OPERATIONS AND MAINTENANCE AGREEMENT
Exhibit 99.5
[*] Designates portions of this document that have been omitted pursuant to a request for
confidential treatment filed separately with the Commission.
Service Provider: Solar Power, Inc.
SEF Host Customer: Aerojet — Phase 1
SEF Site Location: Rancho Cordova, CA
SEF Host Customer: Aerojet — Phase 1
SEF Site Location: Rancho Cordova, CA
THIS OPERATIONS AND MAINTENANCE AGREEMENT (this “Agreement”) is made and entered into
as of the latest date referenced on the signature page below (the “Effective Date”), by and between
Solar Tax Partners 1, LLC, a California limited liability company (“Owner”), and Solar Power, Inc.
(“Service Provider”). Owner and Service Provider are sometimes hereinafter referred to
individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Owner operates a solar energy facility (the “SEF”), and more particularly defined in
Exhibit A hereto on the premises (the “Premises”) described in Exhibit B hereto for
the purposes of providing electric power to the Owner’s host customer, Aerojet — Rancho Cordova, CA
(the “User”);
B. Owner desires to retain the services of Service Provider to operate and manage the SEF and
provide scheduled maintenance of the SEF, and Service Provider is willing to perform such services
upon the terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing recitals, the mutual agreements, representations, warranties
and covenants set forth in this Agreement and the Exhibits hereto, and other good and valuable
consideration, the receipt of which is hereby acknowledged, Owner and Service Provider agree as
follows:
ARTICLE 1.
RESPONSIBILITIES OF SERVICE PROVIDER
RESPONSIBILITIES OF SERVICE PROVIDER
1.1 Appointment of Service Provider.
(a) Owner hereby appoints Service Provider, and Service Provider hereby accepts the
appointment, to perform the SEF operations and maintenance services (“Services”) on behalf of Owner
as of the Services Commencement Date as further described in Exhibit C hereto in accordance
with and subject to the terms and conditions set forth in this Agreement.
(b) Except as otherwise expressly provided in this Agreement, Service Provider shall perform
the Services and its obligations under this Agreement, and act at all times as an independent
Service Provider of Owner. None of Service Provider’s employees shall be, or shall be considered
to be, employees of Owner. Service Provider shall be fully responsible for the payment of all
wages, salaries, benefits and other compensation to its employees. This Agreement is not intended
to create, and shall not be construed to create, and neither Party shall be or constitute, or be
deemed or construed to be or constitute, under any circumstances or for any purpose whatsoever, a
partner, joint venturer, agent (except as specifically provided in this Agreement) or legal
representative of the other Party, and the Parties expressly disclaim any intention to create a
partnership, joint venture, association or other such relationship. Neither Party is granted any
right or authority to assume or create any obligation or responsibility, express or implied, on
behalf of or in the name of the other Party, or to bind the other Party in any manner (except as
specifically provided in this Agreement).
1.2 Performance of Maintenance Services. Service Provider shall perform the
maintenance portion of the Services in a clean, safe, efficient and environmentally reasonable
manner and maintain the SEF in good operating and mechanical condition in accordance with this
Agreement and (i) all applicable laws and permits, (ii) all applicable express warranties and
guarantees provided by manufacturers, suppliers, or Service Providers who provided materials or
labor under the Engineering, Procurement and Construction Agreement dated September 30, 2009 (the
“EPC Agreement”) for the SEF subject to the terms and limitations thereof, and (iii) all
manufacturer’s maintenance instructions and specifications.
1.3 Performance Objectives. Service Provider shall perform the Services and its
obligations under this Agreement in a manner that (a) insures the operation of the SEF within all
required operational parameters and requirements, (b) preserves all warranties provided by
manufacturers, suppliers, or Service Providers who provided materials or labor under the EPC
Agreement relating to the SEF, subject to Force Majeure, (c) maintains the SEF, and
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(d) seeks to minimize the variable operating costs of and wear and tear on the SEF, including
using commercially reasonable efforts to achieve industry standard levels of SEF availability.
1.4 Non-Covered Services.
(a) The Services shall not include, and Service Provider shall not be responsible for, any
operations, maintenance, repair, or other services beyond the Services set forth in Exhibit
C (such non-covered services referred to hereinafter as “Non-Covered Services”). All work
associated with Non-Covered Services will be billed according to the terms of Section 2.2. Any
studies or other services required by Owner to review options to optimize system performance will
be provided as Non-Covered Services.
(b) The Performance of any Non-Covered Services by Service Provider shall require a written
request from Owner specifying the Non-Covered Services to be performed by Service Provider.
Notwithstanding the foregoing, if (i) the costs of Non-Covered Services to be performed by Service
Provider do not exceed $500.00 in any single instance, or (ii) the Non-Covered Services are
provided by Service Provider on an emergency basis to prevent an imminent danger of injury, loss,
or damage (exceeding $500.00), Service Provider shall attempt to notify Owner via telephone prior
to the performance of any Non-Covered Services and shall be authorized to proceed with the
performance of such Non-Covered Services upon receiving verbal approval from Owner. Should Service
Provider be unable to contact Owner prior to providing any Non-Covered Services on an emergency
basis, Service Provider shall be authorized to perform such emergency Non-Covered Services without
prior approval from Owner and shall notify Owner immediately thereafter in writing specifying the
nature of the emergency and the Non-Covered Services provided.
(c) Service Provider shall perform any Non-Covered Services only to the extent Service
Provider is capable of, and licensed to, provide such Non-Covered Services and in accordance with
the provisions of this Agreement.
