Document:

exhibit_4-11.htm

Exhibit 4.11

 

 

Engineering Procurement & Construction Contract

 

for the construction of a photovoltaic system

 

 

between

 

 

ECOWARE S.p.A

 

As Contractor

 

 

And

 

 

ELLOMAY PV ONE SRL

 

As Principal

 

  

  

  

 

Engineering Procurement & Construction Contract

 

With this contract

 

ELLOMAY PV ONE S.r.l., with its registered offices located in Galleria Borromeo, 3, VAT Registration Number and Tax Code 04459950285, entered in the Companies Register of Padova at no. 391298, represented by Mr. Ran Fridrich in his capacity as Sole Director (hereinafter known as “Principal”);

 

and

 

ECOWARE S.p.A, with its registered offices at Via Nona Strada, 9, 35129 Padua, VAT Registration Number and Tax Code Number 03571330277, entered in the Companies Register in Padua at number 03571330277, represented by Ing. Leopoldo Franceschini, born in Padua on 7th September 1947, in his capacity of legal representative (hereinafter known as the “Contractor”);

 

(hereinafter known individually as a “Party” and jointly as the "Parties")

 

Whereas:

 

	
(A)  

	
The Principal is a company operating in the sector of the development and operational management of photovoltaic systems;

 

	
(B)  

	
The Contractor is a company operating in the construction of photovoltaic systems and has the expertise to perform the Works, as defined below, in accordance with the terms and conditions set out under this Contract;

 

	
(C)  

	
NOVALTEK Servizi S.r.l. with registered office in Monterado (Ancona), Via Cerasi no. 18, tax code 02379340421, is a company operating as the developer of photovoltaic systems (the “Developer”). Upon endorsing this Contract, the Developer undertakes to co-operate with the Parties hereto and support the Contractor to ensure the proper performance of this Contract in relation to the transfer of the Building Permit, the STMC, and all permits in connection therewith, and of the Land Use Rights.

 

	
(D)

	
The Principal intends to proceed with the construction and operation of one photovoltaic system in the province of Ancona, Italy, in the Municipality of Senigallia, made up of 3060 modules made of Monochristalline, with generators having respectively a capacity equivalent to 734,40 kWp (hereinafter known as the "System");

 

  

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(E)

	
In relation to the System, the Developer has filed the following authorisations and requests:

 

	
  

	
(i)

	
The Building Permit, as defined below, was issued by the competent municipal offices in Senigallia (Ancona), on 20 October 2009 (prot. 09/037527);

 

	
  

	
(ii)

	
Application to ENEL, as defined below, for connection to the national electricity grid, pursuant to the Electrical Energy and Gas Authority Resolution No. 99/08, by means of a communication dated 23 June 2009; ENEL has transmitted the STMC, as defined below, (preventive T0017809) on 14 August 2009 and the Developer has formally accepted the STMC proposed by ENEL for the connection to the national electricity grid of the System, by means of its letter of acceptance dated 22 September 2009.

 

	
  

	
(iii)

	
ENEL shall communicate notice of end of the authorization process pursuant to Regional Law 19/1988 and subsequent amendments by way of a letter that is expected on or around 20 March 2010;

 

	
(F)

	
Sunex 3 S.r.l., a company wholly owned by Contractor, with registered offices in Via Nona Strada 9, 35129 Padua, Italy, VAT Registration Number and Tax Code Number 06085820964 (“Sunex3”) has signed a definitive Land Use Right contract, enclosed hereto as Annex 1, with the owner of the Area, as defined below. Contractor undertakes to cause Sunex3, pursuant to article 1381 of the Civil Code, to assign to the Principal the rights and obligations arising under the Land Use Right, as provided under Article 4.2 a) (ii). The Parties have agreed that, to share the costs related to the tax liabilities arising in connection with such assignment, a sum equal to Euro 10,000.00 (ten thousand) shall be deducted from Payment Milestone 1, as defined below;

 

	
(G)

	
In order to realize the System, the Principal needs a partner with high expertise and standing in the construction of photovoltaic systems to be appointed for the planning, realization, operation and connection of the “turn key” system (as defined below), and the Contractor is a leading company operating, inter alia, in said field;

 

	
(H)

	
On 2 December 2009, the Parties entered into a framework agreement, regulating the general understanding on which their partnership should be based.

 

	
(I)

	
On 22 January 2010, the Parties entered into an agreement (the “Option Agreement”), enclosed hereto as Annex 18, whereby the Principal was provided with an option right to purchase the shares of Sunex 3, in accordance with the terms and conditions of the Option Agreement and on execution of which the Principal paid a deposit equal to Euro 50,000.00 (fifty thousand), half of which shall be deducted from Payment Milestone 1, as defined below.

 

	
(J)

	
The Principal is planning to appoint a financial institution (the “Financing Entity”), which will grant to the Principal, on a leasing or project finance basis, two credit lines, the first named “Base Line” for financing of project’s costs, and the other named “VAT Line” to finance VAT on such costs (the “Financing“);

 

 

Page 3 of 39

 

 

	
(K)

	
The Contractor has confirmed the feasibility and economic convenience of the solution for the connection proposed by ENEL with the STMC referred to under point E (ii) above;

 

	
(L)

	
In the light of the above, the Contractor decided to enter into this Contract, and undertook (i) to carry out all the activities and services provided herein; and (ii) to guarantee, pursuant to article 1381 of the Civil Code, the proper fulfilment of all the obligations and activities to be performed and carried out by the Developer;

 

	
(M)

	
The Principal is willing to entrust the Contractor also with the operation and maintenance of the System through execution of an ad hoc operation and maintenance agreement (the “O&M Agreement”), which shall be executed, as soon as it is feasible and in any case as a condition precedent to Payment Milestone 2,  substantially in the form of Annex 17.

  

NOW THEREFORE the Parties agree as follows:

 

Article 1 – Recitals, annexes and previous agreements

 

1.1 The recitals and annexes to this contract (hereinafter known as the “Contract” or “EPC Contract”) shall represent an integral and substantial part of the same.

 

1.2 This Contract replaces and fully supersedes any previous agreement entered into between the Parties, either written or oral, on the matters outlined here below.

 

Article 2 – Definitions and Interpretation

 

2.1 In addition to any other words and expressions defined in this Contract, the terms used in this Contract, where they start with a capital letter, shall have the following meanings:

 

	
·  

	
AEEG: means the Electrical Energy and Gas Authority incorporated pursuant to the Law No. 481 dated 14th November 1995;

 

	
·  

	
Applicable Law: means each and every law, regulation, measure, ruling, decree (including the Decree Law) or deed having a binding nature in Italy and issued by every state body and judicial and/or administrative authority, which is in force on the date in which this Contract is entered into or which comes into force thereafter;

 

	
·  

	
Applicable Permits: means each and every license, authorization, certification, filing, recording, permit, affidavit (including the denuncia di inizio attività, the autorizzazione unica or permesso di costruire) or other approval with and/or of any competent authorities that is required by Applicable Law for the construction and connection to the grid (including the comunicazione conclusione iter autorizzativo issued by Enel pursuant to Regional Law 19/1988 as subsequently amended) and admission to the Incentives of the System including, without limitation, those required by Applicable Law in zoning, building, environmental, landscaping, planning and/or archaeological matters;

 

  

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·  

	
Area: means the area in the plan referred to in Annex 2 to this Contract, in which the System shall be built;

 

	
·  

	
Building Permit: means the construction authorisation (“Permesso di costruire”) provided for by Presidential Decree 6 June 2001 no. 380;

 

	
·  

	
Civil Code: means the Italian Civil Code, introduced with the Royal Decree Law No. 2, dated 16th March 1942, and all subsequent amendments and/or integrations thereto;

 

	
·  

	
Commencement of Operation: means the commencement of operation (i.e. entrata in esercizio) of the System pursuant to Article 2(g) of the Ministerial Decree 19 February 2007;

 

	
·  

	
Communication of the Executive Project’s Approval: with reference to the System, shall have the meaning set out in the Article 8.3 below;

 

	
·  

	
Completion Date shall have the meaning indicated in Article 9.1;

 

	
·  

	
Confidential Information: means the information, data, notes, records, agreements, documents, in whatsoever form drawn up, provided by one of the Parties to the other or, in any case, obtained from one of the Parties and connected with the execution of this Contract and, in particular, the Technical Specifications, including, without any limits  whatsoever, any technical and contractual documentation inherent in the Works and their object, as well as any document of a commercial or financial nature, data relating to prices and technical knowledge, models, formulas, industrial processes, records, photographs, drawings, contractual conditions, software, programmes and models and any other intellectual  property concerning the Party making the communication or, in any case, to whom said data refer, with the exception of any information already made available to the public;

 

	
·  

	
Consideration: means, with reference to the System, the all inclusive, invariable, sum that the Principal shall pay to the Contractor to perform the Works with respect to the System as per Article 4.1 of this Contract;

 

	
·  

	
Construction Health and Safety Coordinator (coordinatore in materia di sicurezza e salute durante la realizzazione): means the individual appointed by the Principal pursuant to Article 7 below, who has been entrusted with the duties related to this role pursuant to Article 92 of the Legislative Decree Law No. 81/2008 and subsequent amendments and integrations;

 

	
·  

	
Contract: means this Contract, including all the Annexes and all amendments hereto as mutually agreed by the Parties;

 

	
·  

	
Contractor’s Parent Company: means Kerself S.p.A., a company incorporated under the laws of Italy, with its registered office at Via della Tecnica 8, Prato di Correggio, registration with the Registro delle Imprese of 01777890359, Fiscal Code and Vat No. 01777890359;

 

	
·  

	
Delay Liquidated Damages means the damages referred to in Article 9.3;

 

	
·  

	
Decree: means the Decree Law dated 19th February 2007 no. 25336 issued by the Economic Development Minister and whose object is the “Criteria and methods to encourage the production of electrical energy by means of solar photovoltaic conversion in implementation of Article 7 of the Legislative Decree Law No. 387, dated 29th December 2003” (Criteri e modalità per incentivare la produzione di energia elettrica mediante conversione fotovoltaica della fonte solare, in attuazione dell'articolo 7 del decreto legislativo 29 dicembre 2003, n. 387), and subsequent amendments and/or integrations thereto;

 

  

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·  

	
Definitive Project: means,  the “Progetto Definitivo”, i.e. the project drawings to realise the Works and the relative annexes, a copy of which is attached hereto, as Annex 4;

 

	
·  

	
Design Health and Safety Coordinator (coordinatore in materia di sicurezza e salute durante la progettazione): means the individual appointed by the Principal pursuant to Article 7, who shall draft the PSC and who has been entrusted with the duties related to this role pursuant to Article 91 of the Legislative Decree Law No. 81/2008 and subsequent amendments and integrations;

 

	
·  

	
Discount: has the meaning indicated in Article 9.7 hereof;

 

	
·  

	
Discretional Variations: has the meaning indicated in Article 10.2 (b) hereof;

 

	
·  

	
ENEL: means Enel Distribuzione S.p.A.;

 

	
·  

	
Equipment: means the Contractor’s equipment and components to carry out the Works listed in Annex 3 of this Contract;

 

	
·  

	
Executive Project: means  the “Progetto Esecutivo”, i.e. the project drawings prepared and delivered by the Contractor prior to the commencement of the Works pursuant to Article 8, in compliance with the Technical Specifications and with the Decree Law provisions;

 

	
·  

	
Expert: means the arbitrator appointed for the solution of technical and related matters in accordance with Article 24.2;

 

	
·  

	
FAC: means the Final Acceptance Certificate, i.e. the certificate that shall be issued by Principal in compliance with the outline set forth in Annex 16 acknowledging the positive outcome of the conditions mentioned in art. 12;

 

	
·  

	
Financing: means the project loan that may be arranged by the Principal, in compliance with recital H above;

 

	
·  

	
Financing Entity: means the financing institution or any other equity partner identified by the Principal which could grant the Financing to the Principal;

 

	
·  

	
First Reassessment Test: means the First Reassessment Test of the MGPR to be performed pursuant to Article 12.6.

 

	
·  

	
Force Majeure: has the meaning indicated in Article 11;

 

	
·  

	
GSE: means the Gestore dei Servizi Elettrici - GSE S.p.A., i.e. the entity appointed to implement the incentive tariff regime foreseen by the Decree Law;

 

	
·  

	
Health and Safety Coordinators: means the Construction Health and Safety Coordinator jointly with the Design Health and Safety Coordinator;

 

	
·  

	
IAC: means the Incentive Acceptance Certificate, i.e. the certificate that shall be issued by the Principal in accordance with the outline set forth in Annex 15, after the release of the TAC and PAC, acknowledging that the System has been admitted to the Incentive scheme and that the agreement with GSE has been entered into;

 

  

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·  

	
Incentive: means the incentive to the tariff for the production and delivery of power to the national electricity grid through a solar power plant, in accordance with the Ministerial Decree of 19 February 2007 and the Resolution No. 90 of 11 April 2007 of AEEG;

 

	
·  

	
Incentive Agreement: (“Convenzione con GSE”) means the agreement between the Principal and GSE in order to obtain the Incentive;

 

	
·  

	
Interconnection Agreement means the agreement to be entered into between the Principal and the national electricity grid operator which provides the terms and conditions for the connection to the national grid.

 

	
·  

	
Land Use Rights are the rights in rem (“diritto di superficie”) referred to in Recital F, to be acquired by the Principal over the Area, pursuant to Article 3.2 (a).

 

	
·  

	
Mechanical Completion: means the completion of all Mechanical Works of the System;

 

	
·  

	
Mechanical Works: means, with reference to the System, all the mechanical and electrical works. It includes (a) supply and installation of the following equipment: inverters, photovoltaic modules and DC installation, mains, pits, cabling, electrical boxes and protection devices, internal connections and interconnections with external installations, weather station, low voltage installation, civil engineering, medium voltage installation (including transformation, protection equipment and utility interconnection equipment, security and monitoring systems); and (b) the static test of structures (collaudo statico) according to the Applicable Law. For the avoidance of doubt, the Mechanical Works do not comprise the physical realization of the connection line to the national electricity grid;

 

	
·  

	
Minimum Guaranteed Performance Ratio (or MGPR): means the minimum performance ratio guaranteed by the Contractor pursuant to the Annex 9 and in accordance with the methodology used for the measurement of the System performance according to the standard CEI EN 61724 (CEI 82-15) as described in the same Annex 9;

 

	
·  

	
Necessary Variations: has the meaning indicated in Article 10.2  (a) below;

 

	
·  

	
O&M Agreement: means the operation and maintenance agreement referred to in Recital (M) above;

 

	
·  

	
Operational Inspection: means, with reference to the System, the verification process carried out by the Contractor according to the Technical Specifications,  the Applicable Laws, and the MGPR which shall be carried out by the Parties in accordance with Annex 10 and article 12 below in order to achieve the PAC;

 

	
·  

	
PAC: means the Provisional Acceptance Certificate, i.e. the certificate that shall be issued by Principal in compliance with the outline set forth in Annex 14 acknowledging the positive outcome of the Operational Inspection;

 

	
·  

	
Parent Company Guarantee: means the guarantee, consistent with the form set forth in Annex 5, whose maximum amount is equal to the amount of the Consideration to be issued by the Contractor’s Parent Company in favour of the Principal, in compliance with Article 4.2, as guarantee for the obligations undertaken by the Contractor under this Contract.

 

	
·  

	
Payment Milestones: means the milestones for the payment of the Consideration as set out in Article 4 of this Contract;

 

  

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·  

	
Performance Liquidated Damages: means the damages referred to in Article 13.2;

 

	
·  

	
POS: means the operative safety plan (i.e. Piano Operativo di Sicurezza) to be drawn up by the Contractor, with reference to the System, in compliance with the CSP, in accordance with Article 89, paragraph 1, letter h) of the Legislative Decree Law No. 81/2008 and subsequent amendments and integrations thereto, as possibly amended in agreement with the Health and Safety Coordinators;

 

	
·  

	
Power Purchase Agreement (or PPA): means the agreement that the Principal will enter into with the energy company of its choice for the sale of the produced electricity;

 

	
·  

	
Project Implementation Schedule (or PIS): means the schedule for the implementation of the construction of the System, which is attached as Annex 7 as may be updated, from time to time, in agreement between the Parties;

 

	
·  

	
PSC: means the coordination and safety plan drawn up by the Design Health and Safety Coordinator during the planning phase, pursuant to Article 100 of Legislative Decree Law No. 81/2008, which must include, inter alia, an estimate for the safety costs, as eventually altered  by the Construction Health and Safety Coordinator during the performance phase while the Works are carried out;

 

	
·  

	
Reassessment Tests: means jointly the First Reassessment Test and the Second Reassessment Test of the MGPR will be performed pursuant to Article 12.6.

 

	
·  

	
Second Reassessment Test: means the Second Reassessment Test of the MGPR to be performed pursuant to Article 12.6.

 

	
·  

	
Service Order: means the orders given during the execution of the Works;

 

	
·  

	
Site Manager: means the individual appointed by the Contractor, who shall work with the Works Manager throughout the performance of the Works;

 

	
·  

	
Start of Works: has, with reference to the System, the meaning indicated in Article 8.4 herebelow;

 

	
·  

	
STMC: means the minimum technical solution for connection referred to in the AEEG Resolution no. 99/08 and subsequent amendments;

 

	
·  

	
System: means the photovoltaic system in the Municipality of  Senigallia (AN) made up of 3060 modules made of monochristalline, with a generator that has a capacity equivalent to 734,40 kWp, and, for the avoidance of doubt, shall include all the items, such as without limitation, cables, modules, inverters, structures, cabins, etc, that are finalised at the functioning of the plant;

 

	
·  

	
TAC: means the Technical Acceptance Certificate, i.e. the certificate that shall be issued by Principal in accordance with the outline set forth in Annex 11 following the Technical Inspection;

 

	
·  

	
Technical Consultant: means the consultant appointed by the Principal and/or the Financing Entity, who has been appointed to monitor the progress of the Works;

 

	
·  

	
Technical Inspection: means the inspection procedure that the Principal shall carry out pursuant to Annex 10 and in accordance with Article 12 in order to verify that the Mechanical Completion complies with the Technical Specifications, Applicable Laws and rules of the trade, and to achieve the TAC;

 

  

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·  

	
Technical Specifications: means the documentation, referred to in Annex 6 of this Contract, in which the technical specifications on the basis of which the Contractor shall perform the Executive Project and Works to reach the MGPR are indicated;

 

	
·  

	
Variations: mean, jointly, the Discretional and Necessary Variations;

 

	
·  

	
Warranty Bond: means the insurance bond on first demand equal to 15 % (fifteen per cent) of the Consideration, issued by a first-class insurance company which has been attributed, at least a S&P A-rating or which, in any case, satisfies the Principal and the Financing Entity;

 

	
·  

	
Warranty Period: means the period of 2 (two) years starting from execution of the PAC.

 

	
·  

	
Working Day: means every day except for Fridays, Saturdays, Sundays and public or bank holidays;

 

	
·  

	
Works: means the activities that have been performed or are to be performed by the Contractor for the System pursuant to this Contact, as better described in Article 3 hereof;

 

	
·  

	
Works Manager: means the “Responsabile Lavori”, i.e. the individual appointed by the Principal, in compliance with the Law No. 81/2008, who shall perform the site management duties foreseen by the Applicable Law and/or listed in this Contract;

 

2.2. The following interpretation provisions shall be applied to this Contract, unless otherwise provided for:

 

	
(a)

	
the articles’ headings are merely indicated for the sake of convenience of reference and cannot be used for the interpretation of the terms contained in this Contract;

 

	
(b)

	
reference to sections, articles and annexes shall be understood as being made, unless otherwise indicated, to the sections, articles and annexes contained in this Contract;

 

	
(c)

	
unless explicitly indicated in this Contract,

 

	
  

	
(i)

	
any reference to this Contract shall be a reference to the Contract, as validly revised, integrated or amended and

 

	
  

	
(ii)

	
any reference made to any other agreement or document shall imply reference to that agreement or document, as validly revised, integrated or amended;

 

	
(d)

	
unless otherwise explicitly indicated, the words and definitions, used in the singular form shall have the same meaning, mutatis mutandis, even when used in the plural form and vice versa;

 

	
(e)

	
the terms, "herein", "therein" and synonyms in this Contract refer to the entire Contract and not to particular articles in this Contract, unless explicitly provided in this sense, just as the terms “below” or “above” indicate the part below or above in this Contract, with reference to the point in which said terms have been used;

 

	
(f)

	
the word “included” and the expression “in particular” shall always be considered to be followed by the expressions “without limitations” or “not limited to” even if not effectively followed by said expressions;

 

	
(g)

	
every reference to each individual shall also refer to his legitimate successors and assignees;

 

  

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(h)

	
if, on the basis of this Contract, an activity must be performed, a communication sent or a term expires on a day other than a Working Day, said activity shall then be performed, the communication be sent or the relative term expire on the Working Day falling immediately after.

 

Article 3 – Object and Description of the Works

 

3.1 With this Contract, the Principal has entrusted “turn key” the Contractor, who accepts, with the realization of the Executive Project and the performance of all the Works in a world class manufacturing way and in compliance with the Technical Specifications and Applicable Laws. The Contractor is also entrusted, inter alia, with (i) obtaining of all the Applicable Permits required for the construction and the functioning of the System, (ii) the realisation of all the necessary Works required for the integral construction of the System in accordance with the terms and conditions set forth by this Contract, (iii) the connection of the System to the national electricity grid in compliance with the Project Implementation Schedule, and (iv) the assistance in obtaining the Incentive.

 

3.2 In particular, and without limitation, the following activities must be understood as having been included in the invariable Consideration referred to in Article 4:

 

	
(a)  

	
Land Use Right (diritto di superficie): the Contractor undertakes to cause Sunex3 to appoint the Principal as party of the final Land Use Right agreement(s) referred to in Recital (F) above, so that the Principal will be able to validly hold the Land Use Right (diritto di superficie) over the Area, pursuant to Article 4.2.(a). All activities related to any cadastral parcelling (frazionamento) which may be necessary in relation to any plot of land involved by the System shall be carried out by the Contractor;

 

	
(b)  

	
Transfer in favour of the Principal of the Applicable Permits, including the STMC and the Building Permit submitted by the Developer. In particular, the Contractor undertakes to cause the Developer to perform any required activity or prepare any needed document for the successful transfer of the Building Permit in favour of the Principal, pursuant to Article 4.2, including delivery to the competent Municipality Technical Offices of the variations to the Building Permit, if any;

 

	
(c)  

	
Engineering: including the performance, for the System, of the Executive Project in compliance with the Technical Specifications and their amendment as required in order to obtain the Principal’s final, written approval, including, without limitation, the System “as-built” documentation, the electrical single wire and multi-wire diagrams, Technical Specifications, components and operation and maintenance manuals;

 

	
(d)  

	
Civil Works: including, for the System, the realization of entries, digging work for the electrical underground cabling, if any, foundations, enclosures and constructions necessary to house the inverters and transformers, fencing, in accordance with the Executive Project and the Technical Specifications and supplying, on his own initiative and expense, the materials, vehicles or any other component and labour necessary. Realisation of all the provisional Works, including those located outside the Area (signage, even luminous, placards, crush barriers aimed at defining or limiting the paths of pedestrians and vehicles, in compliance with the traffic and viability provisions), as well as the preparation of the equipment aimed at guaranteeing, for the entire duration of the Works, in compliance with the provisions on safety and health on the workplace and what is contained and has been prescribed in the PSC. Realisation of site offices for the Works Manager and the Design Health and Safety Coordinator. Realisation of the utilities required for the supply of water, gas, electricity, drainage into the sewers, as well as the provision of suitable offices for the Design Health and Safety Coordinator. Payment of all the charges for the consumption of water, gas, electricity and drainage into the sewers, as described above. Building of barriers or provisional protection for the Works and wherever the safety provisions require them;

 

  

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(e)  

	
Supply of the electro-mechanical apparatus: including supply, installation and start up of the photovoltaic modules, mounting structures, inverters, module boards and electrical connection in direct and alternating current into the national electricity grid, transformation box, interface module boards, supervision and control system, monitoring system, video surveillance and weather station.

 

	
(f)  

	
Assembly and installation: the supply and installation, including the use of labour, of all the materials, accessories and secondary components that might be required for the correct and safe operation and management of the System. Maintenance and operative capacity of the site for the entire duration of the Works;

 

	
(g)  

	
Constant inspection and planning of the states of progress concerning the Works.

 

	
(h)  

	
Grid connection civil works: the timely realisation of all the civil works required by ENEL with reference to the STMC, for the purposes of the System’s connection to the grid (merely by way of an example, the realisation of the area/cable line and delivery box). The works may include the intervention of ENEL.

 

	
(i)  

	
Delivery to the Principal of all the necessary documentation, on issue of the System’s PAC and as a condition for the issue of the FAC, to be drawn up in compliance with the Applicable Law and in order to obtain the Incentive;

 

	
(j)  

	
Post-STMC activities: relations with the competent authorities (such as, inter alia, ENEL) and the individuals appointed by the latter for the System’s connection to the grid shall be directly managed by the Contractor, who must constantly monitor ENEL’s activities and those of the other individuals, soliciting them, when necessary, with the means deemed to be most expedient, in order to facilitate and, in any case, make such connection to the national electricity grid possible within the Completion Date established by the Project Implementation Schedule. Furthermore, the Contractor shall carry out all activities and formalities aimed at obtaining the Incentive Agreement, the Interconnection Agreement and the PPA (as the case may be), and to prompt the Principal for proper action in connection therewith, when necessary.

 

	
(k)  

	
Custody of the Area: maintenance, protection, monitoring, security service, custody and conservation of the Area and of the equipment erected or stored therein until the issuance of the relevant PAC. The protection and security systems and procedures will be in line with the best practice and the minimum standard requested by the insurers. The Contractor shall be the keeper of the Works, as well as all the materials and equipment to be used during the execution of the Works and must, therefore, adopt the necessary measures aimed at avoiding any losses, damages and thefts, as well as providing, at its own initiative and expense, for the replacement of what has been damaged or removed until the issue of the PAC and the System’s delivery to the Principal.

 

	
(l)  

	
Clearance of the Area: removal of all tools and materials that are not necessary during the Warranty Period within the first twenty (20) Working Days after the signing of the PAC; cleaning of the Area, including the restoration of the surrounding areas and roads, in order to leave the System in the condition necessary for its proper operation and maintenance. Removal and transport to the authorised public dumps, of all waste materials that cannot be re-used, with final delivery, to the Principal, of the certification of its disposal, in compliance with the Applicable Law.

 

  

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3.3 The Contractor shall perform, more generally, any other activities that might be necessary to duly perform the Contract, to achieve the standards of world class manufacturing, and MGPR.

 

3.4 In addition, the Contractor shall file, at its expense, any documents and applications necessary to apply for and obtain the Applicable Permits on a timely basis, or in the event that the Applicable Law requires that such Applicable Permits be filed by the Principal, the Contractor hereby undertakes to fully cooperate in good faith with the Principal in interacting with the public authorities and carry out all the activities to obtain them, as soon as possible, and in any case within the terms set out by the Applicable Law and the POS.

 

3.5 It is understood that the planning, realization, any inspection and the subsequent management of the System may be financed by the Financing Entity in compliance with the project financing or leasing outline, and that this shall require this Contract’s co-ordination with the terms set forth in the financing agreement, by means of entering into a direct agreement with the Financing Entity (the “Direct Agreement”). Therefore, the Parties mutually undertake to enter into the Direct Agreement, if necessary.

 

Article 4 – Consideration, Terms of Payment and Guarantees

 

4.1 The Principal shall pay the Contractor the Consideration of Euro 3,050.00 per kWp (three thousand fifty) for the System, plus VAT, in compliance with the following terms and conditions.

 

4.2 The Consideration shall be paid to the Contractor in accordance with the following Payment Milestones:

 

	
  

	

a) Payment Milestone 1: payment of Euro 680.00 per kWp (six hundreds eighty), with deduction of Euro 10,000.00 (ten thousand) referred to in Recital (F) and of the deposit equal to Euro 25,000.00 (twenty five thousand) referred to in Recital (I), shall become due by the Principal on occurrence of all the following events:

 

	
  

	
i.

	
completion of the Building Permit and all Applicable Permits (excluding the Incentive) procedure, including submission of the variations, if any, consequent to the planning and Equipment amendments, and the performance of the provisions established by the competent municipal technical offices to which the Building Permit might be subject to;

 

	
  

	
ii.

	
transfer to the Principal or a third company indicated by the Principal of the relevant Land Use Rights, by way of assignment of the definitive Land Use Right contract or by any other way as the Principal may require;

 

	
  

	
iii.

	
connection of the System to the grid is reasonably estimated by the Contractor, by way of  a statement drafted in accordance with Annex 13 to take place within 120 (hundred and twenty) days;

 

	
  

	

iv.

	

delivery of the Parent Company Guarantee in compliance with the last paragraph of this Article 4.2, letter a).

 

  

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Promptly after payment of the relevant invoice, and in any case within 45 days of receipt thereof by the Principal, the Contractor shall provide evidence to the Principal that the Building Permit as well as the STMC (and of any Applicable Permit already obtained) have been successfully transferred to the Principal.

 

The Contractor undertakes to deliver to the Principal, the Parent Company Guarantee within 7 (seven) Working Days of execution of this Contract, and in any case before having received the payment. The Parent Company Guarantee will be issued for the due performance of the Works, as well as for the due performance by the Contractor of any and all the obligations undertaken under this Contract, including, but not limited to, (i) the obtaining of a valid title of Land Use Right over the land where the System shall be built and developed in accordance to Article 3 above; (ii) the obtaining of all the Applicable Permits required for the realization, connection and the functioning of the System; (iii) the transfer of the Building Permit in favour of the Principal; (iv) the admission to the Incentives; and (v) any and all payment obligations arising in connection herewith. The Parent Company Guarantee will be issued in the form under Annex 5, for an amount equal to the Consideration. From the execution date by the Principal of the PAC, the Parent Company Guarantee must also guarantee the precise and prompt performance of the obligations undertaken by the Contractor, pursuant to the O&M Agreement, as well as the punctual performance of all the payment obligations, borne by the Contractor under the O&M Contract. The Parent Company Guarantee shall be finally released upon issuance of the FAC.

 

	
  

	
(b) Payment Milestone 2: subject to the provisions of art. 12.1 hereof, payment of Euro 340.00 per kWp (three hundreds forty) shall become due on occurrence of all the following events:

 

	
  

	
(i)

	
satisfactory outcome of the Technical Inspection and the relevant issuance of the TAC;

 

	
  

	
(ii)

	
all conditions precedent to Payment Milestone 1 are in place and valid;

 

	
  

	
(iii)

	
the Contractor can still reasonably estimate connection of the System within 120 (hundred and twenty) days of Payment Milestone 1;

 

	
  

	
(iv)

	
execution of the O&M Agreement.

 

	
  

	
(c) Payment Milestone 3: subject to the provisions of art. 12.2 hereof, payment of Euro 2,030.00 per kWp (two thousand thirty) shall become due on occurrence of all the following events:

 

	
  

	
(i)

	
satisfactory outcome of the Operational Inspection and issuance of the PAC;

 

	
  

	
(ii)

	
all conditions precedent to Payment Milestones 1 and 2 are in place and valid;

 

	
  

	
(iii)

	
delivery by the Contractor to the Principal of the Warranty Bond, provided that the Warranty Bond shall become effective on payment of Payment Milestone 3 by the Principal.

