HomeMy WebLinkAboutItem 6d - Authorize Solar Power Purchase Agreement Contract Assignment Item 6d
Department: Public Works
Cost Center: N/A
For Agenda of: 9/16/2025
Placement: Consent
Estimated Time: N/A
FROM: Aaron Floyd, Interim Public Works Director
Prepared By: Noah Maidrand, Engineer II
Chris Read, Sustainability Manager
SUBJECT: AUTHORIZE SOLAR POWER PURCHASE AGREEMENT CONTRACT
ASSIGNMENT
RECOMMENDATION
Authorize the City Manager or their designee to execute a Consent to Assignment of
Project Documents and Acknowledgement to transfer Power Purchase Agreements from
ForeFront Power to Greenskies Clean Energy, in a form subject to review and approval
by the City Attorney’s office.
POLICY CONTEXT
California Government Code Section 4217.12 allows a public agency to enter i nto an
energy services contract and a related facility ground lease provided the agency
determines it is in the best interest of the public agency. This determination was made by
Council in 2018 via Resolution No. 10933 allowing staff to execute power purchase
agreements to offset the City’s energy consumption.
DISCUSSION
Background
A Power Purchase Agreement (PPA) is a financial agreement where the cost of a solar
asset is paid for by purchasing electricity directly from the owner of that system over the
term of the agreement. Under this arrangement, a third party owns and operates the
system, and the City pays the third party for electricity generated. This arrangement
allows the City to adopt sustainable energy solutions without any upfront capital
investment.
As described in the 2018 Council Agenda Report, the City is “piggybacking” from a
statewide procurement process conducted by the Joint Powers Authority called the
School Project for Utility Rate Reduction (SPURR), which selected ForeFront as its
primary vendor. In 2018, Council made findings that the projects would save both money
and energy, allowing for a direct contract with ForeFront under Government Code Section
4217.
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Item 6d
The PPA approved in 2018 includes a Master Services Agreement (Attachment A) that
sets standard terms and conditions for the relationship between the City and ForeFront,
and site specific “Energy Service Agreements”, which set the terms and conditions for
each site. This format was set up to maximize flexibility as sites were removed or added.
Since approval in 2018, one project was removed due to infeasibility, Utilities – Reservoir
1, and one project was added due to an emergent opportunity, Cultural Arts District
Parking Structure. Table 1 provides the current list of proposed project sites, the reason
for inclusion, and the estimated offset of existing electrical load. The electricity produced
by the solar arrays will reduce the amount of energy needed to be purchased from PG&E
at each site, providing cost savings over the 20 -year period of the solar contracts. In all
cases, projects were designed to offset as much load as possible given current site
constraints. Forefront has prepared conceptual layouts of each site showing the
approximate size and location of the systems (Attachment C).
Table 1. Justification and Offset of Existing Load by Site
Site Justification Offset of
Existing Load
Cultural Arts District
Parking Structure Solar is included in the project design. 94%*
SLO Swim Center Solar is needed to offset current circulation
pumping, projected heat pump water heating. 110%**
Fire Station 1
Solar is needed to offset current electricity use and
if paired with a battery in the future could serve as a
microgrid.
62%
Bus Yard Solar is needed to offset the expected increase in
load from electric bus charging. 11%
*Load was modeled based on project design using comparable usage data from the City of Monterey
parking structures. The offset includes EV Charging Infrastructure.
**The projected solar generation at the SLO Swim Center exceeds current electrical loads because the
system is sized to account for operational constraints and to allow for future load growth or expanded uses.
While the existing pool heat pumps cannot be directly offset by solar, the additional capacity ensures
flexibility for future equipment upgrades or facility expansions without needing to install a new system.
Project History
In 2018, the portfolio of projects included Fire Station #1, SLO Swim Center, and the Bus
Yard. Since all of the proposed projects were relatively small, ForeFront’s finance
department would only proceed with the projects if they were all constructed in the same
calendar year. In 2019, the agreements were finalized and fully executed by both parties.
However, in 2019, it became clear that the Transit Yard would need substantial
engineering and realignment to accommodate electric bus charging. In order to maintain
the full portfolio, all projects were put on indefinite hold until the Transit Yard Electric
Vehicle Charging Infrastructure Project (Transit EV Charging Project) was complete. With
the completion of the Transit EV Charging Project in 2024, the City has now resumed
focus on the solar projects.
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Item 6d
Since the agreements were authorized with Forefront, the Public Utilities Commission
adopted a new net energy metering policy (commonly referred to as net energy metering
3, or NEM 3.0) that substantially decreased the value of solar energy that is generat ed
and exported to the grid. To maintain the previous more lucrative net energy metering
(the rate earned by selling power back to PG&E, often referred to as NEM 2.0), the City
worked with ForeFront to submit grid interconnection applications for all four proposed
sites. Interconnection agreements were executed by the City Manager on October 7,
2024. As a result, the City has received “grandfathered” NEM 2.0 rates. These rates will
expire for each site if a solar project is not operational by April 14, 2026. For projects that
go online prior to this date, rates are grandfathered for 20 years.
On June 23, 2025, staff met with Forefront’s Chief Commercial Officer and were informed
that Forefront had a large backlog of NEM 2.0 projects that had fallen behind schedule
and were at risk of missing the NEM 2.0 deadline. If projects did not meet the NEM 2.0
deadline, they would default onto NEM 3.0, making them far less fiscally advantageous.
To mitigate this, Forefront would offload many of their NEM 2.0 deadline projects onto
other solar providers they deem capable of executing the PPA’s as executed. The City’s
solar projects were identified as projects that Forefront would like to transfer to another
solar provider.
Forefront identified Greenskies Clean Energy LLC (GCE) as an appropriate alternative
capable of delivering the City’s solar projects as scoped. City staff met with GCE staff and
have affirmed that they are capable of delivering the City’s solar projects within the NEM
2.0 deadline1. GCE has delivered over 150 commercial solar projects in California and is
actively working with several municipalities in California to deliver similar solar projects.
The Master Service Agreement allows the “Provider”, Forefront, to transfer or assign the
Power Purchase Agreement with the consent of the “Purchaser”, the City. Under the
terms of the Power Purchase Agreement, the City cannot unreasonably withhold consent
to the assignment. After reviewing with the Office of Sustainability and the City Attorney’s
office, staff recommend consenting to this assignment of the City’s agreement to GCE to
ensure the NEM 2.0 deadline is met for the City’s solar projects.
Staff recommend authorizing the City Manager to execute the Consent to Assignment
once staff have finalized the form and terms of the consent. This delegated authority will
allow staff to continue working with Forefront and GCE to complete the design and meet
the tight project timeline. Staff have prepared a Draft Consent to Assignment (Attachment
B) in coordination with the Office of Sustainability and the City Attorney’s Office that they
will work to finalize with GCE. The existing terms and conditions of the Master Services
Agreement (Attachment A) and the Site-Specific Agreements will remain the same,
except as modified by the Consent to Transfer. Final Consent to Assignment will be
reviewed and approved by the City Attorney’s Office prior to execution.
1 Staff are currently negotiation with GCE to assign some punitive cost of delay equivalent to the loss of
savings between NEM 2.0 and NEM 3.0 if the NEM 2.0 deadline is missed. The City would also have the
right to terminate the contract if that deadline is missed as a material breach of contract.
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Item 6d
Previous Council or Advisory Body Action
September 2018: Authorize Power Purchase Agreement with Forefront Power.
Specific recommendations included:
1. Authorize staff to negotiate a solar PPA with ForeFront Power for the design
and potential development, operation, and maintenance of solar energy
systems at and for City Facilities, and
2. Adopt Resolution No. 10933 (2018 Series) making findings on energy savings
as required by Government Code 4217.12., and
3. Authorize the City Manager to enter into a solar PPA with ForeFront Power in
a form subject to the approval of the City Attorney, and
4. Authorize the City Manager to enter into Interconnection Agreements to
maintain “time of use” rates for City facilities in a form subject to the approval
of the City Attorney.
June 2019: 2019-21 Financial Plan (Climate Action MCG Task 10 – Develop
PPA solar projects)
June 2021: 2021-23 Financial Plan (Climate Action MCG Task 4.3.iv – Complete
installation of solar projects […])
July 2021: Adoption of Lead by Example Plan (Energy 1.3: Complete solar projects
at SLO Swim Center, Transit Yard, and Fire Station 1 to offset energy use at key
facilities)
June 2023: 2023-25 Financial Plan (Climate Action MCG Task 4.1.c – Complete
installation of solar panels […])
Public Engagement
The public participated in each of the previous financial plans, and the Lead by Example
plan adopted by City Council that prioritized installing solar arrays at City facilities to offset
greenhouse gas emissions. During the strategic planning process for the 2025 -27
Financial Plan, the community aff irmed that Climate Action and Resilience remained a
Major City Goal.
CONCURRENCE
This project transition has concurrence with the Office of Sustainability and the City
Attorney’s office.
ENVIRONMENTAL REVIEW
The contract assignment has no impact on previous environmental reviews. Each project will
undergo an individual CEQA determination once ready for construction.
FISCAL IMPACT
Budgeted: N/A Budget Year: N/A
Funding Identified: N/A
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Item 6d
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current Funding
Request
Remaining
Balance
Annual
Ongoing Cost
General Fund $0 $0 $0 $0
State $0 $0 $0 $0
Federal $0 $0 $0 $0
Fees $0 $0 $0 $0
Other: $0 $0 $0 $0
Total $0 $0 $0 $0
This recommendation has no fiscal impact on the project. These projects do not have any
upfront capital costs to the City but will have some increased operational costs during the
first years of operation, with net positive energy savings over the 20-year term of the PPA.
Table 2. Year 1 Cost Increase and Year 20 Cumulative Savings by Site
Site Year 20 Cumulative
Savings Fund Source
CAD Parking $532,083 Parking Fund
SLO Swim Center $572,412 General Fund – LRM
Fire Station 1 $38,710 General Fund – LRM
Transit Yard $1,590,066 Transit Fund
Total $2,733,271
*The CAD Parking Structure has projected savings in year 1 based on comparable data from a parking
structure in the City of Monterey.
ALTERNATIVES
Council could decide not to approve the Consent to Assignment with GCE.
ForeFront has indicated their inability to complete the projects by the NEM 2.0 deadline.
Should Council pursue this option, it is unlikely that the City would be able to design and
construct the solar projects within the NEM 2.0 deadline, which would eliminate the
project savings and viability of a power purchase agreement model for energy efficiency
projects based on NEM 3.0’s lower value of solar energy.
ATTACHMENTS
A - General Terms and Conditions of Energy Service Agreement
B - DRAFT Consent to Assignment
C - Site Conceptual Layouts
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***
GENERAL TERMS AND CONDITIONS OF
ENERGY SERVICES AGREEMENT
These General Terms and Conditions (“General Conditions”) are dated ___________________and are witnessed
and acknowledged by FFP BTM SOLAR, LLC, a Delaware limited liability company (“Provider”) and the City of
San Luis Obispo, a California Municipal Corporation (“Purchaser”), as evidenced by their signature on the last
page of this document. These General Conditions are intended to be incorporated by reference into Energy
Services Agreements that may be entered into between Provider and Purchaser. These General Conditions shall
have no binding effect upon Provider or Purchaser, respectively, except to the extent Provider or Purchaser
becomes a party to an Energy Services Agreement that incorporates these General Conditions.
1. DEFINITIONS.
1.1 In addition to other terms specifically defined elsewhere in the Agreement, where capitalized, the
following words and phrases shall be defined as follows:
“Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled
by or under common control with such specified Person.
“Applicable Law” means, with respect to any Person, any constitutional provision, law, statute, rule, regulation,
ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, registration, license, franchise,
permit, authorization, guideline, Governmental Approval, consent or requirement of any Governmental Authority
having jurisdiction over such Person or its property, enforceable at law or in equity, including the interpretation and
administration thereof by such Governmental Authority.
“Assignment” has the meaning set forth in Section 13.1.
“Bankruptcy Event” means with respect to a Party, that either (i) such Party has (A) applied for or consented to the
appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a
substantial part of its property; (B) admitted in writing its inability, or be generally unable, to pay its debts as such
debts become due; (C) made a general assignment for the benefit of its creditors; (D) commenced a voluntary case
under any bankruptcy law; (E) filed a petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding up, or composition or readjustment of debts; (F) taken any corporate or other
action for the purpose of effecting any of the foregoing; or (ii) has a petition in bankruptcy filed against it, and such
petition is not dismissed within ninety (90) days after the filing thereof.
“Business Day” means any day other than Saturday, Sunday or any day within the meaning of the California Code of
Civil Procedure Section 135.
“Commercial Operation” has the meaning set forth in Section 3.3(b).
“Commercial Operation Date” has the meaning set forth in Section 3.3(b).
“Confidential Information” has the meaning set forth in Section 15.1.
“Construction Start Date” has the meaning set forth in Section 5 of the Special Conditions.
GENERAL CONDITIONS v.20.1
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“Covenants, Conditions and Restrictions” or “CCR” means those requirements or limitations related to the Premises
as may be set forth in a lease, if applicable, or by any association or other organization, having the authority to impose
restrictions.
“Delay Liquidated Damages” means the daily payment of (i) $0.250/day/kW if the Provider fails to achieve the
Commercial Operation Date by the Guaranteed Commercial Operation Date.
“Disruption Period” has the meaning set forth in Section 4.3.
“Early Termination Date” means any date on which the Agreement terminates other than by reason of expiration of
the then applicable Term.
“Early Termination Fee” means the fee payable by Purchaser to Provider under the circumstances described in Section
11.2.
“Effective Date” has the meaning set forth in the preamble to the Special Conditions.
“Energy Services” has the meaning set forth in the Special Conditions, and includes the supply of electrical energy
output from a System pursuant to the terms of each of the Special Conditions.
“Energy Services Agreement” or “Agreement” means each Energy Services Agreement (including the Schedules
attached thereto) that may be entered into between Provider and Purchaser or between their respective affiliates that
incorporates these General Conditions by reference.
“Energy Services Payment” has the meaning set forth in Schedule 2 of the Special Conditions.
“Environmental Attributes” shall mean, without limitation, carbon trading credits, renewable energy credits or
certificates, emissions reduction credits, emissions allowances, green tags, tradable renewable credits, or Green-e®
products.
“Environmental Documents” has the meaning set forth in Section 7.2(h).
