment to the
Lease, and in the event of any conflict or inconsistency between the Lease and
this Agreement, this Agreement shall be controlling. Except as
expressly provided herein, the Lease shall continue in full force and
effect.
5. Authority. Tenant
and each person executing this Agreement on behalf of Tenant hereby covenants
and warrants that (a) Tenant is duly organized and validly existing under the
laws of the States of California and Delaware, (b) Tenant has full power and
authority to enter into this Agreement, and (c) each person (and all of the
persons if more than one signs) signing this Agreement on behalf of Tenant is
duly and validly authorized to do so.
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6. Entire
Understanding. This Agreement contains the entire
understanding between the parties with respect to the matters contained
herein. This Agreement may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change or modification or discharge is sought.
[Remainder of Page Intentionally Left
Blank]
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IN
WITNESS WHEREOF, Landlord and Tenant have executed this Agreement as of the date
first set forth above.
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LANDLORD:
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TENANT:
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FPOC,
LLC,
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Sunpower
Corporation, Systems,
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a
California limited liability company
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a
Delaware corporation
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By:
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/S/ XXXXXX XXXXXXXXX
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BY:
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FP
Management, LLC, a California
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Name:
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Xxxxxx
Xxxxxxxxx
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||
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limited
liability company, its Manager
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Its:
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CEO,
Systems
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By:
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/s/ J.R. ORTON, III
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By:
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/S/ XXX XXXXXX
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X.X.
Xxxxx, III, Manager
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Name:
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Xxx
Xxxxxx
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Its:
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President,
Systems
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