Source: https://www.sec.gov/Archives/edgar/data/1210618/000143774913002992/sopw20130314_8kex10-1.htm
Timestamp: 2019-04-20 22:08:20+00:00

Document:
THIS SOLAR DEVELOPMENT AGREEMENT is effective as of March 12, 2013 (the Effective Date) between Calwaii Power Holdings, LLC, a Delaware limited liability company (Buyer), Solar Hub Utilities LLC, a Hawaiian Limited Liability company hereafter referred to as (Seller), Solar Power, Inc., a California corporation (SPI Lender), and Hawaiian Power, LLC, a California limited liability company (HPL Lender) (SPI Lender and HPL Lender are sometimes hereafter individually referred to as Lender, and collectively as Lenders).
A. Seller has or is in the process of developing, and owns certain rights, interests and assets comprising solar photovoltaic, electricity generating facilities, which are located on sites in Oahu, Maui and Kona, Hawaii, as further described on the Project List attached as Exhibit A.
B. For each Project (as defined below) and in connection therewith Seller has acquired certain real estate rights and other assets and completed or commenced certain development activities. Pursuant to the terms and conditions of this Agreement, Seller shall complete certain Conditions Precedent, Project Milestones and other requirements with respect to the Projects.
C. Upon the completion of certain requirements, Seller shall transfer ownership of each Project and all Acquired Assets (as defined below) for said Project to an SPE (as defined below). Upon completion of the transfer of each Project and all Acquired Assets for said Project to the SPE, one hundred percent (100%) of the membership interests in the SPE shall be transferred to Buyer.
D. Buyer desires to acquire all right, title and interest in and to the Projects and all Acquired Assets for said Projects, pursuant to the terms and conditions of this Agreement. Seller desires to transfer the Projects and all Acquired Assets for said Projects to Buyer in accordance with the terms hereof.
E. SPI Lender and Seller previously entered into an agreement related to the development of the Projects (Original Agreement). Among other things, the Original Agreement called for SPI Lender to act in the capacity of an engineering procurement construction company for the Project wherein SPI Lender would provide pre-development capital, construction financing and construction oversight to Seller to assist in its continued development of the Projects. Seller was to remain the owner and applicant for all of the Projects until a FIT Agreement was executed between Seller and the Utility and consent for any transfer of the Projects was received from the Utility. It was contemplated that SPI Lender would have a secured interest in the Projects. In reviewing the Original Agreement, SPI Lender and Seller agreed that the terms of the Original Agreement may not accurately reflect the intent of SPI Lender and Seller regarding the transactions contemplated. Therefore, the Parties agreed that the Original Agreement was void and amended and restated such agreement effective June 7, 2012 to accurately reflect the transaction between SPI Lender and Seller which was further amended by that First Amendment to Amended and Restated Solar Development Acquisition and Sale Agreement dated October 18, 2012 (collectively, Amended and Restated Agreement).
F. HPL Lender also loaned significant capital to Seller for use in the development of the Projects. While in the process of memorializing such loans it became clear that Seller would require additional funds from HPL Lender in order to develop the Projects. HPL Lender is willing to make additional loans upon the terms and subject to the conditions contained herein.
G. SPI Lender, HPL Lender and Seller have determined that it is in the best interests of the parties to enter into this Agreement, and to amend, restate and replace in the entirety the Amended and Restated Agreement, in order to better coordinate the rights and obligations of the parties, and to reflect the new and complete agreement among the parties. Pursuant to the terms of this Agreement, SPI Lender and HPL Lender shall loan additional capital to Seller to be used solely for pre-development costs of the Projects. Upon Seller obtaining the Consent of the Utility, each Project shall be transferred by Seller to an SPE for purposes of further development and/or sale of the Project. Thereafter, the SPE shall remain the owner and applicant of the Project until a FIT Agreement is executed between the SPE and the Utility and consent for the transfer of the Projects is received from the Utility. Seller, SPI Lender and HPL Lender will each receive a membership interest in Buyer. The loans provided by SPI Lender and HPL Lender will be secured by a first priority security interest in, among other things, the Acquired Assets (as defined below) and will be repaid from the proceeds of the sale and/or development of the Projects and/or the SPEs. Additionally, as members of Buyer, SPI Lender, HPL Lender and Seller will receive distributions from the proceeds of the sale and/or development of the Projects and/or the SPEs.
1.1.1 Acquired Assets. All of Sellers right, title and interest, without reservations or restrictions, in and to all of the assets and rights comprising each of the Projects, whether existing now or in the future, including, without limitation, pursuant to or as reflected in any and all Development Documents, Books and Records, Land Contracts, Permits, the Permit Applications, Reports, Interconnection Rights, Power Purchase Agreements, Project Attributes, Solar Data, or otherwise with respect to any Project.
1.1.2 Active/Completed Projects. The term shall have the meaning set forth in Section 2.2.1(b)(iii).
1.1.3 Additional Project. The term shall have the meaning set forth in Section 5.3.
1.1.4 Additional Project Budget. The term shall have the meaning set forth in Section 5.3.
1.1.5 Affiliate. With respect to any Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with that Person. The term control (including, with correlative meaning, the terms controlled by and under common control with), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or partnership interests, by contract or otherwise.
1.1.6 Agreement. This Solar Development Agreement, as amended and restated, including all Exhibits and Schedules hereto, as the same may be modified, amended or supplemented from time to time in accordance with Section 13.6.
1.1.7 Amended and Restated Agreement. The term shall have the meaning set forth in Recital E.
1.1.8 Ancillary Agreements. Any agreement, contract or binding obligation with regard to any Project, whether existing now or in the future, other than Land Contracts, Interconnection Agreements, and Power Purchase Agreements, including, without limitation, (a) any donation agreement; (b) any PILOT (payment in lieu of taxes) agreement; (c) any road maintenance agreement; (d) any decommissioning agreement; (e) any transmission easements; (f) access easements, and (g) substation use agreements.
1.1.9 Authority. Any federal, state, local or other governmental, judicial, public or statutory instrumentality, tribunal, agency, authority, body or entity, or any political subdivision thereof having legal jurisdiction over the matter or Person in question.
1.1.10 Books and Records. Any and all data, reports, correspondence, maps, surveys and other business records relating to the Projects that are generated or obtained by Seller prior to Closing (other than the Solar Data).
1.1.11 Business Day. Any day that is not a Saturday, Sunday or other day on which commercial banks in California or Hawaii are authorized or required by law to remain closed.
1.1.12 Buyer. The term shall have the meaning set forth in the preamble.
1.1.14 Buyer Confidential Information. The term shall have the meaning set forth in Section 9.4.1.
1.1.15 Buyer Documents. This Agreement, the General Assignment, the LLC Interest Assignment, the Land Contract Assignment, the Interconnection Rights Assignment, Escrow Agreement, and each other agreement, document or instrument to be executed and delivered by Buyer in connection herewith.
1.1.16 Buyer Indemnified Parties. The term shall have the meaning set forth in Section 10.3.1.
1.1.17 Buyers Knowledge. The actual and current knowledge of any of the following Persons: Bradley Ferrell, Steven Kircher and James Pekarsky.
1.1.18 Buyer Operating Agreement. The Operating Agreement of Buyer entered into the Parties as of the Effective Date, a copy of which is attached hereto as Exhibit E.
1.1.19 Buyers Representative. The term shall have the meaning set forth in Section 9.15.3.
1.1.20 Cash Advance. The funds loaned by each of SPI Lender and HPL Lender to Seller, including funds previously loaned, up to the applicable Cash Advance Cap and subject to, among other things, the terms and conditions set forth in Section 2.2.1(b) and (e). All Cash Advances shall be evidenced as advances and amounts of principal due under the SPI Note and HPL Note, as applicable. Notwithstanding the foregoing or the Cash Advance Cap, as provided herein, either SPI Lender or HPL Lender may elect in its sole discretion to advance additional funds to Seller in an amount greater than the applicable Cash Advance Cap, and all funds that either SPI Lender or HPL Lender advances to or on behalf of Seller shall be deemed Cash Advance funds hereunder and for purposes of the SPI Note and HPL Note, as applicable.
1.1.21 Cash Advance Cap. The maximum aggregate amount of Cash Advances to be made from Lenders to Seller, with such amount not to exceed $14,802,073.50. Subject to Section 2.2.1(b)(iv), no more than the maximum aggregate amount of $8,369,786.75 of the Cash Advance Cap shall be provided by SPI Lender (SPI Cash Advance Cap) and no more than the maximum aggregate amount of $6,432,286.75 shall be provided by HPL Lender (HPL Cash Advance Cap). As of the Effective Date, SPI Lender has made Cash Advances to Seller in the aggregate amount of $7,400,277.45 and HPL Lender has made Cash Advances to Seller in the aggregate amount of $5,625,000.00. The Cash Advance Cap may be adjusted from time to time as mutually agreed by Seller, SPI Lender and HPL Lender to take into account cancelled Projects and Additional Projects, as the case may be.
1.1.24 Code. The Internal Revenue Code of 1986, as the same may be amended from time to time, including any amendments or any substitute or successor provisions thereto.
1.1.25 Conditional Use Permit. The Conditional Use Permits or equivalent permits issued, or to be issued, whether existing now or in the future, by the various planning or zoning Authorities providing the zoning for and otherwise authorizing the Projects.
(e) an issued building Permit from the appropriate Authority, allowing for the installation of the Project on the related Property.
1.1.27 Consents. The term shall have the meaning set forth in Section 9.3.
1.1.28 Damages. The term shall have the meaning set forth in Section 10.3.1.
1.1.29 Development Documents. All of the documents and materials with respect to the Projects, including, without limitation, as defined on Schedule 6.16, whether existing now or in the future.
1.1.30 Effective Date. The term shall have the meaning set forth in the preamble to this Agreement.
1.1.31 Encumbrances. Any claim, lien, pledge, mortgage, option, charge, easement, security interest, right-of-way, judgment, encumbrance, lease, interest, mineral reservation, covenant, conditional sales contract, title retention arrangement or restriction or other estate, grant or right of Seller or any third parties.
1.1.32 Endorsements. ALTA, CLTA or company form endorsements required by Buyer that are available in the State of Hawaii with respect to the Property.
1.1.33 End-User. A third party solar photovoltaic, electricity generating facility operator who will own and operate the Project, which may be an SPE that is owned by a third party.
1.1.34 Environmental Laws. All Laws that regulate or relate to (i) the protection or clean-up of the environment; (ii) the Handling of Hazardous Materials; (iii) the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; and (iv) the health and safety of persons or property, including protection of the health and safety of employees. Environmental Laws shall include, without limitation, the Resource Conservation & Recovery Act, Clean Water Act, Safe Drinking Water Act, Occupational Safety and Health Act, Toxic Substances Control Act, Clean Air Act, Comprehensive Environmental Response, Compensation and Liability Act, Emergency Planning and Community Right-to-Know Act, Hazardous Materials Transportation Act, and Centers for Disease Control guidelines, policies and procedures, and all analogous or related Laws.
1.1.35 Escrow Account. The escrow account maintained by the Escrow Holder pursuant to the terms of the Escrow Agreement.
1.1.36 Escrow Agreement. The agreement between SPI Lender, HPL Lender, Buyer, Seller and Escrow Holder regarding the holding and disbursement of Cash Advance funds as set forth in Section 2.2, and in the form attached hereto as Exhibit D.
1.1.37 Escrow Holder. Title Guaranty Escrow Services, Inc.
1.1.38 Facilities. The solar power generating facilities (including, without limitation, any and all support structures, photovoltaic panels, electrical collection system, access roads, and any and all other equipment, materials and improvements associated therewith), which are planned for development related to each the Properties in connection with the Project List.
1.1.39 Fee Simple Property. All Property held in fee simple by Seller or any Property Entities.
1.1.40 Force Majeure Event. The term shall have the meaning set forth in Section 13.19.
1.1.41 Formation Documents. The articles or certificate of incorporation or formation and bylaws of a corporation or operating agreement of a limited liability company.