“Environmental Law” means any and all federal, state, local, provincial and foreign, civil and criminal laws, statutes,
ordinances, orders, common law, codes, rules, regulations, judgments, decrees, injunctions relating to the protection
of health and the environment, worker health and safety, and/or governing the handling, use, generation, treatment,
storage, transportation, disposal, manufacture, distribution, formulation, packaging, labeling, or release to the
environment of or exposure to Hazardous Materials, including any such requirements implemented through
Governmental Approvals.
“Estimated Remaining Payments” means as of any date, the estimated remaining Energy Services Payments to be
made through the end of the then-applicable Term, as reasonably determined by Provider.
“Expiration Date” means the date on which the Agreement terminates by reason of expiration of the Term.
“Fair Market Value” means, with respect to any tangible asset or service, the price that would be negotiated in an
arm’s-length, free market transaction, for cash, between an informed, willing seller and an informed, willing buyer,
neither of whom is under compulsion to complete the transaction. Fair Market Value of the System will be determined
pursuant to Section 2.4.
“Financing Party” means, as applicable (i) any Person (or its agent) from whom Provider (or an Affiliate of Provider)
leases the System, (ii) any Person (or its agent) who has made or will make a loan to or otherwise provides financing
to Provider (or an Affiliate of Provider) with respect to the System, or (iii) any Person acquiring a direct or indirect
interest in Provider or in Provider’s interest in the Agreement or the System as a tax credit investor.
“Force Majeure Event” has the meaning set forth in Section 10.1.
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“Provider” has the meaning set forth in the Special Conditions.
“Provider Default” has the meaning set forth in Section 11.1(a).
“General Conditions” means these General Terms and Conditions of the Energy Services Agreement, including all
Exhibits hereto.
“G uar anteed Co mmer cial Op er atio n Date ” has the meaning set forth in Section 5 of the Special Conditions, which
date shall be extended day-for-day for Force Majeure Events and for other events outside of Provider’s reasonable
control.
“Governmental Approval” means any approval, consent, franchise, permit, certificate, resolution, concession, license,
or authorization issued by or on behalf of any applicable Governmental Authority, including any such approval,
consent, order or binding agreements with or involving a governmental authority under Environmental Laws.
“Governmental Authority” means any federal, state, regional, county, town, city, or municipal government, whether
domestic or foreign, or any department, agency, bureau, or other administrative, regulatory or judicial body of any
such government.
“Hazardous Materials” means any hazardous or toxic material, substance or waste, including petroleum, petroleum
hydrocarbons or petroleum products, and any other chemicals, materials, substances or wastes in any amount or
concentration which are regulated under or for which liability can be imposed under any Environmental Law.
“Indemnified Parties” has the meaning set forth in Section 16.1.
“Initial Term” has the meaning set forth in Section 2 of the Special Conditions.
“Installation Work” means the construction and installation of the System and the start-up, testing and acceptance (but
not the operation and maintenance) thereof, all performed by or for Provider at the Premises.
“Invoice Date” has the meaning set forth in Section 6.2.
“Liens” has the meaning set forth in Section 7.1(e).
“Local Electric Utility” means the local electric distribution owner and operator providing electric distribution and
interconnection services to Purchaser at the Premises.
“Losses” means all losses, liabilities, claims, demands, suits, causes of action, judgments, awards, damages, cleanup
and remedial obligations, interest, fines, fees, penalties, costs and expenses (including all attorneys’ fees and other
costs and expenses incurred in defending any such claims or other matters or in asserting or enforcing any indemnity
obligation).
“Option Price” has the meaning set forth in Section 2.3.
“Party” or “Parties” has the meaning set forth in the preamble to the Special Conditions.
“Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, firm, or other entity, or a Governmental Authority.
“Pre-existing Environmental Conditions” means any: (i) violation of, breach of or non-compliance with any
Environmental Laws with respect to the Premises that first existed, arose or occurred on or prior to Provider’s
commencement of construction at the Premises and (ii) the presence or release of, or exposure to, any Hazardous
Materials at, to, on, in, under or from the Premises that first existed, arose or occurred on or prior to Provider’s
commencement of construction at the Premises.
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“Premises” means the premises described in Schedule 1 of the Special Conditions. The Premises includes the entirety
of any structures and underlying real property located at the address in Schedule 1 of the Special Conditions.
“Provider” has the meaning set forth in the Special Conditions and Preamble
“Purchase Date” means the first Business Day that occurs after the applicable purchase date set forth in Schedule 3 of
the Special Conditions.
“Purchaser” has the meaning set forth in the preamble to the Special Conditions.
“Purchaser Default” has the meaning set forth in Section 11.2(a).
“Renewal Term” has the meaning set forth in Section 2.1.
“Representative” has the meaning set forth in Section 15.1.
“Security Interest” has the meaning set forth in Section 8.2.
“Site-Specific Requirements” means the site-specific information and requirements as may be set forth in Schedule 6
of the Special Conditions.
“Special Conditions” means each Energy Services Agreement, excluding these General Conditions.
“Stated Rate” means a rate per annum equal to the lesser of (a) the “prime rate” (as reported in The Wall Street Journal)
plus two percent (2%) or (b) the maximum rate allowed by Applicable Law.
“System” has the meaning set forth in Schedule 1 of the Special Conditions.
“System-based Incentives” means any accelerated depreciation, installation or production-based incentives,
investment tax credits and subsidies including, but not limited to, the subsidies in Schedule 1 of the Special Conditions
and all other related subsidies and incentives.
“System Operations” means Provider’s operation, maintenance and repair of the System performed in accordance
with the requirements herein.
“Term” has the meaning set forth in Section 2 of the Special Conditions.
“Term Year” means a twelve (12) month period beginning on the first day of the Term and each successive
twelve (12) month period thereafter.
“Termination Date” means the date on which the Agreement ceases to be effective, including on an Early Termination
Date or the Expiration Date.
“Transfer Time” has the meaning set forth in Section 4.3(a).
1.2 Interpretation. The captions or headings in these General Conditions are strictly for convenience
and shall not be considered in interpreting the Agreement. Words in the Agreement that impart the singular
connotation shall be interpreted as plural, and words that impart the plural connotation shall be interpreted as singular,
as the identity of the parties or objects referred to may require. The words “include”, “includes”, and “including”
mean include, includes, and including “without limitation” and “without limitation by specification.” The words
“hereof”, “herein”, and “hereunder” and words of similar import refer to the Agreement as a whole and not to any
particular provision of the Agreement. Except as the context otherwise indicates, all references to “Articles” and
“Sections” refer to Articles and Sections of these General Conditions.
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2. TERM AND TERMINATION.
2.1 Term; Early Termination; Milestone Dates.
(a) Term. The term of the Agreement shall commence on the Effective Date and shall continue for the
number of years after the Commercial Operation Date that are specified in the Special Conditions (the “Initial Term”),
unless and until extended or terminated earlier pursuant to the provisions of the Agreement.
(b) Early Termination. Purchaser may terminate the Agreement prior to any applicable Expiration Date
for any reason upon sixty (60) days’ prior written notice. If Purchaser terminates the Agreement prior to the Expiration
Date of the Initial Term, Purchaser shall pay, as liquidated damages, the Early Termination Fee set forth on Schedule
3, Column 1 of the Special Conditions, and, except when Purchaser exercises its Purchase Option in accordance with
Section 2.2 below, Provider shall cause the System to be disconnected and removed from the Premises. As security
for Provider’s removal obligations hereunder, within 5 business days of Purchaser providing such termination notice,
Provider shall post a decommissioning and removal bond in an amount sufficient to decommission and remove the
System and restore the Premises. Upon Purchaser’s payment to Provider of the Early Termination Fee, the Agreement
shall terminate automatically. If the Purchaser exercises its Purchase Option in accordance with Section 2.2 below,
the Early Termination Fee shall only be payable to the extent required by Section 2.4.
(c) If Provider fails to commence construction by the Construction Start Date, Purchaser shall be
entitled (as its sole remedy) to Delay Liquidated Damages not to exceed $22.5/kW, and, at Purchaser’s election, may
(ii) terminate this Agreement with no liability whatsoever if Provider fails to commence construction of the System
by the date that is 90 days after the Construction Start Date. If Provider fails to achieve Commercial Operation by the
Guaranteed Commercial Operation Date, Purchaser shall be entitled (as its sole remedy) to Delay Liquidated Damages
not to exceed $15/kW, plus (if Installation Work had commenced at the Premises as of the date of termination) any
costs reasonably incurred by Purchaser to return its Premises to its condition prior to commencement of the Installation
Work. Further, Purchaser may terminate this Agreement with no liability whatsoever if Provider fails to commence
Commercial Operation by the date that is 60 days after the Guaranteed Commercial Operation Date. The Construction
Start Date and Guaranteed Commercial Operation Date shall be extended on a day-for-day basis if, notwithstanding
Provider’s commercially-reasonable efforts, interconnection approval is not obtained within 60 days after the Effective
Date, provided that interconnection applications are submitted within 45 days of the later of (a) the Effective Date and
(b) finalization of the System layout.
2.2 Purchase Option. On any Purchase Date, so long as a Purchaser Default shall not have occurred and
be continuing, Purchaser has the option to purchase the System for a purchase price (the “Option Price”) equal to the
greater of (a) the Fair Market Value of the System as of the Purchase Date, or (b) the Early Termination Fee as of the
Purchase Date, as specified in Schedule 3, Column 2 of the Special Conditions. To exercise its purchase option,
Purchaser shall, not less than one hundred and eighty (180) days prior to the proposed Purchase Date, provide written
notice to Provider of Purchaser’s intent to exercise its option to purchase the System on such Purchase Date. Within
thirty (30) days of receipt of Purchaser’s notice, Provider shall specify the Option Price, and Purchaser shall then have
a period of thirty (30) days after notification to confirm or retract its decision to exercise the purchase option or, if the
Option Price is equal to the Fair Market Value of the System, to dispute the determination of the Fair Market Value
of the System in accordance with Section 2.3 below. In the event Purchaser confirms its exercise of the purchase
option in writing to Provider (whether before or after any determination of the Fair Market Value determined pursuant
to Section 2.3), (i) the Parties shall promptly execute all documents necessary to (A) cause title to the System to pass
to Purchaser on the Purchase Date, free and clear of any Liens, and (B) assign all vendor warranties for the System to
Purchaser, and (ii) Purchaser shall pay the Option Price to Provider on the Purchase Date, such payment to be made
in accordance with any previous written instructions delivered to Purchaser by Provider or Provider’s Financing Party,
as applicable, for payments under the Agreement. Upon execution of the documents and payment of the Option Price,
in each case as described in the preceding sentence, the Agreement shall terminate automatically. Payment of the
Option Price shall be in lieu of and instead of any payments as described in Section 2.2 hereof. In the event Purchaser
retracts its exercise of, or does not timely confirm, the purchase option, the provisions of the Agreement shall be
applicable as if Purchaser had not exercised any option to purchase the System. At the Purchaser’s option, an
independent escrow company may be used to facilitate the administration of the terms of purchase set forth herein,
and the Purchaser shall pay the Option Price to the escrow company for delivery to Provider on the Purchase Date
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upon the satisfaction of the terms of purchase set forth herein. All costs and fees of the escrow company shall be paid
by Purchaser. The identity of the escrow company shall be subject to Provider’s approval, which shall not be
unreasonably withheld. In the event the purchase of the System cannot be consummated on the Purchase Date due to
circumstances beyond the Purchaser’s control, and the Purchaser has otherwise complied with the requirements of this
section, the Purchase Date may take place on any Business Day within 30 days of the Purchase Date at no additional
cost to the Purchaser.
2.3 Determination of Fair Market Value. If the Option Price indicated by Provider in accordance with
Section 2.2 is equal to the Fair Market Value (as determined by Provider). Provider shall (at the same time Provider
informs Purchaser of the Option Price) provide Purchaser with a written report that informs Purchaser of the
calculations, price comparisons and data relied upon by Provider in determining the Fair Market Value. Provider shall
also concurrently provide Purchaser with copies of all determinations, appraisals and reports relating to the Fair Market
Value of similarly sized Systems (regardless of whether of such determinations, appraisals, or reports were prepared
or made by Provider or an independent appraiser), not to exceed three (3) separate reports. If Purchaser disputes such
stated Fair Market Value within thirty (30) days of receipt of such notice from Provider, then the Parties shall mutually
select an independent appraiser with experience and expertise in the Energy Services industry. Such appraiser shall
act reasonably and in good faith to determine Fair Market Value and shall set forth such determination in a written
opinion delivered to the Parties. The valuation made by the appraiser shall be binding upon the Parties in the absence
of fraud or manifest error. The costs of the appraisal shall be borne equally by the Parties.
2.4 Removal of System at Expiration. Subject to Purchaser’s exercise of its purchase option under
Section 2.2, upon the expiration or earlier termination of the Agreement, Provider shall, at Provider’s sole expense
and liability, remove all of its tangible property comprising the System from the Premises on a mutually convenient
date but in no case later than ninety (90) days after the Termination Date. The Premises shall be returned to its original
condition, except for System mounting pads or other support structures on roof-mounted systems only, and ordinary
wear and tear. If the System is to be located on a roof, then in no case shall Provider’s removal of the System affect
the integrity of Purchaser’s roof, which shall be as leak proof as it was prior to removal of System (other than ordinary
wear and tear). For purposes of Provider’s removal of the System, Purchaser’s covenants pursuant to Section 7.2 shall
remain in effect until the date of actual removal of the System. Provider shall leave the Premises in neat and clean
order. If Provider fails to remove or commence substantial efforts to remove the System by such agreed upon date,
Purchaser shall have the right, at its option, to remove the System to a public warehouse and restore the Premises to
its original condition (other than System mounting pads or other support structures and ordinary wear and tear) at
Provider’s reasonable cost; or (b) consider the System to be abandoned property which the Purchaser shall have the
right to leave in place and use as the Purchaser’s property (which Provider could only access with the Purchaser’s
separate written permission). Purchaser shall have one hundred eighty (180) days from the aforementioned agreed
upon date to provide Provider with written notice of whether Purchaser will exercise option (a) or (b) above, and the
System will be temporarily deemed to have option (b) status until the Purchaser provides such formal written notice
to Provider.
2.5 Conditions of the Agreement Prior to the Commercial Operation Date.
(a) In the event that any of the following events or circumstances occur prior to the Commercial
Operation Date, Provider may (at its sole discretion) provide notice that it is terminating the Agreement, in which case
neither Party shall have any liability to the other except for any such liabilities that may have accrued prior to such
termination:
(i) Provider determines that the Premises, as is, is insufficient to accommodate the System or unsuitable
for construction or operation of the System.