 

  

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The Contractor shall deliver to the Principal the Warranty Bond, amounting to 15% (fifteen per cent) of the Consideration, to guarantee the due performance of any and all the obligations undertaken by the Contractor under the EPC Contract at the moment of PAC. The Warranty Bond shall be definitively released upon issuance of the FAC, provided that the insurance bond under the O&M contract is issued by the Contractor.

 

4.3 Once the Contractor believes that any of the Payment Milestones set out under Article 4.2 has been achieved, it shall so notify the Principal in writing. Within 5 (five) Working Days from receipt of the notice, the Principal shall inspect the Works and verify that the relevant Payment Milestone has been achieved. In the event of objection, the Principal shall indicate to the Contractor the works pending performance for that Payment Milestone. In the event that no objection is raised in writing by the Principal within such term, the relevant Payment Milestone shall be deemed approved.

 

Payment shall be made within 5 (five) Working Days of the date of receipt by the Principal of the invoice in relation to Payment Milestone 1 and within 15 (fifteen) Working Days in relation to other Payment Milestones. The relevant invoice may not be issued prior to confirmation under the preceding paragraph, and prior to issuance of the TAC with regard to Payment Milestone 2 and prior to issuance of the PAC with regard to Payment Milestone 3, as set forth in detail under Article 12.

 

The Parties agree that the payments of the Payment Milestone, for which the Principal shall issue a wire transfer confirmation, shall constitute mere advance payments and not the single lots in which the Parties intended dividing up the Works, with the exclusion, therefore, of the provision contained in the second paragraph of Article 1666 of the Civil Code.

 

4.4 The Parties agree and accept that the Consideration provided in the Contract is fixed and cannot be amended, save as provided in Article 10 of the Contract. Accordingly, the Parties have agreed to exclude the applicability of the Civil Code and every other provision that would entitle the Contractor to obtain a price review in the Contract in order to realise the Works. Save for art. 10 hereof, the risk related to the events referred to in Article 1664 of the Civil Code (burdensomeness or difficulty in performance: i.e. due to an increase of the cost of works and/or materials, or particular performance difficulties due to geological, hydraulic, etc.) and Article 1467 of the Civil Code is fully and expressly undertaken by the Contractor.

 

4.5 It is understood that, in the case of delay in payment of at least 30 days, the Principal must pay the Contractor interest on arrears as provided for by Legislative Decree 231/2002.

 

Article 5 – Representations and warranties of the Contractor

 

5.1 The Contractor represents and warrants that he has visited the Area, that the same is suitable for the System’s realization in a world class manufacturing way and in compliance with the Technical Specifications and the Applicable Law and has already checked the absence of obstacles of a technical and/or geological and/or hydraulic and/or legal and/or administrative nature with reference to the commencement of the Works. Any and all designs, engineering and project specifications produced and delivered by the Contractor shall be prepared and signed by a duly certified engineer and are appropriate to fully accomplish the purpose of this Contract. Therefore, any approval or acknowledgement by the Principal of the technical designs and documentation shall not release the Contractor from its duties, warranties and liabilities as to the exact delivery of the System and performance of the Works.

 

  

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5.2 The Contractor represents and warrants that at the time of execution hereof he, also through the Developer, holds a valid Building Permit and accepted STMC in relation to the System and that he is unaware of any facts or circumstances, of any kind whatsoever that might prejudice the formation or validity of any System’s Applicable Permits, or the transfer or registration thereof in favour of the Principal. The Area, object of the final building right agreement regarding the Land Use Rights, are free from any encumbrances or burden and there are no third parties (apart from the lawful owners) who can claim any right in relation to such lands, nor prevent the acquisition by the Principal of the Area free from any encumbrances or burden.

 

5.3 The Contractor also represents and warrants to the Principal, with reference to the “turn key” nature of this Contract, to be the only Party liable to the Principal concerning the Works’ complete realization in a world class manufacturing way, undertaking, thus, all liability towards the Principal with reference to all the activities whose performance is entrusted to sub-contractors, pursuant to this Contract.

 

5.4 The Contractor expresses his consent, as of the date hereof, to the assignment and/or pledge in favour of the Financing Entity (or any third parties appointed by the latter) by the Principal of his receivables deriving from this Contract and shall provide his cooperation in the performance of all the formalities and shall provide any further consent, necessary or expedient, required as to the assignment and/or pledge's formation.

 

5.5 The Contractor guarantees to dedicate to the System, at all times, the adequate number of workers and to timely and completely pay all wages, insurance fees and public charges, social securities, etc. for the workers on the sites.

 

5.6 There are no impediments, to Contractor's knowledge that could compromise in some way the obtaining of the authorizations for the construction of the grid infrastructure necessary to connect the System to the grid.

 

Article 6 – The Principal’s duties

 

6.1 The Principal shall undertake to make available in the construction site the areas necessary to allocate the Contractor's site offices and warehouses as well as to store the materials.

 

6.2 The obligations of the Principal shall be those that are established in this Contract and those resulting from the Applicable Law, including, in particular, and without prejudice to the Contractor’s obligations under Article 3, the following:

 

	
(a)  

	
to timely comply with its payment obligations under this Contract;

 

	
(b)  

	
to promptly sign with Enel Distribuzione S.p.A. the Interconnection Agreement for the System, upon being prompted by the Contractor;

 

  

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(c)  

	
to promptly sign with GSE the Incentive Agreement for the System upon being prompted by the Contractor;

 

	
(d)  

	
to promptly sign with the energy company of its choice the PPA upon being prompted by the Contractor;

 

	
(e)  

	
to co-operate, in good faith, with the Contractor in relation to the Contractor's performance of this Contract.

 

Article 7– Works management, Safety Coordination and Costs, Site Rules

 

7.1 Pursuant to Article 89 of the Legislative Decree 81/2008, the Principal shall appoint a Design Health and Safety Coordinator for the planning phase. The Design Health and Safety Coordinator shall be in charge, during the planning phase, of all the obligations and responsibilities pursuant to the Applicable Laws regarding Health and Safety in the workplace. All the fees and expenses relating to said appointment, including his/her consideration shall be borne by the Principal. Pursuant to Article 89 of Legislative decree 81/2008, the Principal shall also appoint a Construction Health and Safety Coordinator for the Executive Project phase, who shall be in charge of all the obligations and responsibilities pursuant to the Applicable Laws regarding health and safety in the workplace. The Principal, pursuant the Article 89 of Legislative Decree 81/2008, shall delegate to a professional duly qualified the duties of supervision and coordination of the manner and timing of the Works (the “Works Manager”, i.e. the Responsabile dei Lavori). All the fees and expenses relating to the Works Manager  and the  Health and Safety Coordinators, including their considerations, shall be borne by the Principal.

 

7.2 In order to allow the Contractor to draw up the Piano Operativo di Sicurezza (the POS) the Principal, pursuant to Article 100 Para 1 of the Legislative Decree 81/2008, through the Design Health and Safety Coordinator, must deliver the Piano di Sicurezza e Coordinamento (the PSC) to the Contractor, at least 30 days before the Start of Works. The Contractor shall deliver to the Principal, at least 20 Working Days before the Start of Works the POS, which shall include any integrations related to the specific risks deriving from the execution of the works pursuant to Article 100, Para 1 of the Legislative Decree no. 81/2008 and to the terms set out in Annex 7 thereto. The POS and its amendment are an integral part of this Contract and the Contractor undertakes to comply with them as well as with any statutory provisions and regulations in force, and shall be held directly and autonomously liable in the case of any breach of the same.

 

7.3 The Works Manager, who in any case shall not have the Principal’s contractual powers of representation, shall supervise the Works to be performed in compliance with the contractual provisions and the law, the terms set out therein and, when the performance is carried out by sub-contractors, he must ensure the coordination between the individual works. In particular, without prejudice to the above, the Works Manager shall be responsible for the following:

 

	
(a)  

	
Represent the Principal on site during the performance of this Contract;

 

	
(b)  

	
Check compliance with the Project Implementation Schedule and, in the case of delay with reference to the latter, agree upon a new programme aimed at guaranteeing compliance with the dates established for the System’s final delivery;

 

  

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(c)  

	
Monitor the site;

 

	
(d)  

	
Check the effective coordination among the subcontractors, under the Contractor’s liability;

 

	
(e)  

	
Draw up the reports relative to the beginning and end of the Works, any suspensions and anything else that might concern the site Works;

 

	
(f)  

	
Check the partial and final advance payments;

 

	
(g)  

	
Analyse the costs indicated by the Contractor in the case of Discretional Variations;

 

	
(h)  

	
Ensure the execution of  the Technical Inspection, the Operational Inspection, the Reassessment Tests, and the delivery of the Works;

 

	
(i)  

	
Check that the Contractor’s performance of the Works takes place in compliance with all the provisions of this Contract, of the Applicable Law and the Technical Specifications, and in a world class manufacturing way. In particular, the Works Manager shall:

 

	
(i)  

	
impart the technical directions required to guarantee the Contractor’s compliance concerning the Works’ performance conditions and, where necessary, formulate the relative remarks and/or objections and propose Variations;

 

	
(ii)  

	
validate the Technical Inspection and the Operational Inspection for the Principal’s approval;

 

	
(iii)  

	
supply the Contractor with clarification and/or supplementary technical explanations concerning the projects’ specific elements and/or technical descriptions necessary to carry on the Works;

 

	
(iv)  

	
order the amendments, which are necessary for technical reasons, related to specific elements of the Works that do not impair the substance and nature of the Works and that do not constitute Discretional Variations;

 

	
(v)  

	
approve the drawings prepared by the Contractor with reference to their compliance with the Technical Specifications and the Executive Project approved by the Principal.

 

  

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7.4 Within 5 (five) Working Days of the Communication of the Executive Project’s approval, the Contractor shall inform the Principal in writing about the Site Manager’s name, who must have the technical expertise and professionalism necessary to perform his appointment according to this Contract. In particular, in order to ensure the correct performance of the Contractor’s obligations under this Contract and the Applicable Law, the Site Manager must:

 

	
(a)  

	
cooperate with the Works Manager, the engineer appointed to draw up and sign the Executive Project and with the Health and Safety Coordinators; and

 

	
(b)  

	
observe all the requirements and observations imparted by the above persons in the case they spot any inconsistency between the Works and the Applicable Laws.

 

7.5 Any instruction, request, integration or order from the Works Manager, the Health and Safety Coordinators and/or the Safety Coordinator shall be communicated to the Contractor in writing by means of specific Service Orders which must be progressively numbered and delivered to the Site Manager in two copies, one of which must be returned, duly signed, by the Contractor in receipt thereof. The Contractor shall not be entitled to refuse to perform the orders received, save for his right to draw up, in writing, his own remarks or reservations on signing the Service Orders which must, in any case, take place, on penalty of forfeiture, within 5 (five) Working Days of receipt of the Service Orders.

 

7.6 The Health and Safety Coordinators, the Works Manager, the Technical Consultant and/or the individuals indicated by the Principal shall be entitled to enter the site, at any time whatsoever, and to carry on the verifications that, at their unquestionable judgement, would be necessary.

 

7.7 The personnel employed by the Contractor to carry out the Works must be experienced and of a sufficient number in respect of the obligations undertaken by the Contractor. The Principal shall be entitled to require the immediate removal from the site of the personnel’s members who, at his unquestionable judgement, do not offer sufficient guarantees for the timely performance and quality of the Works and/or whose conduct might prejudice the System and its performance. The Contractor’s personnel, operating where the work is carried out, must be equipped with an identity badge.

 

7.8 The Contractor undertakes to comply with all the obligations derived from the Applicable Law’s provisions regarding labour and social security, including the general, health rules on the work place, the provisions on accident prevention on the work place, the obligatory insurance for accidents in the work place and professional illnesses, social security for involuntary unemployment, invalidity or old age, tuberculosis and other professional illnesses, the protection of workers in the case of a contract with particular reference to the Legislative Decree Law No. 81/2008 and to any other provisions in force or which might arise during the Works aimed at protecting the workers. Furthermore, the Contractor shall grant his personnel an economic and juridical status in compliance with the applicable labour collective agreements, and shall provide, upon the Principal’s written request, suitable documentation constituting evidence of the appropriate economic and juridical status and holding the Principal harmless from any claim raised by his consultants and/or employees.

 

7.9  Pursuant to Article 26, paragraph 5 of Legislative Decree no. 81/2008, Annex 8 contains specific indications of the costs relating to safety in the Area, which is included in the Consideration, which the Contractor is obliged to draw up with accuracy and precision.

 

  

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7.10 The Parties agree that the prevailing language for any correspondence between them in relation to the entire execution of this Contract, including correspondence, testings and inspections shall be the English language.

 

Article 8 – Performance of the Works

 

8.1 The Contractor shall deliver to the Principal, within 20 (twenty) Working Days of the date on which this Contract is executed, two copies of the Executive Project for the System, one on paper and one using editable software, for the Principal’s approval.

 

8.2 Within 10 (ten) days from the Executive Project’s delivery date to the Principal, pursuant to Article 8.1 foregoing hereto, the Principal shall provide the Contractor with his consent or his remarks and/or proposals for amendment and integration which are necessary in order to bring into line the Executive Project with the Decree Law and the Technical Specifications. The Contractor shall undertake, at his own expense and without this constituting a reason for requesting any variations to the Consideration, to amend the Executive Project in compliance with the Principal’s proposals. The amended/integrated Executive Project shall be delivered to the Principal within the following 10 (ten) Working Days, in order to obtain his approval, provided that in the following 10 (ten) days the Principal shall communicate his decisions to the Contractor.

 

8.3 Once the Executive Project has been approved by the Principal, the latter shall provide the Contractor with a written communication (the “Communication of the Executive Project’s Approval”), and the Parties shall meet within 7 (seven) days of the Contractor’s receipt of said communication, in order to proceed with the delivery of the Area to the Contractor. On delivery of the Area, as a condition to allow the Start of Works, the Contractor shall provide the Principal with evidence that he has entered into the insurances provided under Article 15, in accordance with the terms thereof.

 

8.4 After delivery of the Area, the Contractor shall set up the site and commence the Start of Works for the System.

 

Article 9 – Completion Date and Delay Liquidated Damages

 

9.1 The Contractor undertakes to achieve Mechanical Completion and connection of the System to the grid (i.e. Commencement of Operation) within 120 (one hundred and twenty) days of the date Payment Milestone 1 shall be paid in accordance with the Contract (“Completion Date”). The Parties agree that in the case of delay by the Principal in the payment of the invoices in accordance with the terms set out in Article 4.3, provided that the procedure of inspection of the Works set out therein has been complied with, the Completion Date shall be postponed by a period of time equal to the days of delay in the relevant payment, save for any other remedy provided in this Contract.

 

9.2 In the case of an envisaged delay in respect of the date referred to in Article 9.1, the Contractor shall within 7 (seven) Working Days from the relevant date, deliver to the Principal a written delay recovery plan, specifying the relevant terms and procedures aimed at safeguarding, inasmuch as possible, the punctual achievement of the Completion Date. For the avoidance of doubt the submission of such recovery plan to the Principal shall not relieve the Contractor from any of its obligations under this Contract.

 

  

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9.3 In the case of failure to comply with the date set forth in Article 9.1, the Principal shall be entitled to apply Delay Liquidated Damages equal to Euro 1.2/kWp (one point two)  per day of delay up to a maximum amount of 5% (five percent) of the Consideration, save for any greater damages and all further compensation in the case of termination pursuant to Article 20.1 (b). The Contractor acknowledges that the above amounts are a genuine pre-estimate of the Principal’s losses in the event of delays in the Completion Date.

 

9.4 During the first 90 (ninety) days of delay, the Principal shall offset the Delay Liquidated Damages against the Consideration, which shall accordingly be reduced. As from the 91st (ninety-first) day of delay, the Principal shall be entitled to the payment of the Delay Liquidated Damages accrued until such time (i.e., for the avoidance of doubt, during the first 90 days Delay Liquidated Damages). Further Delay Liquidated Damages shall be payable on a monthly basis upon receipt by the Contractor of the Principal’s payment notice.

 

9.5 Without prejudice to the above, the Principal shall also be entitled (in its absolute discretion) to offset the Delay Liquidated Damages against any monies due, or to become due, to Contractor.

 

9.6 The payment shall not release the Contractor from its obligation to complete the Works or from any other duty, obligation or responsibility under the Contract.

 

9.7 In the event that the 2010 Incentive foreseen by the Decree is not awarded to the System, the Contractor shall be liable to grant to Principal a discount equal to the loss of profit discounted to present (“Discount”). The Parties agree that every 1 (one) cent reduction in the tariff shall result in the Consideration being reduced by Euro 100.00 per kWp (one hundred), on a pro-rata basis. The Discount shall become payable by the Contractor 30 days after it becomes clear that the System is not admitted to the 2010 Incentive foreseen by the Decree.

 

9.8 The Contractor explicitly waives any right to offset the amounts due to the Principal by way of Discount or Delay Liquidated Damages, pursuant to this Article 9, or pursuant to Article 20.1 against any amount that the Contractor might claim against the Principal. The Contractor acknowledges and considers that the Discount and the Delay Liquidated Damages are suitable to the Consideration and the prejudice that each delay might cause the Principal, and waives any claim or action aimed at obtaining a reduction of such Delay Liquidated Damages or Discounts.

 

Article 10 – Variations

 

10.1 The Contractor undertakes to perform any Variations to the Works, which are required both for the execution of the Works according to the best quality standards as well as if requested by the Principal.

 

10.2 In particular, for the purposes of this Contract, the Variations considered shall be the following:

 

	
(a)  

	
Variations required for the correct fulfilment of the Works in a world class manufacturing way and in compliance with the Technical Specifications and the Applicable Law, pursuant to Article 1660 of the Civil Code (“Necessary Variations”);

 

  

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(b)  

	
Variations requested by the Principal during the performance of the Works, or alternatively, proposed by the Contractor and accepted in writing by the Principal and/or the Financing Entity, subject to the favourable opinion of the Technical Consultant (“Discretional Variations”).

 

10.3 In the case of Necessary Variations, the Contractor shall, if at any time whatsoever whilst the Works are being performed the necessity of any kind of quantitative and/or qualitative amendments concerning the same is found, to immediately inform the Principal in writing, indicating the type of Variations proposed with an indication of the relative quantity, materials and price per unit as well as the realization times required for said intervention. It is understood that no Necessary Variation may be performed without the prior consent to do so by the Principal and the Financing Entity (which shall base its consent on the Technical Consultant’s prior positive opinion). Similarly, in the case of Discretional Variations, the Contractor, with the document proposing the same or within 10 (ten) Working Days in the case that the Variations have been proposed by the Principal, shall send to the Principal and to the Technical Consultant a communication setting out the relative quantity, materials, unit prices, realization times connected with said Variations and the relevant higher costs, if any, provided that in any case no Discretional Variation can be performed without the Principal and Financing Entity’s prior written consent, also with regard to the Variations’ cost.

 

10.4 It is understood and agreed between the Parties that: (i) the costs related to the Discretional Variations requested by the Principal, once agreed between the Parties in accordance with the above provisions, shall be added to the Consideration and paid according to the terms of Article 4 above; and (ii) the costs related to the Necessary Variations, provided that they do not exceed 4% (four per cent) of the Consideration, shall be entirely borne by the Contractor. The increase in the Consideration possibly due by the Principal shall not exceed an amount equal to the reasonable costs incurred by the Contractor in relation to the System in order to comply with the Applicable Law.

 

10.5 The determination of the Variation’s value for the purposes of paying for the additional costs and the application of Article 10.4 above, shall take place in compliance with the following criteria:

 

	
(a)  

	
on the basis of the unit prices in the “Construction Work Price Information” published by the Chamber of Commerce of Padua;

 

	
(b)  

	
the activities that cannot be evaluated according to the above criterion must be agreed on the basis of the market prices applicable to the Works, object of the Contract, as agreed in writing between the Parties.

 

  

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10.6 In the case of delay of the Works due to the necessity to carry out any Discretional Variations and Necessary Variations due to a change in the Applicable Law, the Parties accept that the Project Implementation Schedule shall be modified in agreement between the Parties. This extension must be at least equal to the period agreed between the Parties to be necessary to perform the Variations.

 

10.7 The Contractor waives the termination right foreseen by article 1660 of the Civil Code. Furthermore, Article 1661 of the Civil Code shall not apply to the Discretional Variations requested by the Principal.

 

Article 11 – Force Majeure

 

11.1 Force Majeure shall imply any unforeseeable event, fact or circumstances which cannot be directly attributed to the Party invoking it, which is impossible to prevent by employing ordinary diligence and such as to make impossible, objectively and absolutely and either totally or partially, the performance of any of the obligations under this Contract, provided that said events, acts, facts or circumstances:

 

	
(a)  

	
are outside the control, either direct or indirect, of the Party invoking them;

 

	
(b)  

	
could not have been avoided by employing the normal diligence requested by the nature of the activities performed by such Party; and

 

	
(c)  

	
have been invoked by the same as Force Majeure events (“Force Majeure”).

 

11.2 Merely by way of an example, without limitation and on condition that they satisfy the requirements listed in Article 11.1 above, the Parties mutually acknowledge that the following events constitute causes of Force Majeure:

 

	
(a)

	
general and category and national and local strikes (other than the Contractor’s corporate strikes);

 

	
(b)

	
wars or any other hostile acts, including terrorist attacks,  revolts, uprisings and other civil disorder;

 

	
(c)

	
blockages or embargoes, even of a financial nature;

 

	
(d)

	
exceptional, adverse natural phenomena, including lightning, whirlwinds, earthquakes, fires, floods, overflows, floods, drought, adverse weather conditions that impede the performance of the Works and which cannot be foreseen on the basis of weather forecast data for the current period, meteorites and volcanic eruptions;

 

	
(e)

	
explosions, radiation and chemical contamination.

 

  

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11.3 The Contractor acknowledges and accepts that the following events do not constitute Force Majeure:

 

	
(a)  

	
non-obtainment, revocation or non-renewal of any permit required to perform the Works and realization of the Systems, for facts attributable to the Contractor; and

 

	
(b)  

	
any delays in the delivery of supplies and materials by the suppliers.

 

11.4 Each Party shall immediately inform the other one, in writing, about the occurrence of a Force Majeure event that shall hinder his obligations and, in any case, within 48 (forty-eight) hours from becoming aware of the same, indicating the possible impact that said event might have upon the Project Implementation Schedule. The Party concerned shall also promptly inform the other one when said Force Majeure cause ceases.  In the case of no or delayed communication as to the existence of the end of a Force Majeure cause, the Party in breach of his obligations shall be liable for the damage sustained by the other Party, which could have been avoided or limited, in the case of the timely receipt of the relevant communication.

 

11.5 The Contractor acknowledges and accepts that he shall not be entitled to request any increase in the Consideration or different compensation in relation to the Force Majeure event, except for the costs sustained to adopt the measures referred to in Article 11.7. Subject to the Principal and Financing Entity’s approval (which shall employ the Technical Consultant’s positive prior opinion), the terms established in the Project Implementation Schedule for the Works’ performance will be extended, further to the Contractor’s written request, for a period equivalent to the duration of the Force Majeure even and for the time required to put together the Equipment and stores of materials that have eventually been damaged.

 

11.6 Should the aforementioned Force Majeure events continue, uninterruptedly, for a period of more than 90 (ninety) natural, consecutive days, or for more than 120 (one hundred and twenty) natural, non-consecutive days, as accumulated during the period of time in which this Contract is in force, the Principal shall be entitled to terminate this Contract.

 

11.7 In any case, the Parties shall use their best endeavours to reduce the consequence of the Force Majeure event and shall do what they can to re-establish normal conditions and mitigate any damages eventually sustained by the other Party.

 

Article 12 – Inspection of the Works for payment purposes

 

12.1 Payment Milestone 2 - Technical Inspection – TAC. Once the Mechanical Works are completed, the Contractor shall deliver to the Principal the notice of Mechanical Completion. This notice shall imply the suitability of the System, to be prepared and tested for connection to the national electricity grid except for the physical realization of the connection line to the national electricity grid. Within 10 (ten) Working Days from the Principal having received said communication, the Parties, together with the Works Manager and the Site Manager, as well as the Technical Consultant appointed by the Principal and/or the Financing Entity, shall start the Technical Inspection, in accordance with the procedure provided for in Annex 10, in order to verify that the Works have been carried out in accordance with the Technical Specifications, the Applicable Laws and in a world class manufacturing way. If the Technical Inspection is concluded in a positive way, the Principal shall sign the Technical Acceptance Certificate substantially in the form attached in Annex 11. Should the Technical Inspection not be passed, the Contractor shall remedy any defects found within a reasonable timeframe which shall be agreed by the Parties. Following the signing of the Technical Acceptance Certificate, the Contractor shall be entitled to issue the relevant invoice.

 

  

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12.2 Payment Milestone 3 - Operational Inspection - PAC. Upon Commencement of Operation the Contractor will issue the Commencement of Operation notice as described in Annex 12 to the Principal. Within the shortest possible delay provided that the System has been continuously producing energy for a minimum period of 5 (five) consecutive calendar days with a maximum interruption of 2 (two) blank hours, the Parties, with the collaboration of the Works Manager and the Site Manager, as well as the Technical Consultant appointed by the Principal and/or the Financing Entity, shall begin the Operational Inspection according to the procedure described in Annex 10, and in the presence of the Technical Consultant. In order to start the Operational Inspection, the Contractor must provide all the technical documentation required by the Principal and the Technical Consultant, the “as built” drawings of the Works, the instruction manuals and system maintenance documents. It is understood that the responsibility for all Operational Inspection activity shall be borne by the Principal. During the Operational Inspection, the Principal shall check if (i) the Works have been carried out in a world class manufacturing way and if (ii) they abide by the Technical Specifications and Applicable Law, and (iii) if the System performs in accordance with the MGPR. Upon receipt of the Technical Consultants’ commissioning report and a satisfactory evaluation by the Principal and the Financing Entity hereof the Principal shall issue the PAC substantially in the form attached in Annex 14 and will attach the commissioning report of the Technical Consultants hereto. Should the Operational Inspection not be passed, the Contractor shall remedy any defects found within a reasonable timeframe which shall be agreed by the Parties. Specifically in case of non compliance of the System with the MGPR the Principal shall grant the Contractor, in writing, a period of no more than 25 (twenty-five) Working Days from the relative communication, within which the Contractor must remedy said defects and/or carry out any necessary action to achieve a positive result of the Operational Inspection. Following the signing of the Provisional Acceptance Certificate, the Contractor shall be entitled to issue the relevant invoice.

If the PAC has been passed with certain minor finish work still pending execution, the Principal shall sign the Provisional Acceptance Certificate, provided that the pending minor finish works (the Punch List Works) are listed in an attached document signed by the Parties (the Punch List), and that a period of up to thirty (30) days, or the different period agreed upon by the Parties on the basis of the general accepted commercial practice, is set therein for completion of the Punch List Works.  Contractor shall use its best efforts to carry on the Punch List Works so as to minimize any interference with the operation of the relevant System and so as to minimize any reduction in performance or availability of the relevant System.

 

If, at the conclusion of the time period specified in the Punch List, the Punch List Works have not been performed by the Contractor, the Principal, without prejudice to any other rights it may have hereunder in respect of such not completed Punch List Works, shall give notice to the Contractor and the Contractor shall perform such Punch List Works within fifteen (15) days from receipt of the notice.  Should the Contractor fail to do so, the Principal shall be free to perform such works directly or through third parties, and shall have the right to (a) deduct the related direct costs and expenses (duly documented in writing) from the Consideration, or (b) to enforce the Parent Company Guarantee for the amount of said direct costs and expenses.

 

12.3 Transfer of ownership of the System in favour of the Principal shall occur on issuance of the Provisional Acceptance Certificate.

 

12.4 On issuance of the Provisional Acceptance Certificate, the Contractor must make the O&M Agreement operative in relation to the accepted System.

 

  

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12.5 Incentive Acceptance Certificate. The Principal shall issue the IAC as per Annex 15 after having confirmed that all the following conditions have taken place:

 

	
(a)  

	
Power Purchase Agreement is in force with reference to the collection of the electrical energy produced by the System;

 

	
(b)  

	
Incentive Agreement is entered into with GSE in compliance with the terms foreseen in Article 5, paragraph 4, of the Decree Law, together with all the documents foreseen by the AEEG Resolution 90/07 and the Principal has been informed about the System’s admission to the incentive tariff foreseen by the Decree Law.

 

12.6 Reassessment Tests. The First Reassessment Test of the MGPR shall be performed, in accordance with the procedure described in Annex 10, 12 (twelve) months after the PAC. The Second Reassessment Test of the MGPR shall be performed 24 (twenty four) months after the PAC. 

The Contractor shall notify the Principal when the System is ready to be tested and both Parties will agree a date to carry out the Reassessment Tests for the corresponding annual period (such a date will not be later than the fifteen (15) working days following expiry of the 12 month period following the start of the Warranty Period or the date of the end of the Warranty Period as appropriate).

 

The First and the Second Reassessment Test of the System shall be subject to the Technical Consultant’s consent.

 

12.7 Final Acceptance Certificate. The Principal, with the prior written consent of the Technical Adviser and of the Financing Entity, shall issue the Final Acceptance Certificate as per Annex 16 upon the satisfaction of the following conditions,

 

	
·  

	
the System has passed successfully the First and Second Reassessment Test and/or any related Performance Liquidated Damages have been paid by the Contractor.

 

	
·  

	
the IAC has been issued;

 

	
·  

	
agreement with the GSE and the Incentive are in force with reference to the collection of the electrical energy produced by the System;

 

	
·  

	
all the obligations related to the regulation of access to the grids have been fulfilled;

 

	
·  

	
the O&M guarantee foreseen under the O&M Agreement is in place.

 

Article 13 – Warranties for Defects and Materials

 

13.1 The Contractor shall warrant the System’s performances in compliance with the Technical Specifications and the MGPR as foreseen in Annexes 6 and 9 for the period of 24 (twenty four) months after the issue of the PAC. The Contractor shall undertake, in any case, to promptly remedy the System’s lower performance after having received from the Principal a written communication regarding the unsatisfying performance.

 

  

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13.2 Penalties. If the effective performance ratio disclosed by the PAC test and/or the First Reassessment Test and/or the Second Reassessment Test is less than the MGPR, the Contractor shall pay to the Principal Performance Liquidated Damages equal to Euro 7.5 per kWp (seven point five), per each percentage point which is lower than the value indicated in the MGPR. It is understood that the total amount of Performance Liquidated Damages, shall be no more than 1% (one per cent) of the Consideration. Performance Liquidated Damages shall be payable at the end of the month in which the relevant test was held.

 

13.3 Without prejudice to the above, the Contractor shall provide the Principal with a guarantee for any defects concerning the Executive Project and the Works in accordance with Article 1667 and 1669 of the Civil Code. The terms of said guarantee will come into force from the date of issuance of the PAC, in accordance with Article 12 above, for a period of 24 (twenty four) months. The terms to give notice with reference to defects are ruled by Articles 1667 and 1669 of the civil code. Accordingly, the Contractor shall during such time:

 

(a)           replace, repair and/or adjust any defective Equipment;

 

(b)           guarantee availability of spare parts.

 

13.4 In addition to the above, the Contractor must also provide the following specific guarantees with regard to the photovoltaic modules:

 

	
(a)  

	
Install a guaranteed potential by means of the issue of "flash test" certification of the modules.  The power effectively installed must reach the quantity established in the relative manuals, in compliance with the Technical Specifications. Otherwise, the Contractor shall be obliged to replace the faulty modules and/or install additional modules in order to reach the nominal power as described in Recital D;

 

	
(b)  

	
A photovoltaic module efficiency guarantee for a minimum period of twenty years after the issue of the PAC, provided that the cumulative deterioration of the photovoltaic modules does not exceed, for the first 10 (ten) years, 10% (ten percent) and for the first 20 (twenty) years, overall, 20% (twenty percent). The relevant guarantee’s extension in compliance with the terms of the law has already been taken into consideration in calculating the MGPR.

