Exhibit 10.6

***CONFIDENTIAL TREATMENT REQUESTED – CONFIDENTIAL PORTIONS

OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN

SEPARATELY FILED WITH THE COMMISSION***

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

Dated as of March 26, 2007

by and between

Agrupación Solar Llerena-Badajoz 1, A.I.E.,

as Owner

PowerLight Systems S.A.,

as Contractor

and

Solarpack Corporación Tecnológica, S.L.

 

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TABLE OF CONTENTS

 

1.

  

Definitions.

   5

2.

  

Scope.

   10

3.

  

Representatives.

   10

4.

  

The Work.

   11

5.

  

Inspection.

   18

6.

  

Final Completion.

   18

7.

  

Changes and Extra Work.

   18

8.

  

Protective Measures.

   19

9.

  

Force Majeure.

   20

10.

  

Unanticipated Conditions.

   20

11.

  

Termination.

   20

12.

  

Labor.

   25

13.

  

Commencement and Substantial Completion of Work.

   26

14.

  

Reports.

   28

15.

  

Subcontractors and Suppliers.

   28

16.

  

Ownership of Plans, Data, Reports and Material.

   30

17.

  

Contract Price.

   30

18.

  

Payment.

   31

19.

  

Suspension of the Work.

   32

20.

  

Taxes.

   33

21.

  

Owner Obligations.

   33

22.

  

Representations and Warranties.

   33

23.

  

Warranty.

   35

24.

  

Insurance.

   37

25.

  

Indemnity.

   38

26.

  

Performance of the Work.

   39

27.

  

Compliance with Applicable Laws.

   40

28.

  

Hazardous Materials.

   40

29.

  

Governing Law.

   41

30.

  

Liens.

   41

31.

  

Nonwaiver.

   41

32.

  

Dispute Resolution.

   41

33.

  

Notices and Demands.

   44

34.

  

Nondisclosure.

   45

35.

  

Time of Essence.

   45

36.

  

Validity.

   45

37.

  

Survival.

   45

38.

  

Binding Effect.

   46

39.

  

No Oral Modifications.

   46

40.

  

Headings.

   46

41.

  

Counterparts.

   46

42.

  

Authority.

   46

43.

  

Announcements and Publications.

   46

44.

  

Complete Agreement.

   46

 

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45.

  

No Agency.

   47

46.

  

Priority of Documents.

   47

47.

  

Assignment.

   47

48.

  

Waivers.

   47

49.

  

Public deed.

   48

50.

  

Language and documentation.

   48

51.

  

Days.

   48

 

Schedules       Schedule 1A    -   

Construction and Milestone Payment Schedule

Schedule 1B    -   

Field Extra Work and Authorizations, Change Orders

Schedule 4.1    -   

Technical Specifications, Statement of Work and Bill of Materials

Schedule 4.2    -   

Declaración de Impacto Ambiental

Schedule 4.6    -   

Substantial Completion Commissioning Plan for Units and Park

Schedule 13.1    -   

Preliminary Project Schedule

Schedule 23 (a)    -   

Unit Warranty

Schedule 23 (b)    -   

Model of Letter of Credit

Schedule 23.4    -   

Model of Comfort Letter

Schedule 24    -   

Insurance

 

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ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

This ENGINEERING, CONSTRUCTION AND INSTALLATION AGREEMENT, dated as of March 26,
2007 (“Agreement”), is executed in Seville (Spain) by and between Agrupación
Solar Llerena-Badajoz 1, A.I.E., an “agrupación de interés económico” formed
under the laws of Spain (“Owner”), PowerLight Systems S.A., a corporation formed
under the laws of Switzerland (“Contractor”), and Solarpack Corporación
Tecnológica, S.L. (“Solarpack”), a limited liability company duly incorporated
under the laws of Spain.

RECITALS:

WHEREAS, Solarpack is a developer of projects pursuing the creation of solar
photovoltaic (“PV”) parks in Spain owned by individual equity investors
(“Investors”) that will each own installations of no more than 100 kW AC nominal
inverter rating, which is equivalent to approximately 120kWp DC nameplate rating
of PV modules; and

WHEREAS, Contractor designs and builds PV installations and as such is able to
engineer and construct solar PV parks consisting of a field of PV modules,
inverters, trackers and all the necessary ancillary systems to make available
electric energy to the utility grid; and

WHEREAS, Solarpack has collected equity from the Investors1 and has incorporated
Owner, and acts as agent of Owner for the purposes of organizing and supervising
the construction and operation of the Park; and

WHEREAS, Owner leases or owns facilities in the municipality of Llerena,
(Badajoz), Spain as more fully described in Schedule 4.1 hereto (the “Site”);
and

WHEREAS, Owner desires to engage Contractor to supply and install at the Site a
PV park divided in installations of no more than 100 kW AC nominal inverter
rating. As used in this Agreement, “Unit” shall mean each of such independent PV
module installations of 120kWp and 100kWe to be supplied and installed by
Contractor at the Site pursuant to the provisions of this Agreement, each of
which meet the requirements of the Spanish legislation to earn the feed-in
tariff. As used in this Agreement, “Park” shall mean the aggregation of forty
(40) Units which will be located at the Site that share a common fence and
security infrastructure with an aggregated power of 4.8 MWp (4 MWe). The scope
of this Agreement is limited to the Park, as described in Schedule 4.1 hereto;
and

WHEREAS, Contractor desires to provide such supply and installation services,
all in accordance with the terms and conditions set forth in this Agreement; and

 

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1 This EPC and its Annexes shall be disclosed to the Investors provided that
such Investors have executed a confidentiality agreement agreed by PowerLight
and Solarpack.

 

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NOW THEREFORE, in consideration of the mutual promises set forth below, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:

AGREEMENT:

1. Definitions.

Unless otherwise required by the context in which any term appears:
(a) capitalized terms used in this Agreement shall have the respective meanings
set forth in this Section 1; (b) the singular shall include the plural and vice
versa; (c) the word “including” shall mean “including, without limitation”,
(d) references to “Sections”, “Schedules” and “Exhibits” shall be to sections,
schedules and exhibits hereof; (e) the words “herein”, “hereof” and “hereunder”
shall refer to this Agreement as a whole and not to any particular section or
subsection hereof; and (f) references to this Agreement shall include a
reference to all schedules and exhibits hereto, as the same may be amended,
modified, supplemented or replaced from time to time.

“Agreement” shall have the meaning set forth in the preamble.

“Applicable Law” shall mean, with respect to any Governmental Authority, any
constitutional provision, law, directive, statute, rule, regulation, ordinance,
treaty, order, decree, judgment, decision, certificate, injunction,
registration, license, permit, authorization, guideline, governmental approval,
consent or requirement of such Governmental Authority, as construed from time to
time by any Governmental Authority.

“Applicable Permits” shall mean each and every European, national, autonomic,
regional and local license, authorization, certification, filing, recording,
permit or other approval with or of any Governmental Authority, including,
without limitation, each and every environmental, construction or operating
permit and any agreement, consent or approval from or with any other Person that
is required by any Applicable Law or that is otherwise necessary for the
performance of the Work or operation of the Units.

“Bank” shall mean the agent appointed by the financing entities which are
financing the Work on a project finance basis by virtue of a facility agreement
executed between Owner and such financing entities, a copy of which has been
delivered to Contractor prior to the Effective Date.

“Change Order” shall mean a written document signed by the Owner and Contractor
authorizing an addition, deletion or revision to the Work or an adjustment of
the Contract Price or Construction and Milestone Payment Schedule issued after
execution of this Agreement.

“Condition Precedent” shall mean the fulfillment by Owner of the following
conditions precedent for each Unit of the Park:

 

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  (a) Owner has submitted to Contractor a copy of the execution version of the
facility agreement entered into between Owner and the Bank, among others, to
finance the construction of the Park;

 

  (b) Owner has submitted to Contractor a certificate issued by the Bank
confirming (i) that the conditions precedent for the availability of the full
project funding (including the disbursement of equity by the Investors) and the
drawdowns under the facility agreement executed between Owner and the Bank,
among others, have been fulfilled, and (ii) that the Bank has received the final
version of the legal due diligence report issued by the legal advisor to the
Bank confirming all the Applicable Permits which may be required to commence the
construction of each Unit of the Park (other than the Operational Permits) have
been obtained and are in full force and effect; and

 

  (c) Owner has submitted to Contractor a copy of the Applicable Permits which
may be required to commence the construction of each Unit of the Park (other
than the Operational Permits).

“Construction and Milestone Payment Schedule” shall mean the schedule for
prosecution of, and payment for, the Work, in each case as set forth on
Schedule 1A.

“Contract Documents” shall mean this Agreement, the exhibits and schedules
hereto, and drawings, specifications, plans, calculations, models and designs
that are part of Exhibit 1 and that have been prepared by Contractor or any
Subcontractor exclusively for the Work.

“Contract Price” shall mean the amount for performing the Work that is payable
to Contractor as set forth in Section 17.1, as the same may be modified from
time to time in accordance with the terms hereof.

“Contractor” shall have the meaning set forth in the preamble.

“***”

“Contractor Representative” shall mean the individual designated by the
Contractor in accordance with Section 3.2.

“Developer Subcontract” shall mean the subcontract executed on the date hereof
by PowerLight Systems Spain, S.L. (C.I.F. B-84795319), a Spanish subsidiary
wholly-owned by Contractor, and Solarpack by virtue of which Solarpack
undertakes, as Subcontractor of Contractor, to diligently prosecute and obtain
*** and, in the event that Solarpack fails to timely obtain any ***.

 

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“Disclosing Party” shall have the meaning set forth in Section 34.

“Dispute” shall have the meaning set forth in Section 32.1.

“Effective Date” shall mean March 20, 2007.

“Equipment” shall mean (a) all materials, supplies, apparatus, machinery,
equipment, parts, tools, components, instruments, appliances, spare parts and
appurtenances thereto that are required for prudent design, construction or
operation of the Units in accordance with Industry Standards and (b) all
materials, supplies, apparatus, machinery, equipment, parts, tools, components,
instruments, appliances, spare parts and appurtenances thereto described in,
required by, reasonably inferable from or incidental to the Work or the Contract
Documents.

“Euribor” shall mean the Euro Monetary Market reference rate at or about eleven
o’clock (11:00) a.m. (Central European Time) on the second business day
immediately preceding the scheduled date for any payment under this Agreement
that results from the application of the convention in force at any time, under
the sponsorship of the FBE (Federation Bancaire de l’Union Européene) and the
Financial Market Association (ACI), and currently published on Reuter’s EURIBOR
01 page, or such other page that may replace it, applicable to financings with
disbursement of deposits two (2) business days following the date for setting
the interest rate, pursuant to the TARGET (Trans-European Automated Real-Time
Gross Settlement Express Transfer System) schedule for deposits in Euros, for a
period of time equal to one (1) month.

“Euro” shall mean the lawful currency of Spain.

“Final Completion” shall mean satisfaction or waiver of all of the conditions
for the Park set forth in Section 6.

“Force Majeure Event” shall mean, when used in connection with the performance
of a Party’s obligations under this Agreement, any act or event (to the extent
not caused by such Party or its agents or employees or subcontractors) which is
unforeseeable, or being foreseeable, unavoidable and outside the control of the
Party which invokes it, and which renders said Party unable to comply totally or
partially with its obligations under this Agreement. In particular, any of the
following shall be considered a Force Majeure Event:

 

  (a) war (whether or not war is declared), hostilities, revolution, rebellion,
insurrection against any Governmental Authority, riot, terrorism, acts of a
public enemy or other civil disturbance;

 

  (b)

acts of God, including but not limited to, storms, floods, lightning,
earthquakes, hailstorms, ice storms, tornados, typhoons, hurricanes, landslides,
volcanic eruptions, fires, excessive winds (20 m/s) , and objects striking the
earth from space (such as meteorites), sabotage or destruction by a third party
(other than any contractor retained by or on behalf of the Party) of facilities
and equipment relating to the

 

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performance by the affected Party of its obligations under this Agreement; and

 

  (c) strikes, walkouts, lockouts or similar industrial or labor actions or
disputes (any of them whether local, regional, national or sectorial, but only
if affecting Contractor or Subcontractors or Suppliers and to the extent
affecting employees working at the Site, or the logistics of the equipment or
materials needed for the Works).

“Governmental Authority” shall mean any European, national, autonomic, regional,
province, town, city, or municipal government, whether domestic or foreign, or
other administrative, regulatory or judicial body of any of the foregoing.

“Hazardous Material” shall mean oil or petroleum and petroleum products,
asbestos and any asbestos containing materials, radon, polychlorinated
biphenyl’s (“PCBs”), urea formaldehyde insulation, lead paints and coatings, and
all of those chemicals, substances, materials, controlled substances, objects,
conditions and waste or combinations thereof which are now or become in the
future listed, defined or regulated in any manner by any federal, state or
Applicable Law.

“Health and Safety Coordinator” shall have the meaning set forth in Section 3.1.

“Health and Safety Manager” shall have the meaning set forth in Section 3.2.

“Health and Safety Plan” shall have the meaning set forth in Section 8.4.

“Health and Safety Study” shall have the meaning set forth in Section 8.4.

“Indemnified Party” shall have the meaning set forth in Section 25.4.

“Indemnifying Party” shall have the meaning set forth in Section 25.4.

“Industry Standards” shall mean those standards of care and diligence normally
practiced by solar engineering, construction and installation firms in
performing services of a similar nature in jurisdictions in which the Work will
be performed and in accordance with good engineering design practices,
Applicable Permits, and other standards established for such Work.

“Investors” shall have the meaning set forth in the first recital.

“Operational Permits” shall mean, jointly, the *** for the medium voltage
infrastructure and the grid connection for each Unit, the definitive
registration of each Unit within the Administrative Register of Power Facilities
Included within the Special Regime (Registro Administrativo de Instalaciones de
Producción de Energía Eléctrica Acogidas al Régimen Especial, or “RAIPRE”) and
the municipal operation license for each Unit (licencia municipal de
funcionamiento).

 

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“Owner” shall have the meaning set forth in the preamble.

“Owner’s Representative” shall mean the individual designated by Owner in
accordance with Section 3.1.

“Park” shall have the meaning set forth in the sixth recital.

“Park’s EPC Rated Value” shall mean the total aggregated Wp set forth in the
fifth recital.

“Park’s Final Rated Value” shall mean the total aggregated Wp stated in the
manufacturers’ Flash Test Data of the PV modules finally delivered at
Substantial Completion of the Full Park.

“Party” shall mean, individually, each of the parties to this Agreement.

“Person” shall mean any individual, corporation, partnership, company, joint
venture, association, trust, unincorporated organization or Governmental
Authority.

“Receiving Party” shall have the meaning set forth in Section 32.

“Retention” shall have the meaning set forth in Section 18.2.

“Site” shall have the meaning set forth in the fifth recital, and is more fully
described in Schedule 4.1 hereto.

“Site Lessor” shall mean the counterpart of Owner under any lease agreements (or
surface rights agreements) executed in connection with the Site.

“Solarpack” shall mean Solarpack Corporación Tecnológica, S.L.

“Subcontractor” shall mean any Person, other than Contractor and Suppliers,
retained by Contractor to perform any portion of the Work (including any
Subcontractor of any tier) in furtherance of Contractor’s obligations under this
Agreement.

“Substantial Completion” shall mean, for each Unit of the Park, satisfaction or
waiver of all of the conditions set forth in Section 13.3.

“Substantial Completion Date” shall mean the actual date on which the
Substantial Completion of the Full Park, as defined in Section 13.4, has
occurred.

“Substantial Completion of the Full Park” shall mean satisfaction or waiver of
all of the conditions set forth in Section 13.4.

“Suppliers” shall mean those Equipment suppliers with which Contractor contracts
to build the Park.

 

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“Technical Advisor to the Bank” shall mean the independent engineering firm
appointed by Owner, which appointment shall be approved by the Bank, to
supervise the completion of the commissioning tests and execute the certificates
approving any commissioning test contemplated in Section 4.6.

“Technical Dispute” shall have the meaning set forth in Section 32.2.

“Unit” shall have the meaning set forth in the sixth recital.

“Unit Price” shall mean the result of dividing the Contract Price between the
number of Units of the Park.

“Unit Warranty” shall mean the warranty of Contractor set forth on Schedule 23.