(ii) There exist site conditions (including environmental conditions) or construction requirements that
could not have been reasonably known as of the Effective Date and that could reasonably be expected to materially
increase the cost of Installation Work or would adversely affect the electricity production from the System as designed.
(iii) There is a material adverse change in the regulatory environment, incentive program or federal or
state tax code (including the expiration of any incentive program or tax incentives in effect as of the Effective Date)
that could reasonably be expected to adversely affect the economics of the installation for Provider and its investors.
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(iv) Provider is unable to obtain financing for the System on terms and conditions satisfactory to it.
(v) Provider has not received: (1) a fully executed a license in the form of Exhibit A of these General
Conditions from the owner of the Premises (if the Purchaser is a tenant), (2) a release or acknowledgement from any
mortgagee of the Premise, if required by Provider’s Financing Party, to establish the priority of its security interest in
the System, and (3) such other documentation as may be reasonably requested by Provider to evidence Purchaser’s
ability to meet its obligations under Section 7.2(d)(ii) to ensure that Provider will have access to the Premises
throughout the Term.
(vi) There has been a material adverse change in the rights of Purchaser to occupy the Premises or
Provider to construct the System on the Premises.
(viii) Purchaser has determined that there are easements, CCRs or other land use restrictions, liens or
encumbrances that would materially impair or prevent the installation, operation, maintenance or removal of the
System.
(ix) There has been a material adverse change in Purchaser’s credit-worthiness.
(b) If any of the conditions set forth in Section 2.5(a) are partly or wholly unsatisfied, and Provider
wishes to revise the information in the Special Conditions, then Provider may propose written modifications to the
Special Conditions for acceptance by Purchaser. Any such proposed modifications by Provider must expressly state
that they are being proposed pursuant to this section. If Purchaser does not accept such modified Special Conditions
in writing, Provider may terminate this Agreement as provided in Section 2.5(a). In the event of such termination by
Provider, Section 2.4 shall govern the removal of all its tangible property regarding the System from the Premises. If
Purchaser accepts such revised Special Conditions, such revised Special Conditions shall be deemed an amendment
of the Agreement, and the Agreement shall remain in force and effect upon execution of such amendment by both
Parties.
3. CONSTRUCTION, INSTALLATION AND TESTING OF SYSTEM.
3.1 Installation Work. Provider will cause the System to be designed, engineered, installed and
constructed substantially in accordance with Schedule 1 of the Special Conditions and Applicable Law. At its request,
Purchaser shall have the right to review all construction plans and designs, including engineering evaluations of the
impact of the System. Provider shall perform the Installation Work at the Premises between the hours of 7:00 a.m. and
7:00 p.m. in a manner that minimizes inconvenience to and interference with the use of the Premises to the extent
commercially practical.
3.2 Approvals; Permits. Purchaser shall assist Provider in obtaining all necessary consents, approvals
and permits required to perform Purchaser’s obligations under this Agreement, including but not limited to those
related to the Local Electric Utility, any Governmental Approval, and any consents, waivers, approvals or releases
required pursuant to any applicable contract or CCR. Notwithstanding the foregoing, Provider shall be solely
responsible for obtaining any and all building permits for the System.
3.3 System Acceptance Testing.
(a) Provider shall conduct testing of the System in accordance with such methods, acts, guidelines,
standards and criteria reasonably accepted or followed by providers of Energy Services similar to those provided by
the System in the United States. Purchaser reserves the right to do independent testing and/or independent verification
of Provider’s testing, provided that Purchaser provides Provider with sufficient advance notice of such activities so as
to allow Provider to be present during such activities.(b) If the results of such testing indicate that the System is
capable of providing the Energy Services, using such instruments and meters as have been installed for such purposes,
and the System has been approved for interconnected operation by the Local Electric Utility (“Commercial
Operation”), then Provider shall send a written notice to Purchaser to that effect, and the date of such notice shall be
the “Commercial Operation Date.”
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4. SYSTEM OPERATIONS.
4.1 Provider as Owner and Operator. The System will be owned by Provider or Provider’s Financing
Party and will be operated and maintained and repaired by Provider, as necessary to ensure that the System is in good
working order, at Fore Front Power’s sole cost and expense; provided, any repair or maintenance costs incurred by
Provider as a result of Purchaser’s negligence or breach of its obligations hereunder shall be reimbursed by Purchaser
provided that Provider has first provided written notice to Purchaser, and Purchaser acknowledges that it is responsible
for such work.
4.2 Metering. Provider shall install and maintain a utility grade kilowatt-hour (kWh) meter for the
measurement of electrical energy provided by the System and may install a utility grade kilowatt-hour (kWh) meter
for the measurement of electrical energy delivered by the Local Electric Utility and consumed at the Premises.
4.3 System Disruptions. In the event that (a) the owner or lessee of the Premises repairs the Premises
for any reason not directly related to damage caused by the System, and such repair requires the partial or complete
temporary disassembly or movement of the System, or (b) any act or omission of Purchaser or Purchaser’s employees,
Affiliates, agents or subcontractors (collectively, a “Purchaser Act”) results in a disruption or outage in System
production, then, in either case, Purchaser shall (i) pay Provider for all work required by Provider to disassemble or
move the System and (ii) continue to make all payments for the Energy Services during such period of System
disruption (the “Disruption Period”), and (iii) reimburse Provider for any other lost revenue during the Disruption
Period, including any lost revenue associated with any reduced sales of Environmental Attributes and any reduced
System-based Incentives, if applicable, during the Disruption Period. For the purpose of calculating Energy Services
Payments and lost revenue for such Disruption Period, Energy Services for each month of said months shall be deemed
to have been produced at the average rate over the same month for which data exists (or, if the disruption occurs within
the first twelve (12) months of operation, the average over such period of operation).
5. TITLE TO SYSTEM.
5.1 Throughout the duration of the Agreement, Provider or Provider’s Financing Party shall be the legal
and beneficial owner of the System at all times, and the System shall remain the personal property of Provider or
Provider’s Financing Party and shall not attach to or be deemed a part of, or fixture to, the Premises. The System shall
at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code.
Purchaser covenants that it will use reasonable commercial efforts to place all parties having an interest in or lien upon
the real property comprising the Premises on notice of the ownership of the System and the legal status or classification
of the System as personal property. If there is any mortgage or fixture filing against the Premises which could
reasonably be construed as attaching to the System as a fixture of the Premises, Purchaser shall provide, at Provider’s
request, a disclaimer or release from such lien holder. If Purchaser is the fee owner of the Premises, Purchaser consents
to the filing by Provider, on behalf of Purchaser, of a disclaimer of the System as a fixture of the Premises in the office
where real estate records are customarily filed in the jurisdiction of the Premises. If Purchaser is not the fee owner,
Purchaser will, at Provider’s request, use commercially reasonable efforts to obtain such consent from such owner.
5.2 Environmental Attributes And System-Based Incentives. Purchaser’s purchase of Energy Services
includes Environmental Attributes, but does not include System-based incentives. System-based Incentives shall be
owned by Provider or Provider’s financing party for the duration of the System’s operating life. Purchaser disclaims
any right to System-based Incentives based upon the installation of the System at the Premises, and shall, at the request
of Provider, execute any document or agreement reasonably necessary to fulfill the intent of this Section 5.2.
6. PRICE AND PAYMENT.
6.1 Consideration. Purchaser shall pay to Provider a monthly Energy Services Payment for the Energy
Services provided during each calendar month of the Term as set forth in the Special Conditions.
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6.2 Invoice. Provider shall invoice Purchaser on or about the first day of each month (each, an “Invoice
Date”), commencing on the first Invoice Date to occur after the Commercial Operation Date, for the Energy Services
Payment in respect of the immediately preceding month. The last invoice shall include Energy Services provided only
through the Termination Date of this Agreement.
6.3 Time of Payment. Purchaser shall pay all undisputed amounts due hereunder within thirty (30) days
of receipt of the applicable Invoice Date.
6.4 Method of Payment. Purchaser shall make all payments under the Agreement either (a) by
electronic funds transfer in immediately available funds to the account designated by Provider from time to time or
(b) by check timely delivered to the location designated by Provider from time to time. All payments that are not
paid when due shall bear interest accruing from the date becoming past due until paid in full at a rate equal to the
Stated Rate.
6.5 Disputed Payments. If a bona fide dispute arises with respect to any invoice, Purchaser shall not be
deemed in default under the Agreement and the Parties shall not suspend the performance of their respective
obligations hereunder, including payment of undisputed amounts owed hereunder. If an amount disputed by Purchaser
is subsequently deemed to have been due pursuant to the applicable invoice, interest shall accrue at the Stated Rate on
such amount from the date becoming past due under such invoice until the date paid. In the alternative to withholding
payment of an amount that is subject to a bona fide dispute, Purchaser shall also have the option to pay said amount
under an express reservation of the Purchaser’s right to later seek recoupment of that amount. Any amounts so
recouped shall earn interest at the Stated Rate.
7. GENERAL COVENANTS.
7.1 Provider’s Co ve nant s. Provider covenants and agrees to the following:
(a) Notice of Damage or Emergency. Provider shall promptly notify Purchaser if it becomes aware of
any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System,
and immediately notify Purchaser if it becomes aware of any event or circumstance relating to the System or the
Premises that poses a potential risk to human health, the environment, the System or the Premises. In the event
Provider damages the Premises by any act or omission of Provider, or its employees, Affiliates, agents or
subcontractors, Provider shall, at its sole cost, promptly repair said Premises to the condition existing prior to such
damage.
(b) Governmental Approvals. While providing the Installation Work, Energy Services, and System
Operations, Provider shall obtain and maintain and secure all Governmental Approvals required to be obtained and
maintained and secured by Provider and to enable Provider to perform such obligations.
(c) Health and Safety. Provider shall take all necessary and reasonable safety precautions with respect
to providing the Installation Work, Energy Services, and System Operations that shall comply with all Applicable
Laws pertaining to the health and safety of persons and real and personal property. All work shall be performed by
licensed professionals, as may be required by Applicable Law, and in accordance with such methods, acts, guidelines,
standards and criteria reasonably accepted or followed by a majority of System integrators in the United States.
(d) Liens. Other than a Financing Party’s security interest in or ownership of the System, Provider shall
not directly or indirectly cause, create, incur, assume or suffer to exist any mortgage, pledge, lien (including
mechanics’, labor or materialman’s lien), charge, security interest, encumbrance or claim of any nature (“Liens”) on
or with respect to the Premises or any interest therein, in each case to the extent such Lien arises from or is related to
Provider’s performance or non-performance of its obligations hereunder. If Provider breaches its obligations under
this Section, it shall (i) immediately notify Purchaser in writing, (ii) promptly cause such Lien to be discharged and
released of record without cost to Purchaser, and (iii) defend (with counsel subject to the reasonable approval of
Purchaser), indemnify and hold harmless Purchaser against all costs and expenses (including reasonable attorneys’
fees and court costs at trial and on appeal) incurred in discharging and releasing such Lien; provided, Provider shall
have the right to contest any such Lien, so long as it provides a statutory bond or other reasonable assurances of
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payment that either remove such Lien from title to the Premises or that assure that any adverse judgment with respect
to such Lien will be paid without affecting title to the Premises.
(e) Hazardous Materials. Provider shall indemnify, defend and hold harmless Purchaser from and against any
and all claims, actions, causes of action, suits, proceedings, costs, expenses (including attorney’s fees), liabilities,
damages, penalties, fines, losses and liens of any type resulting from (i) any release of Hazardous Materials caused or
permitted by Provider, or (iii) any violation or alleged violation of any Environmental Laws by Provider.
7.2 Purchaser’s Co vena nts. Purchaser covenants and agrees as follows:
(a) Notice of Damage or Emergency. Purchaser shall promptly notify Provider if it becomes aware of
any damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System,
and immediately notify Provider it becomes aware of any event or circumstance that poses an imminent risk to human
health, the environment, the System or the Premises. In the event of damage to Purchaser’s Premises caused by, or as
the result of, the System, Provider shall, at its sole cost, repair said Premises to the condition existing prior to such
damage.
(b) Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or suffer to exist any
Liens on or with respect to the System. If Purchaser breaches its obligations under this Section, it shall immediately
notify Provider in writing, shall promptly cause such Lien to be discharged and released of record without cost to
Provider, and shall indemnify Provider against all costs and expenses (including reasonable attorneys’ fees and court
costs at trial and on appeal) incurred in discharging and releasing such Lien.
(c) Consents and Approvals. To the extent that only Purchaser is authorized to request, obtain or issue
any necessary approvals, Governmental Approvals, rebates or other financial incentives, Purchaser shall cooperate
with Provider to obtain or issue such approvals, Governmental Approvals, rebates or other financial incentives in the
name of Provider. Purchaser shall provide to Provider copies of all Governmental Approvals and CCRs applicable to
the Premises, other than those obtained by Provider or to which Provider is a party.
(d) Access to Premises, Grant of License.
(i) Purchaser hereby grants to Provider a commercial license coterminous with the Term containing all
the rights necessary for Provider to use and occupy portions of the Premises, subject to the terms and conditions hereof,
for the installation, operation, maintenance and removal of the System pursuant to the terms of this Agreement,
including ingress and egress rights to the Premises for Provider and its employees, contractors and subcontractors and
access to electrical panels and conduits to interconnect or disconnect the System with the Premises’ electrical wiring.
If Provider’s financing structure requires that Purchaser enter into a license agreement directly with Financing Party,
Provider shall enter into such an agreement which shall be in a form set forth by Provider and which contain
substantially the same rights as set forth in this Section 7.2(d).
(ii) Regardless of whether Purchaser is owner of the Premises or leases the Premises from a landlord,
Purchaser hereby covenants that Provider shall have reasonable access to the Premises and System during the Term
of this Agreement and for so long as needed after termination to remove the System pursuant to the applicable
provisions herein, and neither Purchaser nor Purchaser’s landlord will unreasonably interfere or mishandle any
Provider equipment or the System without written authorization from Provider; provided, Purchaser and Purchaser’s
landlord shall at all times have access to and the right to observe the Installation Work or System removal.
(iii) If Purchaser is a lessee of the Premises, Purchaser further covenants that it shall deliver to Provider,
a license from Purchaser’s landlord in substantially the form attached hereto as Exhibit A of these General Conditions.