1.1.42 General Assignment. This term shall have the meaning set forth in Section 4.2.
1.1.43 HPL Lender. The term shall have the meaning set forth in the preamble.
1.1.44 HPL Note. A promissory note from Seller to HPL Lender evidencing funds previously loaned and advanced by HPL Lender to Seller and future Cash Advances from HPL Lender to Seller, in the form attached hereto as Exhibit H.
1.1.45 Handling. The production, use, treatment, storage, transportation, generation, manufacture, processing, distribution, disposal, emission, discharge, Release or threatened Release.
1.1.46 Hazardous Materials. Any dangerous, hazardous or toxic substance or constituent or pollutant or contaminant which, pursuant to any Laws in effect as of the Effective Date, has been determined, to be hazardous, toxic or dangerous to human health or the environment, including, but not limited to, any hazardous substance under the Comprehensive Environmental Response, Compensation and Liability Act, as amended (42 U.S.C.A. § 9601 et. seq.), any solid waste under the Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C.A. § 6901 et. seq.), or any contaminant, pollutant, waste or toxic substance under the Clean Air Act, as amended (42 U.S.C.A. § 7401 et. seq.), the Federal Water Pollution Control Act, as amended (33 U.S.C.A. § 1251 et. seq.), the Safe Drinking Water Act, as amended (42 U.S.C.A. § 300f et. seq.), the Emergency Planning and Community Right-To-Know Act, as amended (42 U.S.C.A sec. 110001 et. seq.), the Occupational Safety and Health Act, as amended (29 U.S.C.A sec. 651 et. seq.), the Hazardous Materials Transportation Act, as amended, (49 U.S.C.A. sec. 5101 et. seq.) or the Toxic Substances Control Act, as amended (15 U.S.C.A. § 2601 et. seq.), and any equivalent or applicable state or local laws.
1.1.48 Interconnection Agreements. The interconnection agreements, whether existing now or in the future, with the appropriate Utility for the interconnection of each Project to the Utility distribution grid.
1.1.49 Interconnection Rights. All rights and interests of the non-Utility party, without reservations or restrictions, in the Interconnection Agreements.
1.1.50 Interconnection Studies. The Interconnection studies and reports identified on Schedule 6.16.
1.1.51 Kamehameha Projects. One or more Projects with a capacity of 5MW and located on property leased from the Kamehameha School.
1.1.54 LLC Interest Assignment. The term shall have the meaning set forth in Section 4.2.
1.1.55 Land Contracts. The letters of intent and Lease Agreements entered into between various property owners, whether existing now or in the future, including, without limitation, those listed on Schedule 6.15, establishing the tangible real property interests, easements, or leases in the Properties.
1.1.56 Law. Any law, statute, rule, regulation, ordinance, standard, code, order, judgment, decision, writ, injunction, decree, certificate of need, award or other governmental restriction, including policy or procedure, issued or enforced by any Authority.
1.1.57 Lender. The term shall have the meaning set forth in the preamble.
1.1.58 Lender Event of Default. The term shall have the meaning set forth in Section 11.2.1(b).
1.1.59 Lenders Knowledge. With respect to SPI Lender, the term shall mean the actual and current knowledge of any of the following Persons: Bradley Ferrell, Steven Kircher and James Pekarsky. With respect to HPL Lender, the term shall mean the actual and current knowledge of any of the following Persons: Jack Sweigart, Larry Carter and Ian Craig.
1.1.60 Lender Payment Percentages. The term shall have the meaning set forth in Section 2.3.
1.1.63 Membership Interest shall mean the limited liability company membership interest in Seller.
1.1.65 Notice of Completeness. A written or electronic notice from the appropriate Utility or governmental agency(s) that the application for interconnection with respect to a Project is complete.
1.1.66 Notice to Proceed. A Notice to Proceed issued by the applicable Utility with respect to a Project, as contemplated under the State of Hawaiis Tier 2 or 3 FIT Program.
1.1.67 Ohana Solar. The term shall have the meaning set forth in Section 1.1.94.
1.1.68 Operating Agreement. The term shall have the meaning set forth in Section 9.15.1.
1.1.69 Omnibus Amendment to Loan Documents. An amendment to loan related agreements previously entered into between Seller and SPI Lender including, without limitation, the Security Agreement (Assets) and the Security Agreement (Membership Interests), for purposes of securing all Cash Advances made by HPL Lender and the HPL Note.
1.1.70 Original Agreement. The term shall have the meaning set forth in Recital E.
1.1.71 Party or Parties. Party means Buyer, Seller, SPE Lender or HPL Lender, individually; and Parties means Buyer, Seller, SPI Lender and HPL Lender, collectively.
1.1.72 Permit Applications. Any and all applications, petitions, filings or requests made to any Authority, whether existing now or in the future, on or before the Closing Date in order to obtain a Permit for the Project.
1.1.73 Permits. The licenses, consents, certificates, approvals, and permits required for the construction, installation, ownership or operation of the Projects, whether existing now or in the future, including, without limitation, as described on Schedule 6.14 of this Agreement, including, without limitation, the Conditional Use Permits, if a Conditional Use Permit is required by Law for the Project.
1.1.74 Permitted Liens. All of the following: (a) liens for property taxes and installments of assessments and charges of Authorities not yet due and payable; (b) liens created solely by the act or omission of Buyer or Lender; and (c) any other Encumbrances created or permitted with the prior written consent of Buyer or its Representatives.
1.1.75 Person. Any individual, corporation, partnership, joint venture, association, joint stock company, trust, limited liability company, decedents estate, organization, entity, or unincorporated organization or any Authority.
1.1.76 Phase I Environmental Assessment. Any Phase I Environmental Assessment, if required, in connection with the Projects.
1.1.77 Power Purchase Agreement. A FIT agreement, power purchase agreement or other evidence of a binding commitment from the applicable Utility for the purchase of the electricity generated by the Facility, whether existing now or in the future, at a rate not less than $0.238 US per kWh for Tier 2 Projects and $0.236 US per kWh for Tier 3 Projects, for a term of not less than twenty (20) years, provided that the terms of the power purchase agreement for the Kamehameha Projects and any Projects not qualifying for the FIT program shall be on terms approved by the Utility.
1.1.82 Project. Any single solar-powered electricity generating plant within the portfolio of Projects, and any Additional Projects added pursuant to Section 5.3.
1.1.83 Project Attributes. The renewable energy certificates or credits, green tags, emission credits, carbon offsets and any other environmental attribute currently available or available at any time in the future related to each Property, Facilities or Project, as well as all tax credits, including, without limitation, production tax credits and investment tax credits.
1.1.84 Project List. The term shall have the meaning set forth in Recital A.
1.1.85 Project List Amendment. The term shall have the meaning set forth in Section 5.3.
1.1.86 Project Milestones. The requirements set forth in Section 2.2.2(1)-(5) that must be satisfied by Seller.
1.1.90 Project Substation. Per the Interconnection Agreement.
1.1.91 Project Transfer Date. The date upon which Seller has received the Consent executed by the appropriate Utility for the transfer of the Project from Seller to the SPE and has transferred the membership interest in said SPE to Buyer.
1.1.92 Projects. The complete portfolio of single solar-powered electricity generating plants (including the Facilities and Interconnection) to be located on the various Properties described in the Project List, and any Additional Projects added pursuant to Section 5.3.
1.1.93 Property. All real property on which any of the Projects is intended to be constructed, as evidenced by Land Contracts, whether existing now or in the future, including, without limitation, that real property subject to the Land Contracts listed on Schedule 6.15.
1.1.94 Property Entities. One or more affiliated individuals and entities, including, without limitation, Ohana Solar Power, LLC (Ohana Solar), Richard Jones and MJP Holdings LLC, who Seller has arranged to purchase the Fee Simple Property.
1.1.96 Release. Any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment or the workplace of any Hazardous Materials, and otherwise as defined in any Environmental Law.
1.1.97 Reports. The Phase I Environmental Assessment, the Title Commitments, the Interconnection Studies and the Solar Study.
1.1.98 Representative. With respect to any Person, any officer, director, employee of such Person or other Person designated by written notice to act as the Persons representative.
1.1.99 SPE shall mean a special purpose entity formed by Seller to which a Project (and the Acquired Assets for said Project) or Projects (and the Acquired Assets for said Projects) will be transferred prior to the transfer of the membership interest in the SPE from Seller to Buyer. SPEs shall mean collectively, two or more SPEs.
1.1.100 SPI Lender. The term shall have the meaning set forth in the preamble.
1.1.101 SPI Note. A promissory note from Seller to SPI Lender evidencing funds previously loaned and advanced by SPI Lender to Seller and future Cash Advances from SPI Lender to Seller, in the form attached hereto as Exhibit G.
1.1.102 Security Agreement shall mean, collectively, the Security Agreement (Assets) and the Security Agreement (Membership Interests).
1.1.103 Security Agreement (Assets) shall mean the security agreement by Seller in favor of SPI Lender and HPL Lender providing each Lender with a first priority security interest in the Acquired Assets to secure performance by Seller of the terms of this Agreement, the SPI Note and the HPL Note, as amended from time to time, a copy of which is attached hereto as Exhibit I.
1.1.104 Security Agreement (Membership Interests) shall mean the security agreement by the owners and holders of the Membership Interests in Seller in favor of SPI Lender and HPL Lender providing each Lender with a security interest in the Membership Interests to secure performance by Seller of the terms of this Agreement, the SPI Note and the HPL Note, as amended from time to time, a copy of which is attached hereto as Exhibit J.
1.1.105 Seller. The term shall have the meaning set forth in the preamble.
1.1.107 Seller Confidential Information. The term shall have the meaning set forth in Section 9.5.1.
1.1.108 Seller Documents. This Agreement, the SPI Note, HPL Note, the Omnibus Amendment to Loan Documents, the Security Agreement (Membership Interests), the Security Agreement (Assets), the General Assignment, the LLC Interest Assignment, the Land Contract/Solar Easement Assignment, the Interconnection Assignment, and each other agreement, document or instrument to be executed and delivered by Seller in connection herewith.
1.1.109 Seller Expense Schedule. The estimated schedule of expenses required for the development of the Projects which are to be paid from the Cash Advance. The Seller Expense Schedule is an estimated budget and all expenses to be paid from Cash Advance funds, and other than the amount budgeted therein for Sellers monthly overhead shall be subject to confirmation by each Lender. The Seller Expense Schedule may be modified by mutual agreement of the Parties. The Parties have approved the initial Seller Expense Schedule contemporaneously with the execution of this Agreement.
1.1.110 Seller Event of Default. The term shall have the meaning set forth in Section 11.2.1(a).
1.1.111 Seller Indemnified Parties. The term shall have the meaning set forth in Section 10.3.2.
1.1.112 Sellers Knowledge. The actual and current knowledge of the following Persons: Pat Shudak and Jill Dunphy Noetzelman.
1.1.113 Solar Data. Any and all solar data with regard to the Projects, whether existing now or in the future, included, or included by reference, on Schedule 6.13 to this Agreement. The Solar Data includes the Solar Study.
1.1.114 Survey. A land survey of the Property acceptable to Buyer prepared by a licensed surveyor showing no exceptions that would limit the solar installation on the property.
1.1.115 Taxes. All federal, state, local, foreign and other net income, gross income, estimated, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property taxes and assessments, windfall profits, value added, commercial rent, customs duties, capital gain, social security, royalty, documentary or other taxes, fees, assessments, duties or charges of any kind whatever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, and the term Tax means any one of the foregoing Taxes.
1.1.116 Title Commitment. A preliminary commitment from the Title Company to issue the Title Insurance Policy for the Property insuring the easement, leasehold or fee interests provided under the Land Contracts, as approved by Buyer, and subject only to Permitted Liens, and with such Endorsements as required by Buyer.
1.1.117 Title Company. A title company, qualified and doing business in the State of Hawaii, as selected by Buyer and reasonably acceptable to Seller.