“Unit’s EPC Rated Value” shall mean 120kWp.

“Unit’s Final Rated Value” shall mean the total aggregated Wp stated in the
manufacturers’ Flash Test Data of the PV modules that comprise the Unit at
Substantial Completion of such Unit.

“Work” shall mean all obligations, duties, and responsibilities assigned to or
undertaken by Contractor and described on Schedule 4.1 with respect to each Unit
of the Park.

2. Scope.

Contractor shall provide on a turnkey basis all professional design and
engineering services, Equipment procurement, supervision, labor, materials,
equipment, tools, construction Equipment and machinery, utilities and
transportation up to the general protection cabinet (“Caja General de
Protección”) and revenue meter for each Unit, and procurement of the ***, and
other facilities, items and services, in each case to the extent necessary for
the proper execution and completion of each Unit, in accordance with the
Contract Documents, which are each made a part hereof.

Contractor shall supervise and direct the Work in accordance with Industry
Standards. Contractor shall have sole control over the engineering, design and
construction means, methods, techniques, sequences, and procedures and for
coordination of all portions of the Work under this Agreement unless the
Agreement specifically provides otherwise.

3. Representatives.

3.1 Owner Representatives. Owner designates, and Contractor agrees to accept,
Mr. *** as Owner Representative for all matters relating to Contractor’s
performance of the Work (except for the execution of the certificates approving
any commissioning test contemplated in Section 4.6). However, for the exclusive
purposes of executing the certificates approving any commissioning test
contemplated in Section 4.6, Owner

 

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unconditionally and irrevocably appoints the Technical Advisor to the Bank as
its representative. Owner shall notify Contractor of such appointment in
accordance with Section 33 at least one (1) month prior to the beginning of the
first commissioning test contemplated in Section 4.6. The actions taken by Owner
Representative regarding such performance shall be deemed the acts of Owner and
shall be fully binding for Owner.

The Owner shall appoint a coordinator for health and safety labor matters during
the performance of the Work (the “Health and Safety Coordinator”). The Health
and Safety Coordinator shall perform the functions set out in Section 8.4.

Owner may, upon written notice to Contractor, pursuant to Section 33 hereof,
change the designated Owner Representative, Technical Advisor to the Bank or
Health and Safety Coordinator. However, the replacement of the Technical Advisor
to the Bank shall be notified to Contractor at least one (1) month prior to the
beginning of the first commissioning test contemplated in Section 4.6.

3.2 Contractor Representatives. Contractor designates, and Owner agrees to
accept, Mr. Marco Miller as Contractor Representative for all matters relating
to Contractor’s performance under this Agreement. The actions taken by
Contractor Representative shall be deemed the acts of Contractor.

Additionally, before commencement of the Work on Site, Contractor shall appoint
(i) as Project Manager to supervise all matters related to the performance of
the Work, and (ii) a Construction Manager with the necessary experience in order
to supervise the construction of the Park. The Construction Manager shall be
based on the Site. The Project Manager shall be based in Spain from commencement
of the Work on Site.

Not later than thirty (30) days before commencement of the Work on Site,
Contractor shall appoint a health and safety manager (the “Health and Safety
Manager”) to supervise all matters related to health and safety during the
performance of the Work. The Health and Safety Manager shall be in permanent
contact with the Health and Safety Coordinator and shall perform his functions
as set out in Section 8.4.

Contractor may, upon written notice to Owner, pursuant to Section 33 hereof,
change the designated Contractor Representative or the Health and Safety
Manager.

3.3 The Parties shall vest their Representatives with sufficient powers to
enable them to assume the obligations and exercise the rights of Contractor or
Owner, as applicable, under this Agreement.

3.4 Notwithstanding Sections 3.1 and 3.2, all amendments, Change Orders, notices
and other communications between Contractor and Owner contemplated herein shall
be delivered in writing and otherwise in accordance with Section 33.

4. The Work.

 

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4.1 Subject to Section 21, Contractor shall perform the Work in accordance with
the express description thereof in Schedule 4.1. In particular, the Work shall
include the following:

 

(i) *** and obtaining and maintaining in force all insurances identified as
Contractor’s responsibility on Schedule 24.

 

(ii) Basic and detail engineering (preliminary design and system design
engineering). The Geotechnical, Hidrologic and Topographic Studies have been
delivered to Contractor by Owner.

 

(iii) Civil works, Site grading, landscaping, foundations and all necessary
earth and other preparatory work if required to prepare the part of the Site
where the Park is located.

 

(iv) Supply and manufacture of Equipment and materials, including the supply and
manufacture required for erection, installation and operation of the Units at
the Park including, but not limited to, PV modules, inverters, GPT-0
PowerTracker components and steel, GPT-0 PowerTracker construction *** and
electrical subcontractors. The Work shall include up to the general protection
cabinet (“Caja General de Protección”) and revenue meter for each Unit, which
are included within the scope of the Work but which constitute the limit of such
scope. Technical Specifications are attached as Schedule 4.1.

 

(v) Monitoring systems as specified in Schedule 4.1.

 

(vi) Up to two (2) days per Site of on-site operation and maintenance training
of Owner’s personnel (which shall be the same personnel for any Park built by
Contractor on the same Site, even if the owners of such other Parks are
different from the Owner).

 

(vii) Supply of sufficient spare parts for the Unit Warranty period stipulated
in Schedule 23.

Contractor shall supply, under this Agreement, a total number of forty
(40) Units, with a total installed power of 4.80 MWp and 4 MWe.

4.2 Contractor shall perform all Work in accordance with Industry Standards and
all relevant EU and national regulations and specifications, including
homologation of equipment and installations to EU Directives and national
standards, and all relevant specifications as contained in the Applicable
Permits, especially the “Declaración de Impacto Ambiental” (Schedule 4.2).

4.3 Contractor shall perform engineering and design services, using qualified
architects, engineers and other professionals selected and paid for by
Contractor, in each case as are necessary to prepare all Contract Documents and
submit the Contract Documents to Owner for its review and approval.

 

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4.4 ***. Owner shall file any documents required to obtain any necessary
Applicable Permits and obtain all such Applicable Permits ***. Owner, at its
expense, shall file any documents required to obtain such Applicable Permits on
a timely basis. Owner shall pay for all taxes, fees and costs required of Owner
in order to obtain the Applicable Permits for which the Owner is responsible
under this Section 4.4. In particular, Owner represents and warrants to
Contractor that Owner has obtained all permits, licenses and other
authorizations which may be required to commence the construction of each Unit
of the Park.

4.5 Contractor, at its expense, shall purchase, transport, deliver, inspect to
the extent it deems necessary, and construct and install all Equipment necessary
or useful in order to complete each Unit. Owner will be the importer of record
and shall separately pay all VAT. The status of Owner as importer of record
shall in no way diminish Contractor’s status as a turnkey contractor or alter
the risk of loss otherwise allocated to Contractor pursuant to Section 4.10
below. Contractor will (a) provide all the necessary administrative assistance
to process the importation of goods on behalf of Owner; and (b) indemnify Owner
for any liabilities, penalties or other damages that Owner may incur (excluding
Owner’s obligation to pay VAT) as a result of its status as importer of record.
Pursuant to Section 23, Contractor will provide Owner with a standby letter of
credit in accordance with the model of Schedule 23 (b) and for the amount
contemplated in Section 23.3. Such standby letter of credit will secure
Contractor’s warranty performance obligations in accordance with Section 23
(a) and ***. The aforementioned standby letter of credit shall remain in force
from the Substantial Completion Date and for the two (2) year period during
which the Contractor’s warranties for any of the Units remain in force.

Contractor shall obtain and maintain standard manufacturer’s and supplier’s
warranties for the Equipment, which shall be according to that stipulated under
Section 23.2 hereof. With respect to a Unit, Contractor shall assign to Owner
all of Contractor’s right, title and interest in the Equipment as per
Section 4.10 (a), free and clear of any lien, encumbrance or charge of any kind
created by Contractor or resulting from Contractor’s actions. In addition,
manufacturer’s and/or supplier’s warranties for each Unit shall be expressly
permitted to be assigned and, upon Substantial Completion of the Unit,
Contractor shall assign to Owner all related manufacturer’s and/or supplier’s
warranties for each Unit.

4.6 Contractor shall startup each Unit and perform the commissioning tests for
each Unit and for the Park described on Schedule 4.6.

Owner shall provide such electricity and consumables as may be required to carry
out the tests. The Contractor’s technical personnel (or, when applicable the
installer and/or manufacturer’s personnel, with Contractor’s supervision) shall
operate each Unit during the tests, although Owner (and the Owner’s personnel)
shall be entitled to be present during any test. The Technical Advisor to the
Bank and any third party entrusted with the supervision, vigilance and quality
control of Contractor shall be entitled to attend at and witness the tests.
Contractor shall notify with at least two (2) week notice the start of the
relevant tests for Substantial Completion in order to allow Owner’s
Representative and the Technical Advisor to the Bank to organize properly the
test attendance. Contractor shall also notify the number of Units that will be
tested on such date.

 

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Upon completion of the relevant commissioning tests, Contractor shall submit to
the Technical Advisor to the Bank the certificate of the results thereof for its
approval or rejection. Owner and Contractor agree that the approval or rejection
by the Technical Advisor to the Bank shall fully bind Owner, and that no
certificate of the results of the commissioning tests executed by the Owner’s
Representative (and not by the Technical Advisor to the Bank) shall be a valid
approval or rejection of such commissioning tests.

If the results of the test can be obtained on Site following the performance of
the test and the test has been completed successfully, Technical Advisor to the
Bank and Contractor’s Representative shall execute the relevant certificate
including the results achieved in the test. If the results of the test cannot be
obtained on Site following the performance of the test, Contractor shall
promptly submit to Technical Advisor to the Bank the relevant certificate
containing the results of such test. Technical Advisor to the Bank shall
promptly review such certificate and results and shall determine whether the
test has been successfully completed within five (5) business days following
receipt of such certificate.

If any Unit fails to complete any test, the Technical Advisor to the Bank and
Contractor’s Representative shall execute the relevant certificate including the
results achieved in the relevant test for such Unit. Contractor shall repeat the
test for such Unit one or several times before the Substantial Completion Date.
Contractor shall take all corrective actions so that such Unit may successfully
complete the tests, without prejudice to the Owner’s rights and remedies in
accordance with this Agreement.

Any approval or rejection of the results of the commissioning tests made by the
Technical Advisor to the Bank shall always be deemed to be made by Owner and, in
the event that any Dispute regarding the commissioning tests arises, Contractor
shall be entitled to settle the Dispute in accordance with Section 32. If the
independent expert or the Tribunal decide that any test has been completed
successfully, such decision shall prevail and shall be binding for Owner,
Contractor and the Technical Advisor to the Bank and, therefore, the relevant
test shall be approved for all the purposes contemplated in this Agreement.

4.7 Contractor shall provide to Owner a copy of the operations and maintenance
manual per Park. Contractor shall provide the drafts and the final version of
the operations and maintenance manual on or before the dates contemplated in
Section 4.12. Before Final Completion, Contractor shall remove debris, Equipment
and surplus materials from the relevant part of Site where the Park is located.

4.8 Owner shall be solely responsible to pursue and obtain any subsidies,
rebates or other incentives that may be available from any Governmental
Authority pursuant to or in connection with the purchase of each Unit or
otherwise, and Contractor makes no representation or warranty to Owner as to the
availability of any of such incentives. Contractor shall provide Owner
reasonable assistance upon request; provided that Owner shall reimburse
Contractor, upon demand by Contractor, for any expense incurred by Contractor in
providing such assistance.

 

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4.9 Exclusions.

Contractor shall not perform any work or activity beyond the scope of the Work,
as defined in this Agreement. In particular, the following shall not be included
in the Work and therefore shall be performed by Owner:

 

  (a) Owner shall provide the Site for the Work, and suitable access thereto so
that Contractor may gain access to the Site to perform the Work as soon as any
necessary work permits, licenses and authorizations are obtained, as well as to
the Technical Advisor to the Bank for the purposes of the commissioning tests.
Access to the Site will be done by the ways located on the (north-west;
south-west; north) roads, which shall be sufficient to enable the access to the
Site of the trucks and the Equipment that Contractor may need to use in the
performance of the Work in accordance with Industry Standards applicable to
these kind of projects;

 

  (b) Owner shall select its own personnel so that it is present at the tests of
the Work prior to the date of Substantial Completion of the first Unit of the
Park and operation of the Units;

 

  (c) Owner shall be responsible for hiring any third party entrusted with the
supervision, vigilance and quality control of Contractor;

 

  (d) Owner shall obtain every necessary Applicable Permit (including, in
particular, the Operational Permits), ***, and Owner shall pay for all fees
related to any permits, licenses or authorizations and costs incurred (except
for the costs of Contractor’s personnel -including Contractor’s drafting any
documents that may be necessary- and the costs of any third parties
subcontracted by Contractor to prosecute *** in order to obtain any Applicable
Permits, including ***;

 

  (e) Owner shall be solely responsible for securing and paying for all asset
management services relating to the Parks, and will not require any such
services from Contractor;

 

  (f) Owner shall provide the fence, gates, lighting and security infrastructure
for the Park;

 

  (g) Owner shall be responsible for any engineering, work, Equipment and
materials from the general protection cabinet (“Caja General de Protección”) and
revenue meter for each Unit (which are included within the scope of the Work but
which constitute the limit of such scope) to the grid connection; and

 

  (h)

Contractor shall not be responsible for any environmental liabilities relating
to the Site, except for such pollution, toxic emissions, etc. as are caused by
Contractor during construction of the Park. However, Contractor shall be
required to comply with all applicable environmental laws and regulations during

 

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construction of the Park, including the Declaración de Impacto Ambiental
(Schedule 4.2), and without prejudice to the provisions of Section 27.2.

As a consequence, any work or activity necessary for the Substantial Completion
of the Park, and not included in this Article 4.9, shall be considered as part
of the scope of supply of Contractor.

4.10 Title; Risk of Loss.

 

  (a) Owner shall take title of PV modules, inverters, steel, tracker and other
equipment (“Category 1 Items”) after receipt of payment and release of Original
Bill of Lading by Contractor.

Owner shall take title of the remaining parts of the Park (“Category 2 Items”)
as payments are received by Contractor; provided, however, that except as
otherwise expressly contemplated in this Agreement (and subject to Section 4.10
(d) below), risk of loss for the Units shall remain with Contractor until
Substantial Completion of such Unit.

 

  (b) From the Effective Date and until the date of Substantial Completion in
respect of each Unit, and subject to paragraphs (c), (d) and (e) of this
Section 4.10, Contractor assumes risk of loss and full responsibility for the
cost of replacing or repairing any damage to such Unit and all materials,
Equipment, supplies and maintenance equipment (including temporary materials,
equipment and supplies) that are purchased by Contractor for permanent
installation in or for use during construction of such Unit, regardless of
whether Owner has title thereto under this Agreement; and

 

  (c) Except when attributable to the performance by Contractor or
Subcontractors of any of the Works or Services contemplated in the two (2) year
warranty provided by Contractor under Section 23, Owner shall bear the risk of
loss and full responsibility in respect of each Unit from and after the date of
Substantial Completion of such Unit, and if any portion of such Unit is lost or
damaged for whatever reason, then Contractor shall restore or rebuild any such
loss or damage and complete the Work in accordance with this Agreement at the
sole cost and expense of Owner; provided, however, that Contractor shall not be
obligated to restore or rebuild any such loss or damage unless Owner has
properly carried and maintained the insurance that Owner is required to maintain
pursuant to Section 24 and Contractor has received reasonable assurances from
Owner that Owner will prosecute such claim in a commercially reasonable manner
and Contractor will receive the insurance proceeds, if any, paid under such
Owner-maintained insurance coverages in accordance with the disbursement
provisions of this Agreement.

 

  (d)

Notwithstanding anything herein to the contrary, Contractor shall bear the risk
of loss and full responsibility for the cost of restoring or rebuilding any
damage to such Unit and all materials, Equipment, supplies and maintenance
equipment (including temporary materials, equipment and supplies) that are
purchased by Contractor or Owner for permanent installation in or for use during
construction

 

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of such Unit to the extent caused by a Force Majeure Event occurred from the
Effective Date until the date Substantial Completion of the relevant Unit in
respect of such Unit. For these purposes, and under its responsibility,
Contractor will contract a builder’s risk policy in accordance with Schedule 24.
Specific Force Majeure Events NOT covered by such builder’s risk policy, and not
assumed by Contractor, are war (whether or not war is declared), hostilities,
revolution, rebellion, insurrection against any governmental authority, riot,
terrorism, acts of a public enemy or other civil disturbance.