1.5 Permits. Service Provider shall identify, procure, obtain, maintain and comply
with all permits that may be required under applicable laws for or in connection with the
performance of Services (and Non-Covered Services as actually provided by Service Provider) and
that need to be procured, obtained and maintained by or in the name of Service Provider. Owner
shall provide Service Provider with such assistance and cooperation as may reasonably be required
in order to obtain and maintain all such Permits. Service Provider shall submit copies of all
applications for, and proposed forms of, all such Permits to Owner with sufficient time to allow
for Owner’s review and approval.
1.6 Cooperation with Other Service Providers. Service Provider acknowledges that
Owner has retained, and may from time to time retain, other Service Providers to provide
maintenance, administrative and management services for Owner in connection with the SEF or
otherwise at the Premises. Service Provider shall cooperate and coordinate its activities
hereunder with such other Service Providers. Service Provider shall not be responsible in any way
for any services provided by other Service Providers retained by Owner. Owner shall instruct all
other Service Providers to coordinate the performance of services with Service Provider so as to
not interfere with Service Provider’s performance of Services.
1.7 Personnel Standards.
(a) Service Provider’s employees shall be qualified (and if required by applicable law,
licensed, certified or registered) and experienced in the functions to which they are assigned and
shall meet the requirements of all permits, all applicable laws and the then-current SEF
maintenance manuals (to the extent copies of which have been provided to Service Provider by
Owner). If requested, Service Provider shall provide to Owner evidence of the competence of such
personnel including details of their previous experience and qualifications. If Owner or User
reasonably determines an employee of Service Provider to be under-qualified, disruptive,
non-cooperative or otherwise undesirable at the Premises, Owner or User may request the immediate
removal of such employee from the Premises for any existing or future delivery of the Services and
the replacement of such employee with a different employee of Service Provider; provided that Owner
or User, as the case may be, will use commercially reasonable efforts to provide reasonable notice
to Service Provider of the need for such proposed removal. Neither Owner’s or User’s request to
Service Provider to remove an employee, nor Service Provider’s removal of an employee following
Owner’s or User’s request, shall relieve Service Provider of any of its obligations hereunder or be
construed as a waiver by Owner or User of any of its rights under this Agreement.
(b) Service Provider shall institute policies to forbid and prevent the possession or use of
firearms, alcohol and illegal drugs at the Premises. Service Provider shall institute policies
that require post-accident and for-cause drug or alcohol testing. Service Provider shall institute
policies that require the immediate removal and permanent expulsion from the Premises, and from any
activity associated with the Services being performed at the Premises, of any individual person who
at any time is found in possession of firearms, alcohol or illegal drugs at the Premises or
otherwise not in compliance with this Section 1.6.
1.8 O&M Data and Records.
(a) Service Provider shall prepare and maintain all reports and other information relating to
the SEF maintenance (the “SEF O&M Reports”) and make such SEF O&M Reports available to Owner (i)
within ten (10) business days following performance of any Services under this Agreement and (ii)
upon reasonable request at any time
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by Owner, within ten (10) business days following such request. Service Provider shall make
the SEF O&M Reports available to Owner in hard copy and electronic formats.
(b) Service Provider shall prepare reports and data related to the maintenance of hazardous
materials introduced on-site by the Service Provider at the SEF in a manner complying with all
applicable laws.
1.9 Performance of Operational Services Service Provider shall perform the
operational portion of the Services in a professional manner consistent with standards for the
management and operation of an SEF of this size and type.
ARTICLE 2.
COMPENSATION AND PAYMENT
COMPENSATION AND PAYMENT
2.1 Services Fee.
(a) As full compensation to Service Provider for the performance of Services hereunder, Owner
shall pay Service Provider the Services Fee (“Services Fee”) set forth on Exhibit D hereto.
(b) Unless agreed otherwise in writing by Owner or pursuant to Section 1.4, the payment of
Services Fee shall be full consideration for all time and materials used by Service Provider in the
performance of Services and Service Provider shall not be entitled to any additional cost
reimbursement for any materials used during Services.
2.2 Billing for Non-Covered Services.
(a) In the event that Service Provider provides any Non-Covered Services (or any other
services not included within the scope of the Services), Service Provider shall submit an invoice
and Owner shall compensate Service Provider for such services per the Billing Rate Schedule in
Exhibit D. Third party services will be billed directly to Owner by the applicable third
party and shall be paid by Owner directly in a timely manner.
(b) Service Provider shall invoice Owner within thirty (30) days of completion of any
Non-Covered Services.
2.3 Terms of Payment. Owner shall pay Service Provider within thirty (30) days after
the invoice date. Fees are conditioned upon timely payment and any past due balance will accrue
interest at the monthly rate of one and one half percent (1.5%).
2.4 Taxes. Notwithstanding any provision in this Agreement to the contrary, amounts
set forth in this Agreement are inclusive of sales, use, ad valorem, business or any other taxes
duties, or other fees, assessments, or charges payable by Service Provider on the Services provided
by Service Provider hereunder.
2.5 User has No Obligation to Pay. Owner and Service Provider each acknowledge that
User shall have no obligation to pay any amounts whatsoever under this Agreement.
ARTICLE 3.
TERM; TERMINATION
TERM; TERMINATION
3.1 Term.
(a) The term of this Agreement shall commence on the Services Commencement Date and remain
effective for ten (10) years (the “Initial Term”) unless terminated in accordance with its terms.
This Agreement shall be subject to an automatic extension for consecutive one (1) year periods
thereafter (each, an “Extension Term” and together with the Initial Term, the “Term”), unless
terminated (i) in accordance with its terms or (ii) upon thirty (30) days’ written notice by either
Party to the other Party.