1.1.118 Title Insurance Policy. An ALTA policy of title insurance insuring Buyers interest in the Property, in such amount as Buyer determines, issued by the Title Company, subject only to the Permitted Liens and containing the Endorsements.
1.1.119 Utility; Utilities. Hawaiian Electrical Company (HECO), Hawaii Maui Electrical Company (MECO) and Hawaii Electric and Light Company (HELCO), as applicable to each Project.
(l) where a Partys acceptance, approval, consent or concurrence is required in connection with any matter under this Agreement, such Party shall not unreasonably withhold, condition or delay such acceptance, approval, consent or concurrence.
The Parties collectively have prepared this Agreement, and none of the provisions hereof shall be construed against one Party on the ground that such Party is the author of this Agreement or any part hereof.
2.1 Transfer of Acquired Assets. Upon the terms and subject to the conditions set forth in this Agreement, Seller shall diligently obtain the Consent of each applicable Utility for purposes of the transfer of the Projects (and the Acquired Assets for said Projects) to one or more SPEs and, thereafter, shall diligently transfer the membership interest in said SPEs to Buyer. Thereafter, Buyer shall satisfy all of the requirements and conditions precedent to the Consent of the applicable Utility for the transfer of the Power Purchase Agreement to an End-User if such End-User is not the SPE. The cost to form the SPEs shall be advanced by the Lenders (separate from and not included in the Cash Advance Cap, the SPI Note or the HPL Note) and shall be deemed a Project expense to be reimbursed to the Lenders by Buyer upon sale of the Projects (or the sale of the membership interest in the SPE that owns the Project) and prior to any distributions to the parties pursuant to the Operating Agreement.
(a) The Cash Advance funds from SPI Lender and HPL Lender from and after the Effective Date of this Agreement shall be used solely for completing the development of the Projects pursuant to the Seller Expense Schedule and the terms of this Agreement, such that Seller can (i) obtain an executed Power Purchase Agreement for each Project, (ii) obtain the Consent of the applicable Utility for transfer of the Projects (and the Acquired Assets for said Projects) to one or more SPEs, (iii) satisfy Sellers Conditions Precedent, Project Milestones and other requirements under this Agreement, and (iv) obtain the Consent of each applicable Utility for transfer of the Power Purchase Agreement to an End-User.
(b) (i) Provided that a Seller Event of Default has not occurred, on the first day of each calendar month, starting April 1, 2013 and ending on August 1, 2013, SPI Lender shall make a monthly deposit of Cash Advance funds to Escrow Holder in the amount of $28,090.00 and HPL Lender shall make a monthly deposit of Cash Advance funds to Escrow Holder in the amount of $24,910.00 for Sellers overhead expenses for such month as reflected on the Seller Expense Schedule. Escrow Holder shall be authorized to make disbursement from the Escrow Account of such funds to Seller for overhead expenses without further approval of Buyer, SPI Lender or HPL Lender.
(ii) Provided that a Seller Event of Default has not occurred, beginning on the Effective Date, SPI Lender and HPL Lender shall each deposit funds weekly with Escrow Holder for the payment of costs and expenses, other than overhead expenses as described above, consistent with the overall Cash Advance budget as reflected on the Seller Expense Schedule. The Seller Expense Schedule is an estimate as of the Effective Date of the amounts and time periods that such expenses shall be required. The amounts and timing of payments shall be made as the expenses actually arise, consistent with but not earlier than the Seller Expense Schedule. The Lenders deposits shall be made as follows: (A) not later than the Friday of each week, Seller shall submit a request to Lenders detailing the anticipated fund requirements for the following week, with supporting documentation, consistent with the Seller Expense Schedule (except for the first week of this Agreement, in which case, Seller shall submit such request within five (5) business days of the Effective Date), (B) subject to Lenders review and approval, which shall not be unreasonably withheld, conditioned or delayed, provided that such requests are consistent with the Seller Expense Schedule pursuant to Section 2.2.1(e) below, Lenders shall make a weekly deposit of Cash Advance funds to Escrow Holder for such costs and expenses not later than three (3) business days after receipt of Sellers request, and (C) Escrow Holder shall be authorized to make disbursement from the Escrow Account of such funds directly to the applicable third parties for the payment of the approved expenses as further set forth in Section 2.2.1(c). Notwithstanding the foregoing, SPI Lender shall be solely responsible for 53% of each Cash Advance and HPL Lender shall be solely responsible for 47% of each Cash Advance.
(iii) Notwithstanding the foregoing or any other provision of this Agreement, (A) deposits of Cash Advance funds by Lenders pursuant to this Section 2.2.1(b) shall be subject to and shall not exceed the Cash Advance Cap, and (B) Lenders shall only make disbursements of Cash Advance funds provided that there remain (1) undelivered Projects which are in the Utility Tier 2 or Tier 3 FIT Program, and have not been subject to a Seller Event of Default or otherwise released by both HPL Lender and SPI Lender from this Agreement, plus (2) Projects transferred to SPEs the ownership of which has been transferred to Buyer pursuant to the terms of this Agreement (collectively, Active/Completed Projects), with an aggregate capacity of not less than 12.0 MW DC. If at any time the Active/Completed Projects have an aggregate capacity of less than 12.0 MW DC, then (x) each Lenders obligation to make Cash Advance deposits shall terminate; (y) the Escrow Holder shall cease making Cash Advances to Seller from the Escrow Account, and (z) Escrow Holder shall release to each Lender an equal amount of the remaining Cash Advance balance then held in the Escrow Account.
(iv) The parties acknowledge and agree that as of the Effective Date, SPI Lender has made Cash Advances to Seller in the aggregate amount of $7,400,277.45 and HPL Lender has made Cash Advances to Seller in the aggregate amount of $5,625,000 and neither SPI Lender nor HPL Lender is required to make aggregate Cash Advances in excess of the SPI Advance Cap and HPL Advance Cap, respectively. Notwithstanding the foregoing, if at any time either SPI Lender or HPL Lender fail to deliver its portion of the amount of Cash Advance then due, pursuant to Section 2.2.1(b)(i) or Section 2.2.1(b)(ii) above, and such failure continues for three (3) business days after Lenders receipt of Sellers written notice of the failure to fund, the other Lender, in its sole discretion, may elect to make an additional Cash Advance up to the amount then due by such non-performing Lender by delivering the required funds to Escrow Holder no later than seven (7) days following the expiration of the prior 3-business day notice period. In such event, (A) the SPI Advance Cap and HPL Advance Cap will be adjusted accordingly to reflect an increase in the amount of such advance cap by the electing Lender and a decrease in the amount of such advance cap by the non-performing Lender, (B) the additional Cash Advance will be treated like any other Cash Advance, as additional principal due under the applicable promissory note, (C) the Lender Payment Percentages will be adjusted accordingly and in a pro rata manner to reflect the change in the percentage of the total Cash Advances made by each Lender in comparison to the total of all Cash Advances made by both Lenders, and (D) the Lender making the additional Cash Advance shall be entitled to, and shall receive, in addition to repayment as an additional Cash Advance as provided herein, an amount equal to such additional Cash Advance from the non-performing Lender from any future distributable cash that would otherwise be distributed to such non-performing Lender, as a member of Buyer and pursuant to the Buyer Operating Agreement and prior to any future distributions to such non-performing Lender other than in connection with its SPI Note or HPL Note, as applicable. The performing Lender shall not be required to deliver any such additional Cash Advance and shall not be deemed to be in default of this Section 2.2.1(b) if it does not elect to deliver such additional Cash Advance.
(c) As set forth further in the Escrow Agreement: (i) the Escrow Holder shall be authorized each month to release from the Escrow Account funds for overhead expenses as set forth on the then applicable and approved Seller Expense Schedule directly to the Seller upon written request of the Seller, (ii) the Escrow Holder shall pay all other Project Costs from the Escrow Account by check or wire transfer directly to the appropriate third party payee such amounts as have been approved by each of SPI Lender and HPL Lender, and (iii) the consent of SPI Lender and HPL Lender shall be required for the release and payment by the Escrow Holder of any payments requested by Seller from the Escrow Account for amounts not covered as provided above or in excess of the amounts set forth in the approved Seller Expense Schedule.
(d) Notwithstanding the foregoing, neither SPI Lender nor HPL Lender shall be obligated to make a payment of the Cash Advance under Section 2.2.1(b), and Seller shall not be entitled to obtain Cash Advance disbursements under Section 2.2.1(c) during any time that SPI Lender, HPL Lender or Buyer has noticed an Event of Default which has not been cured as provided in Section 11.2.1.
(e) Buyers Representative shall be responsible to coordinate the Cash Advance process with Seller, including, without limitation, assisting Seller with the preparation of the weekly funds requests, shall receive the weekly funding requests from Seller, shall be responsible for the review and approval of all weekly expense requests on behalf of Lenders, and authorizing and directing the disbursement of funds by Escrow Holder to insure that the funds are paid directly to the correct third party. Seller shall have no authority to disburse or expend Cash Advance funds, other than the overhead funds, without the approval of Buyers Representative.
(f) The Lenders shall also reimburse Seller for their respective share of any pre-approved travel expenses incurred by Seller in connection with the Projects. Prior to incurring such expenses, Seller shall submit a written request for approval of such travel expenses to the Lenders for approval. After receiving such approval from the Lenders, Seller shall be reimbursed for such pre-approved expenses upon submission of actual invoices for such travel expenses within ten (10) business days of receipt of such invoices.
(g) Not later than three (3) business days of the Effective Date, the Lenders shall deposit Cash Advance funds to Escrow Holder with authorization to disburse such funds to Seller or the applicable third parties, as the case may be, upon Escrow Holders receipt of such funds, in the amount of (i) $211,236.00 to Seller for Sellers overhead expenses and other costs paid for December 2012, January 2013, February 2013 and March 2013, (ii) $90,000.00 to Kobayashi Sugita & Goda for legal fees through March 2012, (iii) $189,000.00 to CDF Engineering for engineering fees through March 2012, and (iv) $49,892.00 for Project costs and expenses for the first week of March 2013.
(5) (a) there shall have been no material adverse change in such Project as a result of the actions or inactions of the Seller with respect to its responsibilities and Seller shall have performed in all material respects all of the agreements and complied in all material respects with all of the covenants required hereby to be performed by it with respect to such Project, including, without limitation, the satisfaction of the Conditions Precedent and the obligations under Section 9.9 with respect to such Project; (b) the representations and warranties of Seller set forth in Article 6 of this Agreement shall be true and correct in all material respects as of the date thereof as if made as of such time and (c) such Project has not otherwise been terminated.
2.3 Payment Provisions. As reflected in the Buyer Operating Agreement, each of SPI Lender and HPL Lender shall receive a membership interest in Buyer in consideration of providing pre-development capital to Seller and entering into this Agreement, and Seller will receive a membership interest in Buyer in consideration of its agreement to transfer the Projects (and the Acquired Assets for such Projects) to the SPEs and of the SPEs to Buyer pursuant to the requirements of this Agreement. Each of SPI Lender, HPL Lender and Seller shall receive payments from Buyer from the proceeds of the sale and/or development of the Projects and/or the sale of the SPEs, pursuant to the distribution provisions of the Buyer Operating Agreement, which includes, without limitation, Buyers delivery of a portion of the proceeds of such sales to SPI Lender and HPL Lender to be applied toward the SPI Note and HPL Note (but only until such time that the SPI Note and the HPL Note are paid in full), with forty-seven percent (47%) of the proceeds from each sale delivered to SPI Lender and thirty-eight percent (38%) of the proceeds from each sale delivered to HPL Lender (as modified from time to time pursuant to the terms of this Agreement, the Lender Payment Percentages), in exchange for the release of the security interest of SPI Lender and HPL Lender in the Projects and/or SPEs being sold.
3.1.1 Security Agreements. Seller shall deliver three (3) original counterparts of the Omnibus Amendment to Loan Documents, one (1) each to SPI Lender, HPL Lender and Buyers Representative, each such counterpart being properly executed by the holders of the Membership Interests in Seller, Ohana Solar and an authorized representative of Seller, respectively.