 

Said guarantees must be accompanied by the modules’ producer’s counter-security, of which the Principal shall be entitled to choose to be the direct beneficiary, since the Contractor shall, in any case, be held jointly liable with said producer.

 

  

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Article 14 – Assignment, Subcontracting and Sub-supply

 

14.1 The Contractor shall not be entitled to assign, either totally or partially, the Contract; however, the Contractor may be entitled to subcontract the performance of any portion of the Works to third parties, subject to the Principal’s prior written consent.

 

14.2 In the case of subcontracting, it is understood that the Contractor shall be totally and unconditionally liable to the Principal with reference to the complete, precise and punctual performance of the Contract, including with reference to the totality of the subcontracted works and the supplies and also with reference to compliance with the provisions relative to remuneration and social security and the Works meeting the requirements established by this Contract.

 

14.3 In any case, each of the subcontractors shall abide by and comply with the provisions set forth in the PSC and the POS, since the Contractor shall be held directly liable to the Principal in relation to this compliance.

 

14.4 The Principal shall be entitled to assign this Contract any third company indicated by the Principal, and the Contractor expressly consents as from now to such assignment.

 

Article 15 – Insurance

 

15.1 The Contractor, without prejudice to his own responsibilities, shall, at his own total expenses, enter into the following insurance policies with first-class insurance companies, with an S&P rating of no less than A- or equivalent or, in any case, that satisfies the Principal and the Financing Entity, if appointed, and maintain them operative for the entire period in which this Contract is in force. Said insurance policies must be submitted beforehand to the Principal and the Financing Entity, if appointed, for their approval:

 

	
(a)  

	
Industrial accidents insurance in favour of the Contractor’s employees and/or any workers who are not the Contractor’s employees;

 

	
(b)  

	
employers’ liability, with a minimum limit of no less than Euro 5,000,000.00 per event and 2,000,000.00 per person;

 

	
(c)  

	
Insurance to cover third party civil liability, with a minimum limit per event of no less than Euro 5,000,000.00; the Principal and the Financing Entity, albeit maintaining the qualification of “third party”, they must be inserted as “additional party insured” and there must be an explicit clause waiving the party’s insured recovery against the Principal, the Financing Entity and their employees and consultants;

 

	
(d)  

	
Insurance to cover professional civil liability, with a minimum limit per event of no less than Euro 2,500,000.00;

 

	
(e)  

	
Insurance to cover vehicle civil liability, for all owned vehicles and/or in use, which must be provided with the mandatory insurance policy as foreseen by the Law No. 990/69 and subsequent amendments and integration, for a minimum limit of no less than Euro 5,000,000.00 per accident;

 

  

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(f)  

	
“All risks Property Damage”, including theft, insurance, to cover all the goods and assets, including the main cabins, equipment and machinery used during the Works’ realization, with the sum insured equivalent to the value incurred by replacing the same.

 

15.2 The Contractor, without prejudice to his own responsibilities shall, at his own total expenses, enter into the following insurance policies, with first-class insurance companies, with an S&P rating of no less than A- or equivalent or, in any case, which satisfy the Principal and the Financing Entity, if appointed, and maintain them operative for the entire period in which this Contract is in force. Said insurance policies must be submitted beforehand to the Principal and the Financing Entity, if appointed, for their approval:

 

	
(a)

	
E.A.R. “Erection All Risks” policy to cover the damages derived from the damage to total or partial destruction of the Works, which might occur while the Works are carried out. The cover shall also provide for cover for extended maintenance for a period of 24 months, the supply warranty, the section of third party civil liability (including the crossed liability between the participants and the works) and the advanced loss of profit section. The sum insured for the Works shall be equivalent to the Contract’s value, whilst the civil liability upper limit shall be no less than Euro 5,000,000.00 per accident;

 

	
(b)

	
transport policy to cover the material damages and aimed at the assets required to realise the Works, including the advanced loss of profit section. The cover shall run from the place of departure anywhere in the world until arrival care off the site where the works are performed.

 

15.3 The insurance policies provided under paragraphs 15.1 and 15.2 shall as include the Financing Entity, if appointed, the Principal, and any other subcontractor among the insured parties. The Principal shall be entitled, at his own unquestionable judgement, to enter into other covers or policies in integration of and/or besides those foreseen by this Article 15, simply informing the Contractor of the same beforehand.

 

15.4 The Contractor acknowledges that the insurance cover referred to in Articles 15.1 and 15.2 may be object of encumbrance in favour of the Financing Entity. In this respect, the Contractor agrees that the Principle, at its discretion, may require that the insurance company issues an endorsement letter in favour of the Financing Entity, for the case that a Financing Entity is appointed. In addition the Contractor agrees to use reasonable endeavours to achieve any requirements of the Financing Entity relating to security over the insurance policies.

 

15.5 In any case, the amounts exceeding the upper limits and the indemnity limits insured, as well as the amounts corresponding to any type of excess liability relative to any policy shall be charged to the Contractor.

 

15.6 The Contractor shall be responsible for losses exceeding the insured limits and for policy deductibles. He shall also hold the Principal and the Financing Entity harmless from any claims for compensation for damages, liabilities, costs and expenses derived, directly or indirectly, from events covered by the insurance policies but which, for any reason whatsoever, are not compensated or by events that are not covered by the policies themselves.

 

  

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15.7 It is understood between the Parties that the Principal shall, in any case, be free to commence legal proceedings against the Contractor to seek compensation of all the eventual and further damages that might result as not being covered by any policy and which can be ascribed to the Contractor by virtue of this Contract.

 

15.8 The Contractor shall deliver executed copy the aforementioned policies and evidence of the payment of the premiums for the entire duration of the relative period insured promptly after execution of this Contract and in any case within the terms foreseen in Article 8.3 and hereby undertakes not to make any changes to the policies without the Principal’s prior authorisation to do so. The Contractor shall also undertake to check that sub-contractors underwrite, for the entire duration of the Works, suitable insurance cover in compliance with Articles 15.1 and 15.2 above, charged to the Contractor himself.

 

Article 16 – Performance Suspension

 

16.1 The Principal, by means of the Works Manager, shall be entitled to suspend the Contract, either totally or partially, at any time whatsoever and on more than one occasion, by providing the Contractor with written communication of the suspension sent by registered mail with return receipt. Said suspension cannot, in any case, exceed, as a whole, the overall duration of 45 (forty-five) calendar days.

 

16.2 The Contractor shall be entitled to receive a refund for the costs and expenses sustained due to suspension, which shall be provisionally defined (in order to permit continuation of the Works) by the Works Manager, except for the Parties being entitled to object the Works Manager’s decision pursuant to Article 24.  The Parties shall undertake, in any case, to provisionally apply the Works Manager’s decision.

 

16.3 In the case of suspension arising pursuant to this Article, the Parties have accepted that the Project Implementation Schedule may be amended in agreement between the Parties. This extension must be at least equal to the period of suspension.

 

Article 17 - Unilateral Termination by the Principal

 

17.1 The Principal shall be entitled, at any time whatsoever, to unilaterally terminate the Contract, informing the Contractor by means of notice sent by registered mail with return receipt.

 

17.2 In the case of the Principal’s exercising the unilateral termination right referred to in the previous paragraph and save for Article 17.4 here below, the Principal shall pay the Contractor, in addition to the Consideration for the Works, performed up until that time, an indemnity equal to 10% (ten per cent) of the value of the outstanding Works.

 

17.3 The Contractor shall withhold any advance payment on the Consideration made by the Principal in compliance with the Payment Milestones, save for the Contractor’s right to claim payment of any further amounts due to the Contractor for all the Works that have been carried out until receipt of the termination notice.

 

  

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17.4 The Principal shall be entitled to terminate the Contract pursuant to the above, should the Applicable Law change or should a Force Majeure event occur which renders the realization of the System impossible and leads to the revocation of any Applicable Permit. However, in this case and in derogation to what has been foreseen in Article 17.2, the Contractor shall only be entitled to payment of the consideration due for the Works carried out until the delivery of the termination notice, excluding any indemnity for the part of the Works that have not been performed.

 

17.5 Should the Principal terminate the Contract, it shall promptly return the Parent Company Guarantee to the Contractor.

 

Article 18 – Termination attributable to the Contractor

 

18.1 The Principal shall be entitled to terminate the Contract pursuant to Article 1456 of the Civil Code (clausola risolutiva espressa), by giving notice to the Contractor no later than 30 (thirty) calendar days of the Principal becoming aware of any of the following circumstances:

 

	
(a)  

	
non-delivery of the Parent Company Guarantee and all the insurance policies to the Principal within the terms foreseen in Article 15 of this Contract and in compliance with the condition foreseen therein, or the Contractor’s breach of its obligation of maintaining the Parent Company Guarantee and the insurance policies in force, at its own expense, in compliance with the terms and conditions foreseen in this Contract;

 

	
(b)  

	
any of the representations or warranties provided in Article 5 is imprecise, untrue or misleading;

 

	
(c)  

	
the Building Permit, the STMC, and any other Applicable Permit already obtained are not transferred to the Principal pursuant to art. 4.2.(a);

 

  

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(d)  

	
cancellation or revocation of a Building Permit, STMC, or any Applicable Permit for reasons attributable to the Contractor;

 

	
(e)  

	
the circumstances provided under Article 11.6 occur;

 

	
(f)  

	
non-admission to the 2010 Incentive or in any case non entry into force of the Incentive Agreement;

 

	
(g)  

	
the Contractor has exceeded the maximum limit of Liquidated Damages and/or Penalties foreseen pursuant to Articles 9 and 13;

 

	
(h)  

	
failure to pass the Operational Inspection and consequent non-issue of the PAC;

 

	
(i)  

	
failure to release the Warranty Bond upon issuance of the PAC

 

	
(j)  

	
failure to pass the Reassessment Tests;

 

	
(k)  

	
failure to satisfy the condition in Article 12.7 and consequent non-issue of the FAC within 24 months from the issuance of the PAC

 

18.2 The Principal shall be entitled to send the Contractor notice to perform within the terms of no less than 30 (thirty) calendar days from receipt of the relevant notice (or any longer terms that are considered to be appropriate by the Principal in relation to the circumstances), pursuant to Article 1454 of the Civil Code in all events of the Contractor’s breach, other than those referred to in Article 18.1 above, of his obligations, pursuant to this Contract.  Should the Contractor not perform within such terms, the Principal shall be entitled to declare the Contract terminated.

 

18.3 The Contract shall be terminated pursuant to Article 81 of the Italian Bankruptcy Law (R.D. 267/1942 as amended and/or integrated from time to time), if the Contractor becomes bankrupt or insolvent, goes into liquidation, has a receiving or administration order made against it, compounds with its creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or if any act is done or event occurs which (under Applicable Law) has a similar effect to any of these act or events, unless the Principal consents to continuation of the Contract.

 

  

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Article 19 - Termination attributable to the Principal

 

19.1 In the case of the Principal’s breach of its obligations pursuant to this Contract, the Contractor shall be entitled to send the Principal and the Financing Entity, if appointed, notice to perform within the terms of 30 (thirty) calendar days of receipt of such notice, pursuant to Article 1454 of the Civil Code. The Contractor acknowledges and accepts that termination of the Contract due to facts attributable to the Principal cannot, in any case whatsoever, be declared or requested unless notice demanding performance is sent to the Principal, with the Financing Entity in copy, pursuant to this Article.

 

19.2 The Contract shall be terminated pursuant to Article 81 of the Italian Bankruptcy Law (R.D. 267/1942 as amended and/or integrated from time to time), if the Principal becomes bankrupt or insolvent, goes in liquidation, has a receiving or administration order made against it, compounds with its creditors, or carries on business under a receiver, trustee or manager for the benefit of his creditors, or if any act is done or event occurs which (under Applicable Law) has a similar effect to any of these act or events, unless the Contractor consents to continuation of the Contract.

 

  

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Article 20 – Termination Consequences

 

20.1 In the case of termination of the Contract attributable to the Contractor, in any of the events foreseen by the Applicable Law or by this Contract, the Principal shall be entitled to receive from the Contractor, save for any further damages, payment of a termination penalty equal to 10% (ten percent) of the value of the remaining Works, to be determined in the value of the Consideration less the amounts of the Payment Milestones become due on the time of termination. The Principal shall also be entitled to receive from the Contractor the refund of the amounts corresponding to the balance of the payments which have not been up to that time allocated to the subsequent Works.

 

Without prejudice to the above, the Principal shall also be entitled to:

 

	
(a)

	
prepare a report of completed Works setting forth the value thereof, in which case, upon termination, without prejudice to any provisions of this Contract, the Principal shall have the right to:

 

	
i.  

	
keep the completed Works, in which case the Contractor shall promptly abandon the Area and transfer the ownership of any completed Works if not already transferred; or alternatively,

 

	
ii.  

	
reject the Works, in which case the Contractor shall dismantle the Works bearing the relevant costs and expenses and return to the Principal any payment of the Consideration received, plus interest in accordance with Article 1224 of the Italian Civil Code.

 

	
(b)

	
quantify the amount of any and all penalties, Delay Liquidated Damages, Discounts, etc, owed by the Contractor to the Principal, in which case the Principal shall prepare a statement of amounts due to the Principal less any amounts due to the Contractor under this Contract; the statement of amounts outstanding shall be sent to the Contractor which shall send its observations to the Principal within ten (10) days. Failure to send observations within such ten-day period shall be deemed consent to the statement of amounts due to the Principal. Payment of the amounts indicated in the previous paragraph shall be made within 7 (seven) calendar days of receipt of the above-mentioned statement, and the Principal shall be entitled to enforce the Parent Company Guarantee and/or the Warranty Bond to recover any such amounts. In the event that the Contractor disputes the statement of the Principal within ten (10) days, and the Parties fail to reach an amicable settlement, the dispute shall be settled in accordance with Article 24 hereof. As soon as Contractor pays the amount due, Principal shall return the Parent Company Guarantee and the Warranty Bond. On the contrary, where Contractor fails to pay the amount due pursuant to the above statement, Principal shall be entitled to enforce the Parent Company Guarantee and/or the Warranty Bond;

 

	
(c)

	
have the Area vacated by the Contractor, at his own expenses, from all the material, equipment and machinery belonging to him and from any rubble, debris and rubbish within 15 (fifteen) days of termination.

 

  

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20.2 In the case of termination attributable to the Principal, the Principal shall take definitive delivery of the Works that have been realised up to the time of termination and the Contractor shall be entitled to withhold any payment made by the Principal in compliance with the Payment Milestones pursuant to Article 4, save for the Contractor’s right to claim  payment of any further amounts due to the Contractor for all the Works that have been carried out until receipt of the termination notice and for any further damages. On the Principal’s request, the Contractor shall vacate the Area and the site from all the materials, equipment and machinery that belongs to him at the Principal’s expenses and provide for the removal of any rubble, debris and rubbish.

 

20.3 Without prejudice to the above, in the case of termination due to failure by the Principal to perform its payment obligations pursuant to Article 4, provided that the Contractor has fulfilled all its obligations under this Contract,  the Contractor or any third party indicated by the Contractor shall be entitled to be transferred, by way of a line of business transfer, the Applicable Permits and the Building Right and to keep the Works, by paying to the Principal an amount equal to the percentage of the Consideration already paid by the Principal, upon deduction of an amount equal to Euro 400.00 per kWp (four hundred). It is understood that the in the case of exercise of such right the Contractor shall not be entitled to any other claim towards the Principal and hereby waives any such claim. It is understood that should a Financing Entity have been appointed at the time of termination, this Article 20.3 shall not be applicable.

 

20.4 Furthermore, in the event of termination attributable to the Principal, the Principal shall immediately return to the Contractor the Parent Company Guarantee and the Warranty Bond.

 

Article 21 – Confidentiality Obligation

 

21.1 Each Party declares that:

 

	
(a)

	
the Confidential Information, in any form in which it comes to the knowledge of the Parties, shall not be disclosed, in any case whatsoever, either totally or partially, to any third parties except where, further to termination of the Contract, the Contractor shall have to be replaced with another individual or entity in order to complete the System, in which case the Confidential Information may be disclosed to the individual appointed to the complete the Works object of this Contract;

 

	
(b)

	
said Confidential Information shall not be used for any purposes that is not solely and exclusively related to (i) the performance of this Contract or (ii) the drafting of a prospectus addressed to a fund of the System.

 

21.2 The Confidential Information may only be disclosed to the Parties' shareholders, the directors, executives, employees or consultants employed by the Party receiving the Confidential Information, and the Technical Consultant and the Financing Entity.

 

21.3 Neither of the Parties shall be entitled to make any declarations or announcements to third parties, the press or, in general, to the media, in relation to the Contract, without having received the other Party’s prior, written authorisation, with the exception of the disclosure required by the Applicable Law or by the law applicable to the Principal or to the Principal’s group.

 

  

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21.4 The provisions contained in this Article 21 shall be effective from the date on which this Contract is entered into or from the date of the first communication of said Confidential Information and shall remain in force even after expiry of this Contract.

 

Article 22 – Miscellaneous

 

22.1 This Contract cannot be amended or integrated, in any way whatsoever, unless by means of a written agreement between the Parties.

 

22.2 The Contractor is aware that the Financing represents a priority for the Principal and represents that the project (including both the EPC and O&M Agreement) is at the time of execution technically and legally bankable. In particular, the Contractor is aware that the Financing Entity may require: (i) a Warranty Bond after PAC, in the form of an autonomous and first demand insurance bond covering 15% (fifteen per cent) of the Consideration; (ii) cross default clauses in the event that the Financing covers more than one EPC contract. The Contractor shall encounter such expectations, provided that they are reasonable and substantially in line with the banking standards practiced at the date of execution hereof. In addition, the Contractor shall provide all good faith cooperation as to obtain the Financing in the case that banking standards practiced at the time Financing is negotiated are substantially different from banking standards practiced at the date of execution hereof.

 

22.3 The Parties declare that in the future they are willing to enter into other EPC contracts in relation to other plants (“New Contracts”) and agree that the New Contracts shall be regulated, mutatis mutandis, in accordance with the terms and conditions of this Contract, save as otherwise agreed.

 

22.4 The Principal shall promptly refund to the Contractor any amount reimbursed  by ENEL to the Principal in relation to the infrastructure works carried out by the Contractor outside the Area to connect the System to the grid.

 

22.5 In the case that any provision contained in this Contract is declared invalid on the basis of the Applicable Law by a judge or a board of arbitration, this shall not entail the entire Contract being void, it being understood that the Parties shall promptly meet in order to replace the invalid provision with another one which respects, as much as possible, its meaning.

 

22.6 The Contractor shall not assign the receivables derived from this Contract to any third parties without the Principal’s prior written consent, it being understood that the term, “third parties”, also implies the companies belonging to the same group as the Contractor.

 

22.7 Any communication requested or consented in relation to this Contract must be made in writing and must be (i) delivered by hand, (ii) sent by  registered mail with return receipt, or (iii) sent by fax.  Any communication shall be considered as having been received (i) if delivered by hand, on its delivery to the addressee Party, (ii) if sent by registered mail with return receipt, on the date indicated in said notice, and (iii) if sent by fax, on receipt of confirmation of sending provided by the fax transmitting it. All communications shall be sent to the following addresses:

 

  

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- if addressed to the Principal:

 

	 	
Ellomay PV One Srl

 

	 	
Address: Galleria Borromeo, 3, 35137, Padova (Italy)

 

	 	
Fax no:

 

	 	
Ranf@ellomay.com: eranz@ellomay.com

 

	 	
or any other address, also of third companies, that may be indicated from time to time by the Principal.

 

- if addressed to the Contractor:

 

	 	
Ecoware S.p.A.

	
  

 

	 	
Address:

 

	
Via Nona Strada, 9, I-35129 Padua, Italy

	 	
Attention:

 

	
Ing. Leopoldo Franceschini

	 	
Fax no.:

 

	
+39 049 738 76 38

	 	
E-mail:

	
L.Franceschini@ecoware.eu, I.Bovo@ecoware.eu

 

22.8 The risk related to the event referred to in Article 1664 of the Civil Code has been fully and knowingly undertaken by the Contractor. The risk relative to the event referred to in Articles 1660 and following of the Civil Code shall be attributed to the Contractor within the limits agreed in Article 10 of the Contract.

 

  

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Article 23 - Technical Consultant

 

23.1 The Technical Consultant shall act in the interests of the successful outcome of the System in his capacity of technical adviser in the exclusive interests of the Principal and/or the Financing Entity. The Technical Consultant shall have access to the Works, the Area the project documentation and the one relating to the Works’ performance.

 

23.2 The Technical Consultant shall be entitled to employ third parties to perform his duties provided that, in this instance, he shall procure that said employees comply with the rules in force on site and given by the Contractor or Works Manager.

 

Article 24 – Technical Dispute and Arbitration

 

24.1 The Parties undertake to amicably resolve any dispute arising out of or in connection with the interpretation, validity, performance and termination of this Contract.

 

24.2 In case of any technical dispute between the Parties in any matter relating inter alia to the achievement of a Payment Milestone, the extension of the Project Implementation Schedule, the Commencement of Operation (entrata in esercizio), the Technical Inspection, Operational Inspection, the First Reassessment Test and the Second Reassessment Test, the Variation procedure or any change in Applicable Law, the Parties can mutually agree to request the appointment of a technical expert (the "Expert") to settle the dispute. The proposal for the appointment of the Expert shall state in detail the technical question and include a list of at least three persons proposed for the appointment as Expert. The Parties agree to meet and discuss on the appointment of the Expert during the following ten (10) Working Days after receipt of the request. In the case that the Expert is not appointed by the Parties within fifteen (15) Working Days after the request, the Expert shall be appointed by the Chairman of the bar of the Engineers of Milan (Ordine degli Ingegneri di Milano) upon request of either Party. The Expert shall finally determine the technical matter in accordance with the provisions of this Contract, acting as arbitrator pursuant to Article 1349 of the Italian Civil Code. The Expert shall deliver its determination to the Parties in writing, including an explanation of the underlying reasons, within thirty (30) calendar days after the acceptance of the mandate. The Expert's determination shall (in the absence of patent error or unfairness) be final and binding upon the Parties. The costs of the determination, including fees and expenses of the Expert, shall be borne as determined by the Expert.

 

24.3 Without prejudice to Article 24.2 above, in all the other cases where an amicable solution to the disputes cannot be reached, the settlement of said disputes shall be referred to a Board of Arbitration formed of 3 (three) arbitrators, 1 (one) of whom who shall act as the President, in accordance with the National Arbitration Chamber of Milan’s Rules of International Arbitration, which the Parties have declared that they are aware of and fully accept.

 

24.4 The Board, which shall sit in Milan, shall decide under the procedure and law within 4 (four) months of it being formed. The award shall become immediately enforceable. The award’s registration costs shall be borne by the unprevailing Party.

 

  

Page 37 of 39

  

 

Signed by

 

	
on this date 4/3/2010

 

	
on this date March [●]

	
/s/ Ran Fridrich

	
/s/ Leopoldo Franceschini

	
_____________________________

 

	
_____________________________

	
Mr. Ran Fridrich

 

	
Ing. Leopoldo Franceschini

	
The Principal, Ellomay PV One S.r.l.

	
The Contractor, Ecoware S.p.A.

 

 

DEVELOPER’S ENDORSEMENT

 

The Developer hereby endorses this Contract and in so doing undertakes to cooperate with the Parties hereto and support the Contractor to ensure the proper performance of this Contract in relation to the transfer of the Building Permit, STMC and of the Land Use Rights.

 

 

/s/ Novaltek Servizi s.r.l

_____________________________

 

Ing. Giuseppe Politi

 

The Developer, Novaltek Servizi S.r.l.

 

  

Page 38 of 39

  

 

Annexes

 

	
Annex 1:

	
Executed Land Rights Contract

	  
	
Annex 2:

	
Area Map

	  
	
Annex 3:

	
Equipment

	  
	
Annex 4:

	
Definitive Project

	  
	
Annex 5:

	
Parent Company Guarantee

	  
	
Annex 6:

	
Technical Specifications

	  
	
Annex 7:

	
Project Implementation Schedule

	  
	
Annex 8:

	
Safety Costs

	  
	
Annex 9:

	
Minimum Guaranteed Performance Ratio

	
 

	
Annex 10:

	
Testing Procedures

	  
	
Annex 11:

	
Technical Acceptance Certificate model

	  
	
Annex 12:

	
Commencement of Operation notice model

	  
	
Annex 13:

	
Statement on estimate of Connection of Plant

	  
	
Annex 14:

	
Provisional Acceptance Certificate model

	  
	
Annex 15:

	
Incentive Acceptance Certificate model

	  
	
Annex 16:

	
Final Acceptance Certificate model

	  
	
Annex 17:

	
Model of O&M Agreement

	  
	
Annex 18:

	
Option Agreement

	  

 

  

Page 39 of 39

  

 

Annex 1  [Land Rights Contract]

 

[Translated from Italian]

 

	Inventory no. 41.573	 Register number 15.248

 

LAND RIGHT CONTRACT IN RELATION TO THE CONSTRUCTION AND OPERATION OF A PHOTOVOLTAIC PLANT

 

ITALIAN REPUBLIC

 

Year two thousand and ten, twenty seventh day of January

 

27th of January 2010

 

In Fano, in my office located in Bruno Buozzi Avenue no.33.

 

Before me, Ms. ANNUNZIATA MORICO, Notary in Fano, registered on the Pesaro and Urbino Register of Notaries

 

have personally appeared Mr. and Ms.

 

COSTANTINI RAFFAELE, born in Senigallia, on 27 November 1966, resident in Senigallia, via Metauro, n. 8, Fiscal Code. CST RFL 66S27 I608Q, who declares to be married in separation of assets regime,

COSTANTINI LUIGI, born in Senigallia, on 9 August 1965, resident in Senigallia in via Rossini, 9, Fiscal Code CST LGU 65M09 I608C, who declares to be married in separation of assets regime, but personal owner of the asset;

CESARIN FRANCESCO, born in Piove di Sacco on 20th October 1973, resident in Correzzola in Via Vanezza No 21, Fiscal Code CSR FNC 73R20 G693W, who attends not on his own behalf, but on behalf the limited liability company with sole shareholder "SUNEX 3 S.R.L.", with registered offices in Padua,  Zona Industriale, in Via Nona Strada n.9, share capital Euro 10.000 (ten thousand) fully paid-up, registered at the Companies Registration Office of Padua, with tax code number, VAT registration number and business identification number  06085820964,

Duly appointed as attested by the power of attorney authenticated by Mr. Giorgio Fassanelli, Notary in Padua, on 25th January 2010, index number 73661, that the attorney declares is valid and has not been revoked and that the original is enclosed hereto under the letter "A", hereinafter also referred to as the "Grantee".

 

The persons before me, whose personal identity, qualification and authorisation for signature I, the notary, am certain,  request that I receive this deed with which the parties agree and conclude as follows.

 

Art. 1- Definitions

 

Unless otherwise specified, the definitions reported herebelow will have the meaning attributed to them as follows, independently of the singular or plural use:

 

"Authorisations": any concession, authorisation, licence and / or nulla osta required to proceed with the construction, operation and maintenance of the plant, including all the concessions and necessary agreements with the National Agency for Energy or any another company, and the GSE (Power Supply Company) for the sale of the energy produced by the Plant;

 

"Rental Fees": the amount indicated in art. 5. A;

 

  

1

  

 

"Final Contract": the present final land right contract signed by the Parties;

 

"Consideration": the Rental Fees plus the Indemnity for Damages;

 

"Land Right": the Land Right constituted in favour of the Grantee with the present Final Contract;

 

"Financing": the credit line and more generally the financing granted by the Financing Entity to the Grantee or to any other entity indicated by the latter appointed in accordance with the modalities agreed between them which is required for the construction, testing, operation, management and maintenance of the Plant;

 

"Financing Entity": the company or the companies and/or the private and / or public institutes that grant the financing;

 

"GSE": Provider of the electric services - GSE Inc.;

 

"Plant": the photovoltaic Plant to be realised, including the accessories which, by way of example include the transformer station, the  long-distance overhead power lines and the underground power lines;

 

"Indemnity for Damages ": the amount indicated in art. 5. E;

 

"Plot": the land identified by the Grantee on which the Plant will be built and managed, registered on the Land Register of the Municipality of Senigallia on Sheet 33, Map 54.

 

Art.2- Object of the contract

 

A. The Grantors, Mr COSTANTINI RAFFAELE and COSTANTINI LUIGI, grant  the Grantee, who accepts and purchases the right to build and operate, in accordance with art. 952 of the Civil Code  the terms and conditions set out in this contract and  the authorisations, the Plant  on the Plot located in the town of Senigallia, which is in their exclusive ownership, identified and registered as follows:

 

- Agricultural land, in one sole  plot, total surface area equal to two hectares, twentyfive acres and seventy six centiares (Ha. 02.25.76), included in the "agricultural" zone, according to the current town planning regulations, registered on the Land Register of the Senigallia Municipality on Sheet 54 (formerly 11/c), 02.25.76 hectares, land revenue Euro 99.11 and agricultural revenue Euro 104.94.

 

Borders: other properties owned by the grantors from two sides, Vecchi Attilio save others.

 

With the purposes of  cadastral continuity and transcriptions it is specified that the cadastral details of the divided parcels derive from subdivision no. 276295/2009 submitted to the competent Territory Agency on 31st December 2009, Protocol no. AN0276295.

 

This land became their ownership, in relation to a 2/4 percentage, by way of intestate inheritance from their father Mr Costantini Aldo, died on 20th August 1985, estate communication no. 3, vol. 255, registered in Senigallia and transcribed in Ancona on 5 September 1986, no. 8672 Special Registry and, in relation to the other 2/4,  by way of intestate inheritance from their mother Ms Piersantelli Lidia, died on 3rd June 2003, estate communication no. 57, vol. 343, registered in Senigallia and transcribed in Ancona on 12 January 2006 no. 52, Special Registry.

 

B. The Grantors  are aware of the technical characteristics of the Plant and declare that they have been informed of how the Plant itself shall be operated and of the operative standards normally required to manage such Plants.

 

  

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The Plant will be realised and operated on the Plot and will include all the long-distance power lines and telephone lines which are necessary for, among other things, the connection of the Plant to the conversion groups and to the transformers as well as  the connection point to the Provider’s network of the national electricity grid, and also the related stations and the measurement groups , as well as other technical devices if necessary.

 

The Parties expressly agree that the Grantee will have the right to determine, at its own discretion,  access and the most opportune management, also from an economic point of view, of the underground line of wires (no deeper than 80 cm) and will be allowed to protect the Plant permanently with fencing.

 

C. The Grantors, Mr. COSTANTINI RAFFAELE and COSTANTINI LUIGI, declare and guarantee:

 

(a) that they are the exclusive owners of the Plot, as specified above;

 

(b) that they are freely able to dispose of it;

 

(c) that the Plot is free of bond constraints, charges, easement, mortgages, privileges and / or taxes in any way able to bind or  jeopardise the construction, the testing, the putting into service as well as the management and the maintenance of the Plant.

 

The Grantors also declare that they signed before Mr Rocco Cozza, notary in Senigallia on 8 November 2009, rep. no. 100429/16075, registered in Ancona on 23 November 2009 at no. 14765 Special Registry, a deed whereby they committed to remove the PV plant and procure that the sites are put to their original status after dismissal of the plant. The Grantee declares to be aware of said deed and accept it.