(b) Notwithstanding the foregoing, either Party may terminate this Agreement at any time with
immediate effect by written notice to the other Party, if such other Party is in breach of its
representations, warranties, obligations and covenants under the terms of this Agreement, which
breach has remained uncured for more than thirty (30) days after initial notice of such breach from
the nonbreaching Party to the other Party.
3.2 Obligations Following Termination. Within five (5) days after the termination or
expiration of this Agreement, and upon Owner’s payment in full of the amounts due Service Provider
under the Agreement, Service Provider shall deliver to Owner all of the SEF O&M Reports, SEF books,
records and property in its possession or under its control, and all materials, supplies,
consumables, manuals and any other items furnished to Service Provider by Owner.
ARTICLE 4.
INSURANCE
INSURANCE
4.1 Service Provider Insurance. Within thirty (30) days after the Effective Date,
Service Provider shall provide a certificate of insurance and thereafter shall maintain the
following insurance during the Term with insurance carriers reasonably acceptable to Owner:
(a) Commercial General Liability. Service Provider shall provide and maintain
commercial general liability insurance with combined single policy limits not less than Two Million
Dollars ($2,000,000) for bodily injury or property damage for each occurrence and in the aggregate,
including broad form contractual liability insurance, broad form property damage, personal injury,
products and completed operations insurance.
(b) Automobile Liability. Service Provider shall provide and maintain business auto
liability insurance covering owned, non-owned and hired automobiles in the amount of One Million
Dollars ($1,000,000) combined
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single policy limit for bodily injury and property damage for each
accident.
(c) Worker’s Compensation. Service Provider shall provide and maintain worker’s
compensation insurance as required by applicable law where the Services are performed and
employer’s liability insurance with a limit of liability of One Million Dollars ($1,000,000) for
each accident and in the aggregate.
(d) Excess Liability Insurance. Service Provider shall provide and maintain excess
liability insurance covering employer’s liability, commercial general liability, and business
automobile liability, in the amount of Five Million Dollars ($5,000,000) combined single limit
policy limit per occurrence and in the aggregate for bodily injury and property damage.
(e) Primary Insurance. All policies of insurance referred to in this Section 4.1
shall be endorsed: (i) to specify that they are primary to and not excess to or on a contributing
basis with any insurance or self-insurance maintained by Owner, Owner and User (and their
respective Affiliates) or any SubService Providers in respect of losses arising out of or in
connection with the Services; (ii) to include Owner, Owner, User and, upon User’s request and if
applicable, User’s landlord, or a subsequent owner, tenant or subtenant of the Premises as
additional insureds; and (iii) contain a standard severability of interests clause.
(f) Payment of Deductible. The payment of any deductible for any insurance required
pursuant to this Section 4.1 shall be the responsibility of Service Provider, unless the loss
covered by such insurance is caused by the negligence or willful misconduct of Owner, its officers,
directors, agents, employees, and assigns, in which case the deductible shall be paid by Owner.
(g) Waiver of Subrogation. Service Provider shall require that its insurers release
and waive all rights of subrogation against Owner, User, User’s landlord, if applicable, or a
subsequent Owner, tenant or subtenant of the Premises with respect to any insurance carried by
Service Provider, whether or not required by this Agreement.
4.2 General. The provisions of this Article 4 do not modify, change or
abrogate any responsibility of Service Provider stated elsewhere in this Agreement. Owner assumes
no responsibility for the solvency of any insurer or the failure of any insurer to settle any
claim.
ARTICLE 5.
INDEMNIFICATION
INDEMNIFICATION
5.1 Indemnification. Each party (“Indemnifying Party”) shall indemnify the other
party, its officers, directors, agents, employees, and assigns (each, an “Indemnified Party”), and
undertake to defend and hold the Indemnified Party harmless from and against any claim, demand,
suits, cause of action, losses, penalties, obligations, liabilities, damages, and expenses
(including court costs, reasonable attorneys’ fees, interest expenses and amounts paid in
compromise or settlement) (“Loss”) arising out of personal injury or third party property damages
to the extent caused by or arising out of the fault of or negligent acts or omissions of the
Indemnifying Party.
5.2 Claims for Indemnification. The following provisions shall apply to any claim for
indemnification pursuant to this Article 5 (each, an “Indemnity Claim”):
(i) If an Indemnified Party determines that it is entitled to indemnification under this
Section 5, such Indemnified Party shall promptly notify the Indemnifying Party in writing of the
Loss specifying (to the extent that such information is available) the following: the factual basis
for the Indemnity Claim and the amount of the Indemnity Claim or, if an amount is not then
determinable, and, if an estimate is feasible in the circumstances, an estimate of the amount of
the Indemnity Claim;
(ii) a reasonably detailed description of the basis for its potential claim for
indemnification with respect to such Indemnity Claim; and
(iii) a complete copy of all notices, pleadings and other papers related to such Indemnity
Claim that have been received by the Indemnified Party prior to the date such notice is provided to
Indemnifying Party; provided that failure to give such notice or to provide such information and
documents shall not relieve Indemnifying Party of any indemnification obligation it may have under
this Article 5 unless and only to the extent that such failure shall materially diminish the
ability of Indemnifying Party to respond to the Indemnity Claim or to defend the Indemnified Party.
(b) The Indemnified Party agrees to provide all reasonably necessary or useful information,
assistance and authority to settle and/or defend any Loss; provided that failure to do so will not
affect the indemnity except to the extent the Indemnifying Party is prejudiced thereby. In the
event of a Loss claimed by a third party, the selection of counsel, the conduct of the defense of
any lawsuit, arbitration, or other proceeding, and any settlement shall solely be within the
Indemnifying Party’s control, provided that the Indemnified Party shall have the right to
participate in the defense of such Loss using counsel of its choice, at its expense. No settlement
that would impose any costs or expense upon the Indemnified Party shall be made without such
Party’s prior written consent.