3.1.2 HPL Promissory Note. Seller shall deliver to HPL Lender one (1) original counterpart of the HPL Note, with such counterpart being properly executed by an authorized representative of Seller.
3.1.3 SPI Promissory Note. Seller shall deliver to SPI Lender one (1) original counterpart of the SPI Note, with such counterpart being properly executed by an authorized representative of Seller.
3.1.4 Escrow Agreement. Seller shall deliver to Buyers Representative three (3) original counterparts of a Second Amended and Restated Escrow Agreement, each such counterpart being properly executed by an authorized representative of Seller and Escrow Holder.
3.1.5 Seller Management Confirmation. Seller shall deliver to Buyers Representative two (2) original copies of the action by Seller evidencing the resignation by Shudak as the Manager of Seller, and the appointment or confirmation of Dunphy as the sole Manager.
3.1.6 Operating Agreement. Seller shall deliver to Buyers Representative three (3) original counterparts of the Limited Liability Company Agreement of Buyer, each such counterpart being properly executed by an authorized representative of Seller.
3.2 Representations, Warranties and Covenants of Seller. Seller shall have performed in all material respects all of the agreements and complied in all material respects with all of the covenants required hereby to be performed by it, including those covenants set forth in Article 5 prior to, on or as of the Effective Date, and the representations and warranties of Seller set forth in Article 6 of this Agreement shall be true and correct in all material respects as of the date hereof and as of the Effective Date as if made as of such time.
3.3 No Injunctions or Prohibitions. Except as has already been disclosed by Seller in Schedule 6.9 regarding CDF Engineering LLC and Smith Wong Project, LLC, no preliminary or permanent injunction or other order, decree, or ruling issued by an Authority, and no statute, rule, regulation, or executive order promulgated or enacted by an Authority, which restrains, enjoins, prohibits, or otherwise makes illegal the consummation of the transaction contemplated hereby shall be in effect nor shall there be pending any action or proceeding by or before any Authority challenging the lawfulness of or seeking to prevent any of the transactions contemplated by this Agreement, or seeking monetary or other relief by reason of the consummation of any of such transactions.
4.1 Consents. Seller shall deliver to Buyer original executed copies of the Consents in accordance with Section 9.3, which in all events shall include, without limitation, the Consent from the Utility for the transfer of the Projects (and the Acquired Assets for said Projects) to the SPEs.
4.2.1 General Assignment. Seller and the respective SPEs shall execute two (2) original counterparts of the Bill of Sale and General Assignment and Assumption Agreement for each Project. The Bill of Sale and General Assignment and Assumption Agreement for said Projects shall be in substantially the form of Exhibit B (the General Assignment), each such counterpart being properly executed by an authorized representative of Seller and the SPE. The General Assignment shall convey all of Sellers right, title and interest, without reservations or restrictions, in and to all of the Acquired Assets for the Project to the SPE.
4.2.2 LLC Interest Assignment. Seller shall also deliver to Buyer two (2) original counterparts of the LLC Interest Assignment and Assumption Agreement for each SPE. The LLC Interest Assignment and Assumption Agreement for each SPE shall be in substantially the form of Exhibit C (the LLC Interest Assignment), each such counterpart being properly executed by an authorized representative of Seller and Buyer. The LLC Interest Assignment shall convey all of Sellers right, title and interest, without reservations or restrictions, in and to all of the membership interests in the respective SPE.
4.3 Land Contract Assignment. Seller and the respective SPE shall execute two (2) original counterparts of the Land Contract Assignment for each Project, each such counterpart being properly executed by an authorized representative of Seller and the SPE. The Land Contract Assignment shall convey all of Sellers right, title and interest, without reservations or restrictions, in and to Land Contracts applicable to the Project to the applicable SPE.
4.4 Fee Simple Property Deeds. Seller and the respective SPE shall execute two (2) original counterparts of a quit-claim deed for each Fee Simple Property, each such counterpart being properly executed by an authorized representative of Seller and the SPE. The deeds shall convey to Buyer all of Sellers right, title and interest, without representation or warranty, in and to the Fee Simple Property. In the event any Fee Simple Property is not acquired by the End-User of the Project, upon closing of the sale of the Project or the membership interest for the SPE owning such Project to the End-User, Buyer shall cause the SPE holding such Fee Simple Property to convey such Fee Simple Property back to Seller for no additional consideration; provided that the SPI Note and HPL Note have been paid in full.
4.5 Assignment and Further Assurances. Buyer and Seller agree and acknowledge that certain agreements, rights and interests comprising the Acquired Assets, including under or pursuant to the Development Documents and Land Contracts, may mature or formalize after the Project Transfer Date. Accordingly, Seller shall execute such additional assignments and other documents as are reasonably requested by Buyer to assign, convey, transfer and confirm to Buyer any right, title and interest in or to any of the Acquired Assets from and after the Project Transfer Date are transferred to the applicable SPE. Additionally, Seller shall use commercially reasonable efforts to take all action, deliver all documents and to do all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement.
5.1 Actions. Throughout the period both before and after Closing, each party shall use diligent efforts to timely satisfy all the conditions to the transfer of the Projects to Buyer.
5.2 Notification of Completion or Failure of Conditions. Each Party to this Agreement will promptly notify the other Party whenever it has knowledge that a condition under this Agreement has been satisfied or has not been satisfied within the allotted time; and each Party shall otherwise keep the other Party reasonably apprised with respect to the status of satisfying the obligations hereunder. E-mail communication will be sufficient for notification under this Section 5.2.
5.3 Additional Projects. Seller owns the rights to additional solar photovoltaic electricity generating projects in the State of Hawaii which are currently on the Utility reserve schedule for application to the FIT Tier 2 or 3 program, or which may otherwise be awarded a Power Purchase Agreement, but excluding the Kamehameha Projects (each an Additional Project) and are listed in Schedule 5.3, attached hereto. Each Additional Project that is accepted by the Utility from the reserve queue or awarded a Power Purchase Agreement on terms reasonably acceptable to Buyer shall be included as a Project under this Agreement. To make such additions, from time to time as each Additional Project is placed in the active queue by the Utility from the reserve queue, Seller shall deliver to Buyer and Lenders original executed copies of (a) a written notice of intent to add one or more Additional Projects to this Agreement and providing relevant due diligence information regarding such Additional Projects, including, without limitation, Sellers estimate of the budget for development of such Additional Projects, and (b) two (2) amendments to the Project List to add such Additional Projects (Project List Amendment). Buyer and Lenders shall have thirty (30) days after receipt of the offer materials from Seller to reasonably determine a budget for the development of such Additional Projects (each an Additional Project Budget) and to countersign and return one (1) copy of the Project List Amendment and the applicable Additional Project Budget to Seller. Should Buyer and Lenders elect not deliver the executed Project List Amendment and applicable Additional Project Budget within thirty (30) days of the receipt of the offer materials, then ten (10) days after written notice by Seller to Buyer and Lenders of the pending cancellation of acceptance rights, Buyer and Lenders shall have no further rights or claims to that Additional Project and shall take all necessary steps to confirm that fact, including releasing any security interest or mortgage covering said Additional Project. In the event the Additional Project Budget for development of such Additional Projects will cause the Cash Advance Cap to be exceeded, the Lenders shall commit to funding the excess amount as a condition to their acceptance of the Project List Amendment and the Cash Advance Cap, SPI Advance Cap, HPL Advance Cap and Lender Payment Percentages will be adjusted accordingly and in a pro rata manner to reflect such additional funding by the Lenders.
5.4 Kamehameha Projects. The Kamehameha Projects shall not be considered an Additional Project under Section 5.3 above. HPL Lender shall have a first right of refusal to fund the Kamehameha Projects and to have the Kamehameha Projects included as Projects for purposes of this Agreement. Upon or prior to execution of this Agreement and to the extent not previously provided by Seller to HPL Lender, Seller shall provide HPL Lender all due diligence information regarding the Kamehameha Projects in Sellers possession and control. HPL Lender shall have the right to elect to fund the Kamehameha Projects for a period of thirty (30) days after the Effective Date. If HPL Lender elects to fund the Kamehameha Projects in writing within such thirty (30) day period, then HPL Lender shall advance funds, not to exceed $600,000, for the development costs for the Kamehameha Projects pursuant to a separate expense schedule as approved by HPL Lender on or prior to its election to fund. Such advances shall be (i) separate from and not included in the HPL Cash Advance Cap or the HPL Note, but may at HPLs election be evidenced by a separate promissory note to be executed and delivered by Seller, and (ii) repaid (including a flat rate of interest in the amount of 10% of the aggregate amount advanced) from the sales proceeds of the sale and/or development of the Kamehameha Projects and/or the sale of the SPEs owning the Kamehameha Projects by Buyer, as the case may be. Any remaining sales proceeds from such sale and/or development of the Kamehameha Projects shall be distributed to Seller, SPI Lender and HPL Lender as provided in the Buyer Operating Agreement. Should HPL Lender elect not to fund the Kamehameha Projects within thirty (30) days after the Effective Date, HPL Lender, SPI Lender and Buyer shall have no further rights or claims to the Kamehameha Projects and shall take all necessary steps to confirm that fact, including releasing any security interest or mortgage covering the Kamehameha Projects.
5.5 Update Schedules. To the extent reasonably necessary for the transactions contemplated herein, each of the Parties agrees to take appropriate action to update the Schedules to this Agreement on a periodic basis. Any change to such Schedules shall be identified in an updated Schedule approved by the Parties receiving the updated Schedule (such approval not to be unreasonably withheld or delayed).
(a) Each Lender, directly or through its agents, shall have the right at any time, to review, inspect and copy the books and records of Seller for purposes of confirming compliance by Seller with the terms and conditions of this Agreement.
(b) All Cash Advance funds, whether overhead, Project Costs, or otherwise, shall be used solely and exclusively for the purposes approved by both Lenders pursuant to the Seller Expense Schedule submitted by Seller pursuant to Section 2.2.1.
6.1 Organization. Seller is a limited liability company duly formed, validly existing and in good standing under the Laws of the State of Hawaii.
6.2 Authorization. Seller has all requisite power and authority to execute and deliver this Agreement, and each other Seller Document to be delivered at Project Transfer Date, to own and convey the Acquired Assets and to perform its obligations hereunder and thereunder.
6.3 Organizational Documents. Seller has made available to Buyer true and complete copies of its certificate of organization from the Director of Commerce and Consumer Affairs of the State of Hawaii. Sellers Formation Documents are in full force and effect. Seller is not in violation of any Law affecting its organization or of its Formation Documents in any manner that would have an adverse impact on the Acquired Assets, Projects or on the completion of the transactions contemplated by this Agreement.
6.4 Right and Title to Acquired Assets. Seller has good, valid, marketable and indefeasible title to all of the Acquired Assets free and clear of all matters other than those that would be disclosed by title and UCC searches with respect to the Acquired Assets as of the Effective Date. All of the Acquired Assets are in the possession and control of Seller. At the Project Transfer Date, Seller shall have and convey to Buyer all right, title and interest in and to the Acquired Assets free and clear of all matters other than those that would be disclosed by title and UCC searches with respect to the Acquired Assets as of the Effective Date. None of the matters that would be disclosed by title and UCC searches with respect to the Acquired Assets as of the Effective Date shall have a material adverse effect on the ability of Buyer or an SPE to construct the Facilities as contemplated under this Agreement, except as has already been disclosed by Seller and set forth on Schedule 6.4.
6.5 Authorization and Enforceability. The execution, delivery and performance of this Agreement and the other Seller Documents to be delivered at Effective Date, each Project Transfer Date and the consummation of the transactions contemplated hereby and thereby by Seller have been duly authorized by all necessary action on the part of Seller. Assuming the due authorization, execution and delivery by the other Parties to this Agreement and the other Seller Documents that are to be delivered at Closing, this Agreement constitutes, and the other Seller Documents to be delivered at Effective Date and each Project Transfer Date when executed and delivered by Seller shall constitute, legally valid and binding obligations of Seller, enforceable against Seller in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors rights generally and equitable principles.