 

  (e) Notwithstanding anything herein to the contrary, Owner shall bear the risk
of loss and full responsibility for the cost of replacing or repairing any
damage to such Unit and all materials, Equipment, supplies and maintenance
equipment (including temporary materials, equipment and supplies) that are
purchased by Contractor or Owner for permanent installation in or for use during
construction of such Unit to the extent caused by the negligent, grossly
negligent or wilful acts of the Site Lessor, the Owner or their respective
agents, employees or representatives.

4.11 Training of Owner’s personnel.

 

  (a) Contractor shall provide the Owner’s personnel with up to two (2) days per
Site of on-site operation and maintenance training. The Owner’s personnel will
have the qualifications needed for the performance of their activities and will
be hired by Owner. Contractor shall use its best efforts to enable the Owner’s
personnel to take part in the Commissioning with the Contractor’s personnel,
provided that the Owner’s personnel follows the instructions of Contractor, does
not risk the safety of the tests and does not disturb Contractor’s or
Subcontractor’s regular work.

 

  (b) The schedule for the training lessons will be coordinated with Owner,
provided that the operation and maintenance manuals and such training will be
provided within the thirty (30) days following the Substantial Completion Date,
but not after Contractor has left the Site. The planning of training lessons
will be agreed between Owner and Contractor, but will ensure compliance with the
Construction and Milestone Schedule.

 

  (c) Contractor will propose to Owner, with enough time in advance, the dates
when the Owner’s personnel must be at its disposal for the training lessons.

4.12 Technical Contract Documents to be delivered by Contractor.

Contractor undertakes to deliver Owner the following technical documents on or
prior to the following dates:

 

Technical Document    Submitted 1.- Construction drawings    30 days prior to
commencement of the Work on Site 2.- O&M Manuals Drafts in English    30 days
after to commencement of the Work on Site. Contractor shall translate such O&M
Manuals Drafts into Spanish as soon as possible 3.- Final O&M Manuals in Spanish
   60 days after Substantial Completion Date 4.- As-Built Drawings    30 days
after Substantial Completion Date

For the avoidance of doubt, the final operation and maintenance manuals in
Spanish and the as-built drawings shall be included in the punchlist items
contemplated in Section 13.4 for the Park.

 

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5. Inspection. All Work performed by Contractor and all Equipment shall be
subject to the inspection by Owner and by the Technical Advisor to the Bank, but
such right of inspection of the Work or Equipment shall not relieve Contractor
of responsibility for the proper performance of the Work or Equipment to the
extent provided under this Agreement. Contractor shall provide to Owner or
Owner’s designee or the Technical Advisor to the Bank access to Contractor’s
facility or facilities where the Work is being performed upon reasonable prior
notice (at least forty-eight (48) hours), during business hours, and subject to
compliance with Contractor’s safety rules and policies. Owner shall ensure that
the inspections and tests do not affect the normal performance of this
Agreement.

6. Final Completion. Final Completion of the Park shall be deemed to have
occurred only if punchlist items for the Park contemplated in Section 13.4 have
been completed or waived. Upon Final Completion of the Park, Contractor shall
submit to Owner a written statement requesting acknowledgement of the Final
Completion of the Park. The acknowledgment shall be executed by Owner within
five (5) business days after the receipt of the written statement unless Owner
provides written notice of Contractor’s failure to achieve Final Completion of
the Park. Execution of the acknowledgment or failure of the Owner to provide
written notice of Contractor’s failure to achieve Final Completion of the Park
within five (5) business days shall constitute Final Completion of the Park.

7. Changes and Extra Work.

7.1 Without invalidating this Agreement, Owner may initiate a change in the Work
on a Unit by advising Contractor in writing of the change believed to be
necessary. As soon as practicable after notice, Contractor shall prepare and
forward to Owner in writing the price for the extra or changed Work on such Unit
in accordance with Schedule 1B and any required adjustment to the Construction
and Milestone Payment Schedule or any other term or condition of this Agreement.
Except for minor modifications in the Work not involving extra cost and not
inconsistent with the purposes of the Work, and except in an emergency
endangering life or property, all authorized extra Work or changes, and the
agreed to price, shall be confirmed through a Change Order to this Agreement in
respect of the relevant Unit. No change or extra Work shall be effective without
a Change Order signed by Owner and accepted in writing by Contractor and the
Technical Advisor to the Bank, subject to the provisions of Section 27.2. The
price shall include all costs associated with performing the extra Work or
changes, including the impact on the original

 

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scope of Work, inefficiencies created by the extra Work or changes, and overhead
associated with the extra Work or changes.

7.2 All extra Work and changes shall be performed in accordance with the
provisions and conditions of this Agreement, except as provided in the Change
Order.

7.3 All Change Orders shall be paid by the Owner on a cost plus fifteen percent
(15%) basis. Contractor will use commercially reasonable efforts to secure at
least two (2) bids for any subcontract work required for all Change Orders.

7.4 Contractor may propose Change Orders to Owner if those Change Orders improve
the Units or are otherwise advisable for the Work. This shall not affect the
obligation of Contractor to perform the Work and to deliver the Units in the
form agreed in this Agreement. Any changes to the Units or the Work requested by
any Governmental Authority as a condition to issue an Applicable Permit shall
entitle Contractor to request a Change Order in accordance with this Section 7,
Sections 7.1, 7.2 and 7.3 shall apply mutatis mutandis.

8. Protective Measures.

8.1 Contractor shall be responsible for all injury or damage to individuals or
property that may occur as a result of its fault or negligence or that of its
Subcontractors (other than Solarpack) in connection with the performance of the
Work. Contractor shall be responsible for the proper care and protection of all
Equipment and materials furnished by Contractor and the Work performed until
Final Completion of the Work for each Unit. Given that Owner is responsible for
providing the fence, gates, lighting and security infrastructure for the Park,
Owner shall arrange for the adequate protection for adjacent property to the
extent required by law or by this Agreement, including protection of any Work
existing in public property.

8.2 Contractor shall take all reasonably necessary precautions for the safety of
its employees on the relevant part of the Site where the Park is located and
prevent accidents or injury to individuals on, about, or adjacent to the
premises where the Work is being performed.

8.3 Contractor shall keep the relevant part of the Site where the Park is
located and surrounding areas free from accumulation of waste materials or
rubbish caused by the Work, and upon Final Completion of the Park, shall remove
from the relevant part of the Site where the Park is located all waste
materials, rubbish, tools, Equipment, machinery and surplus materials.

8.4 Health and Safety

Owner shall undertake and prepare a health and safety study (the “Health and
Safety Study”) and Contractor shall implement it through a health and safety
plan (the “Health and Safety Plan”), as required under Applicable Law.
Contractor shall provide the Health and

 

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Safety Coordinator with a draft of the Health and Safety Plan and of the Health
and Safety Study that it intends to put in place for the Owner’s information and
comments, although Contractor shall remain responsible for the correctness and
completeness of the Health and Safety Study and its implementation through the
Health and Safety Plan.

Contractor will adopt, maintain and supervise all measures and programs required
to ensure the safety of all the persons present in the relevant part of the Site
where the Park is located. Unless otherwise agreed, Contractor shall, from the
commencement of the Work on the Park until Final Completion: (i) provide proper
fencing, gates, lighting, security infrastructure and warnings in the Park;
(ii) provide proper temporary roadways, footways; and (iii) take all steps to
protect the environment on and off the relevant part of the Site where the Park
is located and to avoid damage and nuisance to persons or to properties
resulting from pollution, including noise or other causes arising as a
consequence of its method of operation.

Contractor assumes responsibility for the health and safety of its workers and
those of its Subcontractors.

9. Force Majeure. Contractor shall promptly notify Owner in writing of any delay
or anticipated delay in Contractor’s performance of this Agreement due to a
Force Majeure Event, and the reason for and anticipated length of the delay. If
reasonably feasible, Contractor shall deliver such notice within forty-eight
(48) hours of when Contractor becomes aware of such delay. Contractor shall be
excused for any delays or defaults in the performance of its obligations under
this Agreement that are the result of a Force Majeure Event or any other event
outside the reasonable control of Contractor. Contractor shall be entitled to a
reasonable extension of time for delays due to a Force Majeure Event; provided
that any Force Majeure Event that prevents performance, or is reasonably
expected to prevent performance, for more than ninety (90) days shall entitle
either Party to terminate this Agreement, in which case, Section 11.4 shall
apply. Any modification to the Construction and Milestone Payment Schedule
pursuant to this Section 9 shall be documented by a written Change Order to this
Agreement.

10. Unanticipated Conditions. If any unusual or unanticipated conditions exist
or arise at the Site (such as hazardous materials, environmental conditions,
pollution or archeological findings), which conditions would involve the
incurrence by Contractor of any expenses to correct such conditions, Contractor
shall submit a request for approval of the corrective work and payment of the
related expenses to Owner, which approval shall not be unreasonably withheld,
conditioned or delayed. The additional work resulting therefrom will be paid for
by Owner as extra Work pursuant to Section 7. ***

11. Termination.

11.1 Termination by Owner:

Contractor agrees that Owner shall be entitled to terminate this Agreement upon
the occurrence of any of the following circumstances:

 

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  (a) Contractor abandons the entire Work without justified reason for more than
three (3) weeks or does not start the Work without justified reason for more
than three (3) weeks from Effective Date, or

 

  (b) Contractor shall assign this Agreement in whole without the written
authorization of Owner, unless otherwise expressly permitted under this
Agreement, or

 

  (c) Contractor violates in any material respect any of the provisions of this
Agreement, which violation remains uncured for thirty (30) days following
Contractor’s receipt of written notice thereof from Owner, or

 

  (d) the Substantial Completion of the Full Park is delayed for more than ***
months from the Effective Date hereof as a result of Contractor’s default or a
default of its Subcontractors, but at least thirty (30) Units have achieved
Substantial Completion and such Units have also achieved Substantial Completion
of the Full Park, and Owner decides not to grant more time to Contractor to
achieve Substantial Completion of the Full Park for every Unit of the Park, or

 

  (e) fewer than thirty (30) Units of the Park achieve Substantial Completion
within the *** months following the Effective Date as a result of Contractor’s
default or a default of its Subcontractors, and Owner decides not to grant more
time to Contractor to achieve Substantial Completion of the Full Park for every
Unit of the Park, or

 

  (f) ***

 

  (g) Contractor executes this Agreement in bad faith, or

 

  (h) any Force Majeure Event that prevents performance, or is reasonably
expected to prevent performance, for more than ninety (90) days, or

 

  (i) the Condition Precedent is not fulfilled on or before May 20, 2007 and
Contractor decides not to grant more time to Owner to achieve the fulfillment of
the Condition Precedent,

Owner may instruct Contractor to discontinue all or any part of the Work, and
Contractor shall thereupon discontinue the Work of such parts thereof. Owner
shall thereupon have the right to continue and complete the Work or any part
thereof, by contract or otherwise. Upon the occurrence of any of the
circumstances contemplated in paragraphs (a), (b), (c), and (g) above,
Contractor shall be liable to Owner, unless otherwise contemplate herein, for
any and all damage and excess cost incurred by Owner in completing the Work, in
each case to the extent caused by Contractor’s material breach of this
Agreement. Upon the occurrence of any of the circumstances contemplated in
paragraphs (d), (e) and (f) above, the Parties shall proceed as follows:

 

(1) upon the occurrence of the circumstance contemplated in paragraph (d) above:

 

  (I)

the Contract Price shall be reduced to reflect those Units of the Park which
have achieved Substantial Completion and Substantial Completion of the Full

 

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Park as of the *** month deadline, and Contractor will return the portion of the
Contract Price received in excess, according to the new Contract Price, within
the following deadlines:

 

  - the portion of the Contract Price received in excess for the Category 1
Items of such Units will be returned within *** months following the Owner’s
demand; and

 

  - the portion of the Contract Price received in excess for the Category 2
Items of such Units will be returned at Substantial Completion Date; and

 

  (II) in addition, Contractor will pay the Owner, within two (2) months
following the Owner’s demand, (a) a lump sum payment equal to all Common
Expenses for the Park as of the *** month deadline and (b) an amount equal to
the Financing Costs as of the *** month deadline. Owner shall promptly transfer
the payment described in clause (b) to its Investors who are not able to
participate in ownership of the partially completed Park. As used herein,
“Common Expenses” means the net present value of that pro rata portion of the
uncompleted Park’s costs, land lease and security, calculated by Deloitte or any
other prestigious international audit firm chosen by Contractor among the three
(3) presented by Owner. As used herein, “Financing Costs” means (x) the
financing expenses of any Investors of the Owner who are associated with the
uncompleted portion of the Park to carry their loan for a period of up to one
year following the *** month deadline, assuming such expenses were incurred and
(y) the finance charges associated with any early prepayment of loans from such
Investors who do not elect to carry their loan. Title to all property and
equipment provided by Contractor for the uncompleted Units shall be transferred
to Contractor. The Bank shall provide a detailed and justified liquidation of
the expenses and charges contemplated in sections (x) and (y) above. Contractor
shall review this liquidation taking into account the executed copy of the
facility agreement entered into by Owner and the Bank, which has been delivered
to Contractor prior to the Effective Date. Contractor undertakes to acknowledge
that the liquidation made by the Bank is correct and firm if made in accordance
with the provisions of the aforementioned executed facility agreement and,
therefore, undertakes to pay the corresponding amount within *** months
following the Owner’s demand.

 

(2) upon the occurrence of the circumstance contemplated in paragraph (e) above,
within *** months following the Owner’s demand, Contractor will return all the
payments received from Owner pursuant to this Agreement. In such event title to
all property, materials and Equipment provided by Contractor for the Park shall
be transferred to Contractor.

 

(3)

upon the occurrence of the circumstance contemplated in paragraph (f) above,
Owner shall be entitled to reject such Unit and receive a repayment of such Unit
Price for the

 

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Unit for which ***, subject to the following provisions:

 

  (I) If *** have not been achieved for any Unit due to any reason attributable
to Contractor’s performance of the Work: (a) first, Solarpack will return on
demand *** of all payments then received by Solarpack in connection with its
services regarding such Park at any time, to the relevant payer (including those
payments made by PowerLight Systems Spain, S.L. under the Developer
Subcontract); and (b) second, Contractor, within *** months following the
Owner’s demand, will return the payments received for the applicable Unit Price.
A partial or non-fulfillment of (a) in no way diminishes obligation (b) by
Contractor.

 

  (II) If *** have not been achieved for any Unit due to any reason not
attributable to Contractor: (a) first, Solarpack will return on demand one
hundred per cent (100%) of all payments then received by Solarpack in connection
with its services regarding such Park at any time, to the relevant payer
(including those payments made by PowerLight Systems Spain, S.L. under the
Developer Subcontract); and (b) second, Contractor within *** months following
the Owner’s demand, will return the payments received for the applicable Unit
Price. ***. A partial or non-fulfillment of (a) in no way diminishes obligation
(b) by Contractor.

For the purposes of allowing Contractor to make the payments contemplated in
Sections (3) (I) (b) or (3) (II) (b) above, title to all property, materials and
Equipment provided by Contractor for such Unit shall be transferred to
Contractor.

For the avoidance of doubt, Contractor shall not be responsible for the Owner’s
delay in obtaining, or any failure to obtain, in due time and manner the
relevant “acta de puesta en marcha definitiva” for the medium voltage
infrastructure and the grid connection for each Unit or any other Applicable
Permit ***.

The remedies herein shall be inclusive and additional to any other remedies that
may be available under Applicable Law, and no action by Owner shall constitute a
waiver of any such right or remedy.