(c) Any dispute as to whether or not the Indemnified Party’s right to indemnification applies,
and the amount of the Indemnity Claim (as it may have been compromised or settled by the
Indemnified Party, or determined in a proceeding, pending resolution of such dispute) shall be
resolved in accordance with the dispute resolution procedures set forth in Article 6.
ARTICLE 6.
DISPUTE RESOLUTION AND ARBITRATION
DISPUTE RESOLUTION AND ARBITRATION
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6.1 If disputes or disagreements arise related to this Agreement, Owner and Service Provider
each commit to resolving such disputes or disagreements in an amicable, professional and
expeditious manner so as to avoid unnecessary losses, delays and disruptions to the Services.
6.2 Owner and Service Provider will first attempt to resolve disputes or disagreements through
discussions between their respective representatives.
6.3 [reserved]
6.4 In the event of a dispute, claim, or controversy arising out of or in connection with this
Contract, the Parties through their designated representatives or program managers agree to confer
and attempt to resolve the matter informally in good faith. If such dispute cannot be resolved in
this manner within ten (10) calendar days after notice of the dispute is given to the other Party,
then the matter shall be referred to the Parties’ senior officers for their review and resolution.
If the matter cannot be resolved in good faith by such officers within fifteen (15) calendar days
following such referral, the matter shall be submitted to non-binding mediation. Such mediation
shall commence no later than thirty (30) calendar days after submission of the dispute and shall be
conducted in the locality where the Services have been performed and in accordance with the then
prevailing rules of the Construction Industry Mediation Rules of the American Arbitration
Association. The mediation shall be conducted by one neutral mediator, who shall have experience in
the general subject matter to which the dispute relates and who shall be agreed to by the Parties.
In the event that the dispute is not resolved pursuant to such mediation, each Party may pursue any
rights and remedies as each may have, whether at law or in equity. EACH OF THE PARTIES HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE ARISING OUT OF OR RELATING TO THIS
CONTRACT. During the course of the dispute resolution procedures provided in this Article 6
(Dispute Resolution), Service Provider shall continue to perform its obligations hereunder in good
faith until the final resolution of the dispute, claim or controversy, so long as there has not
occurred an event of default by Owner which is not cured within the applicable period under Section
3.1.
ARTICLE 7.
CONFIDENTIAL INFORMATION
CONFIDENTIAL INFORMATION
7.1 Confidentiality.
(a) Confidentiality. Except as required under applicable law, each Party shall hold
in confidence all documents and other information, whether technical or commercial, relating to
this Agreement or the design, financing, construction, ownership, operation or maintenance of the
SEF that is of a confidential nature and that is supplied to it by or on behalf of the other Party.
The Party receiving such documents or information shall not publish or otherwise disclose them or
use them for its own purposes (otherwise than as may be required by it, its professional advisers,
or potential or actual lenders or investors, or potential or actual subcontractors to perform its
obligations or to assert its rights under this Agreement). Each Party further agrees, to the
extent requested by the supplier of such information, to require its subcontractors, vendors,
suppliers and employees to enter into appropriate nondisclosure agreements relative to such
confidential information, prior to the receipt thereof. To the extent reasonably required,
confidential information may be made available to potential debt and equity investors and as
necessary subject to a mutually acceptable confidentiality agreement or to respective advisors who
are bound to confidentiality by applicable rules of professional conduct or by mutually acceptable
confidentiality agreements. The provisions of this Section 7.1 shall not apply to information
within any one of the following categories or any combination thereof: (1) information that was in
the public domain prior to the receiving Party’s receipt or that subsequently becomes part of the
public domain by publication or otherwise, except by the receiving party’s wrongful act; (2)
information that the receiving Party can demonstrate was in its possession prior to receipt thereof
from the disclosing Party and not otherwise subject to an obligation of confidentiality; or (3)
information received by a Party from a third party having no obligation of secrecy with respect
thereof.
(b) The obligations of the Parties under this Section will survive for a period of two (2)
years from and after the expiration or termination of the Agreement.
ARTICLE 8.
NOTICES
NOTICES
8.1 Notices. All notices, requests, statements or payments will be made to the
addresses and persons specified on the signature page below. All notices, requests, statements or
payments will be made in writing. Notices required to be in writing will be delivered by hand
delivery, overnight delivery or U.S. mail. Notice by hand delivery or overnight delivery will be
deemed to have been received when delivered. A Party may change its address by providing notice of
the same in accordance with the provisions of this section.
ARTICLE 9.