6.6 Violation; Conflicts. Except as has previously been disclosed by Seller and set forth on Schedule 6.6, neither the execution, delivery and performance by Seller of this Agreement or the other Seller Documents to be delivered pursuant to the terms of this Agreement nor the transfer of the Acquired Assets and consummation of the transactions contemplated hereby or thereby (a) violates or conflicts with any provision of Sellers Formation Documents; (b) breaches, violates, conflicts with or constitutes a default under any Acquired Asset, creates any right of any Person to accelerate, terminate or cancel, any Acquired Asset; (c) violates the Interconnection Rights, any Laws or any Permits to which Seller or the Acquired Assets are subject; (d) imposes any Encumbrance on any of the Acquired Assets; (e) breaches, violates, conflicts with or constitutes a default under any of the terms or requirements of, or give any third party the right (with or without notice or lapse of time) to revoke, withdraw, suspend, cancel, terminate or modify, any Permits or Consents to which the Projects or Acquired Assets are subject; or (f) breaches, violates, conflicts with or constitutes a default under any of the provisions of, or give any third party the right (with or without notice or lapse of time) to declare a default or exercise any remedy under, or to accelerate any obligation under or cancel, terminate or modify, any written or oral contract, agreement or other obligation to which any of the Acquired Assets, may be bound.
6.7 Consents and Approvals. Except for Consents of the Utility to be obtained on or before the Project Transfer Date, and applicable land use approvals, no consent, approval or authorization of, permit from, declaration, filing or registration with, or notice to, any Authority, any third party or any other Person, is required to be made or obtained by Seller in connection with the execution, delivery, performance and validity of this Agreement and the other Seller Documents to be delivered at Effective Date or each Project Transfer Date, and the consummation of the transactions contemplated hereby and thereby.
6.8 Consultants. Except for EN-RGY Concepts, LLC, which was retained by SPI Lender and to whom SPI Lender is solely obligated for the payment of any commission or fee, Seller shall be solely responsible for the payment of any commission or fee to any broker, consultant, finder, agent or other intermediary with respect to the transactions contemplated by this Agreement that has been engaged, directly or indirectly by Seller or any of its Affiliates.
6.9 Litigation. Except as has been previously disclosed by Seller and set forth on Schedule 6.9, there are no actions, suits or proceedings pending or, to Sellers Knowledge, threatened, against or affecting any Project or any of the Acquired Assets or Sellers transfer of rights and consummation of the transactions contemplated hereby, at law or in equity or before or by any Authority or instrumentality or before any arbitrator of any kind.
6.10 Compliance with Law. Seller is in compliance with all Law in all material respects that were or are necessary to the conduct of its business or ownership of the Acquired Assets. Seller has not received any written notification indicating any violation of, and to Sellers Knowledge, there is no violation of, or non-compliance with, any Law applicable to the Acquired Assets, the Projects or the transactions contemplated hereby.
6.11 Tax Matters. Seller has paid all federal, state, and local taxes with respect to the Acquired Assets, Sellers ownership or operation of the Acquired Assets. All returns and reports with respect to such taxes that as of the date of this Agreement are required to be filed have been duly and timely filed or an appropriate extension thereof has been obtained. There are no liens for Taxes on the Acquired Assets, other than for Taxes not yet due and payable as of the Project Transfer Date. To Sellers Knowledge, there are no pending or threatened proceedings with respect to Taxes relating to Seller or the Acquired Assets. There are no matters under discussion between Seller and any Authority with respect to Taxes relating to Seller or the Acquired Assets, and no extensions of the statute of limitations have either been requested or granted with respect to Taxes relating to Seller or the Acquired Assets.
6.12 No Other Agreements to Sell the Acquired Assets. Seller has no legal or other obligation, absolute or contingent, to or with any other Person to sell or affect a sale of all or any portion of the Acquired Assets or to enter into any agreement or cause the entering into of any agreement with respect to the sale of the Acquired Assets.
6.13.3 Seller has not agreed to indemnify any Person for or against any interference, infringement, misappropriation, or other conflict with respect to the items.
6.14.1 Schedule 6.14 to this Agreement sets forth a true and complete list of the licenses, consents, certificates, approvals, permits and any other authorizations (including the Permits and Permit Applications) by or from any Authority or third party that Seller, to Sellers Knowledge as of the Effective Date, is, except as expressly noted below, required to obtain in order to construct, own and operate the Project and the same are in each case assignable without any third party notice, consent or approval, except as otherwise provided in this Agreement.
6.14.2 Seller has delivered, or shall deliver at the Project Transfer Date, to Buyers Representative a true and complete copy of each Permit listed on Schedule 6.14 to this Agreement and obtained by Seller, if such Permit is required.
(c) no action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand is pending or, to Sellers Knowledge, is threatened which challenges the legality, validity, or enforceability of such Permit.
6.15.1 The Land Contracts comprise all of the Property necessary or appropriate in connection with the successful acquisition, development, construction, installation, completion, ownership, operation and maintenance of the Project in accordance with all Laws; provided, however, that Buyer acknowledges that some of the Land Contracts are not binding agreements themselves, but merely letters of intent or similar such documents, and binding agreements for the benefit of Seller with respect to the ownership, leasing, use and/or occupancy of all of the Property do not exist as of Closing.
(c) Seller has not, and to Sellers Knowledge, no other party to any Land Contract has repudiated any provision thereof.
6.15.3 Schedule 6.15 of this Agreement is a true and complete list of all Land Contracts included in the Acquired Assets. Before Project Transfer Date, Buyer shall have the right to review and if necessary correct the legal descriptions and APN numbers set forth in Schedule 6.15 so that they conform to the property descriptions in the Title Commitments for the Property.
6.16 Development Documents. Schedule 6.16 contains a true and complete list of all written, oral or implied contracts, agreements, leases, powers of attorney, guarantees, sureties, arrangements or other commitments in place as of the Effective Date that are material to the ownership, development or use of the Projects, and other Development Documents comprising the Acquired Assets for each Project.
6.16.2 Seller has not, and to Sellers Knowledge, no other party to any Development Document has repudiated any provision thereof.
6.17.1 Other than as set out in any Phase I Environmental Assessment, to Sellers Knowledge, there has not been a Release of Hazardous Material on or otherwise affecting any Property that: (i) has imposed any reporting obligations on Seller (or other persons) under any Environmental Law; or (ii) has imposed any obligations on Seller (or other persons) under any Environmental Law to investigate, assess, monitor, clean-up, contain, remediate, mitigate, remove, store, transport, dispose and/or treat any contamination or prepare or implement any work plans related thereto, or respond to or prepare for any inquiry, order, hearing or other proceeding by or before any Authority with respect to any contamination.
6.17.2 Seller has not received any written notice of any proceedings, action, or other claim or liability arising under any Environmental Law (including notice of potentially responsible party status under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. §§ 9601 et. seq. or any state counterpart) from any Person or Authority regarding the Property.
6.18 FIT Applications. Seller has submitted and the applicable Utility has accepted a Tier 2 or Tier 3 FIT application for each of the Projects, as applicable.
6.19 No Debarment. Seller and its Affiliates are not subject to debarment or suspended from participation in procurement programs under the Federal Acquisition Regulations or any similar procurement regulations of any other Authority.
6.20 Foreign Corrupt Practices Act. No part of the proceeds from the sale of the Acquired Assets hereunder will be used directly or indirectly for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in material violation of the United States Foreign Corrupt Practices Act of 1977, as amended.
6.21 Schedules; Representations and Warranties. All information contained in the Schedules is true and complete. No representation or warranty of Seller in this Agreement, or any other document delivered pursuant hereto, or any statement, document, certificate or exhibit furnished by Seller pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits a material fact necessary to make the statements contained therein not misleading.
6.22 Excluded Parties List System. Seller hereby represents and warrants that neither Seller, its Affiliates, nor any employee of Seller or its Affiliates are listed on the Excluded Parties List System of the United States General Services Administration as proposed for debarment, debarred, or suspended.
7.1 Organization. SPI Lender is a corporation duly formed, validly existing and in good standing under the Laws of the State of California.
7.2 Authorization. SPI Lender has all requisite power and authority to execute and deliver this Agreement and each other Buyer Document and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Buyer Documents and the consummation of the transactions contemplated hereby and thereby by SPI Lender has been duly authorized by all necessary action on the part of SPI Lender. Assuming the due authorization, execution and delivery by Seller, Buyer and HPL Lender of this Agreement and the other Buyer Documents to which they are a party, this Agreement constitutes, and the other Buyer Documents when executed and delivered by SPI Lender shall constitute, the legally valid and binding obligations of SPI Lender, enforceable against SPI Lender in accordance with the respective terms thereof, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors rights generally and equitable principles.
7.3 No Conflict or Violation. Neither the execution, delivery and performance by SPI Lender of this Agreement nor the other Buyer Documents nor the transfer of rights and consummation of the transactions contemplated hereby or thereby (a) violate or conflict with any provision of SPI Lenders formation documents or any agreement or contract to which SPI Lender is a party; or (b) violate any Laws.
7.4 Consents and Approvals. No consent, approval or authorization of, permit from, declaration, filing or registration with, or notice to, any Authority, any third party payor or any other Person, is required to be made or obtained by SPI Lender in connection with the execution, delivery, performance and validity of this Agreement and the other Buyer Documents and the consummation of the transactions contemplated hereby and thereby.
7.5 Consultants. SPI Lender agrees to compensate its broker, EN-RGY Concepts, for its participation in the transaction, in accordance with a separate agreement.
7.6 Litigation. There are no actions, suits or proceedings pending or, to SPI Lenders Knowledge, threatened, affecting the consummation of the transactions contemplated hereby, at law or in equity or before or by any Authority or instrumentality or before any arbitrator of any kind.
8.1 Organization. HPL Lender is a corporation duly formed, validly existing and in good standing under the Laws of the State of California.
8.2 Authorization. HPL Lender has all requisite power and authority to execute and deliver this Agreement and each other Buyer Document and to perform its obligations hereunder and thereunder. The execution, delivery and performance of this Agreement and the other Buyer Documents and the consummation of the transactions contemplated hereby and thereby by HPL Lender has been duly authorized by all necessary action on the part of HPL Lender. Assuming the due authorization, execution and delivery by the other parties to this Agreement and the other Buyer Documents to which such parties are a party, this Agreement constitutes, and the other Buyer Documents when executed and delivered by HPL Lender shall constitute, the legally valid and binding obligations of HPL Lender, enforceable against HPL Lender in accordance with the respective terms thereof, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting the enforcement of creditors rights generally and equitable principles.
8.3 No Conflict or Violation. Neither the execution, delivery and performance by HPL Lender of this Agreement nor the other Buyer Documents nor the transfer of rights and consummation of the transactions contemplated hereby or thereby (a) violate or conflict with any provision of HPL Lenders formation documents or any agreement or contract to which HPL Lender is a party; or (b) violate any Laws.
8.4 Consents and Approvals. No consent, approval or authorization of, permit from, declaration, filing or registration with, or notice to, any Authority, any third party payor or any other Person, is required to be made or obtained by HPL Lender in connection with the execution, delivery, performance and validity of this Agreement and the other Buyer Documents and the consummation of the transactions contemplated hereby and thereby.
8.5 Litigation. There are no actions, suits or proceedings pending or, to HPL Lenders Knowledge, threatened, affecting the consummation of the transactions contemplated hereby, at law or in equity or before or by any Authority or instrumentality or before any arbitrator of any kind.
9.1 No Breach of Representations and Warranties by Seller. Seller shall not engage in any practice, take any action, embark on any course of inaction or enter into any transaction or agreement that would violate any provision of this Agreement, any of the other Seller Documents, any of the Development Documents or would cause or result in any of the representations and warranties set forth in Article 6 to be untrue in any material respect or, after giving effect to any such practice, action, course of inaction, transaction or agreement, which could hinder in any material respect the transactions contemplated by this Agreement or the other Seller Documents, as applicable.