11.2 Termination by Contractor:

Owner agrees that Contractor shall be entitled to terminate this Agreement upon
the occurrence of any of the following circumstances:

 

(a) Owner shall assign this Agreement, or sublet any part thereof, without the
written authorization of Contractor, unless otherwise expressly permitted under
this Agreement, or

 

(b) the Work is suspended for a period exceeding ninety (90) days pursuant to
Section 19.1 or two (2) months pursuant to Section 19.2, or

 

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(c) Owner fails to pay any amount due under this Agreement provided that a one
(1) month period has elapsed since the date the amount was due, or payment by
Owner has been delayed during a minor term of at least ten (10) days at least
three (3) times, although this shall not entitle Contractor to termination when
said amount is under dispute according to Section 32 hereof, or

 

(d) Owner violates in any material respect any of the provisions of this
Agreement, which violation remains uncured for thirty (30) days following
Owner’s receipt of written notice thereof from Contractor, or

 

(e) Owner executes this Agreement in bad faith, or

 

(f) any Force Majeure Event that prevents performance, or is reasonably expected
to prevent performance, for more than ninety (90) days, or

 

(g) If Owner fails to assume, within thirty (30) days following the termination
of the Force Majeure Event, the cost of restoring or rebuilding any damage
arising under such specific Force Majeure Events NOT covered by Contractor’s
builder’s risk policy pursuant to Section 4.10 (d), or

 

(h) the Condition Precedent is not fulfilled on or before May 20, 2007 and
Contractor decides not to grant more time to Owner to achieve the fulfillment of
the Condition Precedent,

Contractor shall have all rights and remedies that may be available under
Applicable Law against Owner with respect to this Agreement, including without
limitation the right to suspend performance of the Work, to terminate this
Agreement, to require Owner to immediately post payment bonds, and/or Contractor
to file mechanics’ liens.

11.3 Once this Agreement is terminated due to any circumstance contemplated in
paragraphs 11.1 (a), (b), (c), or (g) above, the Parties will execute a
verification certificate (acta de comprobación) of the Work carried out by
Contractor as of that date, settling the price of the part of the Work correctly
made and useful for Owner, and the Parties will calculate the amounts to be paid
to each other, subject to the limitations provided under Section 25.5 of this
Agreement. For the avoidance of doubt, PV modules and inverters shall be always
deemed to be useful for Owner. The aforementioned part of the Work correctly
made and useful for Owner shall maintain the warranty stated in Schedule 23 (a).

11.4 Once this Agreement is terminated due to any circumstance contemplated in
paragraphs 11.1 (h) or 11.2 (a), (b), (c), (d), (e), (f) or (g) above, Owner
shall pay to Contractor (as soon as reasonably practicable, and in any event
within 21 days, in relation to ascertained amounts and within 21 days of
ascertainment in respect of unascertained amounts):

 

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(i) the price of the part of the Work completed at the date of termination, less
the total of all amounts previously paid to Contractor under the Agreement and
in addition, in so far as not included in such price of the Work,

 

(ii) the costs of any additional Work required by Owner;

 

(iii) the costs of component parts (PV, steel, inverters) reasonably ordered for
the Work which shall have been delivered to Contractor or of which Contractor is
legally liable to accept delivery, provided that Contractor has not ordered
those component parts unreasonably early and has used all reasonable endeavors
to avoid or minimize the amount of those costs, and prior to payment by Owner in
respect thereof Contractor has issued the relevant invoice accompanied by a copy
of the Bill of Lading and delivered by Contractor to Owner upon shipment from
point of origin. These invoices will be due within ten (10) calendar days upon
delivery by Contractor. Upon receipt of payment, Contractor will release
Original Bill of Lading which evidences transfer of title;

 

(iv) the cost of delivery under paragraph (iii) above;

 

(v) all reasonable cancellation charges and administration costs incurred by
Contractor in connection with the termination; and

 

(vi) the reasonable documented direct costs of demobilization.

11.5 Once this Agreement is terminated due to any circumstance contemplated in
paragraphs 11.1 (i) or 11.2 (h) above, Owner shall pay to Contractor (as soon as
reasonably practicable, and in any event within 21 days) a cancellation fee of
five per cent (5%) of the Contract Price. Such cancellation fee shall be the
sole compensation for Contractor for all reasonable cancellation charges and
administration costs incurred by Contractor in connection with the termination,
the direct costs of demobilization and the so-called direct damages (daños
directos) arising under the termination of this Agreement. Contractor shall
retain (or, if applicable, receive from Owner) title to all property and
equipment provided by Contractor for the performance of the Work.

11.6 In any event (expressly including every paragraph of Sections 11.1 and 11.2
above), the Parties expressly agree that no Party shall be entitled to claim to
the other for any right to profit (beneficio industrial) or the so-called
indirect damages (daños indirectos), including loss of profit (lucro cesante)
and loss of production (pérdida de producción), except for willful misconduct or
gross negligence. For the avoidance of doubt, upon the occurrence of any event
of termination of this Agreement, (i) the non-defaulting Party may request the
other Party the specific performance of the same in lieu of termination; and
(ii) the non-defaulting Party shall be entitled to claim damages and to be
indemnified by the defaulting Party in case of termination of this Agreement
upon a defaulting Party’s breach.

12. Labor.

 

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12.1 Contractor shall use reasonable efforts to minimize the risk of
labor-related delays or disruption of the progress of the Work. Contractor shall
promptly take any and all reasonable steps that may be available in connection
with the resolution of violations of collective bargaining agreements (convenios
colectivos) or labor jurisdictional disputes. Contractor shall advise Owner
promptly in writing of any actual or threatened labor dispute of which
Contractor has knowledge that might materially affect the performance of the
Work by Contractor or by any of its Subcontractors. Notwithstanding the
foregoing, the settlement of strikes, walkouts, lockouts or other labor disputes
shall be at the discretion of the Party having the difficulty.

12.2 Likewise, Contractor undertakes to comply at all times with the laws and
regulations governing Social Security (Seguridad Social) obligations and
contributions, to register all employees with the Social Security administration
and to punctually and correctly make all required payments, contributions,
filings (including filing forms TC-1 and TC-2) and information disclosures.
Contractor shall promptly submit to Owner copies of forms TC-1 and TC-2 of its
employees and of its Subcontractors’ employees when required by the Owner.

12.3 Contractor shall also be responsible for the submission of any information
required by the labor or tax authorities having jurisdiction over the Site or
the Work in respect of the employees working on the Site or from time to time
employed or hired by Contractor and its Subcontractors to carry out any Work.
Contractor shall also submit copies of that documentation to Owner. Contractor
shall keep at all times in the Site a Registry Book (Libro-Registro) containing
information on its employees and those of its Subcontractors working on the
Site. Owner shall have full access to the information contained in such Registry
Book.

13. Commencement and Substantial Completion of Work.

13.1 Contractor shall perform the Work in accordance with Schedule 4.1 and the
preliminary project schedule which is attached as Schedule 13.1.

13.2 The target date on which Substantial Completion for all the Units of the
Park is achieved shall be *** from the Effective Date. Contractor may claim a
justified extension of the Substantial Completion date for all the Units of the
Park if it is or will be delayed in completing the Work for any of the following
causes:

 

(a) Change Orders agreed pursuant to this Agreement;

 

(b) breach of this Agreement or of a statutory duty by Owner;

 

(c) suspension of the Work pursuant to Section 19;

 

(d) a Force Majeure Event;

 

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(e) any Owner’s delay in obtaining (or any failure to obtain) in due time and
manner the relevant “acta de puesta en marcha definitiva” for the medium voltage
infrastructure and the grid connection for each Unit or any other Applicable
Permit ***;

 

(f) if the Owner achieves the fulfillment of the Condition Precedent later than
May 20, 2007

 

(g) inability or material difficulty for Contractor to access the Site and
perform the Work due to the activities performed by any other contractors or
subcontractors of Owner; or

 

(h) excessive rain or any other weather conditions that significantly deviate
from monthly averages in the municipality of Llerena during the performance of
the Work.

In the event of any material delay (other than those contemplated in paragraphs
(a) to (h) above) that causes the prosecution of the Work not to substantially
conform to the Schedule 1A, Owner may, by written notice to Contractor, direct
that the Work be accelerated by means of overtime, additional crews or
additional shifts or re-sequencing of the Work.

13.3 The following are conditions precedent to Substantial Completion of each
Unit of the Park:

 

(a) each Unit is mechanically, electrically, and structurally constructed in
accordance with the requirements of Schedule 4.1 of this Agreement, the Work and
Industry Standards, except for non-critical punchlist items;

 

(b) each Unit is mechanically, electrically and functionally complete and ready
for initial operations, adjustment and testing, except for non-critical
punchlist items, and the Unit’s Final Rated Value is not below *** of the Unit’s
EPC Rated Value;

 

(c) Commissioning according to procedures set forth in sections 1.1.2, 1.1.3,
1.1.4 and 1.2.1 of Schedule 4.6. are completed successfully and the
corresponding certificates are duly signed by the Owner’s Representative, the
Technical Advisor to the Bank and the Contractor’s Representative; and

 

(d) ***.

At Substantial Completion of each Unit Owner and Contractor shall agree on the
punchlist items for such Unit. The punchlist shall be dealt with no later than
*** months after Substantial Completion. Failure from Contractor to fulfill this
obligation shall entitle Owner to complete the pending works on its own and
charge the Contractor for the duly justified costs.

Substantial Completion shall not be withheld for failure to obtain any
Applicable Permits, including any ***.

13.4 The following are conditions precedent to Substantial Completion of the
Full Park:

 

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(a) at least *** Units of the Park have achieved Substantial Completion in
accordance with Section 13.3 above;

 

(b) the tests set forth in Schedule 4.6 (other than those tests contemplated in
sections 1.1.2, 1.1.3, 1.1.4 and 1.2.1 of such Schedule) are completed
successfully and the corresponding certificates are duly signed by the Technical
Advisor to the Bank and the Contractor’s Representative; and

 

(c) Contractor has delivered to Owner the documentation that, according to
Section 4.12, has to be delivered at Substantial Completion Date.

At Substantial Completion of the Full Park Owner and Contractor shall agree on
the punchlist items (which shall include the operation and maintenance manuals
and the “as-built” drawings of the Park) for the Park. The punchlist shall be
dealt with no later than *** months after Substantial Completion Date. Failure
from Contractor to fulfill this obligation shall entitle Owner to complete the
pending works on its own and charge the Contractor for the duly justified costs.

13.5 Delay Penalties. If the date of Substantial Completion for each Unit
exceeds a *** month period from the Effective Date, as a result of Contractor’s
default or a default of its Subcontractors, Contractor will be subject to a
penalty of *** of the Unit Price of those Units which have not achieved
Substantial Completion for every *** in delay following the aforementioned ***
term. In no event shall the penalty applicable to each Unit under this
Section 13.5 exceed *** of the Unit Price. Delay penalties shall replace the
right of Owner to claim damages (indemnización por daños y perjuicios) from
Contractor for not having achieved Substantial Completion within the
aforementioned *** term, and will be deducted from the *** retention
contemplated in Section 18.2 (a) below.

14. Reports.

14.1 Contractor shall prepare a monthly progress report for the Park that shall
include at a minimum the following and submit it to Owner within ten (10) days
after the end of each calendar month: (a) executive summary, (b) progress of
Work in comparison to the Construction and Milestone Payment Schedule,
(c) safety report, (d) changes in Work and (e) issues/concerns. Contractor will
not unreasonably deny any information request made by the Owner in relation with
the execution of the Work.

15. Subcontractors and Suppliers.

15.1 Contractor shall at all times be responsible for the acts and omissions of
Subcontractors. Contractor shall be responsible for performance of all the Work,
whether performed by Contractor or its Subcontractors. Owner shall not undertake
any obligation to pay or to be responsible for the payment of any sums to any
Subcontractor.

15.2 The subcontracting agreements entered into by Contractor will be formalized
in writing, and shall include any provisions which are necessary to guarantee
the

 

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rights of Owner under this Agreement and shall be consistent with the terms and
conditions of this Agreement. Each subcontracting agreement shall also include a
provision under which the Subcontractor waives any rights it may have under
Article 1597 of the Spanish Civil Code.

15.3 Subcontractors’ personnel shall work in accordance with the instructions
and briefings of Contractor, as if they were employees of Contractor. The
Subcontractors’ personnel shall be subject to the same obligations as those of
Contractor pursuant to Section 12 above.

15.4 Contractor shall use commercially reasonable efforts to evaluate and
consider Spanish local Subcontractors in the construction activities for the
Park, taking into account the benefits using Spanish Subcontractors may have on
the permitting process.

15.5 Subject to meeting the warranty requirements described in Section 23.2,
Owner accepts that the Park may be built with PV modules provided by one of the
following pre-approved Suppliers:

 

  •  

Sharp

 

  •  

SunPower

 

  •  

Sanyo (through Mitsui), ***

 

  •  

Suntech (through Mitsui) ***.

 

  •  

Evergreen.

 

  •  

PowerLight Corporation’s own product is acceptable to Owner as long as they
carry a 25 year warranty provided by PowerLight Corporation.

Contractor confirms that at the signature of this Agreement, the approved PV
module models are:

 

  •  

PowerLight Solar Module ranging from 190 to 230 Wp

 

  •  

Suntech STP class ranging from 240 to 280 Wp

Any other PV Module Models from the pre-approved suppliers must count with the
written approval of the Technical Advisor to the Bank, which shall not be
unreasonably withheld or delayed. In any event, the Technical Advisor to the
Bank must provide such written approval or rejection not later than ten
(10) days following receipt of Contractor’s request.

Any PV Module Model under this agreement should comply with a maximum
Temperature coefficient PM of 0,51%/ºC.

 

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15.6 Subject to meeting the warranty requirements described in Section 23.2,
Owner agrees that the Park may be built with the following inverter equipment:

Supplier: SMA

Model Number: SC100

15.7 Prior to the Contractor’s purchase of the relevant Equipment, Owner shall
have the right to veto any other inverter Supplier proposed by Contractor which
is not listed above. Contractor undertakes to apply commercially reasonable
efforts to involve Spanish Suppliers in the delivery of inverters to the Parks,
as well as to engage Spanish local Subcontractors in the mechanical and
electrical assembly work.

16. Ownership of Plans, Data, Reports and Material.

16.1 Subject to Sections 16.3 and 34, Contract Documents developed by Contractor
under this Agreement shall remain the property of Contractor, even when prepared
and delivered to Owner upon completion of the Work, and irrespective of title
transfer of the Park to Owner. Nothing in this Agreement shall impair, alter or
otherwise affect Contractor’s proprietary rights in its patents, products or
other intellectual property.

16.2 Any additional inventions or intellectual property created during
construction shall be owned by Contractor, provided that Owner shall retain
intellectual property ownership for inventions created without Contractor’s
involvement following Substantial Completion of the Full Park.

16.3 Contractor agrees to grant and hereby grants to Owner an irrevocable,
non-exclusive, royalty-free license of use of Contract Documents developed by
Contractor under this Agreement for the exclusive use of the operation of the
Park. In addition, Contractor agrees to grant and hereby grants to Owner an
irrevocable, non-exclusive, royalty-free license under all patents, copyrights
and other proprietary information of Contractor related to the Work now or
hereafter owned or controlled by Contractor to the extent reasonably necessary
for the operation, maintenance or repair of any Unit or any subsystem or
component thereof designed, specified, or constructed by Contractor under this
Agreement. No other license in such patents and proprietary information is
granted pursuant to this Agreement.

17. Contract Price.

17.1 As full compensation for the Work and all of Contractor’s obligations
hereunder Owner shall pay to Contractor Euros *** VAT excluded (the “Contract
Price”). Therefore, the “Unit Price” for each 120kWp/100kWe Unit shall be *** ,
VAT excluded. The Contract Price shall be changed only by:

1. The Final Price will be ***.

 

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2. Change Orders approved in accordance with Sections 7 or 9; provided that,
upon notice by Contractor to Owner from time to time, the Contract Price may be
adjusted by Contractor to account for any increase following execution of this
Agreement in the cost of materials required for any Unit, but such adjustment
may only be effected in the event of an unanticipated delay in the Work with
respect to such Unit, which delay is beyond the reasonable control of the
Contractor and lasts for at least thirty (30) days which is attributable to
Owner.

The Contract Price shall be paid in accordance with Section 18.