ASSIGNMENT; BINDING EFFECT
ASSIGNMENT; BINDING EFFECT
9.1 Assignment; Binding Effect.
(a) Service Provider shall not, without the prior written consent of Owner, which consent will
not be unreasonably withheld or delayed, assign, pledge or transfer all or any part of, or any
right or obligation under, this Agreement, whether voluntarily or by operation of law, and any such
assignment
or transfer without such consent will be null and void; provided, however, that
notwithstanding the foregoing, Service Provider may, without the consent of Owner, assign,
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pledge or transfer all or any part of Service Provider’s payment rights under this Agreement (i) to any
affiliate of Service Provider, (ii) to any party that acquires Service Provider or all or
substantially all of Service Provider’s assets, or (iii) for security purposes in connection with
any financing and, provided further, that Service Provider shall remain fully liable for the
performance of all of Service Provider’s obligations under this Agreement. Service Provider shall
deliver notice of any such assignment, pledge or transfer to Owner in writing as soon as reasonably
practicable thereafter. Owner agrees to execute such reasonable consents to assignment and other
documents, and to provide such information, as is reasonably requested by Service Provider in
connection with any such assignment, pledge or transfer. Any payment made by Owner to Service
Provider after the effective date of such assignment, pledge or transfer and within ten (10)
business days after receipt of Service Provider’s written notice, shall be deemed payment to the
assignee, pledgee, or transferee identified in Service Provider’s notice. In addition, Service
Provider may subcontract any or all of its duties hereunder, but no such subcontract shall relieve
Service Provider of any such subcontracted duties
(b) Owner may, without the consent of Service Provider, assign, pledge or transfer all or any
part of, or any right or obligation under this Agreement (i) to any affiliate of Owner (including
any affiliate of Owner’s manager), (ii) to any party that acquires Owner or all or substantially
all of Owner’s assets, (iii) to User, or (iv) for security purposes in connection with any
financing or other financial arrangements regarding the SEF, provided, however, that Owner shall
remain fully liable as a guarantor for all of its payment obligations under this Agreement. Owner
shall deliver notice of any such assignment, pledge or transfer to Service Provider in writing as
soon as reasonably practicable thereafter. Service Provider agrees to execute such reasonable
consents to assignment and other documents, and to provide such information, as is reasonably
requested by Owner in connection with any such assignment, pledge or transfer.
(c) Subject to the foregoing restrictions on assignment, this Agreement will inure to the
benefit of and be binding upon the Parties and their respective successors and permitted assigns.
9.2 Cooperation with Financing. Service Provider acknowledges that Owner will be
financing the acquisition of the SEF and Service Provider agrees that it shall reasonably cooperate
with Owner and its financing parties in connection with such financing for the SEF, including the
furnishing of such information and the giving of such certificates; provided that the foregoing
undertaking shall not obligate Service Provider to materially change any rights or benefits, or
materially increase any burdens, liabilities or obligations of Service Provider, under this
Agreement (except for providing notices and additional cure periods to the financing parties with
respect to Events of Defaults with respect to Owner as a financing party may reasonably request).
ARTICLE 10.
MISCELLANEOUS
MISCELLANEOUS
10.1 Hazardous Conditions. Service Provider is not responsible for any Hazardous
Conditions encountered at the Premises. Upon encountering any Hazardous Conditions, Service
Provider will stop work immediately in the affected area and duly notify Owner and, if required by
any legal requirements, all government or quasi-government entities with jurisdiction over the
Premises. “Hazardous Conditions” are any materials, wastes, substances and chemicals deemed to be
hazardous under applicable legal requirements, or the handling, storage, remediation, or disposal
of which are regulated by applicable legal requirements.
(a) Upon receiving notice of the presence of suspected Hazardous Conditions, Owner shall take
the necessary measures required to ensure that the Hazardous Conditions are remediated or rendered
harmless. Such necessary measures shall include Owner retaining qualified independent experts to
(i) ascertain whether Hazardous Conditions have actually been encountered, and, if they have been
encountered, (ii) prescribe the remedial measures that Owner must take either to remove the
Hazardous Conditions or render the Hazardous Conditions harmless.
(b) Service Provider shall be obligated to resume Services at the affected area of the
Premises only after Owner’s expert provides it with written certification that (i) the Hazardous
Conditions have been removed or rendered harmless and (ii) all necessary approvals have been
obtained from all government and quasi-government entities having jurisdiction over the Premises.
(c) To the fullest extent permitted by law, Owner shall indemnify, defend and hold harmless
Service Provider, and its officers, directors, employees and agents, from and against any and all
claims, losses, damages, liabilities and expenses, including reasonable attorneys’ fees and
expenses, arising out of or resulting from the presence, removal or remediation of Hazardous
Conditions at the Premises
(d) Notwithstanding the preceding provisions of this Section 10.1, Owner is not responsible
for Hazardous Conditions introduced to the Premises by Service Provider or anyone for whose acts
they may be liable. To the fullest extent permitted by law, Service Provider shall indemnify,
defend and hold harmless Owner and Owner’s officers, directors, employees and agents from and
against all claims, losses, damages, liabilities and expenses, including attorneys’ fees and
expenses, arising out of or resulting from those Hazardous Conditions introduced to the Premises by
Service Provider or anyone for whose acts it may be liable.
10.2 Governing Law. This Agreement will be governed by the laws of the State of
California, without
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giving effect to the conflicts of laws principles thereof. The parties agree
to perform their respective obligations under this Agreement in accordance with applicable laws.
10.3 Entire Agreement; Amendments. This Agreement (including the exhibits, any
written schedules, supplements or amendments) constitutes the entire agreement between the Parties,
and shall supersede any prior oral or written agreements between the Parties, relating to the
subject matter hereof. Except as otherwise expressly provided in this Agreement, any amendment,
modification or change to this Agreement will be void unless in writing and executed by both
Parties.
10.4 Non-Waiver. No failure or delay by either Party in exercising any right, power,
privilege, or remedy hereunder will operate as a waiver thereof. No waiver by either Party of a
breach of any term or provision contained herein shall be effective unless signed and in writing
and signed by the waiving party. No consent by either Party to, or waiver of, a breach by either
Party, whether express or implied, shall be construed, operate as, or constitute a consent to,
waiver of, or excuse of any other or subsequent or succeeding breach by either Party.
10.5 Severability. If any part, term, or provision of this Agreement is determined by
an arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such
determination shall not affect or impair the validity, legality, or enforceability of any other
part, term, or provision of this Agreement, and shall not render this Agreement unenforceable or
invalid as a whole. Rather the part of this Agreement that is found invalid or unenforceable will
be amended, changed, or interpreted to achieve as nearly as possible the same objectives and
economic effect as the original provision, or replaced to the extent possible, with a legal,
enforceable, and valid provision that is as similar in tenor to the stricken provision, within the
limits of applicable law or applicable court decisions, and the remainder of this Agreement will
remain in full force
10.6 No Third Party Beneficiary. Nothing in this Agreement will provide any benefit to
any third party or entitle any third party to any claim, cause of action, remedy or right of any
kind.