9.2 No Breach of Representations and Warranties by Lender. Neither Lender, shall engage in any practice, take any action, embark on any course of inaction or enter into any transaction or agreement that would violate any provision of this Agreement or any of the other Buyer Documents or would cause or result in any of the representations and warranties set forth in Article 7 or Article 8, as applicable, to be untrue in any material respect or, after giving effect to any such practice, action, course of inaction, transaction or agreement, which could hinder in any material respect the transactions contemplated by this Agreement or the other Buyer Documents.
9.3 Consents and Reasonable Efforts. Seller shall use all commercially reasonable efforts to obtain all consents, approvals, transfers, permissions, waivers, orders, reissuances and authorizations of (and make all necessary filings or registrations with) (collectively the Consents) all Authorities and other third parties which are required to be obtained or made by them in connection with the consummation of the transactions contemplated by this Agreement, including, without limitation, for the acquisition, development, construction, installation and completion of the Projects and to effect the various assignments to Buyer as provided in this Agreement. Buyer, without having to incur third party out of pocket expenses, shall cooperate in good faith with Seller in Sellers effort to obtain the Consents.
9.4.1 Seller acknowledges that Buyer Confidential Information (as defined below) is valuable and proprietary and Seller agrees not to, directly or indirectly, use, publish, disseminate, describe or otherwise disclose any Buyer Confidential Information without the prior written consent of Buyer. For purposes of this Agreement, Buyer Confidential Information shall mean (i) any and all information provided by Buyer or either Lender to Seller and identified by Buyer or Lender as confidential; and (ii) any and all information provided by Buyer or either Lender to Seller with respect to the Projects or the transactions contemplated hereby. Information shall not be deemed to be Buyer Confidential Information if (a) it has become generally known or available within the industry or the public through no act or omission of Seller; (b) Seller can demonstrate that, prior to disclosure in connection with the transactions contemplated hereby, such information was already in the possession of Seller; (c) it was rightfully received by Seller from a third party who became aware of it through no act or omission of Seller and who is not under an obligation of confidentiality to Buyer or Lender; or (d) Seller can demonstrate it was independently developed by employees or consultants of Seller. Notwithstanding the foregoing, from and after the Closing, Buyer Confidential Information shall include any information that is an Acquired Asset, whether or not of the type referred to in clauses (b), (c) or (d) above.
9.4.2 Seller shall maintain any Buyer Confidential Information which has been or will be disclosed directly or indirectly to Seller by or on behalf of Buyer or their Affiliates in confidence and shall not disclose or cause to be disclosed by them or any third person without Buyers prior express written consent; provided, however, that Seller may disclose the Buyer Confidential Information to persons who provide legal, accounting, or other services to Seller in connection with Sellers evaluation or implementation of the transactions contemplated by this Agreement, provided that such persons have first been provided with a copy of this Agreement and have been informed of the duties required hereby.
9.4.3 Notwithstanding the preceding Section 9.4.1 and Section 9.4.2, Buyer Confidential Information may be disclosed if required by any governmental or regulatory Authority or court or otherwise by Law; provided, however, that: (i) such Buyer Confidential Information is submitted under any and all applicable provisions for confidential treatment; and (ii) if Seller is permitted to do so, Buyer is given written notice of the requirement for disclosure promptly after such disclosure is requested, so that it may take whatever action it deems appropriate, including intervention in any proceeding and seeking a protective order or an injunction, to prohibit such disclosure.
9.4.4 Seller agrees that it will not make any use of any Buyer Confidential Information received pursuant to this Agreement, except in connection with the transactions contemplated by this Agreement, unless specifically authorized to do so in writing by Buyer or either Lender, as applicable, and this Agreement shall not be construed as a license or authorization to Seller to utilize the Buyer Confidential Information, except for such purpose.
9.4.5 Upon Buyers request, Seller shall return to Buyer or the appropriate Lender or destroy as promptly as practicable, but in a period not to exceed ten (10) days, (a) all Buyer Confidential Information provided to Seller, including, without limitation, all copies of such Buyer Confidential Information; and (b) all notes or other documents in digital or other format in its possession or in the possession of other persons to whom Buyer Confidential Information was properly provided by Seller. Non-destruction of electronic copies of materials or summaries containing or reflecting Buyer Confidential Information that are automatically generated through data backup and/or archiving systems and which are not readily accessible by Sellers business personnel shall not be deemed to violate this Agreement, so long as the Buyer Confidential Information contained in or reflected in such electronic backup records is not disclosed or used in violation of the other terms of this Agreement.
9.4.6 Seller acknowledges that a breach of the covenants contained in this Section 9.4 will cause irreparable damage to Buyer and/or Lenders, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, Seller agrees that if Seller breaches any of the covenants contained in this Section 9.4, in addition to any other remedy that may be available at law or in equity, Buyer or the applicable Lender shall be entitled to specific performance and injunctive relief, without posting bond or other security and Seller shall have no right or power to raise the defense of adequate remedy at law.
9.5.1 Buyer and each Lender acknowledge that Seller Confidential Information (as defined below) is valuable and proprietary to Seller and Buyer and each Lender agree not to, directly or indirectly, use, publish, disseminate, describe or otherwise disclose any Seller Confidential Information without the prior written consent of Seller. For purposes of this Agreement, Seller Confidential Information shall mean (i) any and all information provided by Seller to Buyer or a Lender and identified by Seller as confidential; and (ii) any and all information provided by Seller to Buyer or a Lender with respect to the Projects or the transactions contemplated hereby. Information shall not be deemed to be Seller Confidential Information if (a) such information is an Acquired Asset under this Agreement; (b) it has become generally known or available within the industry or the public though no act or omission of Buyer or either Lender; (c) Buyer or either Lender can demonstrate that, prior to disclosure in connection with the transactions contemplated hereby, such information was already in the possession of Buyer or a Lender; (d) it was rightfully received by Buyer or a Lender from a third party who became aware of it through no act or omission of Buyer or a Lender and who is not under an obligation of confidentiality to Seller; or (e) Buyer or either Lender can demonstrate it was independently developed by employees or consultants of Buyer or Lender.
9.5.2 Buyer and each Lender shall maintain any Seller Confidential Information which has been or will be disclosed directly or indirectly to Buyer or a Lender by or on behalf of Seller in confidence by it and shall not disclose or cause to be disclosed by Buyer or a Lender or any third person without Sellers prior express written consent; provided, however, that Buyer may disclose Seller Confidential Information to persons who provide financial analysis, banking, legal, accounting, or other services to Buyer or a Lender in connection with Buyer or either Lenders evaluation or implementation of the transactions contemplated by this Agreement, provided that such persons have first been provided with a copy of this Agreement and have been informed of the duties required hereby.
9.5.3 Notwithstanding the preceding Section 9.5.1 and Section 9.5.2, Seller Confidential Information may be disclosed if required by any governmental or regulatory Authority or court or otherwise by Law or in connection with any proceeding with the Commission; provided, however, that: (i) such Seller Confidential Information is submitted under any and all applicable provisions for confidential treatment; and (ii) if Buyer or a Lender is permitted to do so, Seller is given written notice of the requirement for disclosure promptly after such disclosure is requested, so that it may take whatever action it deems appropriate, including intervention in any proceeding and seeking a protective order or an injunction, to prohibit such disclosure.
9.5.4 Buyer and each Lender agree that it will not make any use of any Seller Confidential Information received pursuant to this Agreement, except in connection with the transactions contemplated by this Agreement, unless specifically authorized to do so in writing by Seller, and this Agreement shall not be construed as a license or authorization to Buyer or a Lender to utilize Seller Confidential Information, except for such purpose.
9.5.5 Upon Sellers request, Buyer and each Lender shall return or destroy as promptly as practicable, but in a period not to exceed ten (10) days, (a) all Seller Confidential Information provided to Buyer or a Lender, including, without limitation, all copies of such Seller Confidential Information; and (b) all notes or other documents in digital or other format in its possession or in the possession of other persons to whom Seller Confidential Information was properly provided by Buyer or Lender. Non-destruction of electronic copies of materials or summaries containing or reflecting Seller Confidential Information that are automatically generated through data backup and/or archiving systems and which are not readily accessible by a Buyers or a Lenders business personnel shall not be deemed to violate this Agreement, so long as the Seller Confidential Information contained in or reflected in such electronic backup records is not disclosed or used in violation of the other terms of this Agreement.
9.5.6 Buyer and each Lender acknowledge that a breach of the covenants contained in this Section 9.5 will cause irreparable damage to Seller and Sellers Affiliates, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, Buyer and each Lender agree that if Buyer or a Lender breach any of the covenants contained in this Section 9.5, in addition to any other remedy that may be available at law or in equity, Seller and its Affiliates shall be entitled to specific performance and injunctive relief, without posting bond or other security.
9.6 Access to Properties, Information and Employees. Seller will afford to Buyer and each Lender and its employees, agents and other representatives full and free access to the Acquired Assets and related records during normal working hours in order for Buyer and Lenders to make such due diligence investigation as it shall determine and to satisfy itself with respect to the conditions precedent contained in Articles 3 and 4 and compliance with the covenants in Article 5. Buyer shall maintain comprehensive general liability insurance coverage for the activities contemplated by this Section 9.6. Buyer shall exercise its right of access to the Acquired Assets at its own risk and shall be responsible for, and shall defend and indemnify Seller against, (i) injury or death to any person or damage to any property caused by any negligent act or omission (including strict liability), or willful misconduct of Buyer, its contractors, agents or employees in the exercise of its access rights; and (ii) liens or other encumbrances arising from Buyers activities on the Property under this Section 9.6.
9.7 Confidentiality Regarding this Agreement. The Parties each acknowledge and agree that the terms of this Agreement shall be considered Seller Confidential Information and Buyer Confidential Information.
9.8 Construction of Projects. Subject to the obligations of Seller as provided in the Conditions Precedent, the Project Milestones and as set forth in Section 9.9 below, Buyer shall have the right to construct the Projects, and to control the manner, means and timing of such construction, at its sole cost and expense, and in its sole and absolute discretion. Without limiting the generality of the foregoing, Buyer retains the right to purchase all of the panels, inverters, racking, and balance of system components, and subject to the rights of Environet pursuant to that Right of First Refusal by and between Seller and Environet dated November 2011 with respect to providing certain engineering, procurement and construction services with respect to the Projects located on Oahu, Buyer, retains all rights to select and negotiate the labor and subcontractors related to the installation and construction of the Projects.
9.9.6 All non-construction project management personnel needed to complete the Projects.
9.10 Project Status Reporting and Information. Seller shall weekly conduct a conference call with Buyer and Lenders or provide a written status update report to Buyer and Lenders detailing the status of the Conditions Precedent, Project Milestones, and other requirements of Section 9.9 above, and the projected date that each such requirement will be satisfied for each Project. Seller shall promptly provide to Buyer and Lenders for review, comment and approval copies of all documents, drafts, applications, analyses and other materials which are received or sent by Seller during the process of satisfying the Conditions Precedent, Project Milestones, and other requirements of Section 9.9 above for each Project.
9.11 Project Covenant, Representation and Warranty. Seller hereby covenants and agrees that as of and as a condition to notice of the satisfaction of Project Milestones 1-5 with respect to any Project, the Project shall have all material rights and approvals necessary to construct and operate the Project, subject to the construction of the Project pursuant to the applicable plans and specifications.
9.12 Land Owner Solar Systems. Pursuant to the terms of various Land Contracts, the developer leasing or obtaining easements is obligated to construct photovoltaic solar power systems to be owned by the landowner as consideration for the real property rights granted thereunder. Seller agrees that it shall be Sellers obligation at Sellers sole cost and expense to timely construct such photovoltaic solar power systems in compliance with the terms and conditions of such Land Contracts. Seller shall provide monthly written reports to Buyer and the Lenders regarding the status of such projects and shall coordinate any such construction with Buyer so as not to interfere with Buyers construction and development of any Projects.