17.2 Subject to the Contract Price adjustment mechanisms contemplated in this
Agreement, the Contract Price is firm and fixed and not subject to any variation
or price adjustments (downward or upward) in this Agreement, and stipulates the
full compensation for the design and installation of the Park by Contractor,
except as contemplated in Sections 7, 9 and 10. The Contract Price described in
this Agreement includes all expenses incurred by Contractor including, but not
limited to, design, engineering, Equipment and materials, erection,
commissioning, tests and spare parts required at Park completion, as for
specified in the technical specification, inclusive of cost of travel and
lodging expenses, *** including any custom duties and taxes (other than VAT),
related to Contractor’s performance of its obligations under this Agreement. The
Contract Price does not include Value Added Tax (“VAT”) and any fees related to
any Applicable Permits, which shall be paid by Owner.

17.3 ***

18. Payment.

18.1 Owner shall pay to Contractor the price set forth in Section 17 in
accordance with the Construction and Milestone Payment Schedule for each Unit,
subject to retention as provided in Section 18.2.

18.2 At Substantial Completion of each Unit all remaining payments of the Unit
Price shall become due other than:

 

  (a) a retention of six point *** of each Unit Price payable on the earlier of:
(i) ten (10) days from the date of receipt of the relevant *** for such Unit of
the Park; or (ii) sixty (60) calendar days after the date of Substantial
Completion of such Unit if the ***

 

  (b) a retention of *** of each Unit Price payable ten (10) days from receipt
of the relevant ***; and

 

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  (c) a retention of one hundred fifty percent (150%) of the costs of completing
an agreed punch list (as estimated by Contractor), payable upon completion of
such punch list.

18.3 All invoices for PV modules, inverters, steel, tracker and other equipment
(“Category 1 Items”) shall be accompanied by a copy of the Bill of Lading and
delivered by Contractor to Owner upon shipment from point of origin. These
invoices will be due within *** calendar days upon delivery by Contractor. In
any event, upon receipt of payment ***, Contractor will release Original Bill of
Lading which evidences transfer of title.

All remaining costs (“Category 2 Items”) shall be paid by Owner within
***calendar days of invoice delivery by Contractor, which invoice shall be
delivered on a percentage completion basis.

Invoices for Category 1 Items and Category 2 Items shall be sent by facsimile or
email with confirmation of receipt, and Owner must receive the invoice and, if
applicable, the attached documentation, on the same date of invoice delivery by
Contractor. Owner shall take title of Category 2 Items as payment is received by
Contractor; provided, however, that except as otherwise expressly contemplated
in this Agreement (and subject to Section 4.10(d) above), risk of loss for the
Units shall remain with Contractor until Substantial Completion of such Unit.

18.4 Overdue payment obligations of the Owner hereunder shall bear interest from
the date due until the date paid at a rate per annum equal to Euribor plus two
percent ***.

18.5 Any payments due by Contractor to Owner pursuant to this Agreement shall be
deposited in the bank account designated by the Bank as long as the facility
agreement executed by Owner and the Bank remains in force.

19. Suspension of the Work.

19.1 Contractor may suspend temporarily the Work if Owner fails to pay any
payment application in the terms set out in this Agreement, provided that Owner
fails to remedy such breach within the ten (10) days following the due date of
such payment. Contractor shall be entitled to request (i) an extension of the
deadlines of this Agreement for the same period of the suspension, and (ii) the
reimbursement of the additional costs and expenses, if any, reasonably incurred
and substantiated by Contractor in protecting, securing or insuring the Work,
and in resumption of the Work. If this suspension of the Work continues for more
than two (2) months, Contractor may terminate this Agreement.

19.2 In the event that the Work is totally or partially suspended by reason of
an order from a Governmental Authority, the Party that has caused the issuance
of such order (whether by reason of an act, omission or default) shall bear all
the damages, costs and expenses caused by the suspension, subject to the
limitations provided under Section 25.5 of this Agreement. In addition, if Owner
has caused the issuance of such order, the

 

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deadlines of this Agreement will be extended for the same period of the
suspension, or for such other period that the Parties deem reasonable in view of
the circumstances.

If the suspension is not due to an act, omission or default of any of the
Parties, then the deadlines of this Agreement will be extended for the same
period of the suspension, or for such other period that the Parties deem
reasonable in view of the circumstances, and Owner shall assume any costs
arising under the effects of the suspension on the obligations of the Parties
under this Agreement.

19.3 After the resumption of the performance of the Work, Contractor shall,
after due notice to Owner, examine the Work affected by the suspension.
Contractor shall make good any defect, deterioration or loss of the construction
or the Work affected that may have occurred during the suspension period. Costs
properly incurred by Contractor (including mobilization costs, insurance fees
and others) shall be added to the Contract Price, so long as the suspension did
not arise due to any act, omission or default on the part of Contractor.

20. Taxes.

20.1 Contractor shall pay before delinquency any custom duties and taxes (other
than VAT arising under the Contract Price, although Contractor shall pay any VAT
triggered by any payment to its subcontractors for the performance of any works
or services in Spain by such subcontractors), related to Contractor’s
performance of its obligations under this Agreement. Provided that the
conditions of indemnification set forth in Section 25 are satisfied, Contractor
shall hold harmless, indemnify and defend Owner, together with any and all its
officers, directors, agents and employees from any liability, penalty, interest
and expense by reason of Owner’s failure to pay such taxes or custom duties.
Contractor and Owner shall cooperate with each other to minimize the tax
liability of both Parties to the extent legally permissible.

21. Owner Obligations. Owner shall provide Contractor with all necessary access
to the Site and work areas Contractor requires for completion of the Work.
Contractor shall have reasonable access to the Site after the Final Completion
Date for inspection and photography. If Contractor is ready to ship ordered
materials to the Site, and the Site is not ready to receive materials for any
reason, Owner shall pay for all costs associated with such delay, including (to
the extent applicable) any delivery, drop-off, insurance and temporary-storage
fees.

22. Representations and Warranties.

22.1 Representations and Warranties of Contractor. Contractor represents and
warrants to Owner that:

 

(a)

Contractor is a corporation, duly organized, validly existing, and in good
standing under the laws of Switzerland, and has full power to engage in the
business it presently conducts and contemplates conducting, and is and will be
duly licensed or qualified and in good standing under the laws of Switzerland
and in each other

 

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jurisdiction wherein the nature of the business transacted by it makes such
licensing or qualification necessary and where the failure to be licensed or
qualified would have a material adverse effect on its ability to perform its
obligations hereunder.

 

(b) Contractor has (either directly or through its Subcontractors) all the
required authority, ability, skills, experience and capacity necessary to
perform and shall diligently perform the Work in a timely and professional
manner, utilizing sound engineering principles, project management procedures,
construction procedures and supervisory procedures, all in accordance with
Industry Standards. Contractor has (either directly or through its
Subcontractors) the experience and skills necessary to determine, and Contractor
has reasonably determined, that Contractor can perform the Work for the Contract
Price.

 

(c) The execution, delivery and performance by Contractor of this Agreement will
not (i) violate or conflict with any covenant, agreement or understanding to
which it is a party or by which it or any of its properties or assets is bound
or affected, or its organizational documents or (ii) subject the Units or any
component part thereof to any lien other than as contemplated or permitted by
this Agreement.

 

(d) There are no actions, suits, proceedings, patent or license infringements or
investigations pending or, to Contractor’s knowledge, threatened against it
before any court or arbitrator that individually or in the aggregate could
result in any materially adverse effect on the business, properties or assets or
the condition, financial or otherwise, of Contractor or in any impairment of its
ability to perform its obligations under this Agreement.

 

(e) Contractor and its Representatives have not made any payment or given
anything of value, and Contractor will not, and Contractor will direct its
employees, agents, and Subcontractors and vendors directly contracting with
Contractor, and their employees or agents to not, make any payment or give
anything of value, in either case to any government official to influence his,
her, or its decision or to gain any other advantage for Owner, or Contractor in
connection with the Work to be performed hereunder. None of Contractor, its
Subcontractors or any of their employees or agents shall take any action that in
any way violates the United States Foreign Corrupt Practices Act.

22.2 Representations and Warranties of Owner. Owner represents and warrants to
Contractor that:

 

(a)

Owner is an AIE (Agrupación de Interés Económico) duly incorporated, validly
existing under the laws of Spain and registered with the Commercial Registry to
which it corresponds by reason of its corporate domicile, and has full legal
capacity and standing to pursue its corporate purpose (including the capacity to
dispose of and encumber all of its assets) and full power to engage in the
business it presently conducts and contemplates conducting, and is and will be
duly licensed or qualified and in good standing under the laws of each
jurisdiction wherein the nature of the

 

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business transacted by it makes such licensing or qualification necessary and
where the failure to be licensed or qualified would have a material adverse
effect on its ability to perform its obligations hereunder.

 

(b) The execution, delivery and performance by Owner of this Agreement will not
(i) violate or conflict with any covenant, agreement or understanding to which
it is a party or by which it or any of its properties or assets is bound or
affected, or its organizational documents or (ii) subject the Units or any
component part thereof or the Site or any portion thereof to any lien other than
as contemplated or permitted by this Agreement.

 

(c) There are no actions, suits, proceedings, patent or license infringements or
investigations pending or, to Owner’s knowledge, threatened against it before
any court or arbitrator that individually or in the aggregate could result in
any materially adverse effect on the business, properties or assets or the
condition, financial or otherwise, of Owner or in any impairment of its ability
to perform its obligations under this Agreement.

 

(d) Owner has, and will have, available all the funds that are necessary from
time to time to pay Contractor the Contract Price.

23. Warranty.

23.1 Contractor’s sole warranty hereunder for each Unit shall be a comprehensive
warranty, as set forth in Schedule 23(a), and, except as set forth in such
Schedule, Contractor does not make (and hereby expressly disclaims) any other
warranties of any kind whatsoever; provided, however, that independent of such
warranty, Contractor shall provide Owner a performance guaranty set forth in
Schedule 23(c). The letter of credit contained in Schedule 23(b) shall remain in
force for a *** period, starting from date of Substantial Completion of the
first Unit of the Park, and, to the extent it is dependent upon operation and/or
maintenance, is conditional on the operation and maintenance of the Work and/or
the Units by or for Owner in accordance with the operation and maintenance
manuals prepared and delivered to Owner by Contractor. Contractor shall not be
liable for any defect or deficiency to the extent that the same results from the
specific written direction of Owner relating to the Work and/or the Units,
provided that any such defect or deficiency is not the result of Contractor’s
failure to properly implement the Works in accordance with this Agreement. The
scope of such warranty will include the warranty statements provided under the
warranties referenced in Section 23.2 below for claims made by Owner under such
warranties during the Contractor’s *** period set forth on Schedule 23(a).
Contractor’s obligations pursuant to this paragraph shall be supported by its
parent company under the comfort letter referenced in Clause 23.4.

23.2 Upon expiration of the aforementioned *** period, Contractor will provide
Owner with copies of pass-through warranties provided by PV module and inverter
Suppliers for the benefit of Owner (the “Third Party Warranties”), which have
been approved by Owner and by the Technical Advisor to the Bank and which shall

 

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allow Owner to assign the same. Subject to this Clause 23.2, Owner shall be
responsible for supervising such warranties Third Party Warranties to confirm
that they warrant (a) in the case of PV modules, a ninety percent (90%) rated
power output for years three (3) through ten (10), and a minimum of eighty
percent (80%) rated power from years eleven (11) through twenty five (25) and
(b) in the case of inverters, a *** from the date of expiration of the
aforementioned *** period. Contractor shall include in the subcontracts for the
civil works (so long as no additional expenses or liabilities are incurred by
Contractor) a provision contemplating the Contractor’s faculty to assign at no
cost in favor of Owner its legal rights vis-à-vis the relevant Subcontractor
under the Ley 38/1999, of November 5, de Ordenación de la Edificación.
Notwithstanding the foregoing, Contractor shall include within the scope of its
warranty the warranty statements provided under the Third Party Warranties for
the benefit of Owner for claims made under such Third Party Warranties during
the Contractor’s *** period set forth on Schedule 23(a). Contractor’s
obligations pursuant to the preceding sentence shall be supported by its parent
company under the comfort letter referenced in Clause 23.4.

23.3 At Substantial Completion Date Contractor will provide a standby letter of
credit representing *** of the Contract Price finally payable to Contractor (net
of any fees payable to Solarpack under the Developer Subcontract) minus the
Contract Price for PV modules and inverters. The standby letter of credit will
be issued by a bank chosen by Contractor (duly confirmed at Owner’s cost by a
Spanish bank), will be substantially the form of Schedule 23(b), and shall
remain in force from the Substantial Completion Date and for the *** period
during which the Contractor’s warranties for any each of the Units remain in
force. The standby letter of credit will secure Contractor’s warranty
performance obligations and its obligations to indemnify Owner as described in
Section 4.5 for any liabilities, penalties or other damages it may incur
(excluding the payment of VAT itself) as a result of its status as importer of
record.

If the issuing bank of the letter of credit contemplated in Schedule 23(b)
decides not to permit such letter of credit to be extended beyond the ***
starting from date of Substantial Completion of the first Unit of the Park, and
Contractor fails to provide Owner with an acceptable extended or substitute
letter of credit at least thirty (30) days prior to expiration of such ***
starting from date of Substantial Completion of the first Unit of the Park,
Owner shall be entitled to draw the amounts guaranteed by the letter of credit
pursuant to the terms and conditions of Schedule 23 (b). In such event, the
amounts drawn by Owner shall remain deposited in a bank account during the
remaining *** of the warranty period in order to secure Contractor’s warranty
performance obligations and its obligations to indemnify Owner as described in
Section 4.5 for any liabilities, penalties or other damages it may incur
(excluding the payment of VAT itself) as a result of its status as importer of
record. Upon expiration of the warranty period, Owner shall immediately return
to Contractor any surplus deposited in such bank account.

23.4 In addition, Contractor undertakes to provide Owner with a comfort letter
in the form attached as Schedule 23.4 from its parent company, POWERLIGHT
CORPORATION, domiciled in 2954 San Pablo Avenue, Berkeley, California 94702 USA,
not later than thirty (30) days following the Effective Date.

 

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24. Insurance.

24.1 Contractor, at its expense, shall procure or cause to be procured and
maintain or cause to be maintained in full force and effect at all times
commencing no later than commencement of the work at the Park and until Final
Completion, a builder’s risk policy with the insurance coverages specified in
Part I of Schedule 24, which are agreed by the Parties to be sufficient for
construction of the Park. All insurance coverage shall be in accordance with the
terms of this Section 24 and Part I of Schedule 24 using companies, to the
extent required by Applicable Law, authorized to do business in Spain.

24.2 Owner, at Owner’s expense, shall procure or cause to be procured and
maintain or cause to be maintained in full force and effect at all times during
the period commencing no later than commencement of the work at the Park and
until Final Completion, all insurance coverages specified in Part II of
Schedule 24. Owner, at Owner’s expense, shall procure or cause to be procured
and maintain or cause to be maintained in full force and effect at all times
during the period commencing no later than Substantial Completion of the Full
Park and until the end of the warranty period contemplated in Section 23, all
insurance coverages specified in Part III of Schedule 24. All insurance
coverages shall be in accordance with this Section 24 and Part II of Schedule 24
using companies, to the extent required by Applicable Law, authorized to do
business in Spain. Subject to the prior agreement of the Parties, such insurance
coverages can be included, at Owner’s cost and responsibility, under
Contractor’s insurance policies under Section 24.1 above.

24.3 Contractor’s policies shall provide for a waiver of subrogation rights
against Owner and its affiliates, and their assigns, subsidiaries, affiliates,
directors, officers and employees, and of any right of the insurers to any
set-off or counterclaim or any other deduction, whether by attachment or
otherwise, in respect of any liability of any such Person insured under
Contractor’s Commercial General Liability policy. Contractor releases and waives
any and all rights of recovery against Owner and all of its affiliates,
subsidiaries, employees, successors, permitted assigns, insurers and
underwriters that Contractor may otherwise have or acquire in or from or in any
way connected with any loss covered by policies of insurance maintained or
required to be maintained by Contractor pursuant to this Agreement or because of
deductible clauses in or inadequacy of limits of any such policies of insurance.

24.4 If at any time the insurance to be provided by Owner or Contractor
hereunder shall be reduced or cease to be maintained, then (without limiting the
rights of the other Party in respect of any default that arises as a result of
such failure) the other Party may at its option take out and maintain the
insurance required hereby and, in such event, (a) Owner may withhold the cost of
insurance premiums expent for such replacement insurance from any payments to
Contractor, or (b) Owner shall reimburse Contractor for the premium of any such
replacement insurance, as applicable.