10.7 No Recourse to Affiliates. This Agreement is solely and exclusively between the
Parties, and any obligations created herein on the part of either Party shall be the obligations
solely of such Party. No Party shall have recourse to any parent, subsidiary, partner, member,
affiliate, lender, director, officer or employee of the other Party for performance or
non-performance of any obligation hereunder, unless such obligations were assumed in writing by the
Person against whom recourse is sought.
10.8 Counterparts. This Agreement may be executed in any number of counterparts, and
in original or portable document format, and by the different parties hereto on the same or
separate counterparts, each of which shall be deemed to be an original instrument, and all of which
together shall constitute one and the same Agreement.
10.9 Further Assurances. The Parties shall at their own cost and expense do such
further acts, perform such further actions, execute and deliver such further or additional
documents and instruments as may be reasonably required or appropriate to consummate, evidence, or
confirm the agreements and understandings contained herein and to carry out the intent and purposes
of this Agreement.
10.10 General Interpretation. The terms of this Agreement have been negotiated by the
Parties hereto and the language used in this Agreement shall be deemed to be the language chosen by
the Parties hereto to express their mutual intent. This Agreement shall be construed without
regard to any presumption or rule requiring construction against the Party causing such instrument
of any portion thereof to be drafted, or in favor of the Party receiving a particular benefit under
this Agreement. No rule of strict construction will be applied against any person.
10.11 Access to Premises. Owner shall furnish reasonable access to the Premises in
order to allow Service Provider to perform the Services. Service Provider’s access to the Premises
(including its agents, employees, and representatives) shall be subject to User’s rules and
regulations, security policies and guidelines and access control systems and procedures (as
provided by Owner to Service Provider as of the Effective Date). Owner shall coordinate and
provide for User’s, or User’s agent’s, supervision of Service Provider, as may be required by User,
in a manner that shall not disrupt Service Provider’s performance of the Services.
10.12 No Claims against the Premises. Service Provider understands and acknowledges
that the SEF is separate from, and not an improvement to or a part of the Premises and that the SEF
is separately owned by Owner. Owner, and not User, any owner, landlord, tenant, or subtenant of
the Premises, is solely responsible for the payment of all Services Fees, and Service Providers
shall have no claim against the Premises for unpaid Services Fees. Service Provider agrees not to
attempt to record any lien against the Premises for unpaid Services Fees.
10.13 Headings. The headings of the Sections of this Agreement are inserted
for convenience of reference only and do not form a part or affect the meaning hereof.
10.14 Public Announcements. Notwithstanding anything to the contrary set
forth herein, each Party acknowledges that the other Party (the “Public Party”) is or may become a
publicly-held company, and in conjunction with its duties as a publicly-held company, such Public
Party may from time to time be required to report to the public by filing appropriate disclosure
statements with the Securities and Exchange Commission on form 8(k,) periodical reports, or
otherwise according to applicable securities laws and regulations, or through press releases
(collectively, “Public Information”); provided, however, that unless required by law, the Public
Party shall not use the other Party’s, Owner’s,
or User’s name or brand in such Public Information without prior written consent of the other
Party, which shall not be
7
unreasonably, withheld, conditioned or delayed. To the extent consistent
with applicable law, the Public Party shall have given the other Party, Owner, or User advance
notice and an opportunity to review and provide comment on such releases. On the Public Party’s
request, the other Party shall provide a written description of information about such Party as it
should appear in such filings.
10.15 Force Majeure. Notwithstanding anything to the contrary elsewhere in
this Agreement, neither Party shall be liable for any failure to comply with its obligations under
the this Agreement, other than to pay moneys due, to the extent arising out of any circumstances
not within the reasonable control, directly or indirectly, of the Party affected (“Force Majeure”).
Force Majeure shall include fire, explosion, flood, earthquake, hurricane, tornado, storm, wind or
other unusually adverse weather, civil commotions, civil disobedience, war, rebellion, sabotage,
acts of civil or military authority, acts of public enemy, acts of terrorism, boycotts,
industry-wide strike or labor difficulties, acts of God, and any actions or inactions by the local
utility, but shall not include any inability to make payments that are due hereunder. Each Party
shall be entitled to an equitable adjustment for its performance obligations hereunder arising from
Force Majeure. A Party claiming Force Majeure shall promptly notify the other party, specifying in
reasonable detail the event of Force Majeure, the expected duration, and the steps such party is
taking to remedy any delay.
[Signature Page Follows]
8
Operations and Maintenance Agreement
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INTENDING TO BE LEGALLY BOUND, Owner and Service Provider have signed this Agreement
through their duly authorized representatives effective as of the latest date set forth below.