 

In particular, the grantee shall:

 

	
1)

	
disconnect the plant from the grid;

 

	
2)

	
remove all the panels and the sustaining structures, including any works on the land;

 

	
3)

	
remove all infrastructures (electric lines, machineries and electromechanical equipment, electric cabin, accesses, internal roads, fences, etc), including any works on the land;

 

	
4)

	
firstly, remove materials that can be re-used placing them in the stores; put the materials remaining fro demolition in ad hoc authorised dump, complying with applicable regulations in case of hazardous materials;

 

	
5)

	
restore the original agricultural land, also by cleaning and disposal of any leftover, such as metallic and cement bits or similar.

 

The Grantors also declare that the Plot is not the object of any proceedings of a civil, administrative or criminal nature nor are there any judicial, executive or conservative measures in force that could jeopardise either wholly or in part the sole and exclusive ownership or possession of the Plot with the purpose of carrying out the project. There are no circumstances that could limit or jeopardise the construction, the testing, the putting into service or the management and the maintenance of the Plant; it is not the object of a loan for use agreement, rent or tenant farming agreement; it is free of constructions, buildings, trees and plantations that could obstruct the construction and the functioning of the Plant (here included, by way of example only, any object that can darken the solar light panel of the Plant) and the activities carried out have always been realised in accordance with law and rules both at a national and a  European level, with particular reference to the environmental and landscape provisions;

 

  

3

  

 

(d) that they are  well aware of the use to which the Plot  is destined and that they approve it without reserve or any exception and also  declare and guarantee that the Plot and the subsoil (as is visible and to their knowledge) is free of piping,  sluices or any other equipment which is  generally incompatible  or even only prejudicial or limitative to the use for which 1it will be destined.

 

Art. 3 - Delivery of the Plot

 

A.  The Grantee shall start the construction works for  the Plant, in the manner and in the terms that they consider to be the most appropriate for its own organizational and production demands.

 

Legal possession and material availability of the Plot is delivered on this day in favour of the Grantee, for all the useful and onerous effects.

 

B. At the date of the start of works the Plot will be free from any cultivations, plantations and/or trees that could obstruct the construction and / or the function of the Plant, it being understood that  the Grantee will be able to proceed, at its own discretion, with the removal of  above-mentioned if necessary.

 

C. It remains understood that no other indemnity or compensation shall be due other than the indemnity for damages provided in art. 5.E for the restoration or compensation of damages to cultivations, plantations and / or trees located on the Plot, which are destroyed, damaged, removed or cut off by the Grantee to allow the construction and / or the function of the Plant.

 

D. The Grantee discharges and exonerates the Grantors from any civil and criminal liability for damages to third parties (persons and / or things) of any title that may arise from the construction of the Plant and from its subsequent operation and maintenance, as well as from the removal of the plant and of the access road.

 

Art. 4 - Ownership, rights and easements

 

A. The Parties declare that the Plant as well as any other assets that the Grantee holds on the Plot shall remain ownership of the latter and shall not become part of the Plot.

 

B. The Grantors accept that the Plant as well as all the Grantee’s assets  that the latter may place on the Plot may be the object of a guarantee in favour of a Financing Entity or third parties. Vice versa, the Grantors undertake, for the whole duration of this contract, to maintain the Plot free from bonds, constraints, charges, easements, mortgages, privileges and/or taxes of any kind.

 

C. The Grantors undertake to grant and to constitute on other lands that they own and which are adjacent to the Plot, in addition to the ones established in accordance with Article 4.D hereof, easements for long-distance power lines, cable ducts, overground power lines (and also underground lines), access and passage by all means, including mechanical, as well as any other charge, burden or easement that may be required to operate and maintain the Plant. For this purpose, the Grantors undertake to attend to and execute any authenticated document or deed required in order to allow the regular constitution of any such easements and the related deed shall be transcribed at the relevant Registry at the Grantee’s expense.

 

D. The Grantors, Mr. COSTANTINI RAFFAELE and COSTANTINI LUIGI, each for their individual right and together for the entire, set up:

 

- an access easement, with any means, for 5 (five) meters, on the plot owned by the Grantors and registered at Senigallia cadastral register at sheet 33, Map 52, Ha 00.03.24, in favour of the Plot.

 

  

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- an electroduct easement in favour of the plant to be realised on the Plot on the plot owned by the grantors and registered at Senigallia cadastral register at sheet 33, Map 55, Ha 03.98.39, in accordance with the red lining in the plans enclosed hereto as Annex B.

 

The Grantors shall be entitled to enter the Plot, and the Grantee agrees, along the Plot’s border with Mr Attilio Vecchi’s property, for a space 5 (five) meters wide and for its entire length.

 

Art. 5 - Consideration

 

A. For all legal purposes the Parties declare, in lieu of affidavit, in accordance with Presidential Decree no. 445/2000 and made aware by myself, the Notary, of the criminal liabilities in case of false declaration, as well as aware of the powers of verification of the Financial Administration and of the applicable administrative sanctions in case of omitted, incomplete or false indication of data, as follows:

 

- the Grantee, as compensation for the concession of the building lease, undertakes to pay  the Grantors, according to the methods and the terms indicated hereafter, for the whole duration of the building contract, an annual Rental fee equal to Euro 5,488.00 (five thousand four hundred eighty eight).

 

B. The Parties establish that the Rental fee will have to be paid to the Grantors in a single anticipated instalment by 1st December of each year by way of wire transfer to the Grantors’ bank account  at FINECO THE NEW BANK no. 000003169369 (IBAN IT11 L030 1503 2000 0000 3169 369), as indicated by the grantors.

 

C. The Rental Fee will be reassessed each year according to the percentage of 100 % (hundred percent) of the ISTAT index of the consumer prices of the families of workers and employees, with reference to the stipulated month.

 

For the current year of the signature date of this present building contract, the Rental Fee to be paid for the period between the date of signature of this document and December 31st is equal to Euro 5,488.00 (five thousand four hundred eighty eight) that the Grantee undertakes to pay within and no later than ten days after signing this Contract via a bank transfer as above indicated.

 

The Parties expressly agree that the bank documentation on which the bank transfer shall be shown, shall be considered as proof with full effect of the completed payment of the compensation for the Rental fee.

 

No interests shall accrue on the above amounts.

 

Thus being regulated payment of the consideration, the grantors expressly renounce the registration of the legal mortgage, expressly exonerating the competent conservative of the Land Registry from any liability.

 

D. The Parties recognise that the realisation of the Plant will inevitably compromise the fertility of the Plot. Therefore the Grantee corresponds to the Grantors, by way of compensation damages, the flat rate sum determined in total as Euro 23,050.00 (twenty-three thousand and fifty, the “Indemnity for Damages”).

 

Such sum is paid on today’s date in one single solution payment on 28 January 2010 by way of wire transfer to the bank account above indicated:

 

E. The compensation is understood to be an all inclusive amount, including the right of the Grantees to the constitution of the easement as indicated in art. 4. D, except for the right of the Grantors to the compensation provided by the laws regarding Telephone Easement and of Long-distance power lines, while the grantors have no right to obtain further amounts.

 

  

5

  

 

It is understood that each tax, fee, contribution, expense and other charges pertaining to the property of the area of the Plot, when due, will be the responsibility of the Grantors.

 

The amounts mentioned above are understood as negotiated even in relation to possible modifications of the regulating plan, for which the Grantors will not have the right to obtain any increase in the Rental fee or any Indemnity for Damages.

 

The present constitution of the building lease has been concluded without any mediation expense in accordance with article no. 1754 from the Civil code.

 

Art. 6 - Obligations of the grantors

 

A. The Grantors do not have the right to make any modification or works on the Plot, or on the neighbouring lands of which they may be in possession that are theoretically fit to reduce the power and the efficiency  of the Plant, unless such modifications or works are authorised beforehand in writing by the Grantee.

 

The Grantors particularly undertake:

 

- not to carry out excavations and/or works that could compromise the safety of the Plant;

 

- not to plant trees with high trunks and not to build manufactured products of any kind that could compromise the function of the Plant;

 

- not to place underground pipes and/or other objects or manufactured products in the zone occupied by the long-distance power line, without previous agreement with the Grantee party.

 

B. The Grantors shall undertake to notify the Grantee of any circumstances known to them that could damage the Plant, to jeopardize or limit the functionality of it.

 

Article 7 - Duration

 

A. This present document is valid and binding upon the parties starting from today. The building right will last for twenty-one (21) years from today and will end on 27 January of the 2031 (“Initial Duration”).

 

Before the contract expires, as stated  in the first paragraph, the Grantee shall have the right to unilaterally extend the contract period for a further four (4) years ( "Extension"), indicating their intention to the Grantors - who undertake to grant the extension from then on - by registered letter with return receipt and with a period of prior notice of at least twelve (12) months before the date of termination of the contract originally and/or subsequently provided.

 

The Charge for the grant of the building lease, in the updated contract, should be understood as equal to the amount of the last annuity increased by 20%, to be re-evaluated annually according to the ISTAT indexes. The grantor is obligated from then on to accept such extension to the specified conditions.

 

B. In the hypothetical cases stated in the subsequent articles 8.C and 8.D (resolution due to the Grantee’s fault), as well as the normal expiry of the Contract or following the withdrawal operation under the successive art. 8A, within a maximum period of six (6) months from the termination of the Building Contract, the Grantee will proceed at its own expense to the removal of the Plant or any other operations carried out on the Plot as well as of the access road and electroduct.

 

  

6

  

 

In order to guarantee the removal of the Plant or any other work carried out on the Plot, the Grantee agrees to release within five (5) days from the date of the start of works a surety policy the amount of which shall conform to the amount required by the Company authorizing the project.

 

In order to guarantee the payment of the compensation indicated in art. 5.A, the Grantee agrees to pay the sum of Euro 5,488.00 (five thousand four hundred eighty eight), no later than 30th June, 2010, an annuity equal to the charge in the manner agreed as mentioned above in Article 5 B, as agreed between the parties.

 

The Grantors will forfeit that amount if the Grantee has not paid the Charge within the period referred to in art. 5.B and the Grantors have sent to the Grantee a written notice via registered mail with a return receipt with a declaration of default to comply with the term of ten (10) days from its receipt by the Grantee.

 

Such amount  shall be deducted from the amount due as the last Rental fee payable on the twentieth year (lat rental fee).

 

Article 8 - Withdrawal and cancellation

 

A. The Grantee will have the right to withdraw at any time and at its sole discretion from the Building Contract with a notice period of ninety (90) days by means of a simple written notice, without the implication that any compensation is due to the grantor by way of indemnity or damages in addition to the payment of the charge for the duration of the notice.

 

B. The Grantee will have the right to declare the contract cancelled with immediate effect by means of written notice to the Grantors due to the fault of the latter, if the Grantors, in violation of their own obligations under the previous art.6.A, undertake building works and/or introduce crops or plantations on the Plot, on the property or on adjoining properties of which they may be in possession that are theoretically capable of reducing the power and effectiveness of the Plant or if the Grantors consider said  acts likely to permanently affect the  power and effectiveness of the Plant.

 

C. If the payment of the Charge is delayed for a period exceeding six (6) months, the Grantors will be entitled to send to the Grantee, by registered letter with return receipt, a warning to comply within a period of thirty (30) days.

 

The Grantors will be entitled to terminate this present Building Contract if the Grantee has not fulfilled its own obligations within thirty (30) days after receiving the formal notice. In the case that the Grantors are entitled to request the termination of this present Contract due to non-fulfilment of the Grantee and have the intention to exercise such right, the Grantors shall undertake to communicate this intention in writing to the Grantee and, even pursuant to and by effect of Article 1411 of the Civil Code, to the potential Financing Entity  whose name and address has been notified in writing by the Grantee to the Grantors. Within 60 (sixty) days of receipt of the above-mentioned notice, the Financing Entity will have the right (I) to designate a third party who will take over from the Grantee in this present Contract or (ii) to inform the Grantors of its intention to directly cancel, or via the Grantee, the non-fulfilment of which the right to request the resolution is founded. In such cases, the Grantors may only request the termination of this present Contract in court and only if the causes of non-fulfilment from the Grantee, on which the right to request termination is based, will not be eliminated within 60 (sixty) days from the takeover of the third party or, as appropriate, upon receipt by the Grantors of the notice from the Financing Entity. The Financing Entity will also have the right to appoint a third party who will take over from the Grantee even when, although the latter has fulfilled its obligations under this present Contract, the Financing Entity notifies the Grantee of its intention to declare the forfeiture of the benefit of the term according to Article 1186 of the Civil Code or to terminate for non-fulfilment or cancel the financing contract.

 

  

7

  

 

D. This present contract is deemed to be automatically terminated if one of the Parties outside  the cases expressly covered by the previous articles 8B and 8C, becomes a serious breach of its contractual obligations and does not adequately remedy the same within a reasonable time, or within thirty (30) days of the receipt of the notice communication of the other Party.

 

E. In case of cancellation of the building contract by the Grantee due to the fault of the Grantors (resolution under Articles. 8B and 8D, the Grantee shall have the right to decide whether to proceed with the removal of the Plant or of any other work carried out on the Plot, except the direct or indirect right of compensation for damages,.

 

If the Grantee decides to remove the Plant, the Grantors shall be obliged to reimburse the Grantee for all costs and expenses incurred in such removal and restoration, apart form the right to compensation for additional damages.

 

Art.9 - Assignment of the building contract to third parties

 

A. The Grantors may assign this present contract to third parties, by giving written notice to the Grantee with at least ten (10) days of notice, provided that the third party undertakes in writing to abide by the contents of the Building Contract.

 

In case of sale and/or transfer of the Plot from the part of the Grantors, the latter are  bound to oblige the third party to sign the following clause:

 

"The buyer/transferee shall substitute the vendor in all obligations under the building contract concluded on the 27th January 2010 with an deed received by the Notary Annunziata Morico, index number. [41575] and undertakes to comply with everything in it. "

 

In the absence of such express statement and signature of the vendor/transferee party, the Grantors will have to compensate the Grantee for any damage or prejudice that would result from this omission. In order to enable verification of compliance with this present agreement, the Grantor must send the Grantee a copy of the sale/transfer contract which will be signed by the third party.

 

B. The Grantee will have the right to dispose of this building contract at any time in the favour of a third party, by giving written notice to the Grantors within thirty (30) days, provided that the third party undertakes in writing to respect the contents of the Building Contract. The Grantee may also assign the Building Contract to more third parties as part of a total or partial disposal of the ownership of the Plant or its management. The Grantors must undertake to allow the transfer of the Building Contract, by giving their own consent in order to register the transfer on the Land Registry and make all the statements that may be required. The transfer will be effective in relation to the Grantors starting from the moment in which the the Grantors are informed of the transfer . From that moment on, the Grantee will be released from its obligations in relation to the Grantors, who shall immediately declare their intention to  release the Grantee in the event of non-fulfilment by the third transferee.

 

C. Should this agreement be transferred to third parties through a transfer of part of the company, the Grantors shall renounce, from that moment,  the right to terminate the contract under Article 2558, 2nd paragraph of the Civil Code.

 

Art.10 - Town planning situation

 

Pursuant to and by effect of article 30 of the Presidential Decree dated June 6th 2001 no.380 and subsequently extended and amended,  the land use certificate is attached to this present document under letter "C",  related to the land subject of this present document, issued by the Municipality of Senigallia on January the 25th 2010.

 

  

8

  

 

The Grantors declare that from the date of issue of the above-mentioned certificate until now there have been no modifications to the town planning regulations of the above-mentioned Municipality.

 

The Grantors also declare that there are no farmers settled on the land subject of this present document, or bordering the same land being entitled to an agrarian pre-emption under existing legislation.

 

Art.11 – Applicable Law. Sole jurisdiction

 

This present contract is governed by Italian law. All disputes arising from this Contract shall be the exclusive competence of the Ancona jurisdiction.

 

Art.12 - Communications

 

Unless otherwise stated by the specific clauses in the Building Contract, any communication between the parties shall be made by registered letter with return receipt, or by fax or email, with confirmation of receipt at the addresses indicated in the epigraph to this present document.

 

Communication by fax or email shall be deemed complete only when accompanied by a confirmation receipt.

 

13 - Final clauses

 

A. This present building contract completely covers the will of Parties related to the relationship they have established. .Therefore  any previous agreement or understanding, verbal or written, possibly exchanged between them and concerning the same report must be understood as cancelled and/or revoked.

 

B. Notwithstanding any stipulation in the foregoing regulations, whatever their nature, it will only be valid if made in writing and after the signature date of the building contract.

 

C. The fact that one of the Parties does not exercise at any time its rights that are acknowledged by one or more clauses of the building contract cannot be considered as a renunciation to such rights nor will it obstruct the latter to successively expect timely and thorough implementation.

 

D. If one of the clauses of the building contract should be declared invalid or inefficient by the competent jurisdiction, the same clause will continue in full effect for the part not affected by it.

 

E. Legal fees and taxes are the responsibility of the Grantee Party.

 

F. Each Party undertakes to process the data of the other party in respect of the Legislative Decree 196/2003. The Parties also undertake to maintain and ensure that its own staff, directors, employees and consultants maintain the strictest secrecy and confidentiality on this present document, but it is understood that no party shall be deemed in violation of this undertaking when making a communication that is required by law, made under a procedure provided by this present document or necessary for its execution.

 

The Grantors acknowledge and accept that the Grantee party can show this present contract and any related document to any potential financing bank or potential transfer.

 

  

9

  

 

Art.14 – General Terms

 

Pursuant to and by effect of articles 1341 and 1342 from the Civil Code, the Grantors expressly state that they agree to the following regulations:

 

Article 3, paragraphs A), B) and C) (Delivery of Plot);

 

Article 4, (Property, property rights and easement);

 

Article 5 letter A) (Charge), letter D) (Indemnity for Damages Compensation);

 

Article 7 paragraph A) (Duration and the Right of Extension);

 

Article 8 letter A) (Withdrawal of the Grantee), letter B) (Express Termination Clause), letter A) (Consequences of the Resolution);

 

Article 9 (Assignment of the Building Contract to third parties);

 

Article 11 (Jurisdiction).

 

The parties exonerate me, the Notary, from the reading of the Annexes and declare that they are perfectly aware of them.

 

I, the Notary, received this present document and I read it to the persons before me that approved it and together with me, the Notary, sign it at  fifteen minutes past ten (22: 15).

 

This deed is typed by a person I trust and consists of four sheets on eleven pages, and the present twelfth page ends here.

 

Signed

Costantini Raffaele, Luigi Costantini, Francesco Cesarin

Lampa Maria Teresa,

Francesco Cesarini,

Annunziata Morico, Notary.

 

  

10

  

 

 

ANNEX 2

 

AREA MAP

 

[Translated from Italian]

 

ECOWARE S.p.A

Via Nona Strada, 9 - 35129 Padova - Italy

T. +39 049 7380423 F. +39 049 7387638

P.I./C.F./Reg. Imp. di Padova 03571330277

Cap. soc. 2.230.275,00 i.v.

www.ecoware.eu - info@ecoware.eu

LAND:

“COSTANTINI”

ORDER

9066

Annex 2

Plant Area on Cadastral Map

PV PLANT WITH POWER EQUAL TO 734.40 kWp

 

  

  

  

NOTA

Contractual Surface: 02.25.76 HA

Occupied Surface: 02.25.76 HA

Municipality: SENIGALLIA (AN)

Page: 33

Map: 54

Latitude:    43°40’42.53”N

Longtitude:  13°14’51.11”E

NOME FILE G.01.dwg

DIMENSIONE DEL FOGLIO A3 (420x297 mm)

DISEGNATORE FILE DWG A. LOTTO

REDAZ. 05/02/2010 L. BILATO

VERIF. 05/02/2010 S. BEGGIAO

PROG. 05/02/2010 L. FRANCESCHINI

N. COMMESSA 9066

TERRENO COSTANTINI

TALE DOCUMENTO NON POTRA ESSERE COPIATO. RIPRODOTTO O ALTRIMENTI PUBBLICATO IN TUTTO O IN PARTE SENZA IL CONSENSO DEL PROGETTISTA (legge 22.04.1942 n. 663)

FOGLIO

01/01

SCALA

1:1000

N. DWG

G.01

N. REV

00

URBANISTICA

Planimetria d'inquadramento urbanistico

ECOWARE S.p.A.

via Nona Strada, 9 CAP 35139 - PADOVA (ITALY)

Tel. +39 049 73 80 423 Fax +39 049 73 87 638

www.ecoware.eu   info@ecoware.eu

 

	
REV. DATE

	
REV.BY

	
REV.SECTOR

	
REV.NOTE LAYOUT VARIATION

	
SIGNATURE FOR APPROVAL

 

	
NOTE

	
CONTRACTUAL SURFACE: 02.25.76 HA

OCCUPIED SURFACE: 02.25.76 HA

MUNICIPALITY: SENIGALLIA (AN)

PAPER: 33

MAP: 54

LATITUDE:   43°40’42.53 N

LONGITUDE:   13°14’61.11 E

 

	
FILE NAME   G.01.dwg

	
SHEET

01/01

	
SCALE

1:1000

	
PAPER SIZE  A3 (420X297mm)

	
DESIGNER DWG FILE  A.LOTTO

	
N.DWG

G.01

	
N.REV

00

	
DRAFTED ON  05/02/2010 L.BILATO

	
VERIFIED OF   05/02/2010 S.BEGGIAO

	
GENERAL LAYOUT

GENERAL PLAN

	
PROJECT         05/02/2010  L.FRANCESCHINI

	
ORDER NUMBER 9066

	
TERRITORY: Costantini

	
THIS DOCUMENT SHALL NOT BE COPIED, REPRODUCED OR PUBLISHED, FULLY OR PARTIALLY, WITHOUT THE DESIGNER’S CONSENT (Act 22.04.1942 n. 663)

	 

 

  

  

  

 

Annex 3 to EPC Contract – Senigallia

 

[See Annex to Exhibit 4.10 with corresponding Annex number]

 

  

  

  

 

ANNEX 4 

 

Definitive Project - Costantini

 

[Translated from Italian]

 

NOME FILE G.03.dwg

LV / MV BOX

2. NOTE

TOTAL NUMBER OF FENCE POSTS: 250 

FENCE POSTS DISTANCE: 2.50 m

TOTAL PANELS ELECTROWELDED: 250

TOTAL METERS FIBER OPTIC: 1.237.00 meters. (EW)

 

Viabilita interna – Internal Access

TELECOM LINE

Limit to access

Fence

Clay (+/- Q.C.)

Permanent way (+0.30)

Carriage access

Radiant 36

1. LEGEND

DIMENSIONE DEL FOGLIO A3 (420x297 mm)

DISEGNATORE FILE DWG D. MAZZA

REDAZ. 05/02/2010 L. BILATO

VERIF. 05/02/2010 S. BEGGIAO

PROG. 05/02/2010 L. FRANCESCHINI

N. COMMESSA 9066

TERRENO COSTANTINI

TALE DOCUMENTO NON POTRA ESSERE COPIATO. RIPRODOTTO O ALTRIMENTI PUBBLICATO IN TUTTO O IN PARTE SENZA IL CONSENSO DEL PROGETTISTA (legge 22.04.1942 n. 663)

FOGLIO

01/01

SCALA

1:1000

N. DWG

G.03

N. REV

00

LAYOUT GENERALE

Planimetria Generale d'insleme

ECOWARE S.p.A.

via Nona Strada, 9 CAP 35139 - PADOVA (ITALY)

Tel. +39 049 73 80 423 Fax +39 049 73 87 638

www.ecoware.eu   info@ecoware.eu

 

	
REV. DATE

	
REV.BY

	
REV.SECTOR

	
REV.NOTE LAYOUT VARIATION

	
SIGNATURE FOR APPROVAL

 

Viabilita interna – Internal Access

 

	
FILE NAME   G.03.dwg

	
SHEET

01/01

	
SCALE

1:1000

	
PAPER SIZE  A3 (420X297mm)

	
DESIGNER DWG FILE  D.MAZZA

	
N.DWG

G.03

	
N.REV

00

	
DRAFTED ON  05/02/2010 L.BILATO

	
VERIFIED OF   05/02/2010 S.BEGGIAO

	
GENERAL LAYOUT

GENERAL PLAN

	
PROJECT         05/02/2010  L.FRANCESCHINI

	
ORDER NUMBER 9066

	
TERRITORY: Costantini

	
THIS DOCUMENT SHALL NOT BE COPIED, REPRODUCED OR PUBLISHED, FULLY OR PARTIALLY, WITHOUT THE DESIGNER’S CONSENT (Act 22.04.1942 n. 663)

	 

 

  

  

  

 

ANNEX 5

 

FORM OF PARENT COMPANY GUARANTEE

 

Dear Sirs,

 

Further to our recent discussions and in compliance with the provisions of the Contract (as defined below), we herewith submit to you a parent company guarantee to be executed by way of exchange of commercial letters pursuant to Article 1.1 letter a), Part Two, of the Tariff under Presidential Decree 26 April 1986, no. 131 and in accordance with the terms and conditions specified below between:

 

- Kerself Spa, a joint stock company organised and existing under the laws of Italy and having its registered office at Via della Tecnica 8, Prato di Correggio, registration with the Registro delle Imprese of 01777890359, Fiscal Code and Vat No. 01777890359, corporate capital of [l] (the Guarantor); and

 

- ELLOMAY PV ONE S.r.l., with its registered offices located in Galleria Borromeo, 3, VAT Registration Number and Tax Code 04459950285, entered in the Companies Register of Padova under no. 391298 represented by Mr. Ran Fridrich in his capacity of Sole Director (hereinafter known as “Principal”).

 

WHEREAS:

 

	
(A)

	
By an agreement dated [l] 2010 (the Contract, which term includes all amendments to variations of or supplements to it from time to time in force) the Principal has agreed to engage Ecoware S.p.A. (the Contractor) for the design, supply, construction, assembly and start-up of a photovoltaic plant to be located in the Municipality of Senigallia (Ancona, Italy). Unless the context otherwise requires, words and expressions defined in the Contract have the same meaning when used in this Guarantee, as defined below.

 

	
(B)

	
According to the Contract, Contractors shall procure the delivery to Principal of a parent company guarantee in the form of this guarantee (“Guarantee”) within 7 (seven) Working Days of execution of the Contract and in any case before having received the first payment milestone.

 

	
(C)

	
The Guarantor has agreed to guarantee the due performance of the Contract by the Contractor.

 

	
(D)

	
The Guarantor is the Contractor’s Parent Company, as defined in the Contract.

 

IT IS AGREED as follows:

 

	
1.

	
The Guarantor:

 

	
  

	
(a)

	
guarantees to the Principal, as primary obligor and not as surety, the due and punctual performance by the Contractor of each and all of the obligations, warranties, duties and undertakings of the Contractor under the Contract when such obligations, duties and undertakings shall become due and performable according to the terms of such Contract;

 

	
  

	
(b)

	
agrees, in addition to its obligations set out in clause 1(a) above, to indemnify the Principal against all losses, damages, costs and/or expenses which the Principal may incur by reason of any breach by the Contractor of its obligations, warranties, duties and undertakings under the Contract save that this shall not be construed as imposing greater or different obligations or liabilities on the Guarantor than are imposed on the Contractor under the Contract; and

 

  

  

  

 

	
  

	
(c)

	
agrees to indemnify the Principal on demand against any loss or liability suffered by it if any obligation guaranteed by the Guarantor is or becomes unenforceable, invalid or illegal as if the obligation guaranteed had not been unenforceable, invalid or illegal provided that the Guarantor's liability shall be no greater than the Contractor's liability would have been if the obligation guaranteed had not become unenforceable, invalid or illegal.

 

	
2.

	
The liability of the Guarantor under this Guarantee shall not be reduced or discharged by any act, omission or other thing whereby (in absence of this provision) the liability of the Guarantor under this Guarantee would or might be reduced or discharged in whole or in part as a consequence of:

 

	
  

	
(a)

	
any amendment to the obligations undertaken by the Contractor whether, by way of any addendum or variation referred to in clause 3 below, any suspension of the Works, extension of the time or otherwise; or

 

	
  

	
(b)

	
amendment to, or any variation, waiver or release of, (any part of) the Contract or any security or other guarantee in respect thereof; or

 

	
  

	
(c)

	
the termination of the Contract under the Contract attributable to the Contractor; or

 

	
  

	
(d)

	
any legal limitation, incapacity or other circumstances relating to the Contractor or any other person; or

 

	
  

	
(e)

	
the dissolution, amalgamation, change in status, function, control or ownership, insolvency, liquidation or the appointment of an administrator or receiver of the Contractor or any other person.

 

	
3.

	
In the event of change in control or ownership of the Contractor, the Guarantee shall remain in full force and effect. In the event of change in control or ownership of the Contractor, the Guarantor shall promptly notify to the Principal the name of the new controlling person or owner of the Contractor.

 

	
4.

	
The Guarantor by this Guarantee authorises the Contractor and the Principal to make any addendum, variation or amendment to the Contract, the due and punctual performance of which addendum and variation shall be likewise guaranteed by the Guarantor in accordance with the terms of this Guarantee.

 

	
5.

	
This Guarantee shall be a primary obligation of the Guarantor to perform or to take whatever steps may be necessary to procure the performance of the obligations of the Contractor under the Contract which have been breached, to assume jointly and severally with the Contractor all rights and obligations of the Contractor under the Contract and to pay the Principal from time to time any and all sums of money which the Contractor is at any time liable to pay to the Principal under the Contract; accordingly the Principal shall not be obliged before enforcing this Guarantor Guarantee to take any action in any court or arbitral proceedings against the Contractor, to make demand or any claim against the Contractor, to enforce any other security held by it in respect of the obligations of the Contractor under the Contract or to exercise, levy or enforce any distress, or other process of execution against the Contractor.

 

	
6.

	
The maximum amount (importo massimo garantito) guaranteed by the Guarantor under this Guarantee shall be equal to the Consideration.

 

	
7.

	
This Guarantee shall be effective upon delivery and shall expire 7 (seven) days following the FAC (the “Expiry Date”). Upon the Expiry Date, this Guarantee must be returned to us for cancellation.

 

	
8.

	
Until all amounts which may be or become payable under the Contract or this Guarantee have been irrevocably paid in full, the Guarantor shall not, as a result of this Guarantee or any payment or performance under this Guarantee, be subrogated to any right or security of the Principal or claim or prove in competition with the Principal against the Contractor or any person or demand or accept repayment of any monies or claim any right of contribution, set-off or indemnity and any sums received by the Guarantor or the amount of any set-off exercised by the Guarantor in breach of this provision shall be held by the Guarantor in trust for and shall be promptly paid to the Principal.

 

  

  

  

 

	
9.

	
The Guarantor shall not hold any security from the Contractor in respect of this Guarantee and any such security which is held in breach of this provision shall be held by the Guarantor in trust for and shall promptly be transferred to the Principal.

 

	
10.

	
Each payment to be made by the Guarantor under this Guarantee shall be made in Euro, without any set off or counterclaim and free and clear of all deductions or withholdings of any kind whatsoever or howsoever arising.  If any deduction or withholding must be made by law (including double taxation treaties) the Guarantor will pay that additional amount which is necessary to ensure that the Principal receives on the due date a net amount equal to the full amount which it would have received if the payment had been made without the deduction or withholding.  The Guarantor shall promptly deliver to the Principal any receipts, certificates or other proof evidencing the amounts paid or payable in respect of any such deduction or withholding.

 

	
11.