24.5 The insurance policies limits in no way shall be construed as limits on the
Parties’ liability under this Agreement, subject to the provisions of
Section 25.5.

 

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24.6 The beneficiaries of the insurance policies shall be Owner, Contractor and
the Subcontractors that may be affected by the risks insured. The insurance
policies shall permit Owner to assign its rights thereunder to third parties at
no cost.

24.7 Each Party shall provide the other Party with executed copies of the
insurance policies contemplated in Parts I and II of Schedule 24 and with
evidence that the premiums have been paid not later than thirty (30) days
following the Effective Date. Owner shall provide Contractor with executed
copies of the insurance policies contemplated in Part III of Schedule 24 and
with evidence that the premiums have been paid not later than thirty (30) days
following Substantial Completion of the Full Park.

25. Indemnity.

25.1 Subject to Section 24, Contractor shall fully indemnify, save harmless and
defend Owner from and against any and all costs, claims, and expenses incurred
by Owner in connection with or arising from any claim by a third party for
physical damage to or physical destruction of property, or death of or bodily
injury to any person, but only to the extent caused by (a) the negligence, gross
negligence or willful misconduct of Contractor or its agents or employees or
others under Contractor’s control or (b) a breach by Contractor of its
obligations hereunder.

25.2 Subject to Section 24, Owner shall fully indemnify, save harmless and
defend Contractor from and against any and all costs, claims, and expenses
incurred by Contractor in connection with or arising from any claim by a third
party for physical damage to or physical destruction of property, or death of or
bodily injury to any person, but only to the extent caused by (a) the
negligence, gross negligence or willful misconduct of Owner or any Site Lessor
or their respective agents or employees or others under Owner’s or any Site
Lessor’s control or (b) a breach by Owner of its obligations hereunder.

25.3 Each Party shall indemnify, defend and hold the other Party, and its
present and future direct and indirect parents, subsidiaries and affiliates and
their directors, officers, shareholders, employees, agents and representatives
harmless from and against any and all claims, actions, suits, proceedings,
losses, liabilities, penalties, damages, costs or expenses (including attorneys’
fees and disbursements) of any kind whatsoever arising from (a) actual or
alleged infringement or misappropriation by such Party (or in the case of
Contractor, any Subcontractor and, in the case of Owner, any Site Lessor) of any
patent, copyright, trade secret, trademark, service mark, trade name, or other
intellectual property right in connection with the Units, including without
limitation, any deliverable, (b) such Party’s (or in the case of Contractor, any
Subcontractor’s and, in the case of Owner, any Site Lessor’s) violation of any
third-party license to use intellectual property in connection with the Work,
including, without limitation, any deliverable.

25.4 If any claim is brought against a Party (the “Indemnifying Party”), then
the other Party (the “Indemnified Party”) shall be entitled to participate in,
and, unless in the opinion of counsel for the Indemnifying Party a conflict of
interest between the Parties may exist with respect to such claim, assume the
defense of such claim, with counsel

 

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reasonably acceptable to the Indemnifying Party. If the Indemnified Party does
not assume the defense of the Indemnifying Party, or if a conflict precludes the
Indemnified Party from assuming the defense, then the Indemnified Party shall
reimburse the Indemnifying Party on a monthly basis for the Indemnifying Party’s
defense through separate counsel of the Indemnifying Party’s choice. Even if the
Indemnified Party assumes the defense of the Indemnifying Party with acceptable
counsel, the Indemnifying Party, at its sole option, may participate in the
defense, at its own expense, with counsel of its own choice without relieving
the Indemnified Party of any of its obligations hereunder.

25.5 IN NO EVENT SHALL THE INDEMNIFYING PARTY BE LIABLE TO THE INDEMNIFIED PARTY
FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED TO
THE TERMS OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, COSTS OF
PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES OR BUSINESS INTERRUPTION, EVEN IF
THE INDEMNIFYING PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, BUT
EXCEPT FOR LOSS OR DAMAGE ARISING OUT OF THE PARTIES’ WILLFUL MISCONDUCT OR
GROSS NEGLIGENCE. IN ADDITION, WHETHER AN ACTION OR CLAIM IS BASED ON WARRANTY,
CONTRACT, TORT OR OTHERWISE, UNDER NO CIRCUMSTANCE SHALL THE INDEMNIFYING
PARTY’S TOTAL LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT EXCEED THE
TOTAL AMOUNT PAID BY OWNER TO CONTRACTOR HEREUNDER, MINUS THE AGGREGATE AMOUNT
OF ANY PENALTIES PAID BY THE INDEMNIFYING PARTY UNDER THIS AGREEMENT.

25.6 The Parties also agree that any proceeds collected by the Indemnified Party
as beneficiary of any of the insurance policies contemplated in Schedule 24
shall be deducted from the corresponding claim for damages. Moreover, in the
event that the proceeds collected by the Indemnified Party as beneficiary of an
insurance policy completely indemnify (“mantienen indemne”) such Party from all
damages and expenses incurred, the Indemnified Party shall not be entitled to
claim any amount as damages and expenses, and shall be obliged, if applicable,
to return to the Indemnifying Party any surplus received. Any franchises,
deductibles, caps of liability and any other deductions which may affect the
compensations to be paid by the insurance companies to the Indemnified Party
shall not be deducted from the indemnification due.

26. Performance of the Work.

26.1 Contractor agrees to use, and agrees that it shall require each of its
Subcontractors to use, only personnel who are qualified and properly trained and
who possess every license, permit, registration, certificate or other approval
required by Applicable Law or any Governmental Authority to enable such Persons
to perform their Work involving any part of Contractor’s obligations under this
Agreement.

26.2 Contractor agrees that all materials and Equipment to be supplied or used
by Contractor or its Subcontractors in the performance of its obligations under
this

 

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Agreement shall be in good condition and fit for the use(s) for which they are
employed by Contractor or its Subcontractors. Such materials and Equipment shall
at all times be maintained, inspected and operated as required by Applicable
Law. Contractor further agrees that all licenses, permits, registrations and
certificates or other approvals required by Applicable Law or any Governmental
Authority will be procured and maintained for such materials and Equipment at
all times during the use of the same by Contractor or its Subcontractors in the
performance of any of Contractor’s obligations under this Agreement.

27. Compliance with Applicable Laws.

27.1 Contractor specifically agrees that it shall at all times fully comply with
Applicable Laws and that it shall perform the Work in accordance with the
Applicable Laws in force at the date of execution of this Agreement.
Notwithstanding the foregoing, Contractor shall not be responsible for any
environmental liabilities relating to the relevant part of the Site where the
Park is located, except for such pollution, toxic emissions, etc. as are caused
by Contractor during construction of the Park; provided, however, that
Contractor shall be required to comply with all applicable environmental laws
and regulations during construction of the Park. If any hazardous material is
found in the Site, the removal shall be at the cost of the Owner.

27.2 In the event of change of any Applicable Law between the date of execution
of this Agreement and the Substantial Completion Date, the Parties and the
Technical Advisor to the Bank shall execute a Change Order ruling the
implementation of the modifications to the Work required by such change in the
Applicable Law and, if applicable, the extension of the term to achieve
Substantial Completion. Such Change Orders shall be paid by Owner on a cost plus
fifteen per cent (15%) basis. Contractor will use commercially reasonable
efforts to secure at least two (2) bids for any subcontract work required for
all Change Orders.

27.3 Owner (on behalf of itself and each Site Lessor) specifically agrees that
in the performance of its obligations under this Agreement it shall at all times
fully comply with and cause each Site Lessor to fully comply with Applicable
Laws. Owner further specifically agrees that at all times during its performance
of this Agreement it shall have and cause the Site Lessors to have and keep in
effect all Applicable Permits.

28. Hazardous Materials.

28.1 Subject to Section 27, Contractor hereby specifically agrees to indemnify,
defend and hold Owner, its present and future direct or indirect parents,
subsidiaries, affiliates, divisions, and their respective directors, officers,
employees, shareholders, agents, representatives, successors and assigns
harmless from and against any and all losses, liabilities, claims, demands,
damages, causes of action, fines, penalties, costs and expenses (including, but
not limited to, all reasonable consulting, engineering, attorneys’ or other
professional fees), that they may incur or suffer by reason of:

 

(i) any unauthorized release of a Hazardous Material by Contractor;

 

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(ii) any enforcement or compliance proceeding commenced by or in the name of any
Governmental authority because of an alleged, threatened or actual violation of
any Applicable Law by Contractor; and

 

(iii) any action reasonably necessary to abate, remediate or prevent a violation
or threatened violation of any Applicable Law by Contractor.

28.2 Owner hereby specifically agrees to indemnify, defend and hold Contractor,
its present and future direct or indirect parents, subsidiaries, affiliates,
divisions, and their respective directors, officers, employees, shareholders,
agents, representatives, successors and assigns harmless from and against any
and all losses, liabilities, claims, demands, damages, causes of action, fines,
penalties, costs and expenses (including, but not limited to, all reasonable
consulting, engineering, attorneys’ or other professional fees), that they may
incur or suffer by reason of:

 

(i) any unauthorized release of a Hazardous Material by Owner or any Site
Lessor;

 

(ii) any enforcement or compliance proceeding commenced by or in the name of any
Governmental authority because of an alleged, threatened or actual violation of
any Applicable Law by Owner or any Site Lessor; and

 

(iii) any action reasonably necessary to abate, remediate or prevent a violation
or threatened violation of any Applicable Law by Owner or any Site Lessor.

29. Governing Law. The formation, interpretation and performance of this
Agreement shall be governed by and construed in accordance with the Spanish
common Law.

30. Liens.

30.1 Contractor warrants good title, free and clear of all liens, claims,
charges, security interests, and encumbrances whatsoever, to all Equipment and
other items furnished by it or any of its Subcontractors that become part of the
Park to the extent payment therefor has been received by Contractor.

30.2 Title to all Equipment shall pass to Owner, free and clear of all liens,
claims, charges, security interests, and encumbrances whatsoever, upon the
payment therefor to the Contractor.

31. Nonwaiver. The failure of either Party to insist upon or enforce, in any
instance, strict performance by the other Party of any of the terms of this
Agreement or to exercise any rights herein conferred shall not be construed as a
waiver or relinquishment to any extent of its right to assert, or rely upon any
such terms or rights on any future occasion. No waiver shall be valid unless
stated in writing as set forth in Section 33.

32. Dispute Resolution.

 

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32.1 Good faith negotiations. In the event that any question, dispute,
difference or claim arises out or is in connection with this Agreement,
including any question regarding its existence, validity, performance or
termination (a “Dispute”), which either Party has notified to the other, senior
management personnel from both Contractor and Owner shall meet and diligently
attempt in good faith to resolve the Dispute for a period of thirty (30) days
following one Party’s written request to the other Party for such a meeting. If,
however, either Party refuses or fails to so meet, or the Dispute is not
resolved by negotiation, the provisions of Sections 32.2 and 32.3 shall apply.

32.2 Technical Dispute. Technical Disputes shall be resolved by an independent
expert. For the purposes of this Agreement, a “Technical Dispute” shall mean a
Dispute regarding whether the Park conforms to the Technical Specifications
(Schedule 4.1), whether the relevant part of the Site where the Park is located
meets the required site characteristics (Schedule 4.9), whether the tests
contemplated by the Unit commissioning plan (Schedule 4.6) have been satisfied,
and any other Disputes of a technical or engineering nature. All Technical
Disputes shall be resolved on an accelerated basis by one of the following
institutions unless otherwise agreed in writing by Contractor and Owner:

 

(i) PB Power (being part of the Parsons Brinckerhoff group);

 

(ii) the Energy Research Centre of the Netherlands (or ECN);

 

(iii) Sandia National Laboratories;

 

(iv) RW Beck;

 

(v) MC Meteocontrol GmbH Energy and Weather Services

 

(vi) Centro Nacional de Energías Renovables; or

 

(vii) Instituto de Energía Solar.

 

(viii) Fraunhoffer ISE

32.3 Arbitration. Any Dispute which cannot be settled by negotiation pursuant to
Section 31.1 above or which is not a Technical Dispute, shall be exclusively
referred to and finally resolved by arbitration at law (arbitraje de derecho).
The Parties expressly waive their right to any form of legal recourse and submit
all disputes arising out of or in connection with this Agreement to arbitration,
in accordance with the conditions laid down in this Clause 32.3. For
illustrative purposes only, a Dispute submitted to arbitration means any kind of
point, claim, dispute or controversy that constitute a difference between the
Parties and that they are unable or unwilling to settle by themselves by
negotiation pursuant to Section 31.1 above, whether relating to the performance
and completion of the Agreement, interpretation, execution, rights and
obligations arising out of the Agreement, bilateral services and their
execution, or breach, inefficacy, defects and consequences, invalidity or
avoidance, termination or cancellation.

 

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Arbitration of law shall be applied under the Rules of Arbitration of the Civil
and Mercantile Court of Arbitration (CIMA). The Parties submit to the Rules of
Procedure of the Court and its Tariffs (the “Rules”), acknowledging that they
are apprised of them and herein undertake to act in good faith during the
proceedings at all times and comply with the rulings and arbitral awards,
without prejudice to any legal appeals to which they are entitled. Consequently,
they undertake to cooperate with the arbitral proceedings in all ways, to
establish the exact nature of the difference and to determine whether it is
national or international. The Parties also bind themselves to submit any
documentation and evidence that may be required from them at any given moment
during the course of proceedings, and to pay the advance of costs, fees,
expenses and other costs apportioned by the Court without delay.

An arbitral tribunal (the “Tribunal”) composed of three arbitrators shall be
nominated from among the members of the Civil and Mercantile Court of
Arbitration to hear and rule on disputes. The third arbitrator shall preside
over the Tribunal and shall be designated by the Court President, in accordance
with Court Statutes, which the Parties are apprised of. The remaining two
arbitrators shall be nominated by the Parties when the difference arises, one
(1) appointed by each Party. Arbitrators shall be fluent in English. In the
event of an arbitrator repudiating or rejecting the appointment or the
occurrence of any other circumstances that prevent him from acting, a substitute
arbitrator shall be nominated by the person or persons who nominated the
original arbitrator. If this has not been effected fifteen (15) calendar days
after one Party notified the other Party, the arbitrator shall be appointed by
the Court President.

The seat of the arbitration shall be Madrid. The arbitration shall be conducted
in English. All documents submitted in connection with the arbitration
proceedings shall be in the English language or, if in another language,
accompanied by an English translation.

The Tribunal shall be entitled to appoint any independent expert (either
architect or engineer) to render its opinion on (i) the cause or origin of the
relevant damages or defects, and (ii) the Party which is responsible for such
damages or defects. The Tribunal shall be entitled to impose to the defaulting
Party in the relevant award the performance of any corrective action or the
payment of any compensation that shall be determined in accordance with
Section 11 and Section 25 hereof. The Tribunal shall issue the award within six
(6) months following the date of acceptance of the last of the arbitrators to
act as arbitrator. Both Parties undertake to implement the arbitration award,
which shall be final and binding. Any award issued by the Tribunal shall include
interest from the date of the award until paid in full, at the rate of Euribor
plus two percent (2%).

32.4 Arbitrator Confidentiality Obligation The Parties shall ensure that any
arbitrator appointed to act under this Section will agree to be bound to the
provisions of Section 34 with respect to the terms of this Agreement and any
information obtained during the course of the arbitration proceedings.

32.5 The obligation to arbitrate described in this Section 32 shall not apply
with respect to requests for preliminary injunctions, temporary restraining
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performance, or other procedures in a court of competent jurisdiction to obtain
interim relief when deemed necessary by such court to preserve the status quo or
prevent irreparable injury pending resolution by arbitration of the actual
Dispute.

32.6 The parties agree to submit to the tribunals of Madrid for any question
which can not be submitted to arbitration, including provisional measures, and
for the execution of the obtained award.