“owner:”
Date: December 11, 2009
Solar Tax Partners 1, LLC
By: /s/ HEK Partners, LLC by Xxxxxxx Xxxxxx and Xxxxxx Xxx
Printed name: Xxxxxxx Xxxxxx and Xxxxxx Xxx
Title: Members
Address:
0000 00xx Xxxxxx
Xxx Xxxxxxxxx, XX
Xxx Xxxxxxxxx, XX
“Service Provider:”
Date: December 11, 2009
By: /s/ Xxxx Xxxxxxxxx
Printed name: Xxxx Xxxxxxxxx
Title: Executive Vice President
Telephone: ( 000 ) 000-0000
Address:
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telefax: (000) 000-0000
Telefax: (000) 000-0000
Opertations and Maintenance Agreement
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Exhibit A
SEF Description
3.6 MW System
(17,632) SPI SP205 Modules
(6) (AE 500Kw) Inverters
(3) 480V-12.7 kV Transformers
SEF IS A Single Axis Conergy tracker system
Exhibit A-1
Operations and Maintenance Agreement
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Exhibit B
Description of Premises
Aerojet — Phase 1
Rancho Cordova, CA
Exhibit B-1
Operations and Maintenance Agreement
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Exhibit C
Scope of Services
As of the Delivery Date (as defined in the EPC) (“Services Commencement
Date”), Service Provider shall provide the Services marked below as frequently as indicated below
in accordance with the terms and conditions of this Agreement:
Maintenance Service Schedule
| Services | ||||
| Included | ||||
| (Only if | ||||
| Checked) | Service Description | Service Frequency | ||
þ
|
Inspection of SEF’s general site conditions, PV arrays, electrical equipment, Mounting Structure, Data Acquisition System, and balance of system provided under EPC. | Bi-Annually (tbd) | ||
þ
|
System Testing, including string level open circuit voltage and dc operating amperage tests. | Every 2 years | ||
o
|
Recalibration or Replacement of DAS sensors and meters (per manufacturer’s instructions) | Every 3 years | ||
þ
|
Inverter preventive maintenance per manufacturer’s operating guidelines. | Annually | ||
þ
|
Cleaning of Inverter Cabinet Air Vents | Bi-Annually (tbd) | ||
þ
|
Cleaning and Changing Inverter Air Filters (Per Manufacturer Warranty Requirements) | Annually | ||
þ
|
Cleaning and Removing Dust From Inverter Heat Sinks (Per Manufacturer Warranty Requirements) | Bi-Annually (tbd) |
Exhibit C-1
Operations and Maintenance Agreement
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| Services | ||||
| Included | ||||
| (Only if | ||||
| Checked) | Service Description | Service Frequency | ||
þ
|
Checking torque marks and Re-Tightening appropriate Wiring Connections To Design Specification Torque Force (Per manufacturer’s guidelines) | Annually | ||
þ
|
Cleaning of PV Array Modules (Using Clear Water and Soft Brush Only) | Bi-Annually, As Required | ||
þ
|
Removal of Any Materials (e.g. Trash, Birds Nests, etc.) That May be Found Under The PV Array Modules Obstructing Airflow | Annually | ||
þ
|
Inspection, Maintenance and testing of Mechanical Trackers, replacement of Fluids | Bi-Annually, As Required | ||
þ
|
Inspect array mounting structure, carport structure, conduit runs, and other physical components for wear or damage | Annually | ||
o
|
Inspect and Repair module water spray / rinsing system | Annually | ||
þ
|
Inspect and Test, as APPROPRIATE, tracking electrical components (per manufacturer’s guidelines) | Annually | ||
þ
|
Provide Written SEF Maintenance Report | Ten (10) Business Days following Performance of Maintenance Services |
Exhibit C-2
Operations and Maintenance Agreement
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Operational and management service schedule
GENERAL REQUIREMENTS:
Owner is obligated to satisfy certain operational requirements in connection with that certain
Power Purchase Agreement dated May 8, 2009 (“PPA”), between Owner and User), and certain
maintenance and repair obligations under that certain Lease dated December ___, 2009 (“Lease”)
between Owner and Master tenant 2008-C, LLC (“Master Tenant”). Service Provider agrees to provide
operational and management services to owner, including without limitations, to administer the
operational obligations of Owner under the PPA and the maintenance and repair obligations under the
Lease, and to provide additional operational and management services as set forth below.
Operate and Maintain SEF in accordance with Prudent Industry Practices and Applicable utility
standards and as required by the Internal Revenue Code in order for the Owner to qualify for and
maintain Energy Credits or Cash Grant. [Source: PPA 2(a)]
Install and Maintain in accordance with Prudent Industry Standards a revenue quality meter that
meets utility requirements with electronic DAS capabilities. If requested by User, Service
provider shall test DAS annually and certify results. [Source: PPA 6(a)]
Preserve all PPA data for a minimum of two years following the compilation of data. [Source:
PPA 6(c)]
Ensure all energy generated by the SEF conforms to utility specifications, including the
installation and maintenance of proper power conditioning and safety equipment, submittal of
necessary specifications, coordination of utility testing and verification. [Source: PPA 7(b)]
Arrange delivery of Energy Output to User and any installation and operation of equipment on
User’s side necessary for acceptance and use of the Energy Output [Source PPA 7(c)]
Perform all invoicing, invoice adjustments, and invoice disputes, and other accounting
functions related to the operation of the SEF under the PPA. [Source: PPA 8 and 9]
Exhibit C-3
Operations and Maintenance Agreement
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Provide and take reasonable measures for security of the Generating Facility against access by
unauthorized persons, including reasonable security fencing if appropriate [Source: PPA 12(a)]
Responsible for the identification, cleanup, removal, remediation and disposal of Hazardous
Materials used, generated, treated, stored or transported to the premises. [Source: PPA 13(e)]
Maintain complete and accurate records on all matters relating to the SEF and maintain data as
may be necessary to determine with reasonable accuracy any item relevant to the PPA. [Source: PPA
17]
Take good care of the SEF; keep the same in good order and condition; and make and perform
all repairs. All repairs shall be at least equal in quality and cost to the original improvements
and shall be made in accordance with all Legal Requirements, and the requirements of the PPA and
Easement. The necessity for or adequacy of Repairs shall be measured by the standards which are
appropriate for improvements of similar construction and class, provided that Service Provider
shall in any event make all repairs reasonably necessary to avoid any structural damage or other
damage or injury to the SEF. [Source: Lease 5.02]