	
The Guarantor shall have 5 (five) Working Days from the date of demand to make payment in full to the Principal of any amount due under this Guarantee. The Guarantor shall pay interest on any amount due under this Guarantee from the date which is 5 (five) Working Days from the date of demand until the date of payment in full (as well after as before any judgment) calculated on a daily basis at the six months Euribor plus 3 (three) percentage points.

 

	
12.

	
The Guarantor will reimburse the Principal for all legal and other costs (including non-recoverable VAT) incurred by the Principal in connection with the enforcement of this Guarantee.

 

	
13.

	
Any settlement or discharge between the Principal and the Contractor or the Guarantor shall be conditional upon no order to refund by virtue of any provision of any enactment relating to bankruptcy, insolvency or liquidation being issued by a competent court, in which case the Principal shall be entitled to recover from the Guarantor as if such settlement or discharge had not occurred.

 

	
14.

	
The Guarantor warrants that this Guarantee is its legally binding obligation, enforceable in accordance with its terms, and that all necessary consents and authorisations for the giving and implementation of this Guarantee have been obtained.

 

	
15.

	
The Guarantor warrants and undertakes to the Principal that it shall take all necessary action directly or indirectly to perform the obligations expressed to be assumed by it or contemplated by this Guarantee and to implement the provisions of this Guarantee.

 

	
16.

	
The Guarantor warrants and confirms to the Principal that it has not entered into this Guarantee in reliance upon, nor has it been induced to enter into this Guarantee by any representation, warranty or undertaking made by or on behalf of the Principal (whether express or implied and whether under statute or otherwise) which is not set out in this Guarantee.

 

	
17.

	
The Guarantor acknowledges and consents, also for the purposes of Article 1407 of the Italian Civil Code, that the Principal shall be entitled by notice in writing to the Guarantor to assign this Guarantee at any time in connection with an assignment of the Contract in accordance with the provisions of the Contract, to the Financing Entity.

 

	
18.

	
Any notice hereunder shall be duly given when delivered in writing by hand (in the case of personal delivery) or by registered letter with advice of receipt (Raccomandata A.R.), or by express courier  to the Guarantor or by facsimile, provided an original of such facsimile is also received by us within three (3) Working Days and sent by one of the aforementioned notice methods and shall be duly signed by an authorised representative of the Principal.

 

  

  

  

 

	
19.

	
No delay or omission of the Principal in exercising any right, power or privilege under this Guarantee shall impair or be construed as a waiver of such right, power or privilege nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise of such right, power or privilege or the exercise of any other right, power or privilege.

 

	
20.

	
Without prejudice to Article 1419 (nullità parziale) of the Italian Civil Code, if - at any time - any provision of this Guarantee is or becomes illegal, invalid or unenforceable, neither the legality, validity nor enforceability of the remaining provisions of this Guarantee will in any way be affected or impaired thereby.

 

	
21.

	
The Guarantor shall pay all stamp duties and taxes, if any, to which the execution and delivery of this Guarantee may be subject and shall indemnify the Principal against any and all liabilities with respect to or arising from any delay or omission to pay any such duties and taxes.

 

	
22.

	
This Guarantee implies, where necessary, a waiver, among other things, to the benefits, rights and exceptions under Articles 1247, 1939, 1945, 1953, 1955 and 1957 of the Civil Code.

 

	
23.

	
This Guarantee shall be governed by and construed in accordance with Italian law. The courts of Milan, Italy, shall have exclusive jurisdiction of all matters arising out of or in connection with this Guarantee.

 

	
24.

	
Notices or demands given under this Guarantee shall be sent to the following addresses:

 

(a)           If to the Principal

 

	 	
ELLOMAY PV ONE S.r.l.

	 	
Attention: Mr Ran Fridrich

	 	
Galleria Borromeo, 3

	 	
35137 Padova (Italy)

	 	
Telephone: +972-3-7971111

	 	
Fax: +972 972-3-7971122

 

(b)           If to the Guarantor:

 

	 	
[Guarantor]

	 	
Attention: l

	 	
Telephone: l

	 	
Fax: l

 

***

 

If you agree with the above terms and conditions, please send us by registered mail with return receipt or by express courier or deliver by hand a duly executed letter of acceptance incorporating the full text of this proposal.

Yours faithfully,

___________________________

for and on behalf of the Guarantor

 

 

For acceptance

___________________________

for and on behalf of the Principal

  

  

  

 

Page 1 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

SITE: COSTANTINI

ORDER: 9066

 

ANNEX 6

Technical Specifications

[Translated from Italian]

 

Photovoltaic power plant with output of 734.40 kWp

 

  

  

  

 

NOME FILE G.03.dwg

NOTE:

LV/MV BOX

TOTAL NUMBER OF FENCING POLES: 250

DISTANCE OF POLES: 2,50 m

TOTAL PANELS OF ELECTRO JOINT GRID: 250

TOTAL METERS OF OPTICAL FIBRE: 1,237.00 mt (EW)

HV ENEL LINE

ACCESS LIMIT

FENCE

CLAY

ROAD BALLAST

ROAD ACCESS

RADIANTE 36

1. LEGENDA

DIMENSIONE DEL FOGLIO A3 (420x297 mm)

DISEGNATORE FILE DWG D. MAZZA

REDAZ. 05/02/2010 L. BILATO

VERIF. 05/02/2010 S. BEGGIAO

PROG. 05/02/2010 L. FRANCESCHINI

N. COMMESSA 9066

TERRENO COSTANTINI

TALE DOCUMENTO NON POTRA ESSERE COPIATO, RIPRODOTTO O ALTRIMENTI PUBBLICATO IN TUTTO I ON PARTE SENZA IL CONSENSO DEL PROGETTISTA (legge 22.04.1942 n. 663)

FOGLIO

01/01

SCALA

1:1000

N. DWG

G.03

N. REV

00

General Layout

General Plan as a whole

ECOWARE S.p.A.

via Nona Strada, 9 CAP 35139 - PADOVA (ITALY)

Tel. +39 049 73 80 423 Fax +39 049 73 87 638

www.ecoware.eu   info@ecoware.eu

 

 

  

  

  

 

 

NOME FILE G.00. dwg

	CARATTERISTICHE MODULO FV
	 
	 
	 
	 
	
Specifications

	  	  
	
Type

	  	
ECW 240-60M

	
Peak power (Pm)

	  	
240

	
Open Circuit Voltage (Voc)

	  	
37

	
Short Circuit Current (Isc)

	  	
8,62

	
Optinum operating Voltage (Vmp)

	  	
29,80

	
Optinum operating Current (Imp)

	  	
8,06

	
Practical module efficiency

	  	
16,74%

	
Maximum system voitag [V]

	  	
1000

	
Voltage temperature coefficients

	  	
-0,35%/K

	
Current temperature coefficients

	  	
+0,06%/K

	
Power temperature coefficients

	  	
-0,45%/K

	
Series fuse rating [A]

	  	
15

	
Cells

	  	
6x10 pieces polycristalline solar cells series string (156mmX156mm)

	
Junction box

	  	
with 6 bypass diodes

	
Cable

	  	
length 900mm, 1x4 mmq

	
Front glass

	  	
white toughened safety glass, 3,2mm

	
Cell encapsulant

	  	
EVA (Ethylene-Vinyl-Acetate)

	
Back

	  	
composite film

	
Frame

	  	
anodised aluminium profile

	
Dimensions

	  	
1640x990x50mm (LxWxH)

	
Weight

	  	
23,7 Kg

	
Maximum surface load capacity

	  	
tested up to 2,400 Pa according to IEC 61215

	
Hail

	  	
maximum diameter of 25 mm with impact speed of 23 mxs

	
Temperature range

	  	
- 40 °C to + 85 °C

	
TRASFORMATORE

	 
	
Marca

	  	
TMC

	  
	
Modello

	  	
TMCRES-R 1000 (24kv)

	  
	 	 	 	 
	
Specifiche tecniche

	  	  	  
	  	  	
Avvolgimento Primario

	
Avvolgimento Secondario

	
Potenza nominale

	  	
1000 KVA

	
1000 KVA

	
Tensione nominale a vuoto

	  	
20 KV

	
0,4 KV

	
Variazione di tensione

	  	
+/- 2x2,5%

	  
	
Gruppo vettoriale

	  	
Dyn11

	  
	
Collegamento

	  	
Triangolo

	
Stella + n

	
Classe di isolamento

	  	
24/50/95 kV

	
1,1/3 kV

	
Materiali avvolgimento

	  	
Alluminio

	
Alluminio

	
Tipo di avvolgimento

	  	
Inglobato in stampo

	
Impregnate per immersione

	
Frequenza

	  	
50 Hz

	  
	
Installazione

	  	
Interna

	  
	
Tipo raffreddamento

	  	
AN

	  
	
Altitudine

	  	
< = 1000 m

	  
	
Perdite a vuoto

	  	
1800W

	  
	
Perdite in c.to c.to a 120 120 °C

	  	
11000 W

	 
	
Tensione di c.c.

	  	
6%

	  
	
Corrente a vuoto

	  	
1%

	  
	
Valore delle scariche parziali

	  	
< = 10 pC

	  
	
Livello di pressione acustica LpA

	  	
< = 51 (secondo norme IEC a 1 m di distanza)

	
Temperature ambiente

	  	
40 °C

	  
	
Classe termica

	  	
F

	  
	
Sovratemperatura

	  	
100 °C

	 

	
INVERTER

	 
	
Marca

	  	
E.E.I. - Equipaggiamenti Elettronici Industriali S.r.l.

	
Modello

	  	
Convertitore fotovoltaico 250 kW

	
N° di inverter

	  	
3

	 	 	 
	
Specifiche tecniche

	  	  
	
Potenza di picco

	  	
275 kWp

	
Potenza nominale

	  	
250 kW

	
THDI

	  	
≤ 2%

	
N° di MPPT indipendenti

	  	
3

	
Rendimento Europeo

	  	
97% @ 520 Vcc

	
Max. Tensione a vuoto

	  	
850 Vcc

	
Tensione nominale campo fotovoltaico

	  	
450 Vdc

	
Range di tensione campo fotovoltaico

	  	
300 ÷ 800 Vdc

	
Tensione a vuoto del campo

	  	
850 Vdc

	
Tensione di ripple sul campo fotovoltaico

	  	
< 1%

	
Tensione di uscita

	  	
400 Vac+/-15%

	
Frequenza di uscita

	  	
50 o 60 Hz +/- 2%

	
Distorsione totale della corrente di rete (THDI) a pieno carico

	  	
≤ 2%

	
Cos φ 

	  	
1

	
Consumo in stop

	  	
45 W

	
Consumo nottumo

	  	
0 W

	
Raffreddamento con ventilazione forzata termostata

	  	
si

	
Grado di protezione

	  	
IP 21 ed in container

	
Temperatura di funzionamento

	  	
- 5°C + 40°C

	
Umidità relativa

	  	
95% a 20°C

	
Tensione di isolamento verso terra

	  	
2,5 kV a 50 Hz per 60 sec.

	
Tensione di isolamento tra ingresso ed uscita

	  	
2,5 kV a 50 Hz per 60 sec.

	
Protezione termica

	  	
Integrata

	
Caratteristiche

	  	  
	
Raffreddamento

	  	
ventilatori con filtri

	
Colorazione

	  	
RAL 6018

	
Armadio

	  	
lamiera d'acciaio 20/10

	
Dimensioni

	  	  
	
Altezza (H)

	  	
2100 mm

	
Larghezza (L)

	  	
1200 mm

	
Spessore (P)

	  	
600 mm

	
IMPIANTO FOTOVOLTAICO

	 
	
Terreno

	  	
COSTANTINI

	
Commessa

	  	
9066

	
Potenza (kWp)

	  	
734.40 kWp

	
N° generatori fv

	  	
85

	
Locazione

	  	  
	
Regione

	  	
Marche

	
Provincia

	  	
Ancona (AN)

	
Comune

	  	
Sanigallia

	
Coordinate

	  	  
	
Latitudine

	  	
43°40'41.61"N

	
Longitudine

	  	
13°14'51.44"E

	
Dati catastali

	  	  
	
Foglio

	  	
33

	
Mappali

	  	
54

	
Area

	  	  
	
Superficie a contratto (HA)

	  	
02.25.76

	
Superficie occupata (HA)

	  	
02.25.76

	
radiante36

	  	  
	
Altezza (m)

	  	
6,36

	
Lunghezza(m)

	  	
10,20

	
Area (mq)

	  	
64,872

	
Strip da

	  	
6

	
N° strip

	  	
6

	
N° moduli

	  	
36

	
Modulo

	  	
ECW 240-60M

	
(Wp)

	  	
240

	
Potenza generatore fv (kWp)

	  	
8,64

	
Stringhe per generatore fv

	  	
2

	
N° moduli per stringa

	  	
18

DIMENSIONE DEL FOGLIO A3 (420x297 mm)

DISEGNATORE FILE DWG D. MAZZA

REDAZ. 05/02/2010 L. BILATO

VERIF. 05/02/2010 S. BEGGIAO

PROG. 05/02/2010 L. FRANCESCHINI

N. COMMESSA 9066

TERRENO COSTANTINI

TALE DOCUMENTO NON POTRA ESSERE COPIATO, RIPRODOTTO O ALTRIMENTI PUBBLICATO IN TUTTO I ON PARTE SENZA IL CONSENSO DEL PROGETTISTA (legge 22.04.1942 n. 663)

FOGLIO

02/02

SCALA

/

N. DWG

G.00

N. REV

00

DETTAGLI TECNICI

Dati del Campo FV, modulo, inverter e transformatore

ECOWARE S.p.A.

via Nona Strada, 9 CAP 35139 - PADOVA (ITALY)

Tel. +39 049 73 80 423 Fax +39 049 73 87 638

www.ecoware.eu   info@ecoware.eu

  

  

  

 

Translation of Italian Terms

 

	
PV PLANT

 

	
INVERTER

	
TRANSFORMER

	
Land

	  	
Brand

	  	
Brand

	  	  
	
Order

	  	
Model

	
PV converter 250 kW

	
Model

	  	  
	
Power kWp

	  	
Inverters number

	  	
Technical specifications

	  	  
	
Number of PV generators

	  	  	  	  	
Primary rolling

	
Secondary rolling

	
Location

	  	
Technical specifications

	  	
Nominal power

	  	  
	
Region

	  	
Peak power

	  	
Nominal load-less voltage

	  	  
	
Province

	  	
Nominal power

	  	
Voltage variation

	  	  
	
Municipality

	  	
THDI

	  	
Vectorial group

	  	  
	
Coordinates

	  	
Number of independent MPPT

	  	
Link

	
Triangle

	
Star + n

	
Latitude

	  	
European output

	  	
Isolation class

	  	  
	
Longitude

	  	
Maximum load-less voltage

	  	
Rolling materials

	
Aluminum

	
Aluminum

	
Cadastral Data

	  	
PV plant nominal voltage

	  	
Rolling type

	
Moulded

	
Plunged

	
Paper

	  	
PV plant voltage range

	  	
Frequency

	  	  
	
Maps

	  	
Field load-less voltage

	  	
Installation

	
Internal

	  
	
Area

	  	
Ripple voltage of PV plant

	  	
Cooling type

	  	  
	
Contractual Survey

	  	
Out-voltage

	  	
Altitude

	  	  
	
Occupied Survey

	  	
Out-frequency

	  	
Load-less losses

	  	  
	
Radiant 36

	  	
Overall distortion of the grid flow (THDI) at full load

	  	
Losses c.to c.to at 120 120 °C

	  	  
	
Height (meters)

	  	
Cos φ

	  	
c.c. voltage

	  	  
	
Length (meters)

	  	
Consummation at stop

	  	
Load-less stream

	  	  
	
Area (sq meters)

	  	
Night consummation

	  	
Partial discharge value

	  	  
	
Strips of

	  	
Cooling with forced thermostat ventilation

	  	
LpA acoustic pressure level

	
<=51 (according to IEC at 1 m distance)

	
Number of strips

	  	
Protection degree

	  	
Ambient Temperature

	  	  
	
Number of modules

	  	
Function temperature

	  	
Heath class

	  	  
	
Modules

	  	
Relative humidity

	  	
Over temperature

	  	  
	
(wP)

	  	
Ground isolation voltage

	  	  	  	  
	
Power PV Generator (kWp)

	  	
Isolation voltage between entry and exit

	  	  	  	  
	
Strings for PV generator

	  	
Heat protection

	
Integrated

	  	  	  
	
Number of modules per string

	  	
Features

	  	  	  	  
	  	  	
Cooling

	
ventilators with filters

	  	  	  
	  	  	
Colouring

	  	  	  	  
	  	  	
Cupboard

	
steel plate 20/10

	  	  	  
	  	  	
Size

	  	  	  	  
	  	  	
Height

	  	  	  	  
	  	  	
Breadth

	  	  	  	  
	  	  	
Thickness

	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  

 

 PV MODULE CHARACTERISTICS

 

	
FILE NAME   G.00.dwg

	
SHEET

02/02

	
SCALE

/

	
PAPER SIZE  A3 (420X297mm)

	
DESIGNER DWG FILE  D.MAZZE

	
N.DWG

G.00

	
N.REV

00

	
DRAFTER ON  05/02/2010 L.BILATO

	
VERIFIED OF   05/02/2010 S.BEGGIAO

	
TECHNICAL DETAILS

 Field data form PV inverter and transformer

	
PROJECT         05/02/2010  L.FRANCESCHINI

	
ORDER NUMBER 9066

	
TERRITORY: COSTANTINI

	
THIS DOCUMENT SHALL NOT BE COPIED, REPRODUCED OR PUBLISHED, FULLY OR PARTIALLY, WITHOUT THE DESIGNER’S CONSENT (Act 22.04.1942 n. 663)

	 

 

  

  

  

 

Page 2 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

Ecoware SpA

via Nona Strada, 9 CAP 35139 - PADOVA (ITALY)

Tel +39 049 73 80 423 Fax +39 049 73 87 638

www.ecoware.eu info@ecoware.eu

NAME OF FILE G.03.dwg01 - Technical report - Radiant 36

Resources Operations L. BILATO - R. Schiesari

 

no.REV

00

 

L. EDITION 29/10/2009 BILATO - R. Schiesari

VERIFICATION 29/10/2009 S. BEGGIAO

DESIGNER L. 29/10/2009 FRANCESCHINI

REV. ---

REV. DESCR.

 9069 TERRITORY COSTANTINI

TECHNICAL REPORT

THIS DOCUMENT MAY NOT

BE COPIED, REPRODUCED

OR OTHERWISE

PUBLISHED IN FULL

OR IN PART WITHOUT THE

CONSENT OF

DESIGNER (Act

22/04/1942 No 663)

 

radiant 36

 

  

  

  

 

Page 3 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

CONTENTS

 

	TECHNICAL REFERENCE NORM	6
	1.1           URBAN PLANNING PART 	61.1.1
	Laws and Regulations	6
	1.2           ELECTRICAL PART 	 61.2.1
	Laws and Decrees	6
	1.3           STRUCTURAL - MECHANICAL PART 	71.3.1
	Laws and Regulations	7
	2 INTRODUCTION 	8
	2.1           General Information	8
	2.2           LOCATION	8
	2.3           MORPHOLOGICAL AND WEATHER CHARACTERISTICS OF THE SITE	8
	2.4           GENERAL CHARACTERISTICS OF THE INSTALLATION	10
	2.5           SHADING	10
	2.6           TECHNICAL FRAMEWORK USED	11
	3 DESCRIPTION OF PLANT 	12
	3.1           THE STRUCTURE OF THE PHOTOVOLTAIC INSTALLATION	13
	3.2           CIVIL WORKS	14
	3.2.1               Roads	14
	3.2.2               Access gates	14
	3.2.3               Fence	14
	3.3           HYDRAULICS OF THE SOIL	14
	4 MECHANICS 	15
	5 STRUCTURES 	16
	5.1           General  	16
	
5.2           MATERIALS USED

	16
	5.3           CHARACTERISTICS OF SOIL FOUNDATION	16
	5.4           METHOD USED	16
	5.4.1               Calculation Methodology	16
	5.4.2               Combination of actions	16
	6 ELECTRICAL	17
	6.1           DESCRIPTION OF THE INSTALLATION	17
	6.1.1               PV generator	17
	6.1.2               Framework of parallel string 	19
	6.1.3               Sub-station for MT delivery	19
	6.1.4               Technical Area 	20
	6.1.5               Auxiliary Power  	20
	6.2           PROTECTION AGAINST DIRECT CONTACT	21
	6.2.1               Protection by Insulation	21
	6.2.2               Protection by barriers or enclosures	21
	6.3           Protection against direct contact	21
	6.3.1               Faults in Medium Voltage	21
	6.3.2               Faults in Low Voltage	23
	6.4           PROTECTION OF CONDUCTORS AGAINST CURRENT SURGES	25
	6.4.1               Overload protection	25
	6.4.2               Protection against short circuits	25
	6.4.3               DC side protection	25
	6.4.4              AC side protection	 26

 

  

  

  

 

Page 4 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

	6.5           METHODS FOR DIMENSIONING AND CALCULATION	26
	6.5.1               Cable Sizing	26
	6.5.2               Voltage Drops	27
	6.5.3               Sizing protective conductors	27
	6.5.4               Calculation of Faults	27
	6.5.5               Calculation of the maximum short circuit current	28
	6.5.6               Calculation of short circuit currents	28
	6.6           PROTECTION AGAINST VOLTAGE SPIKES	28
	6.7           INSTALLATIONS FOR GROUNDING	29
	6.7.1               Grounding the technical side area (MT / LT sub-station)	29
	6.7.2               Grounding on photovoltaic field side	29
	7.1           Systems FIBER OPTIC PERIMETER ANTI-INTRUSION SYSTEM	30
	9 INTEGRATED SYSTEM OF CONTROL OF PRODUCTION,	35

 

  

  

  

 

Page 5 of 38

File: R.01 - Technical report - Radiant 36

Project for a photovoltaic power plant equal to 734.40 kWp

 

	REFERENCES	 
	Figure 1: Calculating distances between fixed structures 	9
	Figure 2: Radiant 30 	12
	Sheet 1: Radiant 36 	12
	Section 2: Datasheet Form Ecoware 240 W. 	18
	Scheme 1: Summary of installation and components 	13
	Scheme 2: Control of energy production and alarm management 	35
	Scheme 3: Security 	36
	Scheme 4: Data transmission 	36
	Diagram 5: Central elements for supervision 	37
	Scheme 6: Internal Data Management 	37
	Diagram 7: Management of Technical Assistance and Emergency Information 	38
	Table 1: UTp values from norm CEI 11-1 and the CEI 11-37guide 	22

 

  

  

  

 

Page 6 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

TECHNICAL REFERENCE NORM

 

	
1.1

	
URBAN PLANNING PART

 

	
1.1.1

	
Laws and Regulations

 

LR, 12 April 2007, no. 11

 

Norms for environmental impact assessment

 

LR, 14 June, no. 17

 

Provisions in the environmental field, including those in relation to the decentralization of administrative functions related to the environment

 

DPR 6 June 2001, no. 380

 

Consolidated text of legal provisions and regulations on construction Planning Law of 17 August 1942, no. 1550

 

Planning Law

 

Law of 28 January 1977, no. 10

 

Rules on Buildable land

 

Law of 28 February 1985, no. 47

 

Rules on control of urban development - building Administrative and criminal sanctions LR, 21 October 2008, no. 31

 

Rules governing the production of energy from renewable sources and for the reduction of  emissions and

 

for environmental issues

 

Presidential Decree of 1198, no. 447

 

Regulation laying down rules for simplification of procedures for authorization for construction, expansion, renovation and conversion of production facilities, for the execution of internal works to buildings, and for determining the sites for the production plants in accordance with Article 20, paragraph 8 of the Law of 15 March 1997 No. 59 Decree of 5 February 1997, no. 22

 

	
1.2

	
ELECTRICAL PART

 

	
1.2.1

	
Laws and Decrees

 

CEI 0-2: Guide for the definition of project documentation for electrical installations. 2002).

 

CEI 0-16: Technical Connection Rules (TCR) for active users and passive users of AT and MT networks  from distribution companies for electricity. 2010

 

CEI 11-1: Electrical plants with voltage over 1 kV AC. (1999 and subsequent variants)

 

CEI 11-17: Power plants, and plants for transmission and distribution of electricity - Cable line.

 

  

  

  

 

Page 7 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

(2006)

 

CEI 11-20: Plants for the production of electricity and UPS connected to networks of categories I and II (2000 and later variants)

 

CEI 82-25: Guide to the realization of photovoltaic generation systems connected to electrical networks of medium and low voltage. (2007)

 

CEI 64-8/1-7: Electrical plant users at rated voltage not exceeding 1000 V AC or 1500 V DC. (2007 and later variants)

 

CEI 81-10 (EN 62305): Protection of structures against lightning. (2006)

 

Law no. 186 dated  March 1968  "Provisions concerning the production of materials, equipment, machinery, installations and electrical and electronic systems; Requirements of the electricity distribution companies

 

	
1.3

	
STRUCTURAL - MECHANICAL PART

 

	
1.3.1

	
Laws and Regulations

 

DM Public Works January 16, 1996, "Technical standards relating to general criteria for the verification and security of construction and loads and overloads and Circ. Min of Public Works 4 July 1996, no. 156AA.GG./STC, "Instructions for the application of the "Technical standards on general criteria for the verification of security for construction and overloading" of the Ministerial Decree 16 January 1996";

 

DM Public Works 9 January 1996, "Technical standards for the calculation, implementation and testing of structures in reinforced concrete, both normal and pre-stressed and for metal 

structures ";

 

Ord. PCM March 20, 2003, no. 3274 "Early elements in the general criteria for seismic classification of the national territory seismic and technical regulations for buildings in seismic areas" with its

 

attachments and subsequent additions;

 

DM Public Works March 11, 1988, "Technical standards concerning the investigation of soils and rocks, the stability of natural slopes and escarpments, the general criteria and requirements for the design, implementation and testing of support operations for land and foundation work" and Circ. LL.PP. September 24, 1988 No. 30483.

 

  

  

  

 

Page 8 of 38 

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

2 INTRODUCTION

 

This project documentation identifies the project design choices made for the realization of a photovoltaic plant in relation to the characteristics of the places where it will be installed, with particular reference to safety, reliability and functionality.

 

The completion of the works should be preceded by approval from the client and by the submission of the documents necessary for the authorization and execution of the works themselves and by the preparation of a project of execution.

 

The photovoltaic plant must be implemented in compliance with all technical requirements indicated below, and in total compliance with laws, regulations and norms in force, when they are applicable, even where these are not directly cited in this report.

 

	
2.1

	
General Information

 

The project involves the construction of 1 photovoltaic plant on land in an agricultural property in the Municipality of Senigaglia (Ancona) called "COSTANTINI". The photovoltaic plant will be made with monocrystalline silicon photovoltaic modules mounted on 85 structures (Radian 36) for a total nominal power of 734.40 kWp. The photovoltaic plant is intended to produce electricity and will be connected to the electricity grid for public distribution of medium voltage (20 kV) of Enel Distribuzione (hereafter referred to Enel).

 

	
2.2

	
LOCATION

 

	
Region:

	
Marche

	
Province:

	
Ancona

	
Commune:

	
Senigaglia

	
Map Sheet / Parcel

	
33 / 55

	
Latitude:

	
43°40'41,61''

	
Longitude:

	
13°14'51,44''

	
Area occupied

	
64,872 square meters

 

	
2.3

	
MORPHOLOGICAL AND WEATHER CHARACTERISTICS OF THE SITE

 

The land on which the plant will be built is flat, with an area of approximately 64,872 square meters and located as reported in the project drawings.

 

There were no special problems relating to frequent weather events such as snow, fog, hail, or wind.

 

  

  

  

 

Page 9 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

Figure 1: Calculating distances between fixed structures

  

  

  

  

  

 

Page 10 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
2.4

	
GENERAL CHARACTERISTICS OF THE INSTALLATION

 

The photovoltaic plant will be connected to Enel's public MT distribution network and will be composed of the following elements:

 

	
l  

	
PV array (or photovoltaic generator);

 

	
l  

	
parallel frameworks for strings;

 

	
l  

	
conversion groups and power control (inverter);

 

	
l  

	
LT / MT transformer;

 

	
l  

	
protective devices, and devices for control and MT interface;

 

	
l  

	
supply of auxiliary utilities;

 

	
l  

	
uninterruptible power supplies (UPS) for power and ancillary services and protections of electrical substation;

 

	
l  

	
pipes for connecting the various components of the installation and grounding, and for connection to the public MT network of Enel.

 

The field will consist of photovoltaic solar modules installed on structures called Radiant 36 arranged as shown in project drawings.

 

Such equipment will be installed in dedicated technical rooms to be built and will be connected as indicated in the project drawings. In the same location the equipment for protection and the MT interface will be installed.

 

The supply of auxiliary utilities is derived from the low-voltage AC before the MT / LT transformer.

 

The group to measure the energy produced and incentivized is installed in the technical area and immediately downstream of the inverter on the AC side.

 

Particular attention was paid to the definition of:

 

	
l  

	
the characteristics of the modules constituting the photovoltaic field,

 

	
l  

	
the connection mode of the same,

 

	
l  

	
the characteristics of the DC / AC conversion ,

 

	
l  

	
the characteristics of control devices and protection on the DC side and AC side

 

	
l  

	
the characteristics of the interface device and the network-side security device to safely manage the connection to the distribution network and the internal users.

 

The equipment installed will be protected from the weather, mechanical, thermal and chemical stresses (degree of protection of the components of at least IP2X).

 

	
2.5

	
SHADING

 

For the arrangement of the Radiants on the ground, the Studies & Research Office of Ecoware has concluded that the best available position on the ground is that resulting from the following formula:

 

  

  

  

 

Page 11 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

	
2.6

	
TECHNICAL FRAMEWORK USED

 

This project has been prepared on the basis of surveys and technical documentation acquired, namely:

 

1. Topographic Relief

 

2. Geological Report

 

3. Structural report of calculations for reinforced concrete structures

 

4. Manufacturers' datasheet for the equipment used

 

  

  

  

Page 12 of  38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

3 DESCRIPTION OF PLANT

 

The following describes the major components of the installation

 

Sheet 1: Radiant 36

	
Generating system

Photovoltaic

	
Radiant 36

 

	
Manufacturer

 

	

  

Ecoware SpA

Via Nona Strada, 9

35129 - PADOVA

	
Characteristics

of the system

 

	
Sestante is the name under which the property is identified for the support of photovoltaic modules designed and built by Ecoware for the implementation of fixed photovoltaic installations.

 

Figure 2: Radiant 30

                                                                                                                                                                                                         

 

The radian is composed entirely of metal sheets of galvanized steel. The wing, consisting of a system of beams and stringers, shall be fixed to the earth by four stakes driven into the ground. The work of fitting the stand is easy and repetitive, making it possible to reduce drastically the time for installation of the equipment.

The wing is the part of the structure that houses the photovoltaic modules. It is composed of two strips that come from the factory with the photovoltaic modules assembled according to the Ecoware technology known as Shell PV (SPV), which brings significant advantages in terms of mismatch, transportability, insulation, safety and installability.

 

  

  

  

 

Page 13 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

	
3.1

	
THE STRUCTURE OF THE PHOTOVOLTAIC INSTALLATION

 

Scheme 1: Summary of installation and components

 

	
1

	
 

 

	
Module

Photovoltaic

 

 

	
Set of cells

 

	
Brand:

Ecoware

 

	
Photovoltaic power: 240 Wp

 

	
2

	
 

 

	
Strip

 

	
Set of panels and metal structure to keep them together.