33. Notices and Demands. Any notice, request, demand or other communication
required or permitted under this Agreement, shall be deemed to be properly given
by the sender and received by the addressee if made in writing and (a) if
personally delivered; (b) three (3) days after deposit in the mail if mailed by
certified or registered air mail, post prepaid, with a return receipt requested;
or (c) if sent by facsimile with confirmation. Mailed notices and facsimile
notices shall be addressed as follows to:

 

Owner:

   Agrupación Solar Llerena-Badajoz 1,    A.I.E.    Parque Empresarial Nuevo
Torneo, torre 1,    9ª planta    41015 Seville, Spain    Facsimile No:
+34954962760    Attention: Mr. ***

Contractor:

   PowerLight Systems S.A.    42-44, Cardinal Mermillod    1227 Carouge,
Switzerland    Facsimile No: +41 (0) 22 304 1405    Attention: General Manager

Solarpack:

   Solarpack Corporación Tecnológica, S.L.    C/ Cristóbal Colón, 8B    48992
GETXO (VIZCAYA) -SPAIN-    E-mail: info@solarpack.es    Facsimile No: + 34-94
430 92 09    Attention of: Mr. ***

 

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34. Nondisclosure. Each Party (the “Receiving Party”) shall not use for any
purpose other than performing the Work under this Agreement or divulge,
disclose, produce, publish, or permit access to, without the prior written
consent of the other Party (the “Disclosing Party”), any confidential
information of the Disclosing Party. Confidential information includes, without
limitation, this Agreement and exhibits hereto, all information or materials
prepared in connection with the Work performed under this or any related
subsequent Agreement, designs, drawings, specifications, techniques, models,
data, documentation, source code, object code, diagrams, flow charts, research,
development, processes, procedures, know-how, manufacturing, development or
marketing techniques and materials, development or marketing timetables,
strategies and development plans, customer, supplier or personnel names and
other information related to customers, suppliers or personnel, pricing policies
and financial information, and other information of a similar nature, whether or
not reduced to writing or other tangible form, and any other trade secrets.
Confidential information does not include (a) information known to the Receiving
Party prior to obtaining the same from the Disclosing Party; (b) information in
the public domain at the time of disclosure by the Receiving Party; or
(c) information obtained by the Receiving Party from a third party who did not
receive same, directly or indirectly, from the Disclosing Party. The Receiving
Party shall use the higher of the standard of care that the Receiving Party uses
to preserve its own confidential information or a reasonable standard of care to
prevent unauthorized use or disclosure of such confidential information.
Notwithstanding anything herein to the contrary, the Receiving Party has the
right to disclose Confidential Information without the prior written consent of
the Disclosing Party: (i) as required by any court or other Governmental
Authority, or by any stock exchange the shares of any Party are listed on,
(ii) as otherwise required by law, (iii) as advisable or required in connection
with any government or regulatory filings, including without limitation, filings
with any regulating authorities covering the relevant financial markets, (iv) to
its attorneys, accountants, financial advisors or other agents, in each case
bound by confidentiality obligations, (v) to banks, investors and other
financing sources and their advisors, in each case bound by confidentiality
obligations; or (vi) in connection with an actual or prospective merger or
acquisition or similar transaction where the party receiving the Confidential
Information is bound by confidentiality obligations. If a Receiving Party
believes that it will be compelled by a court or other Governmental Authority to
disclose Confidential Information of the Disclosing Party, it shall give the
Disclosing Party prompt written notice so that the Disclosing Party may
determine whether to take steps to oppose such disclosure. This provision shall
survive the termination of this Agreement for a ten (10) year period.

35. Time of Essence. Time is expressly agreed to be of the essence of this
Agreement and each, every and all of the terms, conditions and provisions
herein.

36. Validity. The invalidity, in whole or in part, of any provisions hereof
shall not affect the validity of any other provisions hereof.

37. Survival. Sections 1, 15, 17, 18, 20, 21, 23, 24, 25, 26, 27, 28, 29, 30,
32, 33, 34, 37, 41, 44, 45 and 46 shall survive termination of this Agreement
and shall survive final payment to Contractor following Final Completion.

 

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38. Binding Effect. This Agreement shall be binding on the Parties hereto and on
their respective permitted successors, heirs and assigns.

39. No Oral Modifications. No oral or written amendment or modification of this
Agreement by any officer, agent or employee of Contractor or Owner, either
before or after execution of this Agreement, shall be of any force or effect
unless such amendment or modification is in writing and is signed by any officer
of the Party (or of the managing member or managing partner of the Party on
behalf of the Party) to be bound thereby.

40. Headings. The headings in this Agreement are for convenience of reference
only and the words contained therein shall in no way be held to explain, modify,
amplify or aid in the interpretation, construction or meaning of the provisions
of this Agreement.

41. Counterparts. This Agreement may be executed in counterparts which, taken
together, shall constitute a single instrument.

42. Authority. Each individual executing this Agreement on behalf of Owner and
Contractor represents and warrants that he or she is duly authorized to execute
and deliver this Agreement on behalf of said Party and that this Agreement is
binding upon said Party in accordance with its terms.

43. Announcements and Publications. Contractor shall coordinate with Owner with
respect to, and provide advance copies to Owner for review of, the text of any
proposed announcement or publication that include any non-public information
concerning the Work prior to the dissemination thereof to the public or to any
Person other than Subcontractors or advisors of Contractor, in each case, who
agree to keep such information confidential. If Owner delivers written notice to
Contractor rejecting any such proposed announcement or publication within two
(2) business days after receiving such advance copies, the Contractor shall not
make such public announcement or publication; provided, however, that Contractor
may disseminate or release such information in response to requirements of
Governmental Authority.

44. Complete Agreement. This Agreement constitutes the complete and entire
agreement between the Parties and supersedes any previous communications,
representations or agreements, whether oral or written, with respect to the
subject matter hereof. There are no additions to, or deletions from, or changes
in, any of the provisions hereof, and no understandings, representations or
agreements concerning any of the same, which are not expressed herein, unless
stated below. THE PARTIES HEREBY AGREE THAT NO TRADE USAGE, PRIOR COURSE OF
DEALING OR COURSE OF PERFORMANCE UNDER THIS AGREEMENT SHALL BE A PART OF THIS
AGREEMENT OR SHALL BE USED IN THE INTERPRETATION OR CONSTRUCTION OF THIS
AGREEMENT.

 

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45. No Agency. This Agreement is not intended, and shall not be construed, to
create any association, joint venture, agency relationship or partnership
between the Parties or to impose any such obligation or liability upon either
Party. Neither Party shall have any right, power or authority to enter into any
agreement or undertaking for, or act as or be an agent or representative of, or
otherwise bind, the other Party.

46. Priority of Documents. In the event of conflicting provisions between any of
the Contract Documents, the provisions shall govern in the following priority:
first, duly executed amendments to this Agreement (to the extent not superseded
by a subsequent amendment), second, this Agreement and third, the other Contract
Documents.

47. Assignment.

47.1 No Party shall be entitled to assign this Agreement or any of its rights or
obligations under this Agreement and shall not enter into any transaction as a
result of which it may transfer, assign, charge or dispose by any title of any
of those rights and obligations, without the prior written consent of the other
Party, which may be withheld in its sole and absolute discretion.

47.2 Without prejudice to the generality of the foregoing, (i) Owner shall be
entitled to assign its right, title and interest in and to this Agreement (and,
in particular, any rights arising in relation to any insurance policy and any
other right to collect any amount from Contractor) to any lenders by way of
security for the performance of obligations to such lenders, and, following
Final Completion, to its Investors on a pro rata basis, provided that Solarpack
shall continue to act as agent on behalf of such Investors in all communications
with Contractor; and (ii) Contractor shall be entitled to assign its right,
obligation, title and interest in and to this Agreement to any of its
affiliates, provided that the comfort letter delivered by Contractor to Owner
covers the obligations of such affiliate under this Agreement. Contractor may
assign this Agreement in connection with a merger, sale or other change of
control of Contractor or its parent company, PowerLight Corporation, so long as
Contractor under this Agreement continues to be a company directly or indirectly
controlled by PowerLight Corporation. Owner shall not be entitled undergo a
change of control prior to Final Completion without Contractor’s prior written
consent.

48. Waivers

No provision of this Agreement shall be considered waived by either Party except
when such waiver is made in writing. The failure of either Party to insist, in
any one or more instances, upon strict performance of any of the provisions of
this Agreement or to take advantage of its rights hereunder or the delay or
failure in exercising totally or partially any right or remedy under this
Agreement, shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights or any other rights for the future, but the
same shall continue and remain in full force and effect.

 

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49. Public deed

This Agreement has been executed in a private document. Each Party shall be
entitled to request to the other the formalization of this Agreement into a
public deed at any moment. In that event, the requesting Party shall bear all
costs and expenses relating to such formalization.

50. Language and documentation

All documentation, data, drawings, schedules, diagrams, specifications and
details associated with the Work and any equipment, materials or components of
the Units shall be provided by Contractor to Owner, and shall be properly
referenced and compiled, in the English language except any documents that need
to be filed with any Spanish governmental authority.

51. Days

In this Agreement “day” means calendar day unless it is specified that it means
a “business day”. Business days means Mondays to Fridays on which banks are open
to the public both in Madrid and Berkeley (California, United States of
America).

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the date set forth above.

 

OWNER:

Agrupación Solar Llerena-Badajoz 1, A.I.E.   By:   /s/ Pablo Burgos Galíndez    

Name: Pablo Burgos Galíndez

Title: Attorney

CONTRACTOR:

PowerLight Systems S.A.

  By:   /s/ Marco Antonio Northland    

Name: Marco Antonio Northland

Title: General Manager Europe

SOLARPACK:

Solarpack Corporación Tecnológica, S.L.

  By:   /s/ José Galíndez Zubiria    

Name: José Galíndez Zubiria

Title: Chairman

In order to speed up the execution of this Agreement, the Parties have expressly
authorized Mercedes Domecq Palomares and Francisco de Borja Oxangoiti Briones to
initial each of the pages of this Agreement.

 

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SCHEDULE 1A

 

PAYMENT SCHEDULE

             

Euros/Wp

  

Wp

    

Price

   ***    4800000   

EPC’s SCOPE

        

Description

   ***    %    Payment Terms - Wire Transfer          Category I         

PV

   ***    ***    *** from Date of Invoice & Transfer of Title at Point of Origin

Steel

   ***    ***   

Inverters

   ***    ***             Category II         

Upon Contract Signature

   ***    ***    *** days from Date of Invoice

Medium Voltage/Grid Connection

   ***    ***    *** days from Date of Invoice on Monthly % Completion Basis

Civil & Electric Construction

   ***    ***            

First Holdback

   ***    ***    The earlier of: ***days from receipt of Acta de Puesta en
Marcha or *** days from Substantial Completion         

Final Holdback

   ***    ***    *** days from Acta de Puesta en Marcha          Total    ***   
***            

NOTES:

           

***

      - Warranty LC open for 2 years from date of Substantial Completion for
value of *** of EPC price to PowerLight, less cost of PV and Inverters.

 

1

 

  

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SCHEDULE 1B

Change Order

 

OWNER: _________________________________

        

CONTRACTOR: ___________________________

        

Project: ___________________________________

        

Contract Date: ______________________________

        

Change Order No. ___________________________

        

This Change Order is made this ________________

   day of    _______________, ________    by             (Owner), and      
(Contractor)

for the following changes in the Work:

Owner agrees to pay for all additions, deletions or revisions to the Work
performed by Contractor or an adjustment of the Contract Price or Construction
and Milestone Payment Schedule, in each case under this Change Order according
to the terms of the Agreement. The change, if any, in the Contract Price shall
be computed according to one of the following methods.

 

1.    No Change                                                               2.
   Costs Plus a Fee                                                       3.   
Unit Price                                                                 4.   
Lump Sum of Euros                                                

Unless Item 1 or 4 is marked, Contractor shall submit promptly to Owner such
itemized labor and material breakdowns as Owner may require for Work performed
or deleted from the Agreement by this Change Order. Contractor shall include the
cost of such change in its next application for payment in a separate line item.

The change, if any, in the Construction and Milestone Payment Schedule resulting
from the Change Order shall be determined according to the terms of the
Agreement and allows for an              addition or              deletion of
             days.

 

 

  

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CONTRACTOR:
.....................................................................................

By:                                                                  

Name:

Title:

OWNER:
...................................................................................................

By:                                                                  

Name:

Title:

 

 

  

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SCHEDULE 4.6

***

 

 

  

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SCHEDULE 23 (a)

Unit Warranty

LOGO [g34887logo_002.jpg]

STANDARD SYSTEM AND MANUFACTURER WARRANTIES –

 

1. PowerLight System Warranty. Commencing on the Substantial Completion date of
such Unit, and for a period of *** thereafter, Contractor warrants that the Unit
will be free from defects in materials and workmanship under normal operating
conditions and shall conform to the Technical Specifications. Contractor hereby
provides a comprehensive ; provided, however, that this warranty over PVshall
include, and hereby incorporates by reference into this warranty, all warranties
provided by the applicable pass-through warranties from Contractor’s
manufacturers identified in the Technical Specifications, including photovoltaic
modules and inverters and, subject to the same terms and conditions of the
warranties provided to Contractor by (“Other Manufacturers, Contractor shall be
directly responsible vis-à-vis the Owner.”) if and to the extent warranty claims
are made under such Other Manufacturers’ warranties during the *** period
described above. During such period Owner shall be entitled to make such
warranty claims directly against the Contractor. If the Unit fails to conform to
the Technical Specifications, referenced in Schedule 4.1 of this Agreement,
Contractor will, at its option, either repair or replace any defective parts.
Unless this warranty is extended by written agreement, Owner shall pay for any
repair costs incurred by Contractor after the *** standard warranty expires.
Under this Warranty, Contractor shall be obliged to repair or replace any
defective parts in time periods consistent with prevailing industry standards,
but in any event within *** of notification of Contractor of such defect. To the
extent Contractor fails to act within such *** period, Owner reserves the right
to conduct such repair or replacement at Contractor’s expense.

 

2. Manufacturer Warranties.

 

1.

Upon expiration of the aforementioned two-year Warranty period, Contractor shall
assign to Owner the applicable pass-through warranties from Contractor’s
manufacturers,

 

 

  

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including photovoltaic modules and inverters (“Other Manufacturers”). Without
limiting Owner’s rights to pursue claims under Other Manufacturers’ warranties
directly against Contractor pursuant to Clause 1 above, Contractor assigns to
Owner the applicable pass-through warranties from the Other Manufacturers. The
Other Manufacturers used for the Work shall be stated in the Technical
Specifications.

 

2. Upon expiration of the aforementioned *** Warranty period, , Contractor makes
no representation or warranty, and Owner shall seek no recourse from Contractor,
regarding the warranties of Other Manufacturers, including, without limitation,
the power output of the PV modules.

 

3. Warranty Exceptions. This warranty shall be void in the event of any of the
following:

 

  (a) alterations or repairs made to the Unit’s supporting structure, or to any
part of the Unit or associated wiring and parts without Contractor ‘s written
approval;

 

  (b) failure of the Unit to perform caused by legislative, administrative, or
executive regulation, order or requisition of the federal government, local
utility or public utilities commission, or any state or municipal government or
official;

 

  (c) use of the Unit beyond the scope contemplated in its operating manuals or
technical specifications;

 

  (d) Force Majeure events; and

 

  (e) a change in usage of the Site, which may affect building or site permits
and related requirements, without the written approval of Contractor, or a
change in ownership of building or property and the new owner has not signed an
assumption agreement of the terms and conditions herein.

 

4. Disclaimer. Except as expressly provided herein, Contractor expressly
disclaims any and all warranties of any kind, express, implied or statutory,
including without limitation any implied warranties of merchantability and/or
fitness for a particular purpose. Neither this Agreement nor any document
furnished under it, unless explicitly stated, is intended to express or imply
any warranty or guarantee with regard to the performance of the Unit, including,
but not limited to i. electricity output, ii. reduction in energy costs or
environmental savings, iii. financial savings or return on investment and iv.
public recognition.

 

5. Transferability. Contractor’s *** Unit warranty is transferable to the
Investors who acquire ownership of the Unit; provided that Owner shall continue
to act as agent on behalf of such Investors in all communications with
Contractor.