(e) Temporary storage space during installation or removal. Purchaser shall use commercially
reasonable efforts to obtain an agreement for sufficient space at the Premises for the temporary storage and staging of
tools, materials and equipment and for the parking of construction crew vehicles and temporary construction trailers
and facilities reasonably necessary during the Installation Work, System Operations or System removal, and access
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for rigging and material handling; provided that such temporary storage and staging does not unreasonably interfere
with Purchaser’s use of the Premises.
(f) On or before the Effective Date of each Special Conditions Purchaser shall identify and set forth in
each Special Conditions and unless previously delivered, Purchaser shall, to the extent the same are known and
available, deliver to Provider copies of all reports, agreements, plans, inspections, tests, studies or other materials
concerning the presence of Hazardous Materials at, from or on the Premises including, but not limited to, soil reports,
design drawings, environmental reports, sampling results or other documents relating to Hazardous Materials that
have been identified or may be present on, in or under the Premises (collectively, the “Environmental Documents”).
Thereafter, Purchaser agrees to provide copies of any new Environmental Documents within ten (10) days of receipt
of same. Purchaser hereby agrees to furnish such other documents in Purchaser’s possession or control with respect
to Governmental Approvals compliance with Environmental Law or Hazardous Materials with respect to the Premises
as may be reasonably requested by Provider from time to time.
(g) Notwithstanding anything to the contrary in the Agreement, Purchaser shall operate and maintain
the Premises to comply with the requirements of all applicable Environmental Laws that limit or govern the conditions
or uses of the Premises, without impairing or interfering with Provider’s construction, operation and ownership of the
System or occupancy of the Premises. In no event shall Provider have any liability or obligation with respect to any
Pre-existing Environmental Condition on, in or under the Premises, or operations or maintenance of the Premises
required to comply with Environmental Laws with respect to Pre-Existing Environmental Conditions.
(j) Purchaser shall indemnify, hold harmless and defend Provider from and against all claims, pay costs
and expenses, and conduct all actions required under Environmental Laws in connection with (i) the existence at, on,
above, below or near the Premises of any Pre-existing Environmental Conditions, and (ii) any Hazardous Materials
released, spilled or deposited at, on above or below the Premises by the Purchaser.
8. REPRESENTATIONS & WARRANTIES.
8.1 Representations and Warranties of Both Parties. In addition to any other representations and
warranties contained in the Agreement, each Party represents and warrants to the other as of the Effective Date that:
(a) it is duly organized and validly existing and in good standing in the jurisdiction of its organization;
(b) it has the full right and authority to enter into, execute, deliver, and perform its obligations under
the Agreement;
(c) it has taken all requisite corporate or other action to approve the execution, delivery, and
performance of the Agreement;
(d) the Agreement constitutes its legal, valid and binding obligation enforceable against such Party in
accordance with its terms, except as may be limited by applicable bankruptcy and other similar laws now or hereafter
in effect;
(e) there is no litigation, action, proceeding or investigation pending or, to the best of its knowledge,
threatened before any court or other Governmental Authority by, against, affecting or involving any of its business or
assets that could reasonably be expected to adversely affect its ability to carry out the transactions contemplated herein;
(f) its execution and performance of the Agreement and the transactions contemplated hereby do not
and will not constitute a breach of any term or provision of, or a default under, (i) any contract, agreement or
Governmental Approval to which it or any of its Affiliates is a party or by which it or any of its Affiliates or its or
their property is bound, (ii) its organizational documents, or (iii) any Applicable Laws; and
(g) its execution and performance of the Agreement and the transactions contemplated hereby do not
and will not require any consent from a third party, including any Governmental Approvals from any Governmental
Authority, that are not identified in the Special Conditions.
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8.2 Representations of Purchaser. Purchaser represents and warrants to Provider as of the Effective
Date that:
(a) Purchaser acknowledges that it has been advised that part of the collateral securing the financial
arrangements for the System may be the granting of a first priority perfected security interest (the “Security Interest”)
in the System to a Financing Party;
(b) To Purchaser’s knowledge, the granting of the Security Interest will not violate any term or
condition of any covenant, restriction, lien, financing agreement, or security agreement affecting the Premises;
(c) Purchaser is aware of no existing lease, mortgage, security interest or other interest in or lien upon
the Premises that could attach to the System as an interest adverse to Provider’s Financing Party’s Security Interest
therein;
(d) To Purchaser’s knowledge, there exists no event or condition which constitutes a default, or would,
with the giving of notice or lapse of time, constitute a default under this Agreement;
(e) To Purchaser’s knowledge, Purchaser has identified and disclosed to Provider in the Special
Conditions (i) all Environmental Documents, (ii) all CCRs, Governmental Approvals or other restrictions imposed
under Applicable Laws with respect to the use of the Premises that could affect the construction and operation of the
System, and (iii) all environmental reports, studies, data or other information relating to the use of the Premises by
Provider within the Purchaser’s possession or control;
(f) To Purchaser’s knowledge, the Premises is in compliance with Environmental Laws, and that
Purchaser holds and is in compliance with all Governmental Approvals required for the ownership and any current
operations or activities conducted at the Premises; and
(g) Purchaser has identified in the Special Conditions and delivered to Provider all material reports and
information concerning the presence or release of Hazardous Materials on, in or under the Premises.
Any Financing Party shall be an intended third-party beneficiary of this Section 8.2.
8.3 EXCLUSION OF WARRANTIES. EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY
SET FORTH HEREIN, THE INSTALLATION WORK, SYSTEM OPERATIONS, AND ENERGY SERVICES
PROVIDED BY PROVIDER TO PURCHASER PURSUANT TO THIS AGREEMENT SHALL BE “AS-IS
WHERE-IS.” NO OTHER WARRANTY TO PURCHASER OR ANY OTHER PERSON, WHETHER EXPRESS,
IMPLIED OR STATUTORY, IS MADE AS TO THE INSTALLATION, DESIGN, DESCRIPTION, QUALITY,
MERCHANTABILITY, COMPLETENESS, USEFUL LIFE, FUTURE ECONOMIC VIABILITY, OR FITNESS
FOR ANY PARTICULAR PURPOSE OF THE SYSTEM, THE ENERGY SERVICES OR ANY OTHER SERVICE
PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH
ARE EXPRESSLY DISCLAIMED BY PROVIDER.
9. TAXES AND GOVERNMENTAL FEES.
9.1 Purchaser Obligations. Purchaser shall reimburse and pay for any documented taxes, fees or charges
imposed or authorized by any Governmental Authority and paid by Provider due to Provider’s sale of the Energy
Services to Purchaser (other than income taxes imposed upon Provider). Provider shall notify Purchaser in writing
with a detailed statement of such amounts, which shall be invoiced by Provider and payable by Purchaser. Purchaser
shall timely report, make filings for, and pay any and all sales, use, income, gross receipts or other taxes, and any and
all franchise fees or similar fees assessed against it due to its purchase of the Energy Services. This Section 9.1
excludes taxes specified in Section 9.2.
9.2 Provider Obligations. Subject to Section 9.1 above, Provider shall be responsible for all income,
gross receipts, ad valorem, personal property or real property or other similar taxes and any and all franchise fees or
similar fees assessed against it due to its ownership of the System.
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10. FORCE MAJEURE.
10.1 Definition. “Force Majeure Event” means any act or event that prevents the affected Party from
performing its obligations in accordance with the Agreement, if such act or event is beyond the reasonable control,
and not the result of the fault or negligence, of the affected Party and such Party had been unable to overcome such
act or event with the exercise of due diligence (including the expenditure of reasonable sums). Subject to the foregoing
conditions, “Force Majeure Event” shall include without limitation the following acts or events: (i) natural
phenomena, such as storms, hurricanes, floods, lightning, volcanic eruptions and earthquakes; (ii) explosions or fires
arising from lightning or other causes unrelated to the acts or omissions of the Party seeking to be excused from
performance; (iii) acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist
acts, or rebellion; (iv) strikes or labor disputes (except strikes or labor disputes caused solely by employees of Provider
or as a result of such party’s failure to comply with a collective bargaining agreement); (v) action or inaction by a
Governmental Authority (unless Purchaser is a Governmental Authority and Purchaser is the Party whose performance
is affected by such action nor inaction). A Force Majeure Event shall not be based on the economic hardship of either
Party, or upon the expiration of any lease of the Premises by the Purchaser from the owner of the Premises.
10.2 Excused Performance. Except as otherwise specifically provided in the Agreement, neither Party
shall be considered in breach of the Agreement or liable for any delay or failure to comply with the Agreement (other
than the failure to pay amounts due hereunder), if and to the extent that such delay or failure is attributable to the
occurrence of a Force Majeure Event; provided, the Party claiming relief under this Article 10 shall as soon as
practicable after becoming aware of the circumstances constituting Force Majeure (i) notify the other Party in writing
of the existence of the Force Majeure Event, (ii) exercise all reasonable efforts necessary to minimize delay caused by
such Force Majeure Event, (iii) notify the other Party in writing of the cessation or termination of said Force Majeure
Event and (iv) resume performance of its obligations hereunder as soon as practicable thereafter; provided, Purchaser
shall not be excused from making any payments and paying any unpaid amounts due in respect of Energy Services
delivered to Purchaser prior to the Force Majeure Event performance interruption.
10.3 Termination in Consequence of Force Majeure Event. If a Force Majeure Event shall have occurred
that has affected Provider’s performance of its obligations hereunder and that has continued for a continuous period
of one hundred eighty (180) days, then either Party shall be entitled to terminate the Agreement upon ninety (90) days’
prior written notice to the other Party. If at the end of such ninety (90) day period such Force Majeure Event shall
still continue, the Agreement shall automatically terminate. Upon such termination for a Force Majeure Event, neither
Party shall have any liability to the other (other than any such liabilities that have accrued prior to such termination),
other than Providers obligations as set forth in Section 2.4.
11. DEFAULT.
11.1 Provider Defaults and Purchaser Remedies.
(a) Provider Defaults. The following events shall be defaults with respect to Provider (each, a “Provider
Default”):
(i) A Bankruptcy Event shall have occurred with respect to Provider;
(ii) Provider fails to pay Purchaser any undisputed amount owed under the Agreement within
thirty (30) days from receipt of notice from Purchaser of such past due amount; and
(iii) Provider breaches any material representation, covenant or other term of the Agreement
and (A) if such breach can be cured within thirty (30) days after Purchaser’s written notice of such breach and Provider
fails to so cure, or (B) Provider fails to commence and pursue a cure within such thirty (30) day period if a longer cure
period is needed.
(b) Purchaser’s Re med ies. If a Provider Default described in Section 11.1(a) has occurred and is
continuing, in addition to other remedies expressly provided herein, and subject to Article 12, Purchaser may terminate
the Agreement and exercise any other remedy it may have at law or equity or under the Agreement.
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11.2 Purchaser Defaults and Provider’s Re med ies.
(a) Purchaser Default. The following events shall be defaults with respect to Purchaser (each, a
“Purchaser Default”):
(i) A Bankruptcy Event shall have occurred with respect to Purchaser;
(ii) Purchaser breaches any material representation, covenant or other term of the Agreement
if (A) such breach can be cured within thirty (30) days after Provider’s notice of such breach and Purchaser fails to so
cure, or (B) Purchaser fails to commence and pursue said cure within such thirty (30) day period if a longer cure period
is needed; and
(iii) Purchaser fails to pay Provider any undisputed amount due Provider under the Agreement
within thirty (30) days from receipt of notice from Provider of such past due amount.
(b) Provider’s Re med ies. If a Purchaser Default described in Sections 11.2(a) has occurred and is
continuing, in addition to other remedies expressly provided herein, and subject to Article 12, Provider may terminate
this Agreement and upon such termination, (A) Provider shall be entitled to receive from Purchaser the Early
Termination Fee, and (B) Provider may exercise any other remedy it may have at law or equity or under the Agreement.
11.3 Cross Default. With respect to any Systems that are co-located at the same Premises, if a Party
defaults under the Agreement related one such System, it shall also be a default of such Party under the Agreement(s)
related to the other co-located System(s); provided, a cure of the original default shall be a cure of any such cross
default. In the event of a cross default, the non-defaulting Party shall be entitled to exercises its rights with respect to
all such Agreements, including terminating all such Agreements (but not less than all such Agreements) and, if
Provider terminates the Agreements due to a Purchaser Default, Purchaser shall pay the Early Termination Fees for
all such terminated Agreements.
11.4 Removal of System. Upon any termination of the Agreement pursuant to this Article 11, Provider
will remove the System pursuant to Section 2.4 hereof, absent any purchase of the System by Purchaser pursuant to
Section 2.2 hereof.
12. LIMITATIONS OF LIABILITY.
12.1 Except as expressly provided herein, neither Party shall be liable to the other Party or its Indemnified
Persons for any special, punitive, exemplary, indirect, or consequential damages, losses or damages for lost revenue
or lost profits, whether foreseeable or not, arising out of, or in connection with the Agreement, provided, the limits of
liability under this Section 12.1 shall not apply with respect to indemnity obligations hereunder in respect of third-
party personal injury or environmental claims.
12.2 A Party’s maximum liability to the other Party under the Agreement, shall be limited to the
aggregate Estimated Remaining Payments as of the date of the events giving rise to such liability, provided, the limits
of liability under this Section 12.2 shall not apply with respect to (i) indemnity obligations hereunder in respect of
personal injury or environmental claims, (ii) any obligation of Purchaser to pay Energy Service Payments, the Early
Termination Fee or the Option Price (iii) any obligation of Provider to pay for Lost Savings in accordance with the
Special Conditions, if applicable, (iv) any obligation of Provider to pay for Delay Liquidated Damages, and (v) any
obligations of Provider under section 2.4 relating to removal of System at Expiration Date, and (vi) any insured loss.
13. ASSIGNMENT.
13.1 Assignment by Provider. Provider shall not sell, transfer or assign (collectively, an “Assignment”)
the Agreement or any interest therein, without the prior written consent of Purchaser, which shall not be unreasonably
withheld, conditioned or delayed; provided, Purchaser agrees that Provider may assign this Agreement without the
consent of the Purchaser to an affiliate of Provider or any party providing financing for the System. In the event that
Provider identifies a secured Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then
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Purchaser shall comply with the provisions set forth in Exhibit B of these General Terms and Conditions and agrees
to provide such estoppels and acknowledgments as Provider may reasonably request from time to time. Any Financing
Party shall be an intended third-party beneficiary of this Section 13.1. Any Assignment by Provider without obtaining
the prior written consent and release of Purchaser, when such consent is required by this Section 13.1, shall not release
Provider of its obligations hereunder.