The strips beside are fixed together, forming sails

	  
	
3

	 	
Sail

 

	
More strips assembled together.

 

	
Availability

strip: 6 +6 +6 +6 +6

 

	
Total modules on Sail: 36

	
Dimensions (WxH)

mm: 10200x6360

 

	
4

	
 

 

 

	
Radiant 36

 

	  	  
	
5

	
 

 

	
Subfield

 

	
This is the set of n Sextants forming a framework for Parallel Strings The creation of strings for Radiant 36 micro areas laid out in several rows is executed through the passage of production cables in a buried pipe.

 

	  
	
6

	
 

 

 

 

	
Photovoltaic plant

 

	
The plant consists of:

PHOTOVOLTAIC FIELD:

the set of subfields referring to the same measure group for energy

DATA NETWORK:

ELECTRICAL PLANT

Provision: This is to be understood as the no. of panels for each strip arranged vertically

POWER SERVICES

sub-station for

CONVERSION /Transformation

	  

 

  

  

  

Page 14 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

	
3.2

	
CIVIL WORKS

 

	
3.2.1

	
Roads

 

The roads will be implemented

 

	
l  

	
in BALLAST: Used to access the property and for the movement area in front of the sub-station

 

	
3.2.2

	
Access gates

 

The access routes to the plant foresee provision of galvanized iron gates opening in two parts - with concrete foundations.

 

	
3.2.3

	
Fence

 

The enclosure is accomplished by posts in the soil (depth of 1.30 m) made up of poles of a C profile, 30x60x120x60x30 thickness 3, separated from each other by 2.5m. They serve as support for the network of panels of Orsopanel type, 6x3 (h 1930 mm)

 

	
3.3

	
HYDRAULICS OF THE SOIL

 

The existing agricultural hydraulic system on the land assigned for the photovoltaic plant will not be altered by the latter, so that namely:

 

	
1.

	
levelling operations will not be performed to such an extent as to alter the slopes creating the natural gradients to run off storm water towards the existing natural drains serving the area.

 

	
2.

	
streets for development will be made in ballast laid out above the countryside level for a total height of 30 cm + cm: from the slope detected, such roads will not act as a barrier to the natural run-off slope of the water, where it appears that the opposite is true, driveways should be provided for each channel each 15-25 m for the flow of water.

 

  

  

  

 

Page 15 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

4 MECHANICS

 

The entire structure is protected by galvanizing and this is such as to ensure the protection of the same for the Conto Energia 20-year duration (except marine areas or particular exceptions). Finally a special mention must be made about the system of junction between the different components of the frame of the solar sail.

 

These are made using a "clinching" technique  that unites the two parts of material through a simple mechanical deformation, and this joining technique (imported from the automotive sector) has a number of important advantages over the traditional technique of welding.

 

These advantages may be summarized as follows:

 

	
l  

	
Absence of changes in the protection of the material (zinc coating, painting) in areas of junction

 

	
l  

	
Homogeneity and Certification of holding for individual joints

 

	
l  

	
Reduction in  production time

 

  

  

  

 

Page 16 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

5 STRUCTURES

 

This chapter aims to describe the structural part of the entire Radiant (sail + stand + foundation) and provide the preliminary level of the calculation methodology that will be used at the executive level.

 

	
5.1

	
General

 

The structure of the sails that hold the photovoltaic modules is of a size so it can hold the loads, as required by the regulations (wind, snow, seismic effects), without resorting to electronic controls.

 

The structure of the Radiant is designed to withstand a wind speed of 28 m / s with gusts of 41 m / s

 

This choice, though punitive in economic terms, appears to be the only  possible one in legal and regulatory terms which also  ensures the operator of the photovoltaic plant the best duration of the same over time.

 

	
5.2

	
MATERIALS USED

 

The structure is composed of:

 

1. Profiles of folded cold metal compounds with S235 blades;

 

2. tubular UNI

 

All bolted joints are made with screws and bolts in cl. 8.8

 

	
5.3

	
CHARACTERISTICS OF SOIL FOUNDATION

 

The characteristics of the soil foundation for each site are derived from a Geotechnical SPT test campaign which was carried out at a depth of 4 m , which is appropriate to characterize the layers of soil affected by the loads. The sampling points and the results are reported in the geological report.

 

	
5.4

	
METHOD USED

 

	
5.4.1

	
Calculation Methodology

 

The methodology of calculation used for the verification of resistance to permanent actions and the weather-based strains is the ultimate limit state, with elastic calculation of the effects of the actions of  calculation.

 

In verifying flexing of sections, for cold formed profiles, the effective elastic moduli were taken, performing the reductions foreseen to prevent instability of the dishes.

 

	
5.4.2

	
Combination of actions

 

In determining the loads on structures under consideration the slope of the sail, equal to 30 degrees, is essential.

 

For the sizing of beams that form the edges of the panels and stringers, the combination of its own weight, snow and wind with solar panels above the wind level will be critical. However, for the foundations, we must also consider the combination of its own weight and wind with solar panels under the wind level, due to the danger of lifting as a result of the upward action.

 

The calculations and the results of structural checks are specified in the "structural calculation report.

 

  

  

  

 

Page 17 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

  

6 ELECTRICAL

 

	
6.1

	
DESCRIPTION OF THE INSTALLATION

 

	
6.1.1

	
PV generator

 

The photovoltaic generator, built on fixed structures of Ecoware type model Radiante 36, will be made up of 170 strings in parallel (2 for each Radiante), each consisting of 18 PV modules in series with nominal power of 240 Wp each.

 

The modules will be of Ecoware type, monocrystalline silicon, each with rated power equal to 240 Wp (see Section 2: Module Datasheet)

 

Each PV module will be equipped with bypass diodes, so as to exclude the part of the module containing one or more cells which are broken / shaded in order to avoid the counter-power and resulting in damage (these diodes will be included in the junction box coupled to the PV module itself).

 

The connection between the modules in each string will be established, wherever possible, with the cables with which the modules are provided.

 

Where these are not sufficient, the features needed to form the string will be made with unipolar sheathed ,rubber insulated cables,  with rated voltages of at least 0.6 / 1 kV with sections of at least 4 mm 2 , with MC4 connectors or similar.

 

Total peak power of the plant is therefore equal to:

 

P = TOTP (nr. tot. Mod.240 power mod 3060 * Wp) = 734.40 kWp

 

More details of calculation are shown in the attached calculation tables.

 

  

  

  

Page 18 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

Section 2: Datasheet Form Ecoware 240 W.

 

 

Via Nona Strada, 9 - 35129 Padova - Italy

T. +39 049 7380423 F. +39 049 7387638

www.ecoware.eu - info@ecoware.eu

ECOWARE S. p. A

Specifications of ECW 240-60M Monocrystalline solar module

SPI-Sun Simulator4600

	
Type

	
240-60M

	
Peak Power (Pm)

	
240W

	
Open Circuit Voltage (Voc)

	
37V

	
Short Circuit Current (Isc)

	
8.62A

	
Optimum operating Voltage (Vmp)

	
29.8V

	
Optimum operating Current (Imp)

	
8.06A

	
Practical module efficiency

	
16.74%

	
Maximum system voltage [V]

	
1000

	
Voltage temperature coefficients

	
-0.35%/K

	
Current temperature coefficients

	
+0.06%/K

	
Power temperature coefficients

	
-0.45%/K

	
Series fuse rating [A]

	
15

	
Cells

	
6x10 pieces monocrystalline solar cell strings (156mmx156mm)

	
Junction box

	
with 6 bypass diodes

	
Cable

	
length 900mm, 1x4mm2

	
Front glass

	
White toughened safety glass, 3.2mm

	
Cell encapsulation

	
EVA (Ethylene-Vinyl-Acetate)

	
Back

	
composite film

	
Frame

	
Anodised aluminium profile

	
Dimentions

	
1640x990x50mm(LxWxH)

	
Weight

	
23.7 Kg

	
Maximum surface load capacity

	
tested up to 2,400 Pa according to IEC 61215

	
Hail

	
maximum diameter of 25mm with impact speed of 23 m·s-1

	
Temperature range

	
-40°C to +85°C

The electrical data relates to standard test conditions [STC]: 1,000 W/m2; AM 1.5; 25°C.

Performance deviation of Pmpp: ±3%; Performance deviation of Voc(V), Isc(A), Vmpp(V) and Impp(A): ±10%. 

Certified in accordance with IEC 61215, IEC 61730-1/2 and UL 1703.

Dimensions

Characteristics

	
Title: ECW 240-60M

	
Vmp= 29.8V

	
Isc= 8.62A

	
FF= 0.75

	
Voc= 37V

	

η= 16.74%

	
Pm= 240W

	
Rs= 0.52 Ω

	
Imp= 8.06A

	
Rsh= 90.69 Ω

  

  

  

Page 19 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.1.2

	
Framework of parallel string

 

The frames of parallel strings (hereinafter for brevity called QPS) are the elements of the plant which carry out the parallel connection of the strings and connect them to the INVERTER.

 

Figure 3: Board of Parallel Strin

 

	
The set of strings connected in parallel through the appropriate QPS is a subfield.  

 

The QPS are devices that, in addition to their main function, can also act as protection against discharges or surges. Each string is attached to a framework of parallel strings (QPS) suitable for connecting up to a maximum of 10 strings, suitable for outdoor installation (IP54 grade protection). The connection between the strings and the QPS will be achieved with single-core sheathed, rubber insulated cables, with rated voltages of at least 0.6 / 1 kV and with section of 10 mm2 to limit losses in the cables.

	 

 

Each QPS will be provided with the following devices for cut-off and protection:

 

	
-

	
A general cutout switch with an appropriate current rating and a user voltage of at least 900 V DC and category of use of at least DC2l-A  a connection of 2 breaker poles in series is foreseen);

 

	
-

	
15 A fuse, type gG, suitable for use up to 1000 V DC, for each string;

 

	
-

	
SPD suitable for use in DC, to guarantee a voltage discharge which is less than or equal to the holding voltage of the inverters indicated by their manufacturer (2.3 kV in the absence of indications); Each QPS will be connected to the same inverter as shown in the project drawings.

 

The outgoing lines from each QPS will be executed with unipolar sheathed, rubber insulated cables, with nominal voltages of at least 0.6 / 1 kV, in a section appropriate to limit losses in the cables.

 

These lines will be laid in underground conduits (PVC corrugated pipes, suitable for burying, type at least 450 N) of appropriate diameter (see project tables).

 

Each line will be protected with fuses of type gG, suitable for use up to at least 900 V DC installed in the input columns of the inverter.

 

The indicated location of the excavation may be deduced from the project drawings.

 

	
6.1.3

	
Sub-station for MT delivery

 

The MT delivery sub-station will be   a newly-built concrete structure, , subdivided into:

 

1. a delivery area (for the exclusive use of Enel);

 

2. A measuring area (for use by Enel and users);

 

3. a user area (for the exclusive use of users).

 

The delivery and measuring areas will be implemented in strict compliance with the technical requirements of the distributor and of the CEI 0-16 norms.

 

  

  

  

Page 20 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

A bi-directional meter (Enel) will be placed in the measurement area to measure the energy collected and

 

fed into the grid. In the user area the MT frame will be connected to protect the line connecting the technical area, the sub-station's auxiliary services frame and an uninterruptible power supply (UPS) for power for medium voltage protections.

 

	
6.1.4

	
Technical Area

 

A technical area will be located in the position shown in the project tables which will contain:

 

	
-

	
The MT frame, containing the overall MT device (DG);

 

	
-

	
The protection of the transformer, wtih cutting and grounding of the MT line;

 

	
-

	
The three EEI model 250 inverters;

 

	
-

	
The MT / LT 20 / 0.4 kV transformer, which is rated 1000 kVA;

 

	
-

	
The auxiliary frame (conditioning, lighting and service outlets, etc.).

 

	
-

	
An uninterruptible power supply (UPS) to supply ancillary services and protections for electrical substations.

 

	
-

	
The GSE measurement groups for the energy produced and promoted installed on the AC side at low voltage at the parallel point of the inverters;

 

The connection between the Enel delivery area and the MT frame will be implemented with three wire unipolar cable of type RG7H1R 12/20 kV, section 95 mm 2.

 

The general device (GD) will consist of an automatic MT switch, equipped with a circuit for opening and a coil for absence of tension on which the general protection (GP) will act, the switch will be of fixed type, combined with a three-pole switch on the network side.

 

The switch will be equipped with a protection system consisting of:

 

1 relay protection in accordance with the requirements of Enel and CEI 0-16, with a maximum of three thresholds for maximum current, two with adjustable time delay (51) and one instant-triggering (50), and a threshold of intervention for homopolar current (51N) with adjustable delay, to be set according to the requirements set out by Enel;

 

	
-

	
(/1}3 phase TAs, with transformation ratios of 300 / 5, accuracy class 5P30, u = 24 kV, nominal performance 5 VA;

 

	
-

	
No1 TA homopolar toroid, with transformation ratio 100 / 1, accuracy class 5P20, u = 0.72 kV, 2.5 VA nominal performance.

 

The device interface (ID), unique for the entire photovoltaic plant, will consist of an automatic LT switch, equipped with a coil circuit for opening on absence of tension on which the security interface (SI) acts

 

The protection interface (PI) will be constituted by a relay protection conforming to the requirements and prescriptions of Enel and

 

CEI 0-16, with the following protections:

 

	
-

	
Minimal protection - absence of tension (27);

 

	
-

	
Protection of maximum tension (59);

 

	
-

	
Protection of minimum frequency (81 <);

 

	
-

	
Protection of maximum frequency (81>);

 

Such protections will be calibrated according to the specifications set out by Enel.

 

The location and characteristics of the inverter cabin and the components installed in it are to be inferred from the project drawings.

 

	
6.1.5

	
Auxiliary Power

 

The supply for ancillary services will be derived directly from the MT / LT transformers and will be connected to the general auxiliary frame(QAUX) that will feed:

 

- Auxiliary equipment in the technical room;

 

- The anti-intrusion system;

 

- The security cameral system and its lighting system

 

  

  

  

Page 21 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.2

	
PROTECTION AGAINST DIRECT CONTACT

 

Protection against direct contact is to protect people from the dangers arising from contact with live parts of an electrical installation.

 

	
6.2.1

	
Protection by Insulation

 

Live parts are to be completely covered with insulation which can only be removed by destruction.

 

	
6.2.2

	
Protection by barriers or enclosures

 

Live parts are placed within enclosures or behind barriers such as to ensure at least the degree of protection of IPXXB (finger test) or IPXXD (test wire of 1 mm) if within reach. Wrappers or barriers should be removable only with the use of keys or tools.

 

	
6.3

	
Protection against direct contact

 

Protection against indirect contact is to protect people from t the dangers arising from contact with accessible metal parts which not normally live, but that could be for accidental reasons or due to failure of the main insulation.

 

	
6.3.1

	
Faults in Medium Voltage

 

In the case of single-phase ground faults on the medium voltage, upstream of the general device, interruption of the faulty current I F is guaranteed by the protection of the distributor of electricity.

 

For correct size of the ground installation, the distributor shall communicate the values of:

 

• Single-phase ground fault current MT (I F)

 

• Time of the elimination of the fault(t F)

 

The earth faults on medium voltage lines present in the photovoltaic plant will be interrupted by protection present in the plant.

 

People’s  safety of will certainly be guaranteed if the ground devices of the photovoltaic installation ensure an earth resistance ER such that (CEI 11-1, art. 9.9):

 

E k Tp RI ≤ U 1

 

  

  

  

 

Page 22 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

Table 1: UTp values from norm CEI 11-1 and the CEI 11-37guide

 

Where IK1 is the maximum single-phase ground fault current and UTP is the contact voltage allowable and corresponding to the time required to eliminate  the fault in the MT protection. The values of UTP indicated in the CEI 11-1 norm and in the CEI 11-37 guide, are given in the Table below.

 

	
tF (s)

	
UTP (V)

	
tF (s)

	
UTP (V)

	
0.04

	
800

	
0.55

	
185

	
0.06

	
758

	
0.60

	
166

	
0.08

	
700

	
0.64

	
150

	
0.10

	
660

	
0.65

	
144

	
0.14

	
600

	
0.70

	
135

	
0.15

	
577

	
0.72

	
125

	
0.20

	
500

	
0.80

	
120

	
0.25

	
444

	
0.90

	
110

	
0.29

	
400

	
0.95

	
108

	
0.30

	
398

	
1.00

	
107

	
0.35

	
335

	
1.10

	
100

	
0.39

	
300

	
3.00

	
85

	
0.40

	
289

	
5.00

	
82

	
0.45

	
248

	
7.00

	
81

	
0.49

	
220

	
10.00

	
80

	
0.50

	
213

	
10.00

	
75

 

The values of IK1 (maximum fault current phase to earth) and UTP (contact voltage) are communicated by the distributor of electricity in the process of completion of the process to connect the installation to the medium voltage network.

 

If the above ratio and Tp RI k ≤ U 1 can not be guaranteed, you should take a reading of the contact voltages and step voltages and verify that they comply with the limits allowed. If this is done, you should implement the protective measures referred to in the IEC norm 11-1 (equipotentials, surfacing, etc.)..

 

  

  

  

Page 23 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.3.2

	
Faults in Low Voltage

 

The protection against indirect contact is made with low voltage side automatic disconnection circuit as required by IEC standard 64-8, art. 413.1.

 

The relationships that govern the choice of features that the devices for protection must have change according to the methods of earthing, defined as TN. TT and IT.

 

TN system = The system has one point connected directly to the ground while the masses of the installation are connected to the same point by means of a conductor for protection. More specifically, we have a TN-S system when the neutral conductor and protective conductor are separate,

 

TN-C when the neutral conductor and protective conductor are combined into a single conductor (PEN), a TN-CS system when TN-C system is limited to a part of the plant.

 

TT = The system has one point connected directly to the ground while the masses of the plant are connected to a ground system electrically independently of the earthing system for the power feed.

 

IT System = The system has the active parts separated from the ground (floating) while the masses of the installation shall be earthed individually, in groups or collectively.

 

The TN system relates to plants at low voltage on the AC side placed inside and outside the technical area, whose power is derived from the auxiliary frame. The common (neutral) is connected to the earth of the technical room and the masses are connected to the earth sinks placed near the control frames

 

The individual sinks and the ground of the technical area are connected by conductors to the ground.

 

The system is therefore attributable as type TN-S

 

The TN system is also found in the plant for PV production on the DC side in which the masses (frames) of the modules are connected to ground through the support structures which are themselves directly connected to ground and positive pole is connected to ground at each inverter.

 

The protective devices should interrupt power to the circuit automatically when in case of failure, between an active part and a mass or a protective conductor there is a contact voltage above 50 V ac and 120 V dc

 

The tension of contact should be eliminated in times sufficiently low, set conventionally, identifiable by the "safety curve" and never be more than 5s. For the TN system the condition to be met is as follows:

 

Zs * Ia = Uo where:

 

= Zs is the impedance of the ring fault that includes the source, the active conductor until point of failure and the protective conductor from the point of failure and the source Ia = is the current that causes the automatic interruption of food within the time defined in the table 41A of Article. 413.1.3.3 of the IEC 64-8 according to the nominal voltage

 

Uo

 

Uo = is the nominal voltage AC, effective triphase and earth that corresponds to the voltage at phase-neutral

 

  

  

  

Page 24 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

The choice of device in a TN system can be made between:

 

	
-

	
Differential current protection device, in particular of selective anti-disturbance type;

 

	
-

	
Overcurrent protection device;

 

More specifically:

 

	
-

	
TN-C system, that is when the neutral and protective functions are combined into a single conductor, called PEN; differential current protection devices should not be used;

 

	
-

	
TN-CS system, that is when the neutral and protective functions are combined into a single conductor in one part of the system; if differential protection devices are used, no

 

PEN conductor should be used downstream of the same.

 

It is stated that for the plant in question, where photovoltaic modules have been adopted, equipment and cabling systems in class II, a kind of passive protection is achieved that does not require automatic interruption of the circuit according to CEI 64-8 art. 413.2.

 

It is understood that, despite the intervention of the safety devices (fuses), the heads of the strings remain under a dangerous voltage (> 120V) while the terminals of the photovoltaic modules are still at a level of voltage below the voltage limit set by the rules of contact.

 

In conclusion it is necessary that before any maintenance operation at the photovoltaic plant any alarm signals emitted by the inverter will be noted and that due care will be taken on the DC circuit, especially along and at the heads of the lines connecting the strings to the inverter.

 

  

  

  

Page 25 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.4

	
PROTECTION OF CONDUCTORS AGAINST CURRENT SURGES

 

The conductors must be protected by one or more devices from the occurrence of current surges that may be caused by overload or short circuits.

 

The devices that provide these protections are:

 

	
-

	
Circuit breakers equipped with overcurrent releases;

 

	
-

	
Fuses.

 

	
6.4.1

	
Overload protection

 

In order to avoid current overload, which could lead to harmful overheating of the insulation or of the surrounding environment, a conduit, with operating current Ib and range Iz

 

(Ib <= Iz), must be protected by a device having a rated current and (/1}

 

conventional working current If such that these satisfy the conditions:

 

Ib <= In <= Iz

 

If <= 1.45 x Iz

 

The switches comply with IEC 23-3 and 17-5 and fulfill the second condition.

 

	
6.4.2

	
Protection against short circuits

 

The protective devices should interrupt short circuit currents that may occur in the plant in a way that ensures that the conductor does not reach dangerous temperatures according to the ratio:

 

I 2 t <= K 2 S 2 where:

 

I 2 t = Joule's integral, so that the specific energy passing through in a time equal to the duration of the short circuit

 

K = coefficient characteristic of each cable;

 

S = section of the conductor.

 

	
6.4.3

	
DC side protection

 

The cables of the PV system are chosen for the maximum current that the modules can generate in the most critical conditions, namely the short circuit current Isc, then it is reasonable to suggest that they should be protected against overload due to surges.

 

Protective devices are chosen so as to interrupt short circuit currents that, in a photovoltaic plant, can be determined by:

 

	
-

	
Failure between two poles of the DC system;

 

	
-

	
Ground fault for systems with a ground point;

 

	
-

	
Double earth fault systems isolated from ground

 

The devices are generally fuses, installed either in frames for parallel strings (to protect the wire string against overcurrent due to the sum of the currents of the other strings in parallel) or at the input of the inverter (to protect the cable for connection between this and the framework for parallel strings).

 

  

  

  

 

Page 26 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.4.4

	
AC side protection

 

The cables between the inverter and the point of parallel are also sized for the maximum current produced thus making it unnecessary to provide protection against overcurrent due to overload.

 

However protection is provided against overcurrent due to short circuits which usually coincides with the master switch for low voltage as this is suitable for strong currents on the network side.

 

Indeed, in the case of short circuit, the inverter limits the output current to a maximum value of  approximately double its current rating by involving the internal protection when a short circuit is fed directly from the network.

 

	
6.5

	
METHODS FOR DIMENSIONING AND CALCULATION

 

	
6.5.1

	
Cable Sizing

 

The sizing of the cables is such as to ensure the protection of the conductors for currents against overload.

 

According to IEC 64-8/4 (para.433.2) the protective device must be coordinated with the conductor so that the following conditions are fulfilled:

 

a) Ib ≤ In ≤ Iz

 

b) If ≤ 1.45 Iz

 

To satisfy  condition a) it is necessary to size the cable on the basis of the nominal current for protection upstream.

 

From the current Ib we determine the nominal current for the upstream protection (normalized values) and with this we proceed to the choice of the section.

 

The choice is made according to the table showing the permissible current Iz according to the type of insulation of the cable you want to use, the type of installation and number of active conductors; the range that the cable will have will therefore be:

 

Minimum Iz = In / k

 

where the coefficient k for downgrading also takes into account any parallels. The section is chosen so that its range (multiplied by a coefficient k) is immediately higher than that calculated using the current rating (Iz minimum).Any parallel calculation, assuming they all have the same section, length, pose, etc.. (para. 433.3), considering the minimum range as a result of the sum of individual ranges (graded by the number of parallels in the derating factor for proximity).

 

Condition B does not require verification for the switches that respond to the standard 23.3 IV Ed have a ratio between conventional current IF and nominal current in less than 1.45 and constant for all calibrations below 125A. For industrial equipment, however, the CEI 17.5 and IEC 947 norms establish that this ratio can vary according to the nominal current but it must remain less than or equal to 1.45. It follows that under these regulations  condition B will always be satisfied.

 

Conduits dimensioned according to this criterion are therefore protected against surges.

 

From the section of the phase cable we derive the calculation of 'I 2 t of the cable or maximum permissible specific energy for the cable as:

 

I 2 t = K 2 S 2

 

The constant K is given by the standard 64-8/4 (para.434.3), depending on the conductive material and insulating material.

 

  

  

  

 

Page 27 of 38 

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.5.2

	
Voltage Drops

 

The voltage drops are measured on the UNEL 35023-70 scales.

 

Consistent with these tables, the voltage drop of a single branch is evaluated as:

 

CDT (Ib) = kcdt x Ib x (Luke / 1000) x [Rcavo x cos φ + sin φ Xcavo x] x 100/Vn [%]

 

where

 

kcdt = 2 for single-phase systems

 

kcdt = 1.73 for three-phase systems.

 

Parameters Rcavo and Xcavo are taken from the UNEL Table and depend on the type of cable (unipolar / multipolar), and the section of the conductors and the values of Rcavo reported refer to 80 ° C, while the Xcavo refers to 50Hz, both being expressed in ohms / km.

 

The voltage drop from upstream to downstream (total) of a number of users is determined by the sum of voltage drops, absolute for one conductor, of the branches upstream of the users in question, and from this we then find a percentage of the voltage drop in the system (three-phase or single-phase) and the rated voltage of the user concerned.

 

	
6.5.3

	
Sizing protective conductors

 

The IEC 64.8 (para. 543.1) provide two methods for sizing of conductors Protection:

 

	
-

	
Determination in relation to the section of phase;

 

	
-

	
Determination by calculation.

 

The first criterion is to calculate the section in the following format:

 

	
-

	
Spec = Sf where Sf <16mm 2;

 

	
-

	
Spec = 16 mm 2 if 16 <= sf <= 35;

 

	
-

	
Spec = Sf / 2 if Sf> 35 mm 2.

 

The second criterion is to determine the value by the integral of Joule.

 

The method adopted in this project is the second.

 

	
6.5.4

	
Calculation of Faults

 

The calculation of faults is done in order to determine the minimum and maximum short circuit currents immediately downstream of protection (starting line) and downstream of users (end of line).

 

The conditions in which they are determined are:

 

	
-

	
Tri-phase fault (symmetrical);

 

	
-

	
Ground phase fault (asymmetrical).

 

The parameters for the sequences of each user are initialized from those of user input and the first should, in turn, initialize the parameters of the line downstream.

 

  

  

  

Page 28 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.5.5

	
Calculation of the maximum short circuit current

 

The calculation is performed under the following conditions:

 

a) the nominal voltage must be multiplied by a factor of tension equal to 1;

 

b) the minimum impedance fault is calculated at 20 ° C.

 

	
6.5.6

	
Calculation of short circuit currents

 

The calculation is performed under the following conditions:

 

a) the nominal voltage must be multiplied by a factor of tension equal to 1;

 

b) the minimum impedance fault is calculated at 20 ° C.

 

Neglecting the lowering of line voltage and raising the temperature would give:

 

 

Norm 64-8 proposes a formula that takes into account some parameters previously neglected, stating that values obtained by this formula are used to verify the timeliness for intervention by protection devices, but not for the determination of the power for interruption "

 

 

where:

 

I cc = short-circuit current in A

 

0.8 = factor taking into account voltage sag

 

V = voltage in V

 

S = conductor cross section in mm 2

 

1.5 = factor which takes into account the temperature

 

ρ = resistivity of conductor at 20 ° C in mm 2 / m

 

2 = factor for single phase

 

l = length of line in m

 

	
6.6

	
PROTECTION AGAINST VOLTAGE SPIKES

 

On the terminals of each frame for parallel strings (QPS) there have been adopted surge dischargers  (SPD) type CPT CS3-40/600 to protect against surges induced by discharges of atmospheric origin.

 

  

  

  

 

Page 29 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

	
6.7

	
INSTALLATIONS FOR GROUNDING

 

	
6.7.1

	
Grounding the technical side area (MT / LT sub-station)

 

The grounding device will consist of:

 

- metallic screens for MT cables, earthed at both ends;

 

- From the ground ring of the sub-stations, made with steel rod section at least 50 mm 2;

 

- Four stakes in galvanized steel, length at least 1.5 m, at the head of the ring;

 

- The earth nodes of the sub-stations and protective conductors and equipotentials.

 

All the masses, the outside masses, and the neutral conductor, should be connected to the track.

 

	
6.7.2

	
Grounding on photovoltaic field side

 

The ground device will consist of:

 

- The metal structures supporting the photovoltaic modules are designed as natural dispersers;

 

- dispersers positioned near the vertical control panels.

 

All the masses and the masses outside the plant should be connected to the ground device. The determination of the section of the protective conductor is calculated by the formula:

 

Sp2*K2 = I2* t

Sp = Chamber of protective conductor;

 

I = fault current that runs through the protective conductor for a fault free on mass

 

t = Tripping time of the protection device;

 

K = Characteristic value of the conductor.

 

  

  

  

 

Page 30 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

7 SECURITY SYSTEM

 

The security system adopted by Ecoware for photovoltaic systems consists of two main components that married together, provide a high level performance, reducing costs compared to normal devices adopted and a speed of installation that goes directly from the pre-wired cable to the company. They are:

 

1. Fiber optic perimeter anti-intrusion system

 

2. PICS ®

 

More details are contained in the tables IS.01, 02, and 03.

 

	
7.1

	
FIBER OPTIC PERIMETER ANTI-INTRUSION SYSTEM

 

The security system is a 24 hour-a-day fiber optic perimeter system , which provides protection from intruders from within the protected area. It uses fiber optic technology for  sensors and as a support element for the transmission of the alarm. Since the fiber optic line is made of glass and an internal light (not electrical)signal passes down the same, , the system is 100% reliable as an alarm signal. The system is not affected by bad weather (hail, thunderstorms, fog, sun, rain), wind (there is no wind effect),  magnetic fields or electrical interference from radio frequencies, or vibrations of any kind. Finally, birds do not cause false alarms because the system, through the management software, deletes all optical stress points, by continually reading an average of the signals arising from the fiber optics. The perimeter fiber optical system is composed of:

 

	
- 

	
Central FOSE microprocessor that runs from 1 to 8 transponders

 

	
-

	
Optical protection in the field

 

	
-

	
Support poles for the system with taut strings

 

	
-

	
Fiber optic link between central microprocessor and alarm zones.

 

PICS ® 7.2

 

Each network consists of a control unit and area microprocessor controllers which are connected to sensors (PICS-node).

 

The PICS-node consists of an electronic circuit of small size, protected from weathering by a coating of acrylic / polyurethane resin and fixed permanently on the back of each photovoltaic module.

 

Depending on the manufacturer and the process for mounting, the attachment of the PICS-node will be ensured by a safety bolt and / or a two-component epoxy adhesive that once dried crystallizes and makes it impossible to remove.

 

PICS-Each sensor node contains an identification code that resides on a 64-bit nonvolatile memory (lasered ROM).

 

The sensors are electrically connected together with bus cable thus forming areas.

 

The electrical connection of the cables is by a crimped termination in heat-shrunk nylon that ensures resistance to weathering.

 

Each area is connected to a microprocessor called the "area controller" which is housed in the field frame for the Tracker installations while for the Radiantes it is necessary to use one dedicated frame fixed to the poles of the structure.