Operate the SEF as required under the Internal Revenue Code and Cash Grant Guidance in orcder
to maintain the eligibility of the SEF for energy credits under Section 48 of the Internal Revenue
Code or applicable casg grants under Section 1603 of the American Recovery and reinvestment Act of
2009 [Source: STP1 OA, 4.01(z), 4.02(w)]
Obtain and maintain in good standing all permits, licenses and governmental approvals necessary
for the operation and maintenance of the SEF. [Source: STP1 OA 4.02(b)]
Provide Owner with such information as necssary for Owner and Master tenant to make timely,
accurate and complete submissions of reports to governmental agencies related to the operationor
maintenance of the SEF. [Source: STP1 OA 4.02(g)]
Comply with the provisions of all applicable laws in the operation and maintenance of the SEF,
including without limitation, all state and local zoning laws, building codes, health and safety
codes and all other governmental obligations, and contractual obligations identified to Service
Provider. [Source: STP1 OA 4.02(h)]
Provide Owner and master tenant of notice of any written or oral notice of any default of
failure of compliance; litigation or criminal action or administrative proceedings, or
communication from any lender or other person or governmental authority which is not in the
ordinary course of business, with respect to the Services [Source: STP1 OA
4.02(k)]
4.02(k)]
Exhibit C-4
Operations and Maintenance Agreement
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In operating the SEF, use commercially reasonable efforts to obtain all contracts, materials,
supplies, utilities and services required on the most adventageous terms available, provided that
Owner shall be obligated to pay the cost of all materials and supplies. [Source: STP1 OA
4.02(l)]
Operate the SEF in a manner that satisfies the requirements of all covenants and restrictions
applicable to the property, including the easement and the Lease, and projects generating Energy
Credits. [Source: STP1 OA 4.02(o), 4.02(y)]
Take all actions necessary to ensure that the Property contains no, and is not affected by the
presence of, any Hazardous Substance, and to ensure that the Property is not in violation of any
federal, state, or local statute, law, regulation, rule, or ordinance, including any Environmental
Law. Service Provider shall promptly deliver to Owner and Master Tenant any notice received from
any source whatsoever of the existence or potential existence of any Hazardous Substance on the
Property or of a violation of any federal, state, or local statute, law, regulation, rule or
ordinance, including any Environmental Law with respect to the Property. [Source: STP1 OA
4.02(s)]
Cause to be prepared and delivered to Owner and Master Tenant the following:
Within fifteen (15) days of the end of each calendar month
(i) a report of any construction activity (including monthly draw
requests as and when submitted to the Lender; any and all inspection reports done by or on
behalf of the Lender; all Architect’s reports; and the minutes of all meetings of the
Managing Member regarding any issue of rehabilitation of the Property);
(ii) reports of operations, including an unaudited comparison of actual
operating expenditures during the applicable quarter with the projections for such quarter
as set forth in the Budget approved and provided by Master Tenant;
(iii) an analytic report of the energy produced by the SEF and compared
to the projected production incorporated into the Projections.
(iv) a report of such other information as may be deemed by the Owner or
Master Tenant to be material to the operation of the SEF
Immediately:
(v) from time to time as may be reasonably requested by the Owner or
Master Tenant, information on the state of SEF or any of the Services;
(vi) upon receipt of notice of any violation of any health, safety,
building code, or other statute or regulation, a detailed statement
Exhibit C-5
Operations and Maintenance Agreement
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describing such matters along with any written notices thereof received by any federal,
state, or local governmental entity.
(vii) upon learning of an operational condition or circumstance which is
expected to reduce below the projected levels the amount of Energy Credits, a detailed
statement describing such matters;
(viii) upon learning of any material default or violation of the
Easement, PPA or upon any termination of any such documents, a detailed statement
describing the nature of such default and any actions that the Service Provider proposes to
take in response to such default or termination; or
Within two (2) days after receipt by the Company:
(ix) copies of all reports, notices, filings or correspondence sent or
received by the Company regarding the occurrence of any event which has or may have a
material adverse effect on the SEF (including, without limitation, any reports, notices,
filings or correspondence with any governmental agency, default notices, notices of
reductions or elimination of benefits under any federal, state, or local program previously
enjoyed by the Company, notice of any IRS proceeding involving the Company, notice of any
demand for payment or draw under any construction completion guarantee, performance bond;
or letter of credit regarding the Company; and notices regarding the Property’s compliance
with any regulatory restrictions imposed thereon); and
(x) copies of all lawsuits or legal proceedings or alleged violations of
law, and notices of all actions taken, or proposed to be taken, affecting the SEF.
[Source: STP1 13.04, MT 13.04]
Exhibit C-6
Operations and Maintenance Agreement
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Exhibit D
Services Fee Schedule
As full compensation to Service Provider for the performance of Services
hereunder, Owner shall pay Service Provider the following Services Fee after the Services
Commencement Date:
| Payment Frequency | ||
| Initial Annual Services Fee | (As Marked) | |
| o Quarterly | ||
$41,000
|
þ Semi-Annually | |
| o Annually |
The Services Fee will escalate at a rate of three percent (3%) per year beginning at the first
anniversary of the Services Commencement Date.
Billing Rate Schedule for Non-Covered Services
Payment for Non-Covered Services shall be on a Time & Materials Basis per the following schedule:
| 1. | Service Provider Employees billed at $[*] per hour. | ||
| 2. | Subcontractor charges will be billed at cost plus [*] percent ([*]%). | ||
| 3. | Materials, travel, lodging and other expenses will be billed at direct cost plus [*] percent ([*]%). | ||
| 4. | Hourly Rates listed will escalate at a rate of [*]% per year beginning at the first anniversary of the Services Commencement Date. |
Exhibit D-1