 

 

  

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SCHEDULE 23 (b)

Model of Letter of Credit

EXHIBIT FOR STANDBY LETTER OF CREDIT APPLICATION:

THIS EXHIBIT, IN THIS FINAL FORM, IS AN INTEGRAL PART OF AND MUST BE ATTACHED TO

UNION BANK OF CALIFORNIA, N.A. APPLICATION AND AGREEMENT FOR

IRREVOCABLE STANDBY LETTER OF CREDIT DATED                      ,             .

APPLICANT: POWERLIGHT CORPORATION (SPAIN-WARRANTY)

 

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FROM:

   UNION BANK OF CALIFORNIA, N.A.    SOUTHERN CALIFORNIA    TRADE SERVICE
OPERATIONS    1980 SATURN STREET, MAIL CODE: V01-519    MONTEREY PARK,
CALIFORNIA 91755-7417, U.S.A.    SWIFT NO.: BOFC US 33 LAX

DATE:

  

[BANK USE ONLY]

SUBJECT:

   ISSUANCE OF OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.__________ [BANK USE
ONLY]

ADVISING BANK AND

  

CONFIRMING BANK:

   BANCO SANTANDER CENTRAL HISPANO S.A.    MADRID HEAD OFFICE, SPAIN   
ATTN-FOREIGN DEPARTMENT

SWIFT IDENTIFIER CODE:

   BSCHESMM

BENEFICIARY:

   AGRUPACIÓN SOLAR LLERENA-BADAJOZ 1 A.I.E. (OWNER)

 

 

  

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   Parque Empresarial Nuevo Torneo, torre 1, 9ª planta    41015 Seville, Spain

APPLICANT:

   POWERLIGHT CORPORATION    2954 SAN PABLO AVENUE    BERKELEY, CALIFORNIA 94702
U.S.A.

CURRENCY:

   EUR

AMOUNT:

   ________________ (_____________AND __/100 EUROS)

AVAILABLE BY:

   PAYMENT AT THE COUNTERS OF THE ADVISING AND CONFIRMING BANK IN MADRID, SPAIN

EXPIRY DATE:

   _______________, 2008 OR ANY AUTOMATICALLY EXTENDED DATE AS HEREIN SET FORTH
AT THE CLOSE OF BUSINESS OF THE ADVISING AND CONFIRMING BANK, IN MADRID AT THE
ABOVE ADDRESS.

LADIES/GENTLEMEN:

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.              [BANK
USE ONLY] (“LETTER OF CREDIT”) IN YOUR FAVOR. THIS LETTER OF CREDIT IS AVAILABLE
BY SIGHT PAYMENT WITH THE ADVISING AND CONFIRMING BANK OF THE FOLLOWING
DOCUMENTATION:

 

  1. YOUR SIGHT DRAFT (S) DRAWN ON US, PURPORTEDLY SIGNED BY AN AUTHORIZED
OFFICER OF THE BENEFICIARY, MARKED: “DRAWN UNDER UNION BANK OF CALIFORNIA, N.A.,
IRREVOCABLE STANDBY LETTER OF CREDIT NO.              [BANK USE ONLY], DATED
             [BANK USE ONLY].”

 

  2. A DATED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OF
BENEFICIARY STATING EITHER ONE OF THE FOLLOWING:

“THE UNDERSIGNED BEING A DULY AUTHORIZED OFFICER OF THE OWNER (“BENEFICIARY”)
HEREBY REPRESENTS AND WARRANTS THAT POWERLIGHT CORPORATION (“APPLICANT) IS IN
DEFAULT OF ITS WARRANTY OBLIGATIONS SET FORTH IN SECTION 23 OF THE EPC

 

 

  

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(ENGINEERING PROCUREMENT AND CONSTRUCTION) AGREEMENT BY AND BETWEEN BENEFICIARY
AND APPLICANT DATED MARCH 26, 2007 THEREFORE, THE BENEFICIARY HEREBY DEMANDS
PAYMENT UNDER THE LETTER OF CREDIT IN THE AMOUNT OF EUR                     .”

OR

“THE UNDERSIGNED BEING A DULY AUTHORIZED OFFICER OF THE OWNER (“BENEFICIARY”)
HEREBY REPRESENTS AND WARRANTS THAT POWERLIGHT CORPORATION (“APPLICANT”) IS IN
DEFAULT OF INDEMNITY OBLIGATIONS SET FORTH IN SECTION              OF THE EPC
AGREEMENT BY AND BETWEEN BENEFICIARY AND APPLICANT DATED                 
THEREFORE, THE BENEFICIARY HEREBY DEMANDS PAYMENT UNDER THE LETTER OF CREDIT IN
THE AMOUNT OF EUR                     .”

PARTIAL DRAWINGS ARE PERMITTED.

THIS LETTER OF CREDIT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AN
AMENDMENT FOR A ONE YEAR PERIOD BEGINNING ON THE PRESENT EXPIRATION DATE HEREOF
                , 2008, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO SUCH EXPIRATION
DATE WE HAVE SENT YOU AND BARCLAYS BANK S.A. (ADDRESS: PLAZA DE COLÓN 1, 28046
MADRID (SPAIN)) WRITTEN NOTICE BY TELETRANSMISSION THROUGH THE ADVISING BANK AND
CONFIRMING BANK THAT WE ELECT NOT TO PERMIT THIS LETTER OF CREDIT TO BE SO
EXTENDED BEYOND, AND WILL EXPIRE ON ITS THEN CURRENT EXPIRY DATE. NO
PRESENTATION MADE UNDER THIS LETTER OF CREDIT AFTER SUCH EXPIRY DATE WILL BE
HONORED.

THIS LETTER OF CREDIT SHALL FINALLY EXPIRE ON                  2009, IF IT HAS
NOT PREVIOUSLY EXPIRED IN ACCORDANCE WITH THE PRECEDING PARAGRAPH.

UPON RECEIPT BY YOU OF OUR NOTICE THAT WE ELECT NOT TO RENEW, YOU MAY DRAW
AGAINST PRESENTATION TO OUR OFFICE AT THE ADDRESS ABOVE OF THE FOLLOWING
DOCUMENTATION:

 

  1. YOUR SIGHT DRAFT DRAWN ON US PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OF
THE BENEFICIARY MARKED: “DRAWN UNDER UNION BANK OF CALIFORNIA, N. A.,
IRREVOCABLE STANDBY LETTER OF CREDIT NO.              [BANK USE ONLY.],
DATED                  [BANK USE ONLY].”

 

 

  

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  2. A DATED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED OFFICER OF THE
BENEFICIARY STATING:

“THE UNDERSIGNED BEING A DULY AUTHORIZED OFFICER OF THE OWNER HEREBY REPRESENTS
AND WARRANTS THAT POWERLIGHT CORPORATION HAS FAILED TO PROVIDE AN ACCEPTABLE
EXTENDED OR SUBSTITUTE LETTER OF CREDIT AT LEAST THIRTY (30) DAYS PRIOR TO
EXPIRATION OF UNION BANK OF CALIFORNIA, N. A. IRREVOCABLE STANDBY LETTER OF
CREDIT NO.              [BANK USE ONLY].”

THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING, AND SUCH
TERMS SHALL NOT BE MODIFIED, AMENDED OR AMPLIFIED BY ANY DOCUMENT, INSTRUMENT OR
AGREEMENT REFERRED TO IN THIS LETTER OF CREDIT, IN WHICH THIS LETTER OF CREDIT
IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES.

EXCEPT AS STATED HEREIN, THIS LETTER OF CREDIT IS NOT SUBJECT TO ANY CONDITION
OR QUALIFICATION AND IS OUR INDIVIDUAL OBLIGATION WHICH IS IN NO WAY CONTINGENT
UPON REIMBURSEMENT OR ANY RIGHT OF SUBROGATION. WE IRREVOCABLY WAIVE ANY AND ALL
RIGHTS OF SUBROGATION, WHETHER AS PROVIDED BY STATUTE OR OTHERWISE, NOW OR
HEREAFTER THAT MIGHT, BUT FOR SUCH WAIVER, EXIST, IN RESPECT TO THIS LETTER OF
CREDIT OR ANY PAYMENT WE MAKE UNDER IT, AS TO THE APPLICANT, YOU, OR THE
TRANSACTION BETWEEN YOU AND THE APPLICANT. WE FURTHER GIVE IRREVOCABLE NOTICE
THAT WE ARE NOT NOW AND WILL NOT BE THE SECONDARY OBLIGOR OR CO-OBLIGOR OF
APPLICANT’S OBLIGATIONS AND LIABILITIES TO YOU FOR ANY PURPOSE. OUR OBLIGATIONS
TO YOU UNDER THIS LETTER OF CREDIT ARE OUR PRIMARY OBLIGATIONS AND ARE STRICTLY
AS STATED HEREIN.

SPECIAL INSTRUCTIONS:

THE ORIGINAL OF THIS LETTER OF CREDIT MUST BE PRESENTED TOGETHER WITH THE ABOVE
DOCUMENTS TO THE ADVISING BANK AND CONFIRMING BANK IN ORDER TO ENDORSE THE
AMOUNT OF DRAWING ON THE REVERSE SIDE.

ALL BANKING CHARGES OUTSIDE THE UNITED STATES, INCLUDING ADVISING AND
CONFIRMATION FEES ARE FOR BENEFICIARY’S ACCOUNT.

WE HEREBY AGREE WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS OF THIS CREDIT WILL BE DULY HONORED

 

 

  

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UPON PRESENTATION AND DELIVERY TO THE ADVISING AND CONFIRMING BANK, IN MADRID,
SPAIN

INSTRUCTIONS TO THE ADVISING AND CONFIRMING BANK:

BANCO SANTANDER CENTRAL HISPANO, S.A., MADRID, SPAIN IS REQUESTED TO ADVISED THE
BENEFICIARY WITH ITS CONFIRMATION.

THE ADVISING AND CONFIRMING BANK IS AUTHORISED TO CLAIM REIMBURSEMENT FOR
CONFORMING PRESENTATIONS UNDER THIS LETTER OF CREDIT, BY SENDING THEIR
TELETRANSMISSION BY AUTHENTICATED SWIFT MESSAGE TO UNION BANK OF CALIFORNIA,
N.A., MONTEREY PARK, CALIFORNIA TO OUR BANK IDENTIFIER CODE-BOFCUS33LAX AND
CITING—“DEMAND UNDER THE UNION BANK OF CALIFORNIA, N.A., IRREVOCABLE STANDBY
LETTER OF CREDIT NO.              DATED                  IN THE AMOUNT OF
EUR              (AMOUNT OF DRAWING) DATED                  (DATE OF DRAWING)
DOCUMENTS HAVE BEEN SENT BY COURIER SERVICE TO UNION BANK OF CALIFORNIA, N.A.”

PROCEEDS WILL BE REMITTED IN ACCORDANCE WITH THE INSTRUCTIONS RECEIVED.

THIS LETTER OF CREDIT IS SUBJECT TO THE “UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS (1993 REVISION)”, INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NO.500.

 

 

  

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SCHEDULE 23.4

Model of Comfort Letter

 

To: AGRUPACIÓN SOLAR LLERENA-BADAJOZ 1, A.I.E.

Parque Empresarial Nuevo Torneo, torre 1, 9ª planta

41015 Seville, Spain

Berkeley, California (USA), on                 , 200[ ]

 

Dear Sirs

We refer to the Engineering, Procurement and Construction Agreement (hereinafter
“EPC’), signed on March 26, 2007 at Seville, between Agrupación Solar
Llerena-Badajoz 1 A.I.E., a corporation located at Parque Empresarial Nuevo
Torneo, torre 1, 9ª planta 41015 Seville, Spain, (hereinafter “Owner’) and our
wholly-owned subsidiary POWERLIGHT SYSTEMS, S.A., a company located at 42-44
Cardinal Mermillod, 1227 Carouge (Switzerland), (hereinafter the “Contractor’).
Pursuant said EPC the Contractor and Owner engage in the design and installation
of a solar Park with a DC rated aggregated capacity up to 4.80 MWp (4.0 MWe). On
the EPC, SOLARPACK CORPORACION TECNOLÓGICA, S.L., a corporation located at c/
Cristóbal Colón 8-b, 48992 Guecho (Spain), will act as the duly authorized
representative of the Owner.

In accordance with Section 23.4 of said EPC, the Contractor undertakes to
provide the Owner with a Comfort Letter from its mother company, POWERLIGHT
CORPORATION, a corporation organized and existing under the laws of United
States, with its principal offices at 2954 San Pablo Avenue Berkeley, California
94702 USA (hereinafter Powerlight Co.).

NOW THEREFORE, we Powerlight Co. hereby undertake as follow:

 

  (1) Powerlight Co. hereby irrevocably and unconditionally guarantees the
performance and fulfilment by the Contractor of all of the Contractor’s
obligations, tasks and liabilities under the EPC.

 

  (2)

In addition, Powerlight Co. hereby acknowledges and confirms that, if the
Contractor fails to perform, or delays the performance of, any of the
Contractor’s obligations, tasks and liabilities under the EPC, shall be liable
under this Comfort Letter for performance of such obligations under the EPC, as
well as for any and

 

 

  

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all applicable damages, compensation and other remedies under the EPC and/or at
law in respect or as a result of such failure or delay.

 

  (3) The amendment or novation of the EPC shall not imply, in any event, the
cancellation, termination, restriction or limitation of this Comfort Letter,
that shall remain in force and shall extend its effects to any other obligations
assumed by the Contractor under the amended EPC.

 

  (4) This Comfort Letter shall be governed by and construed in accordance with
the laws of Spain. Any dispute arising in connection with this Comfort Letter
shall be finally settled by the Courts and Tribunals of the city of Madrid
(Spain).

IN WITNESS WHEREOF, Powerlight Co. issue this Comfort Letter as of the day and
year first above written.

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

  

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SCHEDULE 24

Insurance Requirements:

Part I: Contractor shall secure and maintain the following insurance coverages:

Commercial General Liability

Limits of Liability:

$2,000,000. General Aggregate

$2,000,000. Products/Completed Operations Aggregate

$1,000,000. Personal & Advertising Injury Limit

$1,000,000. Per Occurrence

Endorsements issued in favor to the Owner:

 

  •  

Additional Insured

 

  •  

Coverage afforded the Owner shall be Primary and non-contributing to any other
insurance maintained by the Owner

 

  •  

Thirty (30) days notice of cancellation, except ten (10) days for non-payment of
premium.

Automobile Liability:

Limits of Liability:

$1,000,000. per accident

Workers’ Compensation:

Limits of Liability:

Statutory

Employers’ Liability:

Limits of Liability:

 

 

  

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$1,000,000. per occurrence

Umbrella/Excess Liability:

$20,000,000. Aggregate

Excess over Primary Limits of Liability required for Commercial General
Liability, Automobile Liability and Employers’ Liability.

Professional Liability:

Limits of Liability:

$1,000,000. each claim

$2,000,000. aggregate

Builders’ Risk:

Builders Risk insurance covering the entire project for the full cost of
replacement of the project at the time of any loss. Coverage shall be written
for “All Risks” of physical loss or damage including Earthquake and Flood.
Coverage for the project shall be written to include coverage loss of Business
Income, Construction Penalties, Expediting Expenses, Interest, Taxes, arising
out of physical loss or damage to the project. This insurance shall include
Contractor as Additional Insured and Loss Payee as their interest may appear.
Contractor shall only be required to pay up to USD$200,000. in aggregate premium
for Builders’ Risk insurance across all EPC Agreements signed under the BFA. If
more than such amount is necessary, Contractor and the relevant Owners shall
mutually agree on appropriate cost allocation.

Cargo Coverage:

Cargo coverage to cover loss or damage to project property & equipment while in
due course of transit from it’s point of origin to the site. Insurance shall be
valued at the C.I.F. plus 10% (cost, insurance, freight plus 10%).

Part II: Owner Insurance Requirements until Substantial Completion of the Full
Park

Upon commencement of the work at the Park and until Substantial Completion of
the Full Park Owner shall procure and maintain comprehensive insurances
appropriate for owners risks arising out of the actions or omissions of their
representatives and the Technical Advisor to the Bank during the performance of
the Work.

Part III: Owner Insurance Requirements after Substantial Completion of the Full
Park

 

 

  

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Upon Substantial Completion of the Full Park and until the end of the warranty
period contemplated in Section 23, Owner shall procure and maintain
comprehensive insurances appropriate for owners risks arising out of their
ownership and operation of each Unit and the entire Park.

 

 

  

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