 

  

  

  

Page 31 of 38

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

The microprocessor checks the status of the PICS-nodes and in case of damage or tampering transmits an alarm signal via wireless or RS485 control unit.

 

In turn, the control unit notifies the operations center of Ecoware in Padua via RF, GSM or satellite, and Ecoware can thus also see the area where the alert was generated and intervene promptly.

 

The whole system offers maximum security due to the continuous  dialogue between the monitoring station, the control unit, the microprocessors and single-node PICS allowing the immediate identification of the infringement and prompt action by supervision staff.

 

The PIC control system can be integrated into the general plant control system that monitors and manages the production of energy, alarms and access control.

 

  

  

  

 

Page 32 of 38 

File: R.01 - Technical report - Radiant 36 - Costantini

Project for a photovoltaic power plant equal to 734.40 kWp

 

8 Integrated Security

 

To protect the entire site from intrusion attempts, as required by the commission, a system will be installed composed of these main elements:

 

VIDEOSURVEILLANCE: camera and lighting

 

ANTI-INTRUSION: microwave barriers

 

The INTEGRATED SYSTEM has an innovative appearance and firmware to facilitate programming operations and normal use of the instrument. Architecture modular, with MDV motion detection for outdoor environments, interference filters against atmospheric agents variation of natural and / or artificial light, dimension of objects, from 8 to 16 masking areas for each video input, SDD Slow Down Detection - real time image analysis through Neuro Type Algorithm (patented) with smart features, MPX software and a multi-level video-map for alarm management. Sixteen supervised video inputs and sixteen video outputs Loopthrough, sixteen alarm inputs and two video outputs for analog monitors, represent the characteristics of  reference of this model. Due to  its high level of flexibility, the integrated digital system MDV + Alexys + MPX is used in the management of high security video control systems in environments of different types, such as the banking, industrial and service sectors, where it is necessary both to ensure high quality image definition and long range recording.Thus rendering it Ideal for perimeter protection against intruders and terrorists. The system comes standard with a Linux operating system, and an internal Hard Disk with 250GB (MDV) + 320GB (Alexsys) with internal expandability up to 640GB. Integrated Virtual Keyboard. Motion detector performed in real time using cutting edge technology with dynamic masking zones and levels of sensitivity. Activity detector. Multiplexers and demultiplexers of recorded images.

 

MOTION DETECTION

 

This special and extremely important function is independently programmable for each individual camera. By defining masking zones  and sensitivity levels and thus optimising the  analysis and recording stages and employment of the hard drive,  only the images characterized by the actual presence of motion detected within the preset areas will be recorded and static images shall be  discarded as insignificant.

 

Moreover, this feature allows you to proactively manage the alarm, activating a warning to the Control Center, from which you can acquire images directly and decide on the possible intervention of on-site personnel.

 

CENTRALIZATION

 

This is an extraordinary feature that gives the devices that are equipped with it a level of expandability ranking among the most advanced on the market today: the centralization of images using public lines (PSTN-ISDN-ADSL-HDSL) or LAN, WAN networks. Simultaneous management of local video-recording and communication with the Control Center  provides a powerful means of Video-surveillance.

 

  

  

  

 

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DESCRIPTION OF THE EQUIPMENT

 

Integrated system

 

	
l  

	
1 Integrated system with access to 16 points

 

	
l  

	
1 Software for management and remote control

 

	
l  

	
1 digital color LCD Monitor 19 "

 

VIDEO-SURVEILLANCE: camera and lighting

 

 

Cameras                                                                                                                     

 

	
l  

	
15 1 / 3 6mm diagonal Sony Super HAD Color Day & Night CCD Cameras .

 

	
l  

	
15 Auto Iris Lenses (with optics of a type variable from 4 to 9 mm, infrared-sensitive for better resolution during the night)

 

	
l  

	
15 Waterproof outdoor housings

 

	
l  

	
1 Professional Camera Speed Dome mod.DH801 Color, high-speed use, Indoor / outdoor - New high strength plastic body, polycarbonate transparent dome - Function Day & Night + Accessories

 

	
l  

	
3 Boost Modules

 

	
l  

	
1 Safety cabinet

 

	
l  

	
Special 75Ohm coaxial cable, RG-59 shielded type

 

	
l  

	
UTP-CAT5 network cable

 

	
l  

	
Network 220V power cable rubberized with section of 3x1.5.

 

	
l  

	
coaxial BNC connectors.

 

 

Lighting

 

	
l  

	
1 + dim clock to switch on and off the lamps.

 

	
l  

	
16 bulbs

 

	
l  

	
No. 16 posts 7.80m

 

	
l  

	
FGO cable

 

	
l  

	
Switches

 

  

  

  

 

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ANTI-INTRUDERS: microwave barriers

 

	
l  

	
1 Central multiarea microprocessor mod.ETR/100 with 8 inputs

 

	
l  

	
expandable to 104

 

	
l  

	
1 Command keyboard and programming mod. NIRVA

 

	
l  

	
1 volumetric dual technology detector mod DT2000

 

	
l  

	
7 Microwave Outdoor Barriers mod.BM-200Q

 

	
l  

	
1 indoor electronic internal siren - piezoelectric

 

	
l  

	
2 powered external siren mod.SA/101

 

	
l  

	
6 Group autonomous power mod.C/11-K

 

	
l  

	
6 serial concentrators with 8 inputs, mod. RIVER

 

  

  

  

 

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Project for a photovoltaic power plant equal to 734.40 kWp

  

 

 

Scheme 2: Control of energy production and alarm management

9. INTEGRATED CONTROL SYSTEM FOR PRODUCTION, ENERGY AND SURVEILLANCE: PROTEO

This document specifies the hardware and software for the architecture of the Proteus supervision system.

 

Supervision is based on networks of communication at many levels and on software applications which allow monitoring of devices present in the plants.

 

The generic definition of the elements is a key factor in that the entire system provides for monitoring of devices regardless of their make and model, of their modes of communication and of the transmission protocols that they can use.

 

If some elements are not equipped with "outputs" capable of meeting the demands for Proteo’s data collection signal converters or other accessories will be installed which do meet these requirements.

Transformer

Inverter

RS232

RS485

IP

Modbus

(Other)

The significant items in the container are the Inverter, the Low Board (QBT), the Transformer, the Medium Board and Ups.

 

Any of said items provides data to the supervision system using its own original protocols.

 

A connections system which is adapted to the devices in the container, together with the installation of signal converters if necessary, allows monitoring of functioning and error signals in real time.

Ups

Junction

Box

QMT

Local PC

QBT

 

  

  

  

 

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Scheme 3: Security

Scheme 4: Data transmission

Optical perimetral System + PICS

The standard communication modalities used to synchronize the local supervision location with the central server is by way of satellite communication. The installation of a switch between PC and router has been foreseen to allow devices to use properly IP protocols, if any.

Any sub-system can communicate in an independent way and be manually installed on the site. Proteo is capable to communicate with those systems regardless of what protocol is used and in a transparent way with regard to the communication modalities that are used.

Access Control System

Access Control

Router

Satellite

Switch

Satellite Aerial

Anti-intrusion + Panels theft

Local PC

 

  

  

  

 

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Scheme 5: Central elements for supervision

Scheme 6: Internal Data Management

All plants use their data in an asynchronic way with respect to the central server. Such data, if related to values and sizes synchronizations, are elaborated by the server that archives them. Data relating to errors or anomaly signals are shown to the technical assistance officers who put in place the relevant problem solving procedures. If the issue cannot be solved by remote, officers start a Trouble Ticketing procedure involving local technicians.

Server

Technical Assistance

Back-up unity

Plant n

Plant 1

Server WEB

Plant 2

Server

 

  

  

  

 

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Scheme 7: Management of Technical Assistance and Emergency Information

Server

Technical Assistance

Semi-automatic procedures for solving of errors and anomaly 

Electronic Squad

Trouble Ticketing Handling

First Aid

Mechanics Squad

Electricians Squad

  

  

  

 

Annexes 7-18 to EPC Contract – Senigallia

 

[See Annexes to Exhibit 4.10 with corresponding Annex numbers]LOAN AND SECURITY AGREEMENT

NEWTEK SMALL BUSINESS FINANCE, INC. (as Borrower)

and

CAPITAL ONE, N.A.(as Lender)

Dated as of December 15, 2010

List of SchedulesSchedule AIneligible Financed SBA LoansSchedule 1.1(a) IndebtednessSchedule 1.1(b)LiensSchedule 3.1(a)(xiv)Commercial Tort ClaimsSchedule 5.1Qualification JurisdictionsSchedule 5.2Places of BusinessSchedule 5.3LitigationSchedule 5.7Tax ID Numbers/Organizational NumbersSchedule 5.9SubsidiariesSchedule 5.10(b)LeasesSchedule 5.11(c)ERISA PlansSchedule 5.13(a)NamesSchedule 5.13(b)Certain Intellectual Property MattersSchedule 5.13(c)Additional Intellectual Property MattersSchedule 5.14Other AssociationsSchedule 5.15Environmental MattersSchedule 5.17Capital StockSchedule 5.19UCC OfficesSchedule 5.21Letter of Credit RightsSchedule 5.22Deposit Accounts

This Loan and Security Agreement ("Agreement") is dated this 15th day of December, 2010, by and between NEWTEK SMALL BUSINESS FINANCE, INC., a New York corporation ("Borrower"), and CAPITAL ONE, N.A. ("Lender").

BACKGROUND

Borrower desires to establish a revolving credit facility with Lender and Lender is willing to make revolving loans to Borrower under the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows: 

DEFINITIONS AND INTERPRETATION

Terms Defined.  As used in this Agreement, the following terms have the following respective meanings:

"Account" means all of the "accounts" (as that term is defined in the UCC) of Borrower, whether now existing or hereafter arising."ACH Transactions" means any cash management or related services including the automatic clearing house transfer of funds by Lender for the account of Borrower pursuant to agreement or overdrafts."Advance" has the meaning set forth in Section 2.1."Affiliate" means, with respect to any Person, (a) any Person which, directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such Person, or (b) any Person who is a director or officer (i) of such Person, (ii) of any Subsidiary of such Person, or (iii) any person described in clause (a) above.  For purposes of this definition, control of a Person shall mean the power, direct or indirect, (x) to vote 5% or more of the Capital Stock having ordinary voting power for the election of directors (or comparable equivalent) of such Person, or (y) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.  Control may be by ownership, contract, or otherwise."Approved Forms" means the forms of SBA 7(a) Note Receivable Documents, approved and used by Borrower in the conduct of its business, together with such changes and modifications or additions thereto from time to time as allowed by this Agreement or as required by the SBA."Asset Sale" means the sale, transfer, lease, license or other disposition by Borrower, or by any Subsidiary of Borrower, to any Person other than Borrower, of any Property now owned, or hereafter acquired, of any nature whatsoever in any transaction or series of related transactions.  An Asset Sale includes, but is not limited to, a merger, consolidation, division, conversion, dissolution or liquidation."Authorized Officer" means any officer (or comparable equivalent) of Borrower authorized by specific resolution of Borrower to request Advances or execute Quarterly Compliance Certificates as set forth in the incumbency certificate referred to in Section 4.1(d) of this Agreement."Availability" means as of any date of determination, the lesser of: (i) the Maximum Loan Amount; or (ii) the Borrowing Base."Base Rate" means a variable per annum rate, as of any date of determination, equal to the rate of interest publicly announced from time to time by Lender as its prime rate, which is a rate set by Lender based upon various factors including Lender's costs and desired return, general economic conditions, and other factors, and is used as a reference point for pricing some loans.  However, Lender may price loans at, above, or below such announced rate and, accordingly, Borrower acknowledges that the Prime Rate may not necessarily be the lowest rate of interest charged by Lender to its customers.  Any changes in the Base Rate shall take effect on the day specified in the public announcement of such change."Base Rate Margin" means one percent (1.0%) per annum."Blocked Account" has the meaning set forth in Section 6.13. "Blocked Account Agreement" means a blocked account agreement between Borrower and Lender as required herein. "Borrowing Base" means, as of any date of determination by Lender, from time to time, an amount equal to the lesser of: (i) the Maximum Loan Amount, or (ii) the difference between (A) 85% of the aggregate outstanding principal amount of the SBA 7(a) Guaranteed Note Receivables related to the Financed SBA Loans, less (B) Ineligible Financed SBA Loans, less in the case of clause (i) or (ii), any Reserves. "Borrowing Base Certificate" means a certificate, duly executed by an Authorized Officer, appropriately completed and substantially in the form of Exhibit A hereto."Borrowing Notice" means a written notice to Lender requesting disbursement of an Advance hereunder."Business Day" means a day other than Saturday or Sunday or a national banking holiday when Lender is open for business in New York, New York."Capitalized Lease Obligations" means any Indebtedness represented by obligations under a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP, consistently applied."Capital Expenditures" means, for any period, the aggregate of all expenditures (including that portion of Capitalized Lease Obligations attributable to that period, which have not been financed) made in respect of the purchase, construction or other acquisition of fixed or capital assets, determined in accordance with GAAP."Capital Stock" means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all other ownership interests in a Person (other than a corporation) and any and all warrants or options to purchase any of the foregoing."Cash Management System" has the meaning set forth in Section 2.4(b)."CCCRE" means CCC Real Estate Holding Co. LLC, a Delaware limited liability company."Crystaltech" means Crystaltech Web Hosting, Inc., a New York corporation."Closing" has the meaning set forth in Section 4.6."Closing Date" has the meaning set forth in Section 4.6."Collateral" means all of the Property and interests in Property described in Section 3.1 of this Agreement and all other Property and interests in Property that now or hereafter secure payment of the Obligations and satisfaction by Borrower of all covenants and undertakings contained in this Agreement and the other Loan Documents."Credit Parties" means Parent, Borrower (and any subsidiaries of Borrower), and each Guarantor."Default" means any event, act, condition or occurrence which with notice, or lapse of time or both, would constitute an Event of Default hereunder."Default Rate" has the meaning set forth in Section 2.6(b)."Environmental Laws" means any and all Federal, foreign, state, local or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees and any and all common law requirements, rules and bases of liability regulating, relating to or imposing liability or standards of conduct concerning pollution, protection of the environment, or the impact of pollutants, contaminants or toxic or hazardous substances on human health or the environment, as now or may at any time hereafter be in effect."EBITDA" means net income (loss) plus goodwill impairment (incurred prior to the date hereof), interest, taxes (or less tax benefit), depreciation and amortization determined in accordance with GAAP, plus cash actually received but excluded from the GAAP calculation of EBITDA solely due to the effect of FAS 166.  For purposes of determining the EBITDA for Newtek Business Services, Inc. net income shall be reduced by the amount of income from tax credits, increased by the other than temporary decline in investments, and reduced (if a gain) or increased (if a loss) of net change in the fair market value of credits in lieu of cash and notes payable in credits in lieu of cash and shall exclude the effect of any minority interests."Eligible SBA 7(a) Loan" means an SBA 7(a) Loan that does not violate any SBA Rules and Regulations."ERISA" means the Employee Retirement Income Security Act of 1974, as the same may be amended, from time to time."Event of Default" has the meaning set forth in Section 8.1."Expenses" has the meaning set forth in Section 9.6."FAS 166" means Statement of Financial Accounting Standards No. 166 Accounting for Transfers of Financial Assets an amendment of FASB Statement No. 140 dated, June 2009."Facility Fee" has the meaning set forth in Section 2.7(a)."Financed SBA Loans" means those SBA 7(a) Loans extended by Borrower to SBA 7(a) Loan Obligors using the proceeds of Advances made hereunder, which SBA 7(a) Loans constitute Collateral for the Loan, as specifically set forth in each Request for Advance delivered by Borrower to Lender in accordance herewith."Fixed Charge Coverage Ratio" means, calculated for Parent on a consolidated basis, as of the end of any calendar quarter, EBITDA for the previous four (4) calendar quarters, less capital expenditures during the previous four (4) calendar quarters, divided by the sum of the amounts paid during the previous four (4) calendar quarters for (i) principal of long term debt, (ii) interest (iii) dividends and (iv) treasury stock redemptions.  For the purposes of the foregoing, during the nine calendar month period following the closing date, items (i) and (ii) in the denominator will be annualized until December 31, 2010; thereafter all will be on a trailing twelve month basis. "FIRREA" means the Federal Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended."FTA" means Colson Services Corp., as fiscal and transfer agent for the SBA and as the SBA's agent to hold the original SBA 7(a) Loan Notes pursuant to the Multi-Party Agreement, and as bailee for Lender for purposes of perfecting Lender's security interest in the original SBA 7(a) Loan Notes pursuant to the Multi-Party Agreement, or any other Person designated by the SBA or Lender, subject to the consent of the SBA in accordance with the terms of the Multi-Party Agreement to perform the same or similar function."GAAP" means generally accepted accounting principles as in effect on the Closing Date applied in a manner consistent with the most recent audited financial statements of Borrower furnished to Lender and described in Section 5.7 herein."Governmental Authority" means any federal, state or local government or political subdivision, or any agency, authority, bureau, central bank, commission, department or instrumentality of either, or any court, tribunal, grand jury, or arbitration."Guarantor" means each of: (i) Parent; (ii) Small Business Lending, Inc., a Delaware corporation; (iii) Crystaltech; (iv) Universal Processing Services of Wisconsin LLC (d/b/a Newtek Merchant Solutions), a Wisconsin limited liability company; (v) CCCRE; and (vi) any other Person that is or becomes a wholly-owned Subsidiary of Borrower."Guarantor Security Agreement" means each guarantor security agreement to be executed by each Guarantor in favor of Lender on or prior to the Closing Date, each to be in form and substance satisfactory to Lender."Guaranty Agreement" means each guaranty agreement to be executed by each Guarantor in favor of Lender on or prior to the Closing Date, in form and substance satisfactory to Lender."Hazardous Substances" means any substances defined or designated as hazardous or toxic waste, hazardous or toxic material, hazardous or toxic substance or similar term, under any Environmental Law."Hedging Agreements" means any Interest Hedging Instrument or any other interest rate protection agreement, foreign currency exchange agreement, commodity purchase or option agreement, or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. 101 et seq.)."Indebtedness" means, with respect to any Person at any date, without duplication: (i) all indebtedness of such Person for borrowed money (including with respect to Borrower, the Obligations) or for the deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices); (ii) any other indebtedness of such Person which is evidenced by a note, bond, debenture or similar instrument; (iii) all Capitalized Lease Obligations of such Person; (iv) the face amount of all letters of credit issued for the account of such Person and all drafts drawn thereunder; (v) all obligations of other Persons which such Person has guaranteed; (vi) Disqualified Stock; (vii) all Obligations of such Person under Hedging Agreements; and (viii) all liabilities secured by any Lien on any property owned by such Person even though such Person has not assumed or otherwise become liable for the payment thereof."Ineligible Financed SBA Loans" shall have the meaning set forth on Schedule A hereto.  "Interest Hedging Instrument" means any documentation evidencing any interest rate swap, interest "cap" or "collar" or any other interest rate hedging device or swap agreement (as defined in 11 U.S.C. 101 et seq.) between Borrower and Lender (or any Affiliate of Lender)."Interest Rate" means the Base Rate plus the Base Rate Margin, subject to the applicability of the Default Rate."Inventory" means all of the "inventory" (as that term is defined in the UCC) of Borrower, whether now existing or hereafter acquired or created."IRS" means the Internal Revenue Service."Laws" means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, guidances, guidelines, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, governmental agreements and governmental restrictions, whether now or hereafter in effect."Lien" means any interest of any kind or nature in property securing an obligation owed to, or a claim of any kind or nature in property by, a Person other than the owner of the Property, whether such interest is based on the common law, statute, regulation or contract, and including, but not limited to, a security interest or lien arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt, a lease, consignment or bailment for security purposes, a trust, or an assignment.  For the purposes of this Agreement, Borrower shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional sale agreement or other arrangement pursuant to which title to the Property has been retained by or vested in some other Person for security purposes."Loan" means the aggregate outstanding balance of all Advances made hereunder."Loan Documents" means, collectively, this Agreement, the Note, each Guaranty, each Guarantor Security Agreements, the Trademark Security Agreements, the Blocked Account Agreement, the Trust Account Agreement, the Multi-Party Agreement and all other agreements, instruments and documents executed or delivered in connection therewith, all as may be supplemented, restated, superseded, amended or replaced from time to time."Material Adverse Effect" means an occurrence or state of events which has resulted or could reasonably result in a material adverse effect upon (a) the business, assets, properties, financial condition, stockholders' equity, contingent liabilities, prospects, material agreements or results of operations of Borrower or any Guarantor, taken as a whole, or (b) Borrower's or any Guarantor's ability to pay the Obligations in accordance with the terms hereof, or (c) the validity or enforceability of this Agreement or any of the other Loan Documents or the rights and remedies of Lender hereunder or thereunder."Maturity Date" means December 15, 2012."Maximum Loan Amount" means, initially, Six Million Dollars ($6,000,000); provided, that if Borrower exercises its rights to invoke an Maximum Loan Amount Increase, then the Maximum Loan Amount shall be the initial Maximum Loan Amount plus the amount of such Maximum Loan Amount Increase, but in no event shall the Maximum Loan Amount exceed $12,000,000."Maximum Loan Amount Increase" has the meaning set forth in Section 2.11."Multi-Draw SBA Loan" shall mean a Financed SBA Loan which (a) is a term loan that is not fully disbursed at the closing of such Financed SBA Loan, and (b) pursuant to its terms provides to the applicable SBA Loan Obligor the right to request that the loan be disbursed in multiple draws."Multi-Party Agreement" means the Amended and Restated Multi-Party Agreement by and among Borrower, Parent, CCCRE, Lender, FTA, and the SBA, dated as of December 15, 2010, as the same may be supplemented, modified or amended from time to time."Newtek Small Business Loan Trust Note Offering" means the proposed note offering by Newtek Small Business Loan Trust 2010-1 in an aggregate principal amount of not less than $16,000,000."Note" has the meaning set forth in Section 2.2."Note Participation" means a participation interest in a SBA 7(a) Loan."Obligations" means all existing and future debts, liabilities and obligations of every kind or nature at any time owing by Borrower to Lender, whether under this Agreement, or any other existing or future instrument, document or agreement, between Borrower or Lender, whether joint or several, related or unrelated, primary or secondary, matured or contingent, due or to become due (including debts, liabilities and obligations obtained by assignment), and whether principal, interest, fees, indemnification obligations hereunder or Expenses (specifically including interest accruing after the commencement of any bankruptcy, insolvency or similar proceeding with respect to Borrower, whether or not a claim for such post-commencement interest is allowed), including, without limitation, debts, liabilities and obligations in respect of the Loan and any extensions, modifications, substitutions, increases and renewals thereof; any amount payable by Borrower or any Subsidiary of Borrower pursuant to an Interest Hedging Instrument or any ACH Transactions; the payment of all amounts advanced by Lender to preserve, protect and enforce rights hereunder and in the Collateral; and all Expenses incurred by Lender.  Without limiting the generality of the foregoing, Obligations shall include any other debts, liabilities or obligations owing to Lender in connection with any cash management, or other services (including electronic funds transfers or automated clearing house transactions) provided by Lender to Borrower, as well as any other loan, advances or extension of credit, under any existing or future loan agreement, promissory note, or other instrument, document or agreement between Borrower and Lender."Parent" means Newtek Business Services Inc., a New York corporation."PBGC" means the Pension Benefit Guaranty Corporation."Performing SBA 7(a) Note Receivables" means an SBA 7(a) Loan as to which all scheduled payments of principal and interest are current or no more than sixty one (61) days past due but in no event more than two payments past due."Permitted Capcos" means, collectively, Wilshire DC Partners, LLC, Wilshire Alabama Partners, LLC, Wilshire Louisiana BIDCO, LLC, Wilshire Texas Partners I, LLC."Permitted Disposition" means: (i) sales of SBA 7(a) Guaranteed Note Receivables; (ii) sales of SBA 7(a) Non-Guaranteed Note Receivables; (iii) sales of Note Participations; (iv) sales to SBA of the SBA 7(a) Non-Guaranteed Note Receivable portion of any SBA 7(a) Note Receivable with respect to which SBA also holds the SBA 7(a) Guaranteed Note Receivable portion thereof; (v) other Secondary Market Sales of Financed SBA Loans; and (vi) other dispositions of SBA 7(a) Note Receivables or the collateral therefore, in each case to the extent required or permitted by SBA in accordance with SBA Rules and Regulations; provided that (x) any sales of SBA 7(a) Guaranteed Note Receivables or any sales of Note Participations in any SBA 7(a) Guaranteed Note Receivables may not be for an amount less than par, and (y) any sale of a SBA 7(a) Non-Guaranteed Note Receivable or any sales of Note Participations in any SBA 7(a) Non-Guaranteed Note Receivable may not be for an amount less than the value attributable to the applicable SBA 7(a) Non-Guaranteed Note Receivable, or the participated portion thereof, in the Borrowing Base as of the date of such sale."Permitted Indebtedness" means: (a) Indebtedness to Lender in connection with the Loan, or otherwise pursuant to the Loan Documents, (b) Indebtedness to Lender in connection with the Term Loan Agreement and the Term Loan Documents, (c) purchase money Indebtedness (including Capitalized Lease Obligations) hereafter incurred by Borrower to finance the purchase of fixed assets; provided, that (i) such Indebtedness incurred in any fiscal year shall not exceed (x) as to Borrower, $200,000 and (y) as to Crysteltech Web Hosting, Inc., $100,000, (ii) such purchase money Indebtedness shall not exceed the purchase price of the assets funded and (iii) no such purchase money Indebtedness may be refinanced for a principal amount in excess of the principal amount outstanding at the time of such refinancing, (d) Indebtedness existing on the Closing Date that are disclosed on Schedule 1.1(a) hereto, (e) Indebtedness of Borrower to another Credit Party; provided, the same is at all times secured and fully subordinated to Lender, in each case pursuant to security documents and subordination documents in form and substance satisfactory to Lender, and (f) Indebtedness of Borrower to the Permitted Capcos ; provided, the same is at all times (i) secured and fully subordinated to Lender, in each case pursuant to security documents and subordination documents in form and substance satisfactory to Lender and (ii) less then $3,000,000 in the aggregate at any time."Permitted Investments" means: (a) investments and advances existing on the Closing Date that are disclosed on Schedule 5.10(a) hereto; and (b) each of (i) obligations issued or guaranteed by the United States of America or any agency thereof, (ii) commercial paper with maturities of not more than 180 days and a published rating of not less than A-1 or P-1 (or the equivalent rating) by a nationally recognized investment rating agency, (iii) certificates of time deposit and bankers' acceptances having maturities of not more than 180 days and repurchase agreements backed by United States government securities of a commercial bank if (A) such bank has a combined capital and surplus of at least $500,000,000 or (B) its debt obligations, or those of a holding company of which it is a Subsidiary, are rated not less than A (or the equivalent rating) by a nationally recognized investment rating agency, (iv) U.S. money market funds that invest solely in obligations issued or guaranteed by the United States of America or an agency thereof and (v) except during the continuance of a Default or Event of Default, loans and advances to Parent; provided, that the proceeds of such loans and advances are solely used by Parent in accordance with Section 13(b) of the Guaranty Agreement of Parent in favor of Lender, as the same may be in effect from time to time.  "Permitted Liens" means: (a) Liens securing taxes, assessments or governmental charges or levies or the claims or demands of materialmen, mechanics, carriers, warehousemen, and other like persons not yet due; (b) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance, social security and other like laws; (c) Liens on fixed assets securing  purchase money Indebtedness permitted under Section 7.6; provided that, (i) such Lien attached to such assets concurrently, or within 20 days of the acquisition thereof, and only to the assets so acquired, and (ii) a description of the asset acquired is furnished to Lender in writing; and (d) Liens existing on the Closing Date and shown on Schedule 1.1(b) hereto."Person" means an individual, partnership, corporation, trust, limited liability company, limited liability partnership, unincorporated association or organization, joint venture or any other entity."Pledge Agreement" means each of the Pledge Agreements of even date herewith executed by Pledgors in favor of Lender, and any pledge agreements entered into after the Closing Date by any Credit Party (as required by the Agreement or any other Loan Document)."Pledgors" means, collectively, Parent, Small Business Finance Inc., Crystaltech and each other Person, if any, that executes a pledge agreement or other similar agreement in favor of Lender in connection with the transactions contemplated by the Agreement and the other Loan Documents."Property" means any interest of Borrower in any kind of property or asset, whether real, personal or mixed, or tangible or intangible."Quarterly Compliance Certificate" has the meaning set forth in Section 6.10."Regulation D" means Regulation D of the Board of Governors of the Federal Reserve System comprising Part 204 of Title 12, Code of Federal Regulations, as amended, and any successor thereto."REO Property" means Real Estate owned by Borrower or any other Credit Party, which Real Estate has been acquired and is owned by such Credit Party as a result of foreclosure or acceptance by such Credit Party of a deed in lieu of foreclosure, or similar transaction, whether previously constituting SBA 7(a) Note Receivable Collateral or otherwise), together with all of such Credit Party's now owned or hereafter acquired interests in the improvements thereon, the fixtures attached thereto and the easements appurtenant thereto."Required Procedures" means procedures, including credit and underwriting standards, loan to value ratio limitations and the use of Approved Forms with respect to the financing and servicing of SBA 7(a) Note Receivables as in effect on the Closing Date, together with such changes and modifications thereto from time to time as shall be required by SBA Rules and Regulations or as have been approved in writing by Lender, in Lender's reasonable credit judgment."Reserves" means, with respect to the Borrowing Base, such other reserves against SBA 7(a) Loans or Availability that Lender may, in its reasonable credit judgment, establish from time to time.  Without limiting the generality of the foregoing, Reserves established to ensure the payment of accrued Interest Expenses or Indebtedness shall be deemed to be a reasonable exercise of Lender's credit judgment.  "SBA" means the United States Small Business Administration or any other federal agency administering the SBA Act."SBA Act" means the Small Business Act of 1953, as the same may be amended from time to time."SBA Lender's License" means that authority given to a lender by the SBA to make SBA 7(a) Loans as permitted under the SBA Act, as amended and further authorized by the SBA in CFR Title 13 Part 120-470 and 471, as amended. "SBA Rules and Regulations" means the SBA Act, as amended, any other legislation binding on SBA relating to financial transactions, any "Loan Guaranty Agreement", all rules and regulations promulgated from time to time under the SBA Act, and SBA Standard Operating Procedures and any Official Notices issued by the SBA, all as from time to time in effect."SBA 7(a) Guaranteed Note Receivable" means that portion of any SBA 7(a) Note Receivable that is actually guaranteed by the SBA. "SBA 7(a) Loan Notes" means any promissory notes that at any time evidence SBA 7(a) Loans."SBA 7(a) Loan Obligor" means any Person, other than the SBA, who is or may become obligated to Borrower under an SBA 7(a) Loan."SBA 7(a) Loans" means any loans made by Borrower (or its predecessors in interest) to small businesses and partially guaranteed by the SBA, all originated in accordance with the SBA Rules and Regulations and pursuant to the authorization contained in Section 7(a) of the SBA Act. "SBA 7(a) Non-Guaranteed Note Receivable" means that portion of any SBA 7(a) Note Receivable that is not guaranteed by the SBA."SBA 7(a) Note Receivable" means the obligation of an SBA 7(a) Loan Obligor to pay an SBA 7(a) Loan made by Borrower (or its predecessors in interest) to such SBA 7(a) Loan Obligor, whether or not evidenced by a promissory note or other instrument."SBA 7(a) Note Receivable Collateral" means any and all property or interests in property, whether personal property (including without limitation accounts, chattel paper, instruments, documents, deposit accounts, contract rights, general intangibles, inventory or equipment) or real property, or both, whether owned by an SBA 7(a) Loan Obligor or any other Person, that secures an SBA 7(a) Note Receivable or an SBA 7(a) Loan Obligor's obligations under an SBA 7(a) Loan Note or SBA 7(a) Note Receivable Document, and all supporting obligations in respect thereof."SBA 7(a) Note Receivable Documents" means, with respect to any SBA 7(a) Note Receivable, all original documents, instruments, and chattel paper, executed or delivered to or for the account of Borrower by the applicable SBA 7(a) Loan Obligor and evidencing such SBA 7(a) Note Receivable."SBA Standard Operating Procedures and Official Notices" means Public Law 85-536, as amended; those Rules and Regulations, as defined in 13 CFR Part 120, "Business Loans" and 13 CFR Part 121, "Size Standards"; Standard Operating Procedures, (SOP) 50-10 for loan processing, 50-50 for loan servicing and 50-51 for loan liquidation as may be published and or amended from time to time by the SBA."Secondary Market Net Sales Proceeds" means, as to any Financed SBA Loan: (i) at any time other than during the continuance of a Default or Event of Default, the gross sales proceeds received from a Secondary Market Sale thereof up to an amount equal to the proceeds of Advances made by Lender hereunder in respect of such Financed SBA Loan or (ii) during the continuance of a Default or Event of Default, the gross proceeds received from a Secondary Market Sale of such Financed SBA Loan.  "Secondary Market Sale" means the sale or participation of an SBA 7(a) Loan to the secondary market in accordance with the SBA Rules and Regulations."Subsidiary" means, with respect to any Person at any time: (i) any corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person or owned by a corporation more than fifty percent (50%) of whose voting stock is legally and beneficially owned by such Person; (ii) any trust of which a majority of the beneficial interest is at such time owned directly or indirectly, beneficially or of record, by such Person or one or more Subsidiaries of such Person; and (iii) any partnership, joint venture, limited liability company or other entity of which ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at such time owned directly or indirectly, beneficially or of record, by, or which is otherwise controlled directly, indirectly or through one or more intermediaries by, such Person or one or more Subsidiaries of such Person."Term Loan Agreement" means the Loan and Security Agreement dated as of April 30, 2010 among Borrower, Crystaltech and Lender, as the same may be amended, supplemented or otherwise modified from time to time."Term Loan Documents" means the "Loan Documents" as defined in the Term Loan Agreement."Termination Date" means the earlier to occur of: (i) the Maturity Date; or (ii) any date on which Lender elects to cease making Advances pursuant to this Agreement."Trademark Security Agreements" means those certain Trademark Security Agreements dated the date of this Agreement executed by Borrower and the Guarantors in favor of Lender."Trust Account" shall have the meaning ascribed to such term it in the Trust Account Agreement."Trust Account Agreement" means that certain Amended and Restated Trust Account Agreement, dated as of the Closing Date, by and between Borrower and the Trustee, as the same may be amended, supplemented or otherwise modified from time to time."UCC" means the Uniform Commercial Code as adopted in the state where Lender's office identified in Section 9.8 is located, as the same may be amended from time to time.