13.2 Acknowledgment of Collateral Assignment. In the event that Provider identifies a secured
Financing Party in the Special Conditions, or in a subsequent notice to Purchaser, then Purchaser hereby
acknowledges:
(a) The collateral assignment by Provider to the Financing Party, of Provider’s right, title and interest
in, to and under the Agreement, as consented to under Section 13.1 of the Agreement.
(b) That the Financing Party as such collateral assignee shall be entitled to exercise any and all rights
of lenders generally with respect to Provider’s interests in this Agreement.
(c) That it has been advised that Provider has granted a first priority perfected security interest in the
System to the Financing Party and that the Financing Party has relied upon the characterization of the System as
personal property, as agreed in this Agreement in accepting such security interest as collateral for its financing of the
System.
Any Financing Party shall be an intended third- party beneficiary of this Section 13.2.
13.3 Assignment by Purchaser. Purchaser shall not assign the Agreement or any interest therein, without
Provider’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Any
Assignment by Purchaser without the prior written consent of Provider shall not release Purchaser of its obligations
hereunder.
14. NOTICES.
14.1 Notice Addresses. Unless otherwise provided in the Agreement, all notices and communications
concerning the Agreement shall be in writing and addressed to the other Party (or Financing Party, as the case may
be) at the addresses set forth in the Special Conditions, or at such other address as may be designated in writing to the
other Party from time to time.
14.2 Notice. Unless otherwise provided herein, any notice provided for in the Agreement shall be hand
delivered, sent by registered or certified U.S. Mail, postage prepaid, or by commercial overnight delivery service, and
shall be deemed delivered to the addressee or its office when received at the address for notice specified above when
hand delivered, upon confirmation of sending when sent by facsimile (if sent during normal business hours or the next
Business Day if sent at any other time), on the Business Day after being sent when sent by overnight delivery service
(Saturdays, Sundays and legal holidays excluded), or five (5) Business Days after deposit in the mail when sent by
U.S. mail.
14.3 Address for Invoices. All invoices under the Agreement shall be sent to the address provided by
Purchaser. Invoices shall be sent by regular first class mail postage prepaid.
15. CONFIDENTIALITY.
15.1 Confidentiality Obligation. The Parties acknowledge and agree that in the course of performing
under this Agreement, each will disclose to the other confidential information, including trade secrets, business plans,
strategies, financial information, proprietary, patented, licensed, copyrighted or trademarked information, and/or
technical information regarding the financing, design, operation and maintenance of the System or of Purchaser’s
business (“Confidential Information”) relating to each Party’s business. Except as provided herein, each Party agrees
not to disclose the Confidential Information of the other to any third party and to treat it with the same degree of care
as it would its own Confidential Information. Confidential Information will not include information that: (i) is or
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becomes publicly available through no wrongful act of the receiving Party; (ii) was lawfully obtained by the receiving
Party from a third party who was without any obligation to maintain the Confidential Information as confidential; (iii)
was previously known to the receiving Party without any obligation to keep it confidential; or (iv) was independently
developed by the receiving Party without the use of or reliance upon the Confidential Information of the disclosing
Party. All proprietary and other information received by Provider, whether received in connection with Provider’s
proposal to Purchaser or in connection with any Energy Management Services performed by Provider, will be
disclosed upon receipt of a request for disclosure, pursuant to the California Public Records Act; provided, however,
that, if any information is set apart and clearly marked “trade secret” or “Confidential Information” when it is provided
to Purchaser, Purchaser shall give notice to Provider of any request for the disclosure of such information. Provider
shall then have five (5) days from the date it receives such notice to enter into an agreement with the Purchaser,
satisfactory to Purchaser’s attorney, providing for the defense of, and complete indemnification and reimbursement
for all costs (including plaintiff’s attorney fees) incurred by Purchaser in any legal action to compel the disclosure of
such information under the California Public Records Act. The Provider shall have sole responsibility for defense of
the actual “trade secret” or “Confidential Information” designation of such information. The parties understand and
agree that any failure by Provider to respond to the notice provided by Purchaser and/or to enter into an agreement
with Purchaser, in accordance with this Section, shall constitute a complete waiver by Provider of any rights regarding
the information designated “trade secret” or “Confidential Information” by Provider, and such information shall be
disclosed by Purchaser pursuant to applicable procedures required by the Public Records Act.
15.2 Permitted Disclosures. Notwithstanding any other provision herein, neither Party shall be required
to hold confidential any information that:
(a) Becomes publicly available other than through the receiving Party;
(b) Is required to be disclosed by a Governmental Authority, under Applicable Law or pursuant to a
validly issued subpoena or required filing, but a receiving Party subject to any such requirement shall promptly notify
the disclosing Party of such requirement;
(c) Is independently developed by the receiving Party; or
(d) Becomes available to the receiving Party without restriction from a third party under no obligation
of confidentiality.
15.3 Goodwill and Publicity. Neither Party shall use the name, trade name, service mark, or trademark
of the other Party in any promotional or advertising material without the prior written consent of such other Party.
The Parties shall coordinate and cooperate with each other when making public announcements related to the
execution and existence of the Agreement, and each Party shall have the right to promptly review, comment upon,
and approve any publicity materials, press releases, or other public statements by the other Party that refer to, or that
describe any aspect of, the Agreement; provided, no such publicity releases or other public statements (except for
filings or other statements or releases as may be required by Applicable Law) shall be made by either Party without
the prior written consent of the other Party. At no time will either Party acquire any rights whatsoever to any
trademark, trade name, service mark, logo or other intellectual property right belonging to the other Party.
Notwithstanding the foregoing, Purchaser agrees that Provider may, at its sole discretion, take photographs of the
installation process of the System and/or the completed System, and Provider shall be permitted to use such images
(regardless of media) in its marketing efforts, including but not limited to use in brochures, advertisements, websites
and news outlet or press release articles. The images shall not include any identifying information without Purchaser
permission and the installation site shall not be disclosed beyond the type of establishment (such as “Retail Store,”
“Distribution Center,” or such other general terms), the city and state.
15.4 Enforcement of Confidentiality Obligation. Each Party agrees that the disclosing Party would be
irreparably injured by a breach of this Article 15 by the receiving Party or its Representatives or other Person to whom
the receiving Party discloses Confidential Information of the disclosing Party and that the disclosing Party may be
entitled to equitable relief, including injunctive relief and specific performance, in the event of any breach of the
provisions of this Article 15. To the fullest extent permitted by Applicable Law, such remedies shall not be deemed
to be the exclusive remedies for a breach of this Article 15, but shall be in addition to all other remedies available at
law or in equity.
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16. INDEMNITY.
16.1 Provider Indemnity. Subject to Article 12, Provider will indemnify, defend and hold harmless
Purchaser, Purchaser’s permitted successors and assigns and their respective officials, directors, officers, members,
shareholders and employees (collectively, the “Purchaser Indemnified Parties”) from any and all claims, demands,
suits, proceedings, loss, cost and damages of every kind and description, including any attorney’s fees or litigation
expenses, which might be brought against or incurred by any Purchaser Indemnified Party on account of loss or
damage to any property or for injuries to or death of any person, caused by, arising out of, or contributed to, in whole
or in part, by reasons of any act, omission, professional error, fault, mistake, or negligence of Provider, its employees,
agents, representatives, or subcontractors in connection with or incident to this Agreement, or arising out of worker’s
compensation claims, unemployment compensation claims, or unemployment disability compensation claims of
employees of Provider, or its subcontractors or claims under similar laws or obligations. Provider’s indemnification
obligation will not extend to liability caused by the negligence of any Purchaser Indemnified Party.
16.2 Purchaser Indemnity. Subject to Article 12, Purchaser will indemnify, defend and hold harmless
Provider, Provider’s permitted successors and assigns and their respective directors, officers, members, shareholders
and employees (collectively, the “Provider Indemnified Parties”) from any and all claims, demands, suits, proceedings,
loss, cost and damages of every kind and description, including any attorney’s fees or litigation expenses, which might
be brought against or incurred by any Provider Indemnified Party on account of loss or damage to any property or for
injuries to or death of any person, caused by, arising out of, or contributed to, in whole or in part, by reasons of any
act, omission, professional error, fault, mistake, or negligence of Purchaser, its employees, agents, representatives, or
subcontractors in connection with or incident to this Agreement, or arising out of worker’s compensation claims,
unemployment compensation claims, or unemployment disability compensation claims of employees of Vendor, or
its subcontractors or claims under similar laws or obligations. Purchaser’s indemnification obligation will not extend
to liability caused by the negligence of any Provider Indemnified Party.
17. INSURANCE.
17.1 Generally. Purchaser and Provider shall each maintain the following insurance coverages in full
force and effect throughout the Term either through insurance policies or acceptable self-insured retentions: (a)
Workers’ Compensation Insurance as may be from time to time required under applicable federal and state law, (b)
Commercial General Liability Insurance with limits of not less than $2,000,000 general aggregate, $1,000,000 per
occurrence, and (c) automobile insurance with commercially reasonable coverages and limits. Additionally, Provider
shall carry adequate property loss insurance on the System which need not be covered by Purchaser’s property
coverage. The amount and terms of insurance coverage will be determined at Provider’s sole discretion.
17.2 Certificates of Insurance. Each Party, upon request, shall furnish current certificates evidencing that
the insurance required under Section 17.1 is being maintained. Each Party’s insurance policy provided hereunder
shall contain a provision whereby the insured agrees to give the other Party thirty (30) days’ written notice before the
insurance is cancelled or materially altered.
17.3 Additional Insureds. Each Party’s insurance policy shall be written on an occurrence basis and shall
include the other Party as an additional insured as its interest may appear.
17.4 Insurer Qualifications. All insurance maintained hereunder shall be maintained with companies
either rated no less than A- as to Policy Holder’s Rating and Financial Size Category Class VII (or larger) in the
current edition of Best’s Insurance Guide (or with an association of companies each of the members of which are so
rated) or having a parent company’s debt to policyholder surplus ratio of 1:1.
17.5 Rights of enforcement. In the event any policy of insurance required under this Agreement does not
comply with these requirements or is canceled and not replaced, either party has the right but not the duty to obtain
the insurance it deems necessary and any premium paid by that party will be promptly reimbursed the non-compliant
party.
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18. MISCELLANEOUS.
18.1 Integration; Exhibits. The Agreement, together with the Exhibits and Schedules attached thereto or
incorporated by reference, constitute the entire agreement and understanding between Provider and Purchaser with
respect to the subject matter thereof and supersedes all prior agreements relating to the subject matter hereof which
are of no further force or effect. The Exhibits and Schedules attached to the Agreement, including these General
Conditions as incorporated by reference, are integral parts of the Agreement and are an express part of the Agreement.
In the event of a conflict between the provisions of these General Conditions and any applicable Special Conditions,
the provisions of the Special Conditions shall prevail.
18.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument
in writing executed by duly authorized representatives of Provider and Purchaser.
18.3 Industry Standards. Except as otherwise set forth herein, for the purpose of the Agreement the
normal standards of performance within the Energy Services industry in the relevant market shall be the measure of
whether a Party’s performance is reasonable and timely. Unless expressly defined herein, words having well-known
technical or trade meanings shall be so construed.
18.4 Cumulative Remedies. Except as set forth to the contrary herein, any right or remedy of Provider
or Purchaser shall be cumulative and without prejudice to any other right or remedy, whether contained herein or not.
18.5 Sovereign Immunity. To the extent permitted by Applicable Law, Purchaser hereby waives any
defense of sovereign immunity that Purchaser might otherwise have in connection with any action taken by Provider
to enforce its rights against Purchaser under this Agreement.
18.6 Limited Effect of Waiver. The failure of Provider or Purchaser to enforce any of the provisions of
the Agreement, or the waiver thereof, shall not be construed as a general waiver or relinquishment on its part of any
such provision, in any other instance or of any other provision in any instance.
18.7 Survival. The obligations under Section 2.4 (Removal of System), Section 7.1 (Provider
Covenants), Sections 7.2(d), (e), (f), (g) and (j) (Purchaser Covenants), Section 8.3 (Exclusion of Warranties), Article
9 (Taxes and Governmental Fees), Article 12 (Limitation of Liability), Article 14 (Notices), Article 15
(Confidentiality), Article 18 (Miscellaneous), all payment or indemnification obligations accrued prior to termination
of this Agreement, or pursuant to other provisions of this Agreement that, by their sense and context, are intended to
survive termination of this Agreement shall survive the expiration or termination of this Agreement for any reason.
18.8 Governing Law. This Agreement shall be governed by and construed in accordance with the laws
of the State of California without reference to any choice of law principles. The Parties agree that the courts of the
State of California and the Federal Courts sitting therein shall have jurisdiction over any action or proceeding arising
under the Agreement to the fullest extent permitted by Applicable Law. The Parties waive to the fullest extent
permitted by Applicable Law any objection it may have to the laying of venue of any action or proceeding under this
Agreement any courts described in this Section 18.8.
18.9 Severability. If any term, covenant or condition in the Agreement shall, to any extent, be invalid or
unenforceable in any respect under Applicable Law, the remainder of the Agreement shall not be affected thereby,
and each term, covenant or condition of the Agreement shall be valid and enforceable to the fullest extent permitted
by Applicable Law and, if appropriate, such invalid or unenforceable provision shall be modified or replaced to give
effect to the underlying intent of the Parties and to the intended economic benefits of the Parties.
18.10 Relation of the Parties. The relationship between Provider and Purchaser shall not be that of
partners, agents, or joint ventures for one another, and nothing contained in the Agreement shall be deemed to
constitute a partnership or agency agreement between them for any purposes, including federal income tax purposes.
Provider and Purchaser, in performing any of their obligations hereunder, shall be independent contractors or
independent parties and shall discharge their contractual obligations at their own risk.
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18.11 Successors and Assigns. This Agreement and the rights and obligations under the Agreement shall
be binding upon and shall inure to the benefit of Provider and Purchaser and their respective successors and permitted
assigns.
18.12 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken
together shall constitute one and the same instrument.
18.13 Electronic Delivery. This Agreement may be duly executed and delivered by a Party by execution
and facsimile or electronic, “pdf” delivery of the signature page of a counterpart to the other Party.