9.13 Party Representatives. Each of Buyer, SPI Lender, HPL Lender and Seller shall appoint a representative as the single responsible point of contact and sole representative for all matters relating to this Agreement. Buyers initial representative shall be Ian Craig, SPI Lenders initial representative shall be Steve Kircher, HPL Lenders initial representative shall be Ian Craig and Sellers initial representative shall be Jill Dunphy Noetzelman. The actions of the appointed representative shall be deemed the acts of the appointing party and shall be fully binding on such party. The Parties shall vest their representatives with sufficient powers to enable them to assume the obligations and exercise the rights of each Party, as applicable, under this Agreement; provided that, for the avoidance of doubt, no representative shall have the power or authority to waive any material right or obligation of any Party. Either Party may change its representative by written notice to the other party.
9.14 Delivery Requirements. Seller shall satisfy Project Milestones 1-5 with respect to Projects with an aggregate nameplate capacity of 12 MW DC by July 1, 2014. Notwithstanding any other provision of this Agreement, the failure of Seller to satisfy this requirement shall, at either SPI Lenders or HPL Lenders election by notice to Seller, constitute a Seller Event of Default allowing the other parties to exercise all rights and remedies under Section 11.2.2.
9.15 Seller Covenants and Requirements. As of the Effective Date and during the term of this Agreement, Seller shall comply with the covenants and requirements set forth below. Sellers compliance with each of the requirements below are a condition precedent to SPI Lenders and HPL Lenders obligation to make Cash Advance payments pursuant to the terms of this Agreement. Notwithstanding any other provision of this Agreement, the failure of Seller to satisfy this requirement shall, at either SPI Lenders or HPL Lenders election by notice to Seller, constitute a Seller Event of Default allowing the other parties to exercise all rights and remedies under Section 11.2.2.
9.15.1 Seller represents, warrants and covenants that Sellers Operating Agreement entered into as of April 16, 2012 and effective as of February 25, 2011 (Operating Agreement) is the true and complete Operating Agreement governing the Seller, and is unmodified and remains in full force and effect.
9.15.2 As of the Effective Date, Patrick Shudak shall have resigned as Manager of Seller, and Jill Dunphy Noetzelman shall be the sole Manager of Seller.
9.15.3 Buyer shall have the right to appoint a representative (Buyers Representative) to monitor Sellers compliance with the terms and conditions of this Agreement. The initial Buyers Representative shall be Ian Craig. Buyer shall have the right to remove and replace the Buyers representative with written notice to Seller. Buyers Representative shall have full access and right to review and monitor all accounts, payments, contracts, applications, and other books and records of Seller. Buyers Representative shall be provided reasonable advanced notice of and a right to attend or otherwise participate in all meetings with engineers, Utilities, landowners, and others with regard to the Projects and Seller expenditures.
9.15.4 The exercise of the following rights by JP Energy under the Operating Agreement of Seller shall require (a) the prior written notice to each of Seller, SPI Lender and HPL Lender and (b) the prior written consent of not less than two (2) of Seller, SPI Lender and HPL Lender: (i) the issuance of additional Units and admission of additional members (Sections 2.1(c), 7.4 and 7.6 of the Operating Agreement), (ii) the removal and replacement of Managers or appointment of new Managers in the event of a vacancy (Sections 4.6 and 4.7 of the Operating Agreement), (iii) the dissolution of Seller (Section 8.1 of the Operating Agreement), and (iv) any amendment of the Operating Agreement or Articles of Seller (Section 10.4 of the Operating Agreement). Notwithstanding the foregoing, the approval of a party that is in default under the terms of this Agreement shall not be required, provided that at all times the approval by at least one of the Lenders shall be required to take any of the above-listed actions.
9.15.5 The taking of any of the following actions by Seller shall require (a) the prior written notice to each of Seller, SPI Lender and HPL Lender and (b) the prior written consent of not less than two (2) of Seller, SPI Lender and HPL Lender: (i) undertaking any non-Project related obligations, or any Project related obligations in excess of $10,000 individually or $50,000 in the aggregate (it being further acknowledged by Seller that SPI Lender and HPL Lender are not obligated for any expenses in excess of their respective Cash Advance Cap and as set forth on the Seller Expense Schedule), (ii) securing, receiving funds from additional investors, or admitting additional Members of Seller, (iii) making any material change to any Project (provided that Seller shall have no obligation to complete any Project for which the development cost exceeds the budget, unless the budget has been increased to pay for such additional costs as provided for herein), (iv) filing for bankruptcy, creditor protection or dissolution, (v) engaging in any business other than the development of the Projects, or (vi) the appointment of officers of the Company. Notwithstanding the foregoing, the approval of a party that is in default under the terms of this Agreement shall not be required, provided that at all times the approval by at least one of the Lenders shall be required to take any of the above-listed actions.
9.15.6 The payment by Seller of any Seller expenses that are not set forth on the Seller Expense Schedule shall require approval by both SPI Lender and HPL Lender.
10.1 Records. Seller, Buyer and each Lender agree that each will cooperate with and make available to the other Party, during normal business hours after reasonable advance notice, all books and records retained and remaining in existence after the Effective Date and Project Transfer Date that are necessary in connection with any Tax inquiry, claim, audit, investigation or dispute, any litigation or investigation or any other matter requiring any such books and records or other assistance. The Party requesting any such books and records shall bear all of the out-of-pocket costs and expenses (including, without limitation, reasonable attorneys fees) reasonably incurred in connection with providing such books and records or other assistance.
10.2 Survival. The representations, warranties, covenants and agreements of the Parties herein shall survive until the completion of all of the Projects and the payment of all sums owed under this Agreement including all exhibits hereto.
(v) any liability arising out of Sellers acts or omissions, including negligence.
(ii) any liability arising out of Buyers acts or omissions, including negligence.
10.3.3 Defense of Claims. If any action or proceeding (including any governmental investigation or inquiry) shall be brought or asserted or threatened to be brought or asserted against an indemnified party in respect of which an indemnity may be sought from an indemnifying party, such indemnified party shall notify the indemnifying party in writing as promptly as practicable (and in any event within ten (10) Business Days after the service of the citation or summons); provided, however, that the failure of the indemnified party to give timely notice hereunder shall relieve the indemnifying party of its indemnification obligations hereunder only if, and only to the extent that, such failure caused the Damages for which the indemnifying party is obligated to be greater than they would have been had the indemnified party given timely notice. The indemnifying party shall have the right to assume the defense of such action or proceeding, including through the retention of counsel reasonably satisfactory to the indemnified party, by notifying the indemnified party within ten (10) Business Days after receipt of the indemnified partys written notice. The indemnified party shall have the right to participate in the defense of such action or proceeding at its sole cost and expense; provided, however, that the indemnifying party shall be liable to the extent provided under this Article 10 for all reasonable costs and expenses of defending such action or proceeding incurred by the indemnified party, including reasonable fees and disbursements of counsel, if (i) the indemnifying party fails to assume the defense of such action or proceeding in accordance with the preceding sentence; or (ii) the named parties to any such action or proceeding (including any impleaded parties) include both such indemnified party and the indemnifying party, and such indemnified party shall have been advised by counsel that there may be one or more legal defenses available to such indemnified party that are different from or additional to those available to the indemnifying party (in which case, if such indemnified party notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such action or proceeding on behalf of such indemnified party). The indemnifying party shall not be liable for any settlement of any such action or proceeding affected without its written consent (not to be unreasonably withheld). The indemnified party shall not be required to consent to the settlement of any action or proceeding if such settlement involves anything other than the payment of money by the indemnifying party in full settlement of such action or proceeding.
10.3.4 Further Assurances. Each of the Parties hereto shall use commercially reasonable efforts to take all action and to do all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement.
10.3.5 Limitation on Indemnification. Notwithstanding any indemnification provision in this Agreement to the contrary, any indemnification obligations of Seller with respect to any Buyer Indemnified Parties provided for in this Agreement and any indemnification obligations of Buyer with respect to any Seller Indemnified Parties provided for in this Agreement shall in all cases be subject to, and shall be limited by, any express limitations of liability and non-recourse provisions set forth in this Agreement.
(a) Seller Default. If (i) Seller fails to comply timely and in all material respects with any of Sellers covenants, terms, conditions or obligations contained in this Agreement to be completed or complied with following the Effective Date, upon not less than thirty (30) days prior written notice by SPI Lender or HPL Lender to Seller, if such breach or failure is not cured within such 30-day period; (ii) any representation or warranty made by Seller in this Agreement, or any other document furnished by Seller in connection with this Agreement, shall prove to have been false or misleading in any material respect when so made or deemed made, (iii) an assignment for the benefit of Sellers creditors occurs or Seller consents to the appointment of a trustee or receiver or the filing by or against Seller of any petition or proceeding occurs under any bankruptcy or insolvency law, and in the case of a filing against Seller, such petition or proceeding is not dismissed within sixty (60) days of its initial filing or (iv) a default occurs under the SPI Note, HPL Note, Security Agreement (Assets) or Security Agreement (Membership Interests) subject to any applicable notice and cure periods (each a Seller Event of Default); provided, however, none of the foregoing events shall be deemed a Seller Event of Default if caused, directly or indirectly, by (A) a Lender Event of Default, or (B) any action or inaction by Buyer that is not caused or consent to by Seller.
(b) Lender Default. If SPI Lender or HPL Lender fails to comply timely and in all material respects with any of its covenants, terms, conditions or obligations contained in this Agreement to be completed or complied with, upon not less than (i) thirty (30) days prior written notice by Seller to both SPI Lender and HPL Lender, or (ii) three (3) business days prior written notice if the failure relates to SPI Lenders or HPL Lenders obligations to make payments to Escrow Holder, or the release of its funds to Seller, if such breach or failure is not cured by the defaulting Lender within such 30-day period, or 3-business day period, as applicable (each a Lender Event of Default). Notwithstanding the foregoing, in the event that SPI Lender or HPL Lender shall fail to make any payments then due to Escrow Holder in violation of this Agreement, then the other Lender shall have the right but not the obligation to cure such failure, as provided in Section 2.2.1(b)(iv), and avoid a Lender Event of Default with respect to such defaulting Lender and shall have no less than seven (7) days to do so following receipt of written notice from Seller indicating the event that would otherwise be deemed to be a Lender Event of Default. Notwithstanding the foregoing, neither Lender shall be deemed to have caused a Lender Event of Default as result of the actions of the other Lender and Seller shall have no remedies hereunder against a Lender who is not in violation of any of its obligations under this Agreement. Notwithstanding the foregoing, in the event one Lender makes a Cash Advance payment on behalf of the other Lender as provided in Section 2.2.1(b)(iv), Seller shall not be entitled to call a Lender Event of Default on either Lender.
(1) Either Lender shall be entitled to (i) notify the Escrow Agent in writing (with a copy to Seller) to cease making Cash Advances, (ii) instruct the Escrow Agent to return any remaining balance in the Escrow Account to the Lenders, in equal amounts, to which Seller will consent and/or (iii) to terminate this Agreement as provided in Section 11.2.3(b).
(2) Notwithstanding any other provision of this Agreement, including any limitations set forth in this Section 11.2.2, in the event of a Seller Event of Default, each Lender shall have, among other things, all rights and remedies available to them under the SPI Note, HPL Note, Security Agreement (Assets) and Security Agreement (Membership Interests), and Mortgages.
(b) Lender Default; Sellers Remedies. In the event of a Lender Event of Default, Seller as its sole and exclusive remedy shall be entitled to terminate this Agreement with the defaulting Lender(s) and the defaulting Lender(s) shall, upon receipt of written request from Seller and a non-defaulting Lender or Seller alone, if both Lenders have defaulted, promptly and, in any event, within fifteen (15) days of receipt of written notice, take all action reasonably necessary in order to cause a subordination of its security interest(s) in the Projects or the Assets of Seller for purposes of obtaining reasonably necessary funding for the Projects and in an amount up to the remaining unfunded amount(s) of the SPI Advance Cap and the HPL Advance Cap at the time of the Lender Event of Default. Notwithstanding the foregoing, a defaulting Lender shall continue to have the right to recover its outstanding Cash Advance balance under the SPI Note and/or HPL Note. Notwithstanding the foregoing, neither Lender shall be deemed to have caused a Lender Event of Default as result of the actions of the other Lender and Seller shall have no remedies hereunder against a non-defaulting Lender.