Other Capitalized Terms.  Any other capitalized terms used without further definition herein shall have the respective meaning set forth in the UCC.Accounting Principles.  Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, this shall be done in accordance with GAAP, consistently applied, to the extent applicable, except as otherwise expressly provided in this Agreement.Construction:  No doctrine of construction of ambiguities in agreements or instruments against the interests of the party controlling the drafting shall apply to any Loan Documents.

THE LOAN

Advances.On the terms and subject to the conditions set forth herein (including, without limitation, the conditions precedent set forth in Section IV hereof), Lender agrees to make advances to Borrower from time to time from the date hereof to and including the Business Day immediately prior to the Maturity Date as set forth herein (each an "Advance", and collectively, "Advances"), provided that after giving effect thereto, the aggregate sum of all outstanding Advances shall not exceed the Maximum Loan Amount.  Within such limit and subject to Section 2.1(c), Borrower may borrow, prepay or repay Advances from time to time and may reborrow Advances.In no event shall an Advance be made when any Default or Event of Default has occurred and is continuing.

Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, Borrower may not prepay or repay any Advance on the same day as such Advance shall be made hereunder, except for any prepayment or repayment of any such Advance on the same day as such Advance shall be made (i) as a result of any mandatory prepayment required by Section 2.5(d), (ii) as a result of the termination of the Loan and declaration of the Obligations by Lender pursuant to the terms hereof or the other Loan Documents.  

Note.The Loan shall be evidenced by a single promissory note of Borrower substantially in the form of Exhibit B attached hereto (the "Note"), dated as of the Closing Date, payable to Lender in a principal amount equal to the amount of the Maximum Loan Amount as may be in effect from time to time.The date, amount and Interest Rate of each Advance made by Lender to Borrower, and each payment made on account of the principal balance thereof, shall be recorded by Lender on its books; provided that the failure of Lender to make any such recordation shall not affect the obligations of Borrower to make a payment when due of any amount owing hereunder or under the Note in respect of the Loan.Procedures for Borrowing Advances.Borrower may request an Advance hereunder, on any Business Day during the period from and including the Closing Date to and including the Termination Date, by delivering to Lender, a written request for an Advance substantially in the form of Exhibit C attached hereto (each, a "Request for Advance").  Borrower shall deliver each Request for Advance with respect to each proposed Advance no later than noon (New York City time) on the day of such proposed Advance.  Once given, a Request for Advance shall be irrevocable and Borrower shall be bound thereby.Each Request for Advance shall: (i) attach a schedule identifying the Financed SBA Loans that Borrower proposes to fund using the proceeds of the Advance, which schedule shall contain such information with respect to each Financed SBA Loan as Lender shall reasonably request; (ii) specify the requested funding date; and (iii) include such other matters as may be specified on the form of the Request for Advance or as may be reasonably requested by Lender from time to time. Each Advance shall be in a minimum amount of $100,000 or an integral multiple thereof.  Borrower shall indemnify Lender and hold it harmless against any costs incurred by Lender as a result of any failure of Borrower to timely deliver to FTA the SBA 7(a) Loan Note relating to any Financed SBA Loan as required by Section 8.1(f).Unless otherwise agreed by Lender and Borrower, each Advance requested by Borrower and made by Lender hereunder shall be made to Borrower's main operating account maintained with Lender.Payments - General; Cash Management System.

Except to the extent otherwise set forth in this Agreement, all payments of principal and of interest on the Loan and all Expenses, fees, indemnification obligations and all other charges and any other Obligations of Borrower not made by automatic transfers from the Blocked Account or Borrower's accounts maintained with Lender, shall be made to Lender at its office at 275 Broadhollow Road, Melville, N.Y. 11747, in United States dollars, in immediately available funds.  Lender shall have the unconditional right and discretion (and Borrower hereby authorizes Lender) to charge Borrower's operating and/or deposit account(s) for all of Borrower's Obligations as they become due from time to time under this Agreement including, without limitation, interest, principal, fees, indemnification obligations and reimbursement of Expenses; provided, that Lender may not charge the Trust Account in a manner inconsistent with the Trust Account Agreement.  Any payments received prior to 2:00 p.m. Eastern time on any Business Day shall be deemed received on such Business Day.  Any payments (including any payment in full of the Obligations), received after 2:00 p.m. Eastern time on any Business Day shall be deemed received on the immediately following Business Day. 

On or prior to the date hereof, Borrower shall establish and maintain until the Maturity Date, the cash management system described in Exhibit D attached hereto (the "Cash Management System").

Payment of Interest and Principal; Mandatory Prepayments.From and following the Closing Date, the Loan and the other Obligations shall bear interest at the Interest Rate.Interest is payable in arrears on the first day of each month (beginning on the first day of the first full calendar month after the Closing Date), as provided in Section 2.5(d),  and upon the payment in full of such Advances, whether on the Maturity Date, by acceleration or otherwise.The outstanding principal amount of the Loan, plus all accrued but unpaid interest and all other sums due Lender hereunder, shall be due and payable in full on the Maturity Date.There shall become due and payable and Borrower shall prepay the Advances, together with all accrued but unpaid interest thereon, in an amount equal to (i) the amount by which the then outstanding balance of the Loan exceeds the Borrowing Base, or (ii) the Secondary Market Net Sales Proceeds of any Secondary Market Sale of the guaranteed portion of any Financed SBA Loan, including, without limitation, the guaranteed portion of any Multi-Draw SBA Loan (which proceeds shall be applied as set forth in the Cash Management System and this Agreement).  In addition, in the event that at any time the aggregate amount of Advances in respect of any Financed SBA Loan shall exceed 85% of the outstanding principal amount of the SBA 7(a) Guaranteed Note Receivables related to such Financed SBA Loan, Borrower shall prepay such excess, together with accrued but unpaid interest thereon.  Notwithstanding the foregoing, if clause (ii) of the definition of the term "Secondary Market Net Sales Proceeds" shall be applicable, then such Secondary Market Net Sales Proceeds shall be applied to the Obligations as Lender shall determine, with any excess after such application to be held by Lender, at its option, as cash collateral for the Obligations.      The Loan may be prepaid in whole or in part at any time from time to time, without penalty or premium; provided, however, that Borrower shall have given Lender at least ten (10) days prior written notice of the date of such prepayment.  Any prepayment shall be accompanied by all accrued and unpaid interest.

Additional Interest Provisions.Interest on the Loan shall be calculated on the basis of a year of three hundred sixty (360) days but charged for the actual number of days elapsed.  The date of funding of an Advance shall be included in the calculation of interest.  The date of payment with respect to an Advance shall be excluded from the calculation of interest. After the occurrence and during the continuance of an Event of Default hereunder, the per annum effective rate of interest on all outstanding principal under the Loan shall be equal to the applicable Interest Rate plus five hundred (500) basis points (the "Default Rate").  All such increases may be applied retroactively to the date of the occurrence of the Event of Default.  Borrower agrees that the Default Rate is a reasonable estimate of Lender's damages and is not a penalty.All contractual rates of interest chargeable on outstanding principal under the Loan shall continue to accrue and be paid even after Default, an Event of Default, maturity, acceleration, judgment, bankruptcy, insolvency proceedings of any kind or the happening of any event or occurrence similar or dissimilar.In no contingency or event whatsoever shall the aggregate of all amounts deemed interest hereunder and charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto.  In the event that such court determines Lender has charged or received interest hereunder in excess of the highest applicable rate, Lender shall apply, in its sole discretion, and set off such excess interest received by Lender against other Obligations due or to become due and such rate shall automatically be reduced to the maximum rate permitted by such law.Fees and Charges.On the Closing Date, Borrower shall pay Lender a fully-earned, non-refundable facility fee (the "Facility Fee") equal to the product of: (i) the initial Maximum Loan Amount; multiplied by (ii) one-quarter of one percent (0.25%).On the date that the Maximum Loan Amount Increase is exercised by Borrower, Borrower shall pay Lender, contemporaneously with the effectiveness of the Maximum Loan Amount Increase, a fully-earned, non-refundable facility increase fee equal to the product of: (i) the actual amount of the Maximum Loan Amount Increase; multiplied by (ii) one-quarter of one percent (0.25%).From and following the Closing Date, Borrower shall pay Lender a fee in an amount equal to (i)(A) the Maximum Loan Amount less (B) the average daily outstanding balance of Loans during the preceding month, multiplied by (ii) one quarter of one percent (1/4 of 1%) per annum.  Such fee is to be paid quarterly in arrears on the last day of each calendar quarter. Borrower shall unconditionally pay to Lender a late charge equal to five percent (5%) of any and all payments of principal or interest on the Loans that is not paid within fifteen (15) days of the due date.  Such late charge shall be due and payable regardless of whether Lender has accelerated the Obligations.  Borrower agrees that any late fee payable to Lender is a reasonable estimate of Lender's damages and is not a penalty.Use of Proceeds.  The proceeds of Advances shall be used solely to provide Borrower with short-term financing of an amount not to exceed 85% of the SBA 7(a) Guaranteed Note Receivable in respect of each Financed SBA Loan.Taxes.  All payments of principal and interest on the Loan and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp, documentary, property or franchise taxes and other taxes, fees, duties, levies, assessments, withholdings or other charges of any nature whatsoever (including interest and penalties thereon) imposed by any taxing authority, excluding taxes imposed on or measured by Lender's net income by the jurisdiction under which Lender is organized or conducts business (other than solely as the result of entering into any of the Financing Documents or taking any action thereunder) (all non-excluded items being called "Taxes").  If any withholding or deduction from any payment to be made by Borrower hereunder is required in respect of any Taxes pursuant to any applicable Law, then Borrower will: (i) pay directly to the relevant authority the full amount required to be so withheld or deducted; (ii) promptly forward to Lender an official receipt or other documentation satisfactory to Lender evidencing such payment to such authority; and (iii) pay to Lender such additional amount or amounts as is necessary to ensure that the net amount actually received by Lender will equal the full amount Lender would have received had no such withholding or deduction been required.  If any Taxes are directly asserted against Lender with respect to any payment received by Lender or such Lender hereunder, Lender may pay such Taxes and Borrower will promptly pay such additional amounts (including any penalty, interest or expense) as is necessary in order that the net amount received by such Lender after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount Lender would have received had such Taxes not been asserted.Capital Adequacy.  If any present or future law, governmental rule, regulation, policy, guideline, directive or similar requirement (whether or not having the force of law) imposes, modifies, or deems applicable any capital adequacy, capital maintenance or similar requirement which affects the manner in which Lender allocates capital resources to its commitments (including any commitments hereunder), and as a result thereof, in the reasonable opinion of Lender, the rate of return on Lender's capital with regard to the Loan is reduced to a level below that which Lender would have achieved but for such circumstances, then in such case and upon notice from Lender to Borrower, from time to time, Borrower shall pay Lender such additional amount or amounts as shall compensate Lender for such reduction in Lender's rate of return. A notice to Borrower from Lender as to the amount of that reduction and showing the basis of the computation thereof submitted by Lender to Borrower shall be presumptive evidence of the matters set forth therein.Increase of Maximum Loan Amount.  Provided that: (i) there is no Default or Event of Default that shall have occurred and be continuing, (ii) Borrower's audited Financial Statements delivered pursuant to Section 6.8 hereof with respect to Fiscal Year 2010 show that Borrower has a minimum EBITDA of $7,000,000, calculated in a manner consistent with Section 6.7(a), as of December 31, 2010, and (iii) the Newtek Small Business Loan Trust Note Offering shall have been consummated substantially on the terms and conditions previously furnished to Lender and the proceeds of which shall have been used by Borrower (A) to prepay the Term Loans (as such term is defined in the Term Loan Agreement) in accordance with 2.5(b)(ii) of the Term Loan Agreement or (B) otherwise as agreed to between Borrower and Lender, Borrower shall have the right, upon not less than ten (10) Business Days' notice to Lender, to increase the Maximum Loan Amount by an amount not to exceed $6,000,000 (the "Maximum Loan Amount Increase").  The Maximum Loan Amount Increase shall also be subject to such modifications to this Agreement and the other Loan Documents as Lender shall reasonably request as necessary to effect the Maximum Loan Amount Increase (including, without limitation, the execution and delivery by Borrower of an amended and restated Note and modifications to the Loan Documents relating to a syndication of the Loan by Lender). In addition, in the event Lender shall determine to syndicate the Loan in connection with the Maximum Loan Amount Increase, Borrower agrees that it will enter into such modifications to the Loan Documents as Lender may reasonably request in order to complete a successful syndication of the Loan as determined by Lender in the exercise of its reasonable discretion.  Such modifications may include, without limitation, reallocation of the Loan and the potential making of future Advances, adjustments to the Base Rate Margin, and adjusting any financial covenant requirements.  Only one such increase in the Maximum Loan Amount may be requested by Borrower pursuant to this Section 2.11.  

COLLATERAL

Collateral.  As security for the payment of the Obligations, and satisfaction by Borrower of all covenants and undertakings contained in this Agreement and the other Loan Documents:

Borrower hereby assigns and grants to Lender a continuing Lien on and first priority (except for Liens in favor of Lender under the Term Loan Documents) security interest in, upon and to all assets of Borrower (other than Borrower's SBA Lender's License), including any Real Property and including, without limitation, to the following Property, all whether now owned or hereafter acquired, created or arising and wherever located: Accounts - All Accounts;

Chattel Paper - All Chattel Paper;

Documents - All Documents;

Instruments - All Instruments;Inventory - All Inventory; General Intangibles - All General Intangibles;Equipment - All Equipment,

Fixtures - All Fixtures;Deposit Accounts - All Deposit Accounts, including, without limitation, the Blocked Account and all operating accounts of Borrower maintained at or with Lender, but excluding the Trust Account to the extent prohibited by the Multi-Party Agreement and SBA Rules and Regulations;Goods - All Goods;

Letter of Credit Rights - All Letter of Credit Rights;

Supporting Obligations - All Supporting Obligations;

Investment Property - All Investment Property;Commercial Tort Claims - All Commercial Tort Claims identified and described on Schedule 3.1(a)(xiv) (as amended or supplemented from time to time);

Property in Lender's Possession - All Property of Borrower, now or hereafter in Lender's possession; andProceeds - The Proceeds (including, without limitation, insurance proceeds), whether cash or non-cash, of all of the foregoing property described in clauses (i) through (viii).

Lien Documents.  At the Closing and thereafter as Lender deems necessary, Borrower shall execute and/or deliver to Lender, or have executed and delivered (all in form and substance satisfactory to Lender and its counsel): 

Financing statements pursuant to the UCC, which Lender may file in the jurisdiction where Borrower is organized and in any other jurisdiction that Lender deems appropriate; andAny other agreements, documents, instruments and writings, including, without limitation, intellectual property security agreements, required by Lender to evidence, perfect or protect the Liens and security interests in the Collateral or as Lender may reasonably request from time to time.

Other Actions.In addition to the foregoing, Borrower shall do anything further that may be reasonably required by Lender to secure Lender and effectuate the intentions and objects of this Agreement, including, without limitation, the execution and delivery of security agreements, contracts and any other documents required hereunder.  At Lender's reasonable request, Borrower shall also immediately deliver (with execution by Borrower of all necessary documents or forms to reflect, implement or enforce the Liens described herein), or cause to be delivered to Lender all items for which Lender must receive possession to obtain a perfected security interest, including without limitation, all notes (other than SBA(7)a Notes are delivered to the FTA pursuant to the Multi-Party Agreement), stock powers, letters of credit, certificates and documents of title, Chattel Paper, Warehouse Receipts, Instruments, and any other similar instruments constituting Collateral.Lender is hereby authorized to file financing statements and amendments to financing statements without Borrower's signature, in accordance with the UCC.  Borrower hereby authorizes Lender to file all such financing statements and amendments to financing statements describing the Collateral in any filing office as Lender, in its sole discretion may determine, including financing statements listing "All Assets," "All property and assets" and/or words of similar import in the collateral description therein.  Borrower agrees to comply with the requests of Lender in order for Lender to have and maintain a valid and perfected first security interest in the Collateral including, without limitation, executing and causing any other Person to execute such documents as Lender may require to obtain Control over all Deposit Accounts, Letter of Credit Rights and Investment Property.Searches, Certificates.Lender shall, prior to or at the Closing, and thereafter as Lender may reasonably determine from time to time, at Borrower's expense, obtain the following searches (the results of which are to be consistent with the warranties made by Borrower in this Agreement):UCC searches with the Secretary of State and local filing office of each state where Borrower (and each Guarantor) is organized, maintains its executive office, a place of business, or assets; andjudgment, state and federal tax lien and corporate tax lien searches, in all applicable filing offices of each state searched under subparagraph (i) above.Borrower shall, prior to or at the Closing and at its sole expense, obtain and deliver to Lender good standing certificates showing Borrower and each corporate Guarantor to be in good standing in its state of organization and in each other state in which it is doing and presently intends to do business for which qualification is required.Landlord's and Warehouseman's Waivers.  Borrower will cause each owner of any premises occupied by Borrower or to be occupied by Borrower and each warehouseman of any warehouse, where, in either event Collateral is held, to execute and deliver to Lender an instrument, in form and substance satisfactory to Lender, under which such owner(s) or warehouseman subordinates its/his/their interests in and waives its/his/their right to distrain on or foreclose against the Collateral and agrees to allow Lender to remain on such premises to dispose of or deal with any Collateral located thereon.  Filing Security Agreement.  A carbon, photographic or other reproduction or other copy of this Agreement or of a financing statement is sufficient as and may be filed in lieu of a financing statement.Power of Attorney.  Each of the officers of Lender is hereby irrevocably made, constituted and appointed the true and lawful attorney for Borrower (without requiring any of them to act as such) with full power of substitution to do the following:  (a) endorse the name of Borrower upon any and all checks, drafts, money orders and other instruments for the payment of monies that are payable to Borrower and constitute collections on Borrower's Accounts or proceeds of other Collateral; (b) execute and/or file in the name of Borrower any financing statements, schedules, assignments, instruments, documents and statements that Borrower is obligated to give Lender hereunder or is necessary to perfect (or continue or evidence the perfection of such security interest or Lien) Lender's security interest or Lien in the Collateral; and (c) during the continuance of an Event of Default, do such other and further acts and deeds in the name of Borrower that Lender may reasonably deem necessary or desirable to enforce any Account or other Collateral.Pari Passu Collateral.  The security interests and Liens granted hereunder in the Collateral in all respects shall rank pari passu with the security interests and Liens granted by Borrower under the Term Loan Agreement and the other Term Loan Documents. 

THE CLOSING; CONDITIONS PRECEDENT TO EACH ADVANCE

Conditions to the Closing.  The Closing of this Agreement is subject to the following conditions precedent (all instruments, documents and agreements to be in form and substance satisfactory to Lender and Lender's counsel):

Loan Documents, Resolutions, Opinions, and Other Documents.  Borrower shall have delivered, or caused to be delivered, to Lender the following:

this Agreement, the Note and each of the other Loan Documents all properly executed;financing statements and each of the other documents to be executed and/or delivered by Borrower, the Guarantors, or any other Person pursuant to this Agreement;certified copies of (1) resolutions of  Borrower and each Guarantor's board of directors or managing members (as applicable) authorizing the execution, delivery and performance of this Agreement, the Note to be issued hereunder and each of the other Loan Documents required to be delivered by such applicable party and (2) Borrower's and each Guarantor's articles or certificate of incorporation and by-laws or certificate of formation and shareholders' agreement or operating agreement, as applicable;an incumbency certificate for Borrower and each Guarantor identifying all Authorized Officers, with specimen signatures;a written opinion of Borrower's independent counsel addressed to Lender and opinions of such other counsel as Lender deems reasonably necessary;such financial statements, reports, certifications and other operational information as Lender may reasonably require, satisfactory in all respects to Lender;certification by the president of Borrower that there has not occurred any Borrower Material Adverse Effect since December 31, 2009; payment by Borrower of all fees including, without limitation, the Facility Fee and all of Lender's fees and expenses associated with this Agreement;searches and certificates required under Section 3.4;a pledge agreement from the Parent, Small Business Finance Inc., and Crystaltech, in form and substance satisfactory to Lender; the Multi-Party Agreement together with any required consent of the SBA and;such other documents reasonably required by Lender.Absence of Certain Events.  On the Closing Date, no Default or Event of Default hereunder, or under any other agreement between Borrower, any Guarantor or any Affiliate of any of them and Lender, shall have occurred and be continuing.Warranties and Representations at Closing.  The warranties and representations contained in Section 5 of this Agreement as well as any other Section of this Agreement shall be true and correct in all respects on the Closing Date with the same effect as though made on and as of that date.  Borrower shall not have taken any action or permitted any condition to exist which would have been prohibited by any Section hereof.Compliance with this Agreement.  Borrower shall have performed and complied with all agreements, covenants and conditions contained herein including, without limitation, the provisions of Sections 6 and 7 hereof, which are required to be performed or complied with by Borrower before or at the Closing Date.Officers' Certificate.  Lender shall have received a certificate dated the Closing Date and signed by the chief financial officer of Borrower and Parent certifying that all of the conditions specified in this Section have been fulfilled.The Closing.  Subject to the conditions of this Section, Advances shall be available on such date (the "Closing Date") and at such time as may be mutually agreeable to the parties contemporaneously with the execution hereof (the "Closing") at Lender's office at 1001 Avenue of the Americas New York, NY 10018.Waiver of Rights.  By consummating the Closing hereunder, or by making Advances hereunder, Lender does not thereby waive a breach of any warranty or representation made by Borrower hereunder or under any agreement, document, or instrument delivered to Lender or otherwise referred to herein, and any claims and rights of Lender resulting from any breach or misrepresentation by Borrower are specifically reserved by Lender.Conditions to the Making of Each Advance.  The making of each Advances hereunder is subject to the fulfillment of the following conditions precedent in a manner satisfactory in form and substance to Lender and its counsel:Compliance.  Borrower shall have complied and shall then be in compliance with all terms, covenants, conditions and provisions of this Agreement and the other Financing Documents that are binding upon it.Borrowing Base.  Borrower shall have furnished all Borrowing Base Certificates required by Section 6.8(a) and as evidence thereof, Borrower shall have furnished to Lender such reports, schedules, certificates, records and other papers as may be requested by Lender, and Borrower shall be in compliance with the provisions of this Agreement both immediately before and immediately after the making of the Advance requested.  The aggregate outstanding balance of the Loan immediately after giving effect to such Advance shall not exceed the Borrowing Base.Default.  There shall exist no Event of Default or Default hereunder.Representations and Warranties.  The representations and warranties of Borrower contained among the provisions of this Agreement shall be true and with the same effect as though such representations and warranties had been made at the time of the making of, and of the request for, such Advance.Adverse Change.  No Material Adverse Effect shall have occurred that  would, in the good faith judgment of Lender, have a material adverse effect on Borrower or materially impair the ability of Borrower to pay or perform any of the Obligations.Legal Matters.  All legal documents incident to such Advance shall be reasonably satisfactory to counsel for Lender.Eligibility Requirements.  Each Financed SBA Loan shall be an Eligible SBA 7(a) Loan.  

REPRESENTATIONS AND WARRANTIES

To induce Lender to complete the Closing and make the Loan to Borrower, Borrower warrants and represents to Lender that:

Corporate Organization and Validity.Borrower: (i) is a corporation, duly organized and validly existing under the laws of the state of New York; (ii) has the appropriate power and authority to operate its business and to own its Property; and (iii) is duly qualified, is validly existing and in good standing and has lawful power and authority to engage in the business it conducts in each state where the nature and extent of its business requires qualification, except where the failure to so qualify does not nor could not reasonably be predicted to have a Material Adverse Effect.  A list of all states and other jurisdictions where Borrower is qualified to do business is shown on Schedule 5.1 attached hereto and made part hereof.The making and performance of this Agreement and the other Loan Documents will not violate any law, government rule or regulation, court or administrative order or other such order, or the charter, minutes or bylaw provisions of Borrower, or of Borrower's shareholder's agreement, operating agreement or partnership agreement, as applicable, or violate or result in a default (immediately or with the passage of time) under any contract, agreement or instrument to which Borrower is a party, or by which Borrower is bound.  Borrower is not in violation of any term of any agreement or instrument to which it is a party or by which it may be bound which violation has caused or is reasonably likely to cause a Material Adverse Effect, or of its charter, minutes or bylaw provisions, or of Borrower's operating agreement or partnership agreement, as applicable.Borrower has all requisite power and authority to enter into and perform this Agreement and to incur the obligations herein provided for, and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and the other Loan Documents as applicable.This Agreement, the Note to be issued hereunder, and all of the other Loan Documents, when delivered, will be valid and binding upon Borrower, and enforceable in accordance with their respective terms except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the enforcement of creditors' rights generally and by general equitable principles.Places of Business.  The only places of business of Borrower, and the places where Borrower keeps and intends to keep its Property, are at the addresses shown on Schedule 5.2 attached hereto.Pending Litigation.  There are no judgments or judicial or administrative orders or proceedings pending, or to the knowledge of Borrower, threatened, against Borrower in any court or before any Governmental Authority relating to a claim in excess of $100,000 (except for any proceeding relating to any license or seeking injunctive relief as to which no dollar threshold shall apply) except as shown on Schedule 5.3 attached hereto, other than counterclaims arising solely out of routine collection matters brought by Borrower against any Person.  To the knowledge of Borrower, there are no investigations (civil or criminal) pending or threatened against Borrower in any court or before any Governmental Authority.  Borrower is not in default with respect to any order of any Governmental Authority.  To the knowledge of Borrower, no shareholder or executive officer of Borrower has been indicted in connection with or convicted of engaging in any criminal conduct, or is currently subject to any lawsuit or proceeding or under investigation in connection with any anti-racketeering or other conduct or activity which may result in the forfeiture of any property to any Governmental Authority.Title to Properties.  Borrower has good and marketable title in fee simple (or its equivalent under applicable law) to all the Property it purports to own, free from Liens and free from the claims of any other Person, except for Permitted Liens.Governmental Consent.  Neither the nature of Borrower or of its business or Property, nor any relationship between Borrower and any other Person, nor any circumstance affecting Borrower in connection with the issuance or delivery of this Agreement, the Note or any other Loan Documents is such as to require a consent, approval or authorization of, or filing, registration or qualification with, any Governmental Authority on the part of Borrower (other than with respect to the SBA).Taxes.  All tax returns required to be filed by Borrower in any jurisdiction have been filed, and all taxes, assessments, fees and other governmental charges upon Borrower, or upon any of its Property, income or franchises, which are shown to be due and payable on such returns have been paid, except for those taxes being contested in good faith with due diligence by appropriate proceedings for which appropriate reserves have been maintained under GAAP and as to which no Lien has been entered.  Borrower is not aware of any proposed additional tax assessment or tax to be assessed against or applicable to Borrower.Financial Statements.  The audited consolidated financial statements of Parent as at and for the year ended December 31, 2009 (complete copies of which have been delivered to Lender), and the interim consolidated financial statements of Parent as at and for the three-month and six-month periods ended June 30, 2010 have been prepared in accordance with GAAP and present fairly the financial position of Parent as of such dates and the results of its operations for such periods.  The fiscal year for Parent and Borrower currently ends on December 31.  Borrower's federal tax identification number and state organizational identification number for UCC purposes are as shown on Schedule 5.7 attached hereto.  All projections provided to Lender represent Borrower's best estimate of Borrower's (and Parent's or any consolidated entity's) consolidated future financial performance as of the date thereof and the assumptions contained therein are believed by Borrower to be fair and reasonable in light of current business conditions.Full Disclosure.  The financial statements referred to in Section 5.7 of this Agreement do not, nor does any other written statement of Borrower to Lender in connection with the negotiation of the Loan, contain any untrue statement of a material fact.  Such statements do not omit a material fact, the omission of which would make the statements contained therein misleading. There is no fact known to Borrower which has not been disclosed in writing to Lender which has or is reasonably likely to have a Material Adverse Effect.Subsidiaries.  Borrower does not have any Subsidiaries or Affiliates, except as shown on Schedule 5.9 attached hereto.Investments, Guarantees, Contracts, etc.Borrower does not own or hold equity or long term debt investments in, or have any outstanding advances to, any other Person, except as shown on Schedule 5.10(a) attached hereto.Borrower has not entered into any leases for real or personal Property (whether as landlord or tenant or lessor or lessee), except as shown on Schedule 5.10(b) attached hereto.Borrower is not a party to any contract or agreement, or subject to any charter or other corporate restriction, which has or is reasonably likely to have a Material Adverse Effect.Borrower, except