18.14 Liquidated Damages Not Penalty. Purchaser acknowledges that the Early Termination Fee
constitutes liquidated damages, and not penalties, in lieu of Provider’s actual damages resulting from the early
termination of the Agreement. Purchaser further acknowledges that Provider’s actual damages may be impractical
and difficult to accurately ascertain, and in accordance with Purchaser’s rights and obligations under the Agreement,
the Early Termination Fee constitutes fair and reasonable damages to be borne by Purchaser in lieu of Provider’s
actual damages. Provider acknowledges that Purchaser’s actual damages may be impractical and difficult to accurately
ascertain, and in accordance with Provider’s rights and obligations under the Agreement, the Delay Liquidated
Damages constitute fair and reasonable damages to be borne by Provider in lieu of the Purchaser’s actual damages.
18.15 Attor ne y’s Fee s . In the event that any suit or action is instituted under or in relation to this
Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any
right of such prevailing party under or with respect to this Agreement, including without limitation, such
reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
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These General Terms and Conditions are witnessed and acknowledged by Provider and Purchaser below. Neither
Provider nor Purchaser shall have any obligations or liability resulting from its witnessing and acknowledging these
General Terms and Conditions.
“PROVIDER”: FFP BTM SOLAR, LLC
By:
Name:
Title:
Date:
Go Mizoguchi
President
December 12, 2018
“PURCHASER”: THE CITY OF SAN LUIS OBISPO
By:
Name: Derek Johnson
Title: City Manager
Date:
APPROVED AS TO FORM
J. Christine Dietrick
City Attorney
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Exhibit A
of General Conditions
[Landlord’s Address]
Attn: Authorized Representative
[PURCHASER’S LETTERHEAD]
Re: Proposed Energy System Installation at [Address of Premises]
Lease dated [ ] between [PURCHASER] and [LAND LOR D ] (the “Lease”)
Dear Authorized Representative:
As has been discussed with you, [PURCHASER] (“Purchaser”) and [Forefront Power], LLC and an affiliate of
Forefront Power, LLC (“Provider”) have entered into an Energy Services Agreement, pursuant to which Provider will
install, finance, operate, and maintain a [solar photovoltaic] [battery storage] system at the above-referenced premises
which [PURCHASER] leases from you pursuant to the Lease. By signing below and returning this letter to us, you
confirm that:
1. The [solar photovoltaic] [battery storage] system and the renewable energy (including environmental
credits and related attributes) produced by the system are personal property, and shall not be considered the property
(personal or otherwise) of [LANDLORD] upon installation of the system at the premises. Landlord consents to the
filing by Provider of a disclaimer of the System as a fixture of the Premises in the office where real estate records are
customarily filed in the jurisdiction of the Premises.
2. Provider or its designee (including finance Providers) shall have the right without cost to access the
premises in order to install, operate, inspect, maintain, and remove the [solar photovoltaic] [battery storage] system.
[LANDLORD] will not charge Purchaser or Provider any rent for such right to access the premises.
3. [LANDLORD] has been advised that the finance Providers for the [solar photovoltaic] [battery
storage] system have a first priority perfected security interest in the system. Provider and the finance Providers for
the [solar photovoltaic] [battery storage] system (including any system lessor or other lender) are intended
beneficiaries of [LANDLORD]’s agreements in this letter.
4. [LANDLORD] will not take any action inconsistent with the foregoing.
We thank you for your consideration of this opportunity and we look forward to working with you in our
environmental campaign to increase the utilization of clean, renewal energy resources.
Very truly yours,
[PURCHASER]
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By:_
Name:
Title: Authorized Representative
Acknowledged and agreed by:
[LANDLORD]
By:
Name:
Title: Authorized Representative
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Exhibit B
of General Conditions
Certain Agreements for the Benefit of the Financing Parties
Purchaser acknowledges that Provider will be receiving financing accommodations from one or more Financing
Parties and that Provider may sell or assign the System or this Agreement and/or may secure Provider’s obligations
by, among other collateral, a pledge or collateral assignment of this Agreement and a first security interest in the
System. In order to facilitate such necessary sale, conveyance, or financing, and with respect to any such Financing
Party, Purchaser agrees as follows:
(a) Consent to Collateral Assignment. Purchaser consents to either the assignment, sale or conveyance to a
Financing Party or the collateral assignment by Provider to a Financing Party, of Provider’s right, title and interest in
and to this Agreement.
(b) Notices of Default. Purchaser will deliver to the Financing Party, concurrently with delivery thereof to
Provider, a copy of each notice of default given by Purchaser under the Agreement, inclusive of a reasonable
description of Provider default. No such notice will be effective absent delivery to the Financing Party. Purchaser
will not mutually agree with Provider to cancel, modify or terminate the Agreement without the written consent of the
Financing Party.
(c) Rights Upon Event of Default. Notwithstanding any contrary term of this Agreement:
i. The Financing Party, shall be entitled to exercise, in the place and stead of Provider, any and all rights
and remedies of Provider under this Agreement in accordance with the terms of this Agreement and only in the
event of Provider’s or Purchaser’s default. The Financing Party shall also be entitled to exercise all rights and
remedies of secured parties generally with respect to this Agreement and the System.
ii. The Financing Party shall have the right, but not the obligation, to pay all sums due under this
Agreement and to perform any other act, duty or obligation required of Provider thereunder or cause to be cured any
default of Provider thereunder in the time and manner provided by the terms of this Agreement. Nothing herein
requires the Financing Party to cure any default of Provider under this Agreement or (unless the Financing Party has
succeeded to Provider’s interests under this Agreement) to perform any act, duty or obligation of Provider under this
Agreement, but Purchaser hereby gives it the option to do so.
iii. Upon the exercise of remedies under its security interest in the System, including any sale thereof
by the Financing Party, whether by judicial proceeding or under any power of sale contained therein, or any
conveyance from Provider to the Financing Party (or any assignee of the Financing Party) in lieu thereof, the
Financing Party shall give notice to Purchaser of the transferee or assignee of this Agreement. Any such exercise of
remedies shall not constitute a default under this Agreement.
iv. Upon any default not reasonably susceptible to cure by a Finance Party, including, without limitation,
rejection or other termination of this Agreement pursuant to any process undertaken with respect to Provider under
the United States Bankruptcy Code, at the request of the Financing Party made within ninety (90) days of such
default, Purchaser shall enter into a new agreement with the Financing Party or its designee having the same terms
and conditions as this Agreement.
(d) Right to Cure.
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i. Purchaser will not exercise any right to terminate or suspend this Agreement unless it shall have given
the Financing Party prior written notice by sending notice to the Financing Party (at the address provided by
Provider) of its intent to terminate or suspend this Agreement, specifying the condition giving rise to such right,
and the Financing Party shall not have caused to be cured the condition giving rise to the right of termination or
suspension within thirty (30) days after such notice or (if longer) the periods provided for in this Agreement. The
Parties agree that the cure rights described herein are in addition to and apply and commence following the
expiration of any notice and cure period applicable to Provider The Parties respective obligations will otherwise
remain in effect during any cure period; provided, if such Provider default reasonably cannot be cured by the
Financing Party within such period and the Financing Party commences and continuously pursues cure of such
default within such period, such period for cure will be extended for a reasonable period of time under the
circumstances, such period not to exceed additional ninety (90) days.
ii. If the Financing Party (including any purchaser or transferee), pursuant to an exercise of remedies by the
Financing Party, shall acquire title to or control of Provider’s assets and shall, within the time periods described in
Sub-section (c)(i). above, cure all defaults under this Agreement existing as of the date of such change in title or
control in the manner required by this Agreement and which are capable of cure by a third person or entity, then such
person or entity shall no longer be in default under this Agreement, and this Agreement shall continue in full force
and effect
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Exhibit C
of General Conditions
Requirements Applicable To The Installation Work
Section B.1 Prohibition Against Use of Tobacco. All properties and facilities owned, leased or operated by the
Purchaser are tobacco-free work places. No person on, at or in any Purchaser-controlled property or facility, including,
without limitation, the Premises, may smoke, chew or otherwise use tobacco products. Provider shall be responsible
for: (i) informing any and all persons present on or at the Premises on account of the Installation Work about the
Purchaser’s tobacco-free policy; and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser,
Provider, and each Subcontractor shall require that any person present on or at the Premises on account of the
Installation Work who violates such policy must permanently leave the Premises, and shall prohibit such person from
thereafter being present or performing any of the Installation Work on or at the Premises.
Section B.2 Prohibition Against Use of Drugs.
(a) Purchaser Drug-Free Policy. All properties and facilities owned, leased or operated by the Purchaser
are drug-free work places. No person on, at or in any Purchaser-controlled property or facility, including, without
limitation, the Premises, may: (i) engage in the unlawful manufacture, dispensation, possession or use, including being
under the influence, of any controlled substance, (ii) possess or use any alcoholic beverage, or (iii) use any substance
which may cause significant impairment of normal abilities. Provider shall be responsible for: (i) informing any and
all persons present on or at the Premises on account of the Installation Work about the Purchaser’s drug-free policy;
and (ii) strictly enforcing such policy with respect to the Premises. The Purchaser, Provider, and each Subcontractor
shall require that any person present on or at the Premises on account of the Installation Work who violates such policy
must permanently leave the Premises, and shall prohibit such person from thereafter being present or performing any
of the Installation Work on or at the Premises.
(b) Drug-Free Workplace Certification. Provider is hereby made subject to the requirements of
Government Code Sections 8350 et seq., the Drug-Free Workplace Act of 1990.
Section B.3 Compliance with Labor Requirements. The Installation Work is a “public works” project as defined
in Section 1720 of the California Labor Code (“Labor Code”) and made applicable pursuant to Section 1720.6 of the
Labor Code. Therefore, the Installation Work is subject to applicable provisions of Part 7, Chapter 1, of the Labor
Code and Title 8 of the California Code of Regulations, Section 16000 et seq. (collectively, “Labor Law”). Provider
acknowledges that, as provided by Senate Bill 854 (Stats. 2014, Ch. 28), the Project is subject to labor compliance
monitoring and enforcement by the California Department of Industrial Relations (“DIR”).
Section B.4 Compliance with Labor Code Requirements. Provider must be, and shall be deemed and construed
to be, aware of and understand the requirements of the Labor Law that require the payment of prevailing wage rates
and the performance of other requirements on public works projects. Provider, at no additional cost to the Purchaser,
must: (i) comply with any and all applicable Labor Law requirements, including, without limitation, requirements for
payment of prevailing wage rates, inspection and submittal (electronically, as required) of payroll records, interview(s)
of workers, et cetera; (ii) ensure that its Subcontractors are aware of and comply with the Labor Law requirements;
(iii) in connection with Labor Law compliance matters, cooperate with the DIR, the Purchaser and other entities with
competent jurisdiction; and (iv) post all job-site notices required by law in connection with the Installation Work,
including, without limitation, postings required by DIR regulations. A Subcontractor that has been debarred in
accordance with the Labor Code, including, without limitation, pursuant to Sections 1777.1 or 1777.7, is not eligible
to bid on, perform, or contract to perform any portion of the Installation Work. Wage rates for the Installation Work
shall be in accordance with the general prevailing rates of per-diem wages determined by the Director of Industrial
Relations pursuant to Labor Code Section 1770. The following Labor Code sections are by this reference incorporated
into and are a fully operative part of the Contract, and Provider shall be responsible for compliance therewith:
(a) Section 1735: Anti-Discrimination Requirements;
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(b) Section 1775: Penalty for Prevailing Wage Rate Violations;
(c) Section 1776: Payroll Records;
(d) Sections 1777.5,1777.6 and 1777.7: Apprenticeship Requirements;
(e) Sections 1810 through 1812: Working Hour Restrictions;
(f) Sections 1813 and 1814: Penalty for Failure to Pay Overtime; and
(g) Section 1815: Overtime Pay.
Section B.5 Requirements for Payroll Records. Provider must comply with all applicable provisions of Labor
Code Sections 1776 and 1812, which relate to preparing and maintaining accurate payroll records, and making such
payroll records available for review and copying by the Purchaser, the DIR Division of Labor Standards Enforcement,
and the DIR Division of Apprenticeship Standards. The payroll records must be certified and made available as
required by Labor Code Section 1776.
Section B.6 Contractor Registration. On and after March 1, 2015, no contractor may bid on a public works
project unless the contractor is, and no subcontractor may be listed in any bid for a public works project unless the
subcontractor is, currently registered with the DIR and qualified to perform public work pursuant to Labor Code
Section 1725.5. On and after April 1, 2015, no contractor or subcontractor may be awarded a contract for work on a
public works project, or may perform any work on a public works project, unless the contractor or subcontractor is
currently registered with the DIR and qualified to perform public work pursuant to Labor Code Section 1725.5. It is
not a violation of Labor Code Section 1725.5 for an unregistered contractor to submit a bid authorized by Business
and Professions Code Section 7029.1 or Public Contract Code Section 20103.5, if the contractor is registered at the
time the contract is awarded.
Section B.7 Permits and Licenses. Without limiting anything set forth in Section B.7 of this Exhibit C, Provider,
its Subcontractors, and all of their respective employees and agents: (i) shall secure and maintain in force at all times
during the performance of the Installation Work such licenses and permits as are required by law; and (ii) shall comply
with all federal and State, and County laws and regulations, and other governmental requirements applicable to the
System or the Installation Work. Provider or its subcontractors shall obtain and pay for all permits and licenses
required for the performance of, or necessary in connection with, the Installation Work, and shall give all necessary
notices and deliver all necessary certificates to the Purchaser, and shall pay all royalties and license fees arising from
the use of any material, machine, method or process used in performing the Installation Work. Provider shall be solely
responsible for all charges, assessments and fees payable in connection with any such licenses, permits, materials,
machines, methods, and processes.
Section B.8 Protection of Minor-Aged Students. Provider, in conformance with Education Code Section
45125.1, shall require and be responsible for ensuring compliance by each and every person who will be on or at the
Premises in connection with the construction, maintenance, operation or other purposes related to the System with all
California Department of Justice guidelines and requirements relating to fingerprinting and criminal-history
background checks, regardless of whether Section 45125.1 otherwise by its terms would apply to any such activities.
In the event Education Code Section 45125.1 is repealed or superseded, Provider, following receipt of written notice
from the Purchaser, shall comply with such successor or other requirements as determined by the Purchaser in its
reasonable discretion. The Purchaser, in its discretion, may exempt in writing any person(s) from the foregoing
requirements if Provider makes alternative arrangements for supervision of such person(s) that are acceptable to the
Purchaser in its sole discretion.