(c) by Seller, upon written notice to the applicable defaulting Lender of such termination, in the event of an uncured Lender Event of Default as provided in Section 11.2.2(b) above. Seller may not terminate this Agreement with respect to a Lender that does not have an uncured Lender Event of Default.
(d) If one Lender, but not the other, terminates this Agreement by written notice to Seller pursuant to Section 11.2.3(b) above, this Agreement shall continue between Seller and the non-terminating Lender.
(a) In the event of any termination of this Agreement as provided in Section 11.2, this Agreement shall forthwith become wholly void and of no further force and effect, except as set forth in this Agreement, and there shall be no liability on the part of the terminating party. Notwithstanding the foregoing, no such termination shall serve to release any Party from any liability (including any such liability under Section 10.3) with respect to any breach of its duties and obligations hereunder prior to such termination, provided that each of the Parties hereto shall use take all action and to do all things necessary, proper or advisable to consummate and make effective the rights and remedies contemplated by this Agreement.
(b) Notwithstanding the foregoing, Section 9.4 (Buyer Confidential Information) and Section 9.5 (Seller Confidential Information) shall survive the termination of this Agreement for a period of one year from the date on which such termination occurs.
(c) EXCEPT WITH RESPECT TO THIRD-PARTY CLAIMS, NO PARTY SHALL BE LIABLE FOR ANY LOST OR PROSPECTIVE PROFITS AND IN NO EVENT SHALL ANY PARTY BE LIABLE FOR ANY OTHER PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES (IN TORT, CONTRACT OR OTHERWISE) UNDER OR IN RESPECT TO THIS AGREEMENT OR ANY OTHER BUYER DOCUMENT, SELLER DOCUMENT OR EXHIBITS TO THIS AGREEMENT OR FOR ANY FAILURE OF PERFORMANCE RELATED HERETO, HOWSOEVER CAUSED.
12.1 Step Negotiations. The Parties shall attempt in good faith to resolve all disputes arising out of or relating to this Agreement or any of the transactions contemplated hereby promptly by negotiation, as set forth herein. A Party may give the other party written notice of any such dispute not resolved in the normal course of business. Executives of the Parties at levels one level above the Project personnel who have previously been involved in the dispute shall meet at a mutually acceptable time and place within ten (10) days after delivery of such notice, and thereafter as often as they reasonably deem necessary, to exchange relevant information and to attempt to resolve the dispute. If the matter has not been resolved within thirty (30) days from the referral of the dispute to such executives, or if no meeting of such executives has taken place within fifteen (15) days after such referral, a Party may initiate mediation as provided herein. If a Party intends to be accompanied at a meeting by an attorney, the other Party shall be given at least three (3) Business Days notice of such intention and may also be accompanied by an attorney. All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of the Federal Rules of Evidence and state rules of evidence. Each Party will bear its own costs for this dispute resolution phase.
12.2 Mediation. In the event that any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby is not resolved in accordance with the procedures set forth in Section 12.1, such dispute shall be submitted to a mediator or mediation group that is qualified to mediate this type of dispute. The mediation shall take place at a mutually agreed upon location in metropolitan San Francisco, California, unless otherwise agreed to by the Parties. If the mediation process has not resolved the dispute within thirty (30) days of the submission of the matter to mediation or within such longer period as the Parties may agree to, the dispute shall be decided by arbitration as set forth below. Each Party will bear its own costs for this dispute resolution phase.
12.3 Binding Arbitration. All claims, disputes and other matters in question not resolved by mediation between the Parties to the Agreement arising out of or relating to this Agreement or any of the transactions contemplated hereby shall be decided by binding arbitration by the American Arbitration Association or by a mutually agreed upon arbitrator. The arbitration shall take place in San Francisco, California and shall be conducted in accordance with the American Arbitration Association Commercial Industry Arbitration Rules then obtaining or a mutually agreed upon set of arbitration rules. This agreement to arbitrate and any other agreement or consent to arbitrate entered into in accordance herewith will be specifically enforceable under the prevailing arbitration law of any court having jurisdiction. Notice of demand for arbitration must be filed in writing with the other Party to the Agreement and with the AAA or other mutually agreed to arbitrator. The demand must be made within a reasonable time after the dispute has arisen. In no event may the demand for arbitration be made if the institution of legal or equitable proceedings based on such dispute is barred by the applicable statute of limitations. If the total dispute, exclusive of interest and arbitration costs, does not equal or exceed one million dollars, the arbitration shall be heard by one neutral arbitrator. If the total dispute equals or exceeds one million dollars, then the arbitration shall be heard by three neutral arbitrators. Any arbitration may be consolidated with any other arbitration proceedings. Either Party may join any other interested parties. The award of the arbitrator(s) shall be binding and specifically enforceable in a court of competent jurisdiction. Each Party will bear its own costs for this dispute resolution phase.
13.2 Assignment. No Party may assign any of its rights or obligations under this Agreement without the prior written consent of the other Party. Notwithstanding anything to the contrary, each of SPI Lender, HPL Lender, and Buyer shall have the right to sell, assign and transfer its rights and obligations under this Agreement or with regard to any Project with prior written notice to, but without the consent of, the other parties to this Agreement.
If to SPI Lender: Solar Power, Inc.
with copies to: Solar Power, Inc.
or to such other place and with such other copies as a Party may designate as to itself by written notice to the other Party.
13.4 Choice of Law; Consent to Jurisdiction; Service of Process.
13.4.1 This Agreement shall be construed, interpreted and the rights of the Parties determined in accordance with the Laws of the State of California without reference to its choice of law provisions.
13.4.2 Subject to Article 12, the Parties hereto hereby irrevocably submit to the jurisdiction of the federal or state courts of California for any dispute arising out of or relating to this Agreement or any of the transactions contemplated hereby. Each Party hereby irrevocably waives, to the fullest extent permitted by applicable Law, any objection which it may now or hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum.
13.4.3 Each of the Parties hereto hereby consents to process being served by the other Party to this Agreement in any arbitration, action or proceeding of the nature specified in Article 12 or Section 13.4.2 by mailing of a copy thereof in accordance with the provisions of Section 13.3 hereof.
13.5 Entire Agreement. This Agreement and all exhibits and schedules hereto and any other written agreements entered into in connection herewith shall constitute the entire understanding of the Parties as to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements, understandings, negotiations, and discussions of the parties, whether oral or written, and there are no warranties, representations, or other agreements between the parties or on which any of the parties have relied in connection with the subject matter hereof, except as specifically set forth in this Agreement.
13.6 Amendments and Waivers. No amendment, supplement, modification, waiver, or termination of this Agreement shall be binding, unless executed in writing by each of Seller, Buyer, SPI Lender and HPL Lender. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision of this Agreement, whether or not similar, nor shall such waiver constitute a continuing waiver, unless otherwise expressly provided.
13.7 Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which shall be deemed to be an original, but which together shall constitute a single document. Signatures transmitted by facsimile shall be binding; provided, however, that any person transmitting his or her signature by facsimile shall promptly send an original signature to the other parties in accordance with Section 13.3. If a facsimile signature is used for purposes of executing this Agreement, then the party executing by facsimile shall also promptly send an original signature to Escrow Holder.
13.8 Expenses. Except as otherwise specified herein, each Party hereto shall pay its own legal, accounting, out-of-pocket and other expenses incident to this Agreement and to any action taken by such party in preparation for carrying this Agreement into effect.
13.9 Attorneys Fees and Expenses. In the event any of the parties shall commence legal proceedings for the purpose of enforcing any provision or condition hereof, or by reason of any breach arising under the provisions hereof, then the successful party in such proceeding shall be entitled to court costs and reasonable attorneys fees to be determined by the Court or referee. Without limiting the generality of the foregoing, the prevailing party shall be entitled to recover its attorneys fees and other legal expenses incurred in connection with a bankruptcy or other insolvency-related proceeding of the other party (and including such fees and expenses incurred in efforts, whether successful or not, to obtain adequate protection, annulment, modification or termination of the automatic stay).
13.10 Invalidity. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein (other than a requirement to make payments hereunder), shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by Law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument.
13.11 Legal Representation of the Parties. The parties negotiated this Agreement with the benefit of legal representation, and any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party shall not apply to any construction or interpretation hereof.
13.12 Titles. The titles, captions or headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
13.13 Burden and Benefit. This Agreement shall be binding upon and shall inure to the benefit of, the Parties hereto and their respective successors and permitted assigns. The Buyer Indemnified Parties and Seller Indemnified Parties shall be third party beneficiaries of this Agreement and shall be entitled to indemnification, with full rights of enforcement as though each such person was a signatory to this Agreement. Except as provided in this Section, there shall be no third party beneficiaries of this Agreement.
13.14 Cumulative Remedies. Except as otherwise provided in this Agreement to the contrary, all rights and remedies of either Party hereto are cumulative of each other and of every other right or remedy such Party may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies.
13.15 No Partnership or Joint Venture. The Parties hereto do not intend to create a partnership or joint venture by virtue of this Agreement. No Party shall owe any fiduciary duty to any other Party by virtue of this Agreement or any other Seller Document or Buyer Document or otherwise.
13.16 No Merger. This Agreement is a fully integrated complete agreement and is not merged with or extinguished by any other agreement.
13.17 Public Announcements. No Party may issue any public announcement or other statement with respect to this Agreement or the transactions contemplated hereby, without the prior consent, which shall not be unreasonably withheld or delayed, of the other Parties, unless required by applicable Law, order of a court of competent jurisdiction; provided, however, that any Party or its Affiliates may make any public disclosure it believes in good faith and upon advice of counsel is required by applicable Law or stock market rule without the consent of (but with notice to) the other Party.
13.18 Waiver of Defaults. Buyer, SPI Lender, HPL Lender and Seller hereby waive any defaults (known or unknown, asserted or unasserted) under the Amended and Restated Agreement, the SPI Note, HPL Note or the Security Agreement existing as of the Effective Date.
13.19 Force Majeure. If Seller experiences a Force Majeure Event, the performance of Seller shall be excused for the period of the Force Majeure Event and the period for the performance shall also be extended for the period equal to the period of the Force Majeure Event. Force Majeure Event means, any act or event that delays or prevents a Party from performing all or a portion of its obligations under this Agreement or from complying with all or a portion of the conditions under this Agreement if such act or event, despite the exercise of reasonable efforts by such Party, cannot be avoided by, and is beyond the reasonable control of, the Party relying thereon as justification for such delay, nonperformance, or noncompliance. Without limiting the generality of the foregoing, so long as the following events satisfy the requirements set forth herein, a Force Majeure Event may include: strikes, lockouts, labor troubles, the inability to procure materials, power failure, restrictive governmental laws or regulations, riots, insurrection, and war.
Security Interest of Solar Power Inc. pursuant to the Solar Development Agreement to which this Schedule is attached.
Security Interest of Hawaiian Power LLC pursuant to the Solar Development Agreement to which this Schedule is attached.
Solar Reports, which include PV Watts Calculations for each Project, are located in DropBox. Each PV Watts Calculation is contained within the body of the "Presentation Folder" PDF Document for each Project.
Seller/Seller will deliver copies of the Development Documents for the project to be assigned by Seller at the Project Transfer Date. Seller states that all of the assignable documents necessary to complete this transaction are owned by and are the legal property of the Seller.
All other studies, reports, and drawings to date.
The Seller agrees to take all steps necessary to legally assign the document above as part of the Bill of Sale and General Assignment and Assumption Agreement (collectively, the Development Documents) to Buyer as a part of the transfer of the Project on the Project Transfer Date.

References: § 9601
 § 6901
 § 7401
 § 1251
 § 300
 § 2601