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CONSENT TO ASSIGNMENT OF
PROJECT DOCUMENTS AND ACKNOWLEDGMENT
This Consent to Assignment of Project Documents and Acknowledgment, dated as of
_____________, 2025 (this “Consent”), is made by City of San Luis Obispo (“Purchaser”) and
Greenskies Clean Energy LLC, a Delaware limited liability company (“GCE”) in connection with
those certain power systems:
(a) to be built as noted in Exhibit A to this Consent (the “Systems”);
(b) to be located at the sites identified and described in Exhibit A to this Consent (the
“Sites”); and
(c) the associated agreements and documents associated with such Systems and Sites
including without limitation those identified in Exhibit A to this Consent (collectively
such agreements and documents, the “Project Documents”). To the extent that there are
any actual conflicts between the Project Documents and this Consent, the terms of this
Consent shall prevail unless specifically agreed otherwise in writing signed by
Purchaser and GCE.
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Project Documents.
1. Consent to Assignment and Change of Control.
a. An affiliate of GCE (the “GCE Owner”) will take over the development,
design, procurement, construction, operation, maintenance and ownership of the Systems at the
Sites by means of a purchase of all the rights, contracts and other assets related to such Systems
(collectively, the “Transaction”) to the extent such rights, contracts, and other assets hereinbefore
belonged to FFP BTM SOLAR, LLC, under the Project Documents, and GCE wishes that the
Purchaser hereby gives its unconditional and irrevocable consent to the Transaction (the
“Confirmation”) for the benefit of GCE and the GCE Owner and all of the their successors and
assigns including their financing parties and future assignees. Effective as of the date of this
Consent, the Purchaser hereby gives the Confirmation to GCE for the benefit of GCE and the GCE
Owner and their successors and authorized assigns including to the assignment of all of the Project
Documents (the “Assignment”) to the GCE Owner. Purchaser acknowledges that upon
Assignment, GCE Owner shall have all the rights and responsibilities of “Provider” under each
Project Document, including to perform and enforce the respective obligations thereunder. By
consenting to the Assignment, Purchaser waives any claim that the Assignment, by itself, entitles
Purchaser to termination or acceleration under any Project Document.
b. Any provision for notices under any Project Document is hereby revised so
that the Purchaser give notices as follows:
Greenskies Clean Energy LLC
127 Washington Avenue
West Bldg, Garden Level
North Haven, CT 06473
Attn: General Counsel
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2. Representations and Warranties of Purchaser. Purchaser hereby represents and
warrants to Provider, Assignee and GCE as follows:
a. Purchaser is a California municipal corporation and has all requisite power
and authority to execute and deliver, and to perform its obligations under, the Project Documents
and this Consent;
b. the execution, delivery and performance by Purchaser of this Consent have
been duly authorized by all necessary action and, as of the date hereof, do not require any further
consents or approvals that have not been obtained;
c. the execution, delivery and performance by Purchaser of this Consent will
not (i) violate any provision of any law, regulation, order, judgment, injunction or similar matters
applicable to it; or (ii) conflict with, result in a breach of or violate any of the terms, conditions or
provisions of Purchaser’s formation, constituent or governing documents;
d. all representations made by Purchaser in the Project Documents were true
and correct as of the date the same were made and as of the date hereof;
e. this Consent and the Project Documents are legal, valid and binding
obligations of Purchaser enforceable against Purchaser in accordance with their respective terms
except as may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights in
general;
f. the Project Documents are in full force and effect and have not been
amended except as explicitly indicated in Exhibit A, and there are no other agreements or
representations of any kind between Purchaser and Provider other than the Project Documents
listed in Exhibit A; and
g. as of the date hereof, no liquidated damages or other such payments are due
and owing under any Project Document.
3. Acknowledgment and Confirmation. Purchaser confirms with respect to the
Project Documents, Sites and the Systems as follows.
a. Purchaser confirms each Site has a water source on site which Provider may
use free of charge for the useful life of the System in question with such quantities of water
available at all times when and as would be needed by a system similar to the System f or its
installation, operation and maintenance (all as dictated by prudent industry practices for similar
systems in the county of the Site), with the sole exception of the Cultural Arts District Parking
Structure. No water source is available for use on the top deck of the parking structure.
b. Purchaser has granted Provider sunlight access pursuant to Section 10 of the
Special Conditions (defined in Exhibit A). In connection therewith, Purchaser acknowledges that
unobstructed access to sunlight (“100% Insolation”) is essential to Provider’s performance of its
obligations and a material term of the Project Documents for each System. Purchaser agrees not
to cause and, where possible, not permit any interference with each System’s 100% Insolation. If
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Purchaser becomes aware of any activity or condition that could diminish the 100% Insolation of
any System, Purchaser shall notify the GCE Owner promptly in writing and shall cooperate with
the GCE Owner to retain 100% Insolation. The GCE Owner may seek specific enforcement of
this provision against Purchaser without the necessity of posting a bond and without the
Purchaser’s contesting that an adequate remedy at law exists for the GCE Owner.
c. In addition to the ninety (90) days granted pursuant to Section 2.4 of the
General Terms and Conditions (defined in Exhibit A), Purchaser hereby grants an additional ninety
(90) days to GCE Owner for removal of each System and restoration of the Premises such that
Provider is required to remove, at Provider’s expense, all of its tangible property comprising the
System from the Premises on a mutually convenient date but in no case later than one hundred and
eighty (180) days after the Termination Date.
d. Purchaser understands that as is customary for systems similar to each
System, the GCE Owner intends to enter into financing and/or sale/leaseback arrangements with
respect to each System and the providers of such financing will request that the Purchaser execute
an agreement with them which may be of form and substance as set forth in Exhibit B hereto.
Pursuant to Section 13.1 of the General Terms and Conditions, Purchaser agrees to provide such
standard and customary estoppels as Provider may request, therefore Purchaser will cooperate in
good faith with the GCE Owner in reviewing, negotiating and executing such agreement when
requested by the GCE Owner (but with such variations as are appropriate to account for any
specific circumstances involving the System that are extraordinary to systems similar to the
System).
e. Prior to the end of the term of the Project Documents (the “Initial Term”)
or of any applicable Additional Term (as defined below) either party thereto may give the other
party thereto written notice of its desire to extend the Project Documents on the terms and
conditions set forth therein for three additional periods of five (5) years each (each such additional
period, an “Additional Term”). Such notice shall be given, if at all, not more than one hundred
twenty (120) and not less than sixty (60) days before the last day of the Initial Term or the then
current Additional Term, as applicable. The party receiving the notice requesting an Additional
Term shall respond positively or negatively to that request in writing within thirty (30) days after
receipt of the request, but failure to respond within such thirty (30) day period shall not be deemed
an acceptance of the offer for an Additional Term. Such acceptance shall only be binding and
effective upon express written notification of same. The Additional Term shall begin immediately
upon the conclusion of the Initial Term or the then current Additional Term on the same terms and
conditions as set forth in the Project Documents as in effect immediately prior to the extension in
question. If the party receiving the request for an Additional Term rejects or is deemed to reject
the other party’s offer, the Project Documents shall terminate in accordance with their terms at the
end of the Initial Term (if the same has not been extended) or the then current Additional Term.
4. Representations and Warranties of GCE. GCE hereby represents and warrants to
Purchaser as follows:
a. Purchaser and GCE expressly agree that eligibility for Net Energy
Metering (NEM) 2.0 for the Initial Term and any applicable Additional
Term is an integral part of the performance exchanged under the Project
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Documents. Notwithstanding anything to the contrary in the Project
Documents, GCE guarantees Commercial Operation of the System, as
both of those terms are defined in the General Terms and Conditions, by
April 14, 2026, or the later date to which the California Public Utilities
Commission or Local Electric Utility extends NEM 2.0 grandfathering for
the System, if applicable. (“NEM 2.0 Deadline”). As such, Section 5.2 of
the Special Conditions is amended and replaced with: “The Guaranteed
Commercial Operation Date is April 14, 2026, or the later date to which
the California Public Utilities Commission or Local Electric Utility
extends NEM 2.0 grandfathering for the System, if applicable.”
b. Notwithstanding anything to the contrary in the Project Documents –
including, but not limited to, section 2.1(C) of the General Terms and
Conditions - if (i) GCE fails to submit final building permit sign off and
electrical clearing by the permitting authority having jurisdiction by April
14, 2026, or (ii) prior to the Guaranteed Commercial Operation Date, as
that term is modified herein, GCE fails to keep System’s NEM2
grandfathering status in good standing with the Local Electric Utility such
that the System would not be eligible for 20 years of NEM 2.0
grandfathering, GCE agrees that it shall amend the PPA rates to ensure
that any loss in savings incurred by the City is fully offset and there is no
other negative economic impact to the City. Alternatively and at
Purchaser’s sole selection, if either (i) or (ii) occur, Purchaser may
terminate this Agreement with no liability whatsoever, including, but not
limited to the Early Termination Fee. The foregoing shall not apply to the
extent GCE’s failure is caused by a delay due to an act or omission by
Purchaser in connection with GCE’s submittal of interconnection
applications. The remedies set forth in this paragraph shall be in addition
to, and shall not be deemed a waiver or cancellation of, Purchaser’s right
to Delay Liquidated Damages under the Project Documents.
c. If, prior to the Guaranteed Commercial Operation Date, as that term is
modified herein, the CPUC issues a decision such that the System would
not be eligible for NEM 2.0 grandfathering for at least twenty (20) years,
Purchaser may terminate this Agreement with no liability whatsoever,
including, but not limited to the Early Termination Fee.
d. The Parties shall memorialize the terms of this section 4 by amending, in
writing, Section 5.2 of each of the Energy Services Agreements listed in
Exhibit A.
5. General.
a. This Consent may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be deemed
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to be an original and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Consent by facsimile or e-mail
(including “pdf” format) or other electronic means shall be effective as delivery of an original
executed counterpart of this Consent.
b. In case any provision of this Consent, or the obligations of any of the parties
hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions, or the obligations of the other parties hereto, shall not in any way be affected
or impaired thereby, and the parties hereto shall negotiate in good faith to replace such invalid,
illegal or unenforceable provisions.
c. This Consent shall be binding upon and benefit the successors and
authorized assigns of Purchaser and GCE and their respective successors, transferees and
authorized assigns. No termination, amendment, variation or waiver of any provisions of this
Consent shall be effective unless in writing and signed by Purchaser and GCE.
d. Except as expressly modified by this Consent, all other terms and provisions
of the Project Documents are and remain in full force and effect. This Consent shall be governed
by and construed in accordance with the laws of the State of California.
[Signatures follow on next page.]
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Signature Page
IN WITNESS WHEREOF, the parties hereto by their officers thereunto duly authorized
have duly executed this Consent as of the date first set forth above.
PURCHASER:
By: ___________________________________
Name:________________________________
Title:_________________________________
GCE:
By: ___________________________________
Name:________________________________
Title:_________________________________
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Exhibit A
Exhibit A: Project Documents
Energy Services Agreement – Solar dated October 22, 2024 for the Cultural Arts District Parking
Structure project located at 972 Nipomo St., San Luis Obispo, CA 93401
Energy Services Agreement – Solar dated December 21, 2018 for the Bus Yard project located at
29 Prado Road, San Luis Obispo, CA 93401, as amended by that Amendment No. 1 to Energy
Services Agreement – Solar dated October 10, 2019 and as amended by that Amendment No. 2 to
Energy Services Agreement – Solar dated October 22, 2024.
Energy Services Agreement – Solar dated December 21, 2018 for the Fire Station 1 & Data Center
project located at 2160 Santa Barbara Ave, San Luis Obispo, CA 93401, as amended by that
Amendment No. 1 to Energy Services Agreement – Solar dated November 14, 2019 and as
amended by that Amendment No. 2 to Energy Services Agreement – Solar dated October 22, 2024.
Energy Services Agreement – Solar dated May 21, 2019 for the San Luis Obispo Swim Center
project located at 900 Southwood Dr., San Luis Obispo, CA 93401, as amended by that
Amendment No. 1 to Energy Services Agreement – Solar dated September 27, 2019 and as
amended by that Amendment No. 2 to Energy Services Agreement – Solar dated October 22, 2024.
(collectively, the “Special Conditions”)
General Terms and Conditions of Energy Services Agreement dated December 21, 2018 (“General
Terms and Conditions”).
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Exhibit B
Exhibit B
See Attached:
“Consent to Collateral Assignment of Solar Project Documents and Equipment Subordination”
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Form of Consent
CONSENT TO COLLATERAL ASSIGNMENT OF SOLAR PROJECT DOCUMENTS
AND EQUIPMENT SUBORDINATION
This Consent to Collateral Assignment of Solar Project Documents and Equipment
Subordination, dated as of _____________, 202_ (this “Consent”), is made by
______________________________ (“Host”), and ____________________________
(“Company"), and is provided for the benefit of ______________(“Construction Lender”) and
______________________(“SLB Lessor”), in connection with those certain solar project
documents including that certain consent to assignment to the Company (“Solar Project
Documents”) identified in Schedule A to this Consent, and relates to the solar photovoltaic
systems (“Systems”) located at the sites (“Sites”) identified and described in Schedule B to this
Consent.
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed
thereto in the Solar Project Documents. The term “Financing Party,” as used in this Consent, shall
refer to Construction Lender prior to the Sale Leaseback Transaction (as such term is defined
herein) for a specific System, and to SLB Lessor on or after the Sale Leaseback Transaction for
the specific System.
1.Acknowledgment and Consent.
a.Host acknowledges that Company is entering into a construction financing
agreement with Construction Lender to finance the building of one or more Systems
(“Construction Financing”) and will enter into one or more sale-leaseback transactions (each a
“Sale Leaseback Transaction”, collectively the “Sale Leaseback Transactions”) with
___________, whereby Company will sell its rights, interests and obligations in and to the
Systems to ___________, and in connection therewith __________ will lease the Systems to
Company (collectively, the "Transactions").
b.Host acknowledges that, as a part of the Transactions, Company shall
assign the Solar Project Documents to [_____], or a sister entity thereto, not long after the date
hereof, and may subsequently further assign the Solar Project Documents to another sister entity
in connection with the Transactions (collectively the "Provider Assignees").
c.In order to secure its obligations under the Transactions, Company (i) is
collaterally assigning and granting to Construction Lender a first-priority security interest in all
of Company’s right, title and interest in, to and under the Solar Project Documents including,
without limitation, all of Company’s rights to receive payments under or with respect to the Solar
Project Documents, in connection with the Construction Financing, and (ii) in connection with
the Sale Leaseback Transactions (A) will convey the Systems to SLB Lessor, (B) will
collaterally assign and grant to SLB Lessor a first-priority security interest in all of Company’s
right, title and interest in, to and under the Solar Project Documents (to the extent the security
interest of Construction Lender is released) including, without limitation, all of Company’s rights
to receive payments under or with respect to the Solar Project Documents, (C) is assigning and
granting a non-exclusive license to the access rights set forth in the Solar Project Documents, and
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(D) acknowledging and agreeing that the Financing Party shall not be bound by the terms of the
Solar Project Documents unless and until Financing Party becomes a party to such Solar Project
Documents.
d.To the extent consent is not already granted in the Solar Project
Documents, Host consents to the transactions set forth in subparts (a) through (c) above.
2.Financing Party's Rights. Notwithstanding any contrary term in the Solar Project
Documents:
a.Financing Party shall be entitled to exercise any and all rights of secured
parties generally with respect to the Solar Project Documents.
b.Host agrees that Host will provide to Financing Party notice of any default
by Company and other material notices under the Solar Project Documents and will permit
Financing Party the same cure periods as are available to Company under the Solar Project
Documents, provided that Financing Party shall have an additional ninety (90) days to cure any
default Company did not cure within the cure period permitted, so long as Financing Party is
diligently proceeding to cause a cure; and further provided that any period to cause a cure shall
be tolled if Financing Party is prohibited from curing any default due to bankruptcy of Company
or by any other process, stay or injunction issued by any court or governmental authority.
c.If, in connection with the exercise of any of its rights and remedies,
Financing Party elects to exercise step-in rights under the Solar Project Documents, Financing
Party shall use commercially reasonable efforts to ensure that the System remains under the care
of a Qualified Operator. A “Qualified Operator” is a business organization which has the skillset
and experience to operate and service the System in accordance with the terms of the Solar
Project Documents.
d.If Financing Party transfers Company’s interests in the Solar Project
Documents to a third party (an “Assignee”), so long as the Assignee is also a Qualified Operator,
(i) Host shall recognize the respective Assignee as the counterparty under the Solar Project
Documents; (ii) Host shall continue to perform its obligations under the Solar Project Documents
in favor of such Assignee; and (iii) Financing Party shall be released from any further liability
thereunder (other than those obligations arising prior to the date of such assignment or those
obligations that are not assumed).
3.Representations and Warranties of Host. Host hereby represents and warrants to
Financing Party as follows:
a.Host is duly organized, validly existing and in good standing under the
laws of the _______________ and has all requisite power and authority to execute and deliver,
and to perform its obligations under, the Solar Project Documents and this Consent;
b.the execution, delivery and performance by Host of this Consent have
been duly authorized by all necessary action and, as of the date hereof, do not require any further
consents or approvals that have not been obtained;
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c.the execution, delivery and performance by Host of this Consent will not
(i) violate any provision of any law, regulation, order, judgment, injunction or similar matters
applicable to it; or (ii) conflict with, result in a breach of or violate any of the terms, conditions
or provisions of Host’s formation, constituent or governing documents;
d.this Consent and the Solar Project Documents are legal, valid and binding
obligations of Host enforceable against Host in accordance with their respective terms except as
may be limited by bankruptcy, insolvency and other laws affecting creditors’ rights in general;
e.as of the date hereof, Host has no knowledge of a Force Majeure event
having occurred under the Solar Project Documents; and
f.as of the date hereof, Host has not taken any official action or entered into
any approval to exercise any purchase option available to Host in connection with the Systems.
Representations and Warranties of Company. Company hereby represents and
warrants to Financing Party and Host that the Company has the full power,
authority and legal right to execute, deliver and perform its obligations under this
Consent and the Solar Project Documents. This Consent has been duly executed
and delivered by Company, and this Consent and the Solar Project Documents are
legal, valid and binding obligations of Company enforceable against Company in
accordance with their respective terms except as may be limited by bankruptcy,
insolvency and other laws affecting creditors’ rights in general.
4.Confirmation and Agreement. Host confirms the following matters for the benefit
of Financing Party with respect to the Solar Project Documents and the Systems.
a.To Host’s knowledge, there exists no default or event or condition that
would, with the giving of notice or lapse of time, constitute a default under the Solar Project
Documents, and each of Company and Host has fulfilled all of its respective obligations under
the Solar Project Documents to the extent such obligations are required to be performed as of the
date hereof.
b.Host owns the Sites where the Systems have been or will be installed.
Host acknowledges and agrees that the Site specifications in Schedule B are correct. [If Host is a
Lessee and not a Site Owner: Host confirms that it has a leasehold interest in the Sites, pursuant
to that [Site Control Document] with [Landlord] and such leasehold interest is sufficient for Host
to fulfill its obligations under the Solar Project Documents. Host further confirms that it has
entered into a non-disturbance agreement with [Landlord] wherein [Landlord] (i) disclaims all
ownership in the Equipment, (ii) agrees that, provided Company is not in default, Company’s
right to undisturbed possession of the Site shall not be infringed for the term of the Solar Project
Documents, and (iii) both Construction Lender and SLB Lessor are each a third-party beneficiary
of such non-disturbance agreement].
c.The interest of Financing Party in the Systems shall at all times be
superior to any interest Host may now or hereafter have in the System, and Host hereby
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subordinates any lien, encumbrance or interest heretofore or hereafter created that Host may have
in the System, whether such lien, encumbrance or interest is statutory or by agreement, to the
title, lien, encumbrance or interest of Financing Party, regardless of the timing or order of
creation or any perfection, and whether or not any System (or any part thereof) is deemed a
fixture on the Sites. Host agrees that the Systems are, and shall at all times remain, personal
property notwithstanding that it may be installed on or affixed to the Sites.
d.Without limitation of the foregoing, Host grants to Financing Party and its
agents, employees and contractors a license to enter upon the Sites and remove the Systems for
up to one hundred eighty (180) days after notice to Financing Party of the termination or
expiration of the Solar Project Documents, with such one hundred eighty (180) day period being
tolled for any period of time during which Financing Party is stayed from removing the Systems
by a proceeding in bankruptcy with respect to Company.
e.Host agrees not to hinder such exercise of remedies under the Solar
Project Documents or this Consent. If Financing Party elects to remove the System Financing
Party shall perform such removal in accordance with the terms of the Solar Project Documents,
provided that Financing Party shall have no obligations to remove substructures installed in order
to support the System.
f.The Solar Project Documents are in full force and effect and have not been
amended except as explicitly indicated in Schedule A, and there are no other agreements or
representations of any kind between Host and Company other than the Solar Project Documents
listed in Schedule A.
g.Host will use commercially reasonable efforts to place its direct
successors, assigns and lien holders on notice of the ownership of the Systems by Financing
Party, the existence of Financing Party’s security interest in the Solar Project Documents, and the
fact that the Systems are not part of the Sites or fixtures thereof, as necessary and appropriate to
avoid confusion or adverse claims.
h.Host acknowledges that, under the Transaction, Company is not permitted
to agree to an amendment or assignment of the Solar Project Documents without the prior
written consent of Financing Party, which shall not be unreasonably withheld, conditioned, or
delayed.
i.Host will use commercially reasonable efforts to deliver to Financing
Party, concurrently with delivery to Company, duplicates or copies of all requests, demands or
notices of, or with respect to, default, suspension or termination, or any claim or force majeure
event or exercise of any purchase option, delivered by Host to Company under or pursuant to the
Solar Project Documents. Notwithstanding the previous sentence, Host shall not be liable for
failure to deliver notices under this Section 5(i).
j.There is no mortgage, financing statement, fixture filing, lien, or other
encumbrance (a “Lien”) attached to any of the Sites described in the Solar Project Documents.
Notwithstanding the foregoing, if Company or Financing Party discovers a Lien on one or more
of the Sites that could reasonably be construed as prospectively attaching to one or more
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Systems, Host will secure, or otherwise cooperate with Company and Financing Party to secure,
any non-disturbance agreement, lien waiver, disclaimer, or other documentation (“Waiver
Documentation”) determined by Financing Party as necessary and appropriate to avoid confusion
or adverse claims.
k.There is no easement, license, restrictive covenant, or other such real
estate interest (“Site Interest”), whether possessory or non-possessory, that will adversely affect
Company’s ability to develop, construct, operate, maintain, and decommission any of Systems in
accordance with the Solar Project Documents. Notwithstanding the foregoing, if Company or
Financing Party discovers a Site Interest on one or more of the Sites that could reasonably be
construed as prospectively adversely affecting Company’s ability to comply with the Solar
Project Documents, Host will secure or otherwise cooperate with Company and Financing Party
to secure any Waiver Documentation determined by Financing Party as necessary and
appropriate to permit full compliance with the Solar Project Documents.
l.[Appropriation Language, if applicable] Host confirms that it intends to
fulfill its obligations under the Solar Project Documents, including ensuring that sufficient
monies are appropriated in accordance with applicable law.
m.Host and Company confirm as of the date hereof, no liquidated damages
or other such payments are due and owing.
5.General.
a.Unless otherwise expressly specified or permitted by the terms hereof, all
communications and notices provided for herein shall be in writing, and any such
communication or notice shall become effective (i) upon personal delivery thereof, including,
without limitation, by overnight mail or courier service; (ii) in the case of notice by United States
mail, certified or registered, postage prepaid, return receipt requested, upon receipt thereof; or
(iii) in the case of notice by email or facsimile, upon confirmation of receipt thereof in writing by
the intended recipient, and provided such email or facsimile transmission is promptly further
confirmed by any of the methods set forth in clauses (i) or (ii) above, in each case addressed to
each party hereto at its address set forth below or, in the case of any such party hereto, at such
other address as such party may from time to time designate by written notice to the other parties
hereto:
If to Host:
If to Financing Party:
Construction Lender
Attn:
SLB Lessor
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If to Company:
Clean Focus Yield LLC
127 Washington Avenue
West Bldg, Garden Level
North Haven, CT 06473
Attn: Stanley Chin and General Counsel
b.This Consent may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this Consent by facsimile
or e-mail (including “pdf” format) or other electronic means shall be effective as delivery of an
original executed counterpart of this Consent.
c.In case any provision of this Consent, or the obligations of any of the
parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions, or the obligations of the other parties hereto, shall not in any way be
affected or impaired thereby, and the parties hereto shall negotiate in good faith to replace such
invalid, illegal or unenforceable provisions.
d.This Consent shall be binding upon and benefit the successors and assigns
of Host, Company and their respective successors, transferees and assigns. No termination,
amendment, variation or waiver of any provisions of this Consent shall be effective unless in
writing and signed by Host and Company and consented to by Financing Party.
e.Except as expressly modified by this Consent, all other terms and
provisions of the Solar Project Documents are and remain in full force and effect. This Consent
shall be governed by and construed in accordance with the laws of the State of New York.
f.Each Power Purchase Agreement listed in Exhibit A constitutes a service
contract and not a lease of property pursuant to Section 7701(e)(1) of the Internal Revenue Code,
in accordance with Section 7701(e)(3) of the Internal Revenue Code.
g.Host will from time to time, upon the written request of Financing Party,
execute and deliver such further documents and do such other acts and things as Financing Party
may reasonably request in order to effectuate more fully the purposes of this Consent.
h.To the extent not prohibited by applicable law, the parties hereto hereby
irrevocably waive all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this Consent.
i.This Consent is the entire agreement pertaining to the matters discussed
herein and shall supersede all oral and written representations and negotiations and prior
agreements, if any, related to the subject matter hereof.
[Signatures follow on next page.]
Page 94 of 615
Signature Page
IN WITNESS WHEREOF, the parties hereto by their officers thereunto duly authorized have
duly executed this Consent as of the date first set forth above.
[COMPANY]
By: ___________________________________
Name:
____________________________________
Title:__________________________________
____
[HOST]
By: ___________________________________
Name:
____________________________________
Title:__________________________________
____
Accepted: [Financing Party]
_____________
By: ___________________________________
Name: ________________________________
Title:__________________________________
By: ___________________________________
Name: ________________________________
Title:__________________________________
Page 95 of 615
Schedule A
Power Purchase Agreements (“PPAs”)
Site Control Agreements
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4817-1562-9220.1
Schedule B
Sites and Specifications
To be provided
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Exhibit C
Exhibit C
NEM3 Savings Comparison
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EXHIBIT C: CONSENT TO ASSIGNMENT OF PROJECT DOCUMENTS AND ACKNOWLEDGMENT
NEM2
Site NEM
Scenario PPA Rate PPA
Escalator
Solar
System
Size
Storage
System
Size
Y1
Production
(kWh)
% Energy
Offset
Pre-Solar
Utility Bill
Year 1
Savings
20 Year
Savings
Bus Yard NEM2 $0.23 0%287 0 521,623 11%$1,146,030 ($18,150)$532,083
Sinsheimer NEM2 $0.31 0%259 0 455,286 113%$128,449 ($27,112)$572,412
Fire House NEM2 $0.34 0%126 0 224,406 63%$108,165 ($27,910)$38,710
CAD Parking Structure NEM2 $0.29 0%212 0 354,968 92%$157,819 $33,122 $1,590,066
NEM3
Site NEM
Scenario PPA Rate PPA
Escalator
Solar
System
Size
Storage
System
Size
Y1
Production
(kWh)
% Energy
Offset
Pre-Solar
Utility Bill
Year 1
Savings
20 Year
Savings
Bus Yard NEM3 $0.23 0%287 0 521,623 11%$1,146,030 ($18,159)$531,849
Sinsheimer NEM3 $0.31 0%259 0 455,286 113%$128,449 ($96,636)($1,519,714)
Fire House NEM3 $0.34 0%126 0 224,406 63%$108,165 ($43,508)($457,927)
CAD Parking Structure NEM3 $0.29 0%212 0 354,968 92%$157,819 ($30,054)($56,632)
($9)($234)
($69,524)($2,092,126)
($15,598)($496,637)
($63,176)($1,646,698)
($148,307)($4,235,695)
CAD Parking Structure
Calculated Savings Difference
Site Specific Savings Comparison: NEM 2.0 vs. NEM 3.0
Bus Yard
Sinsheimer
Fire House
8/18/2025 City of San Luis Obispo Page 99 of 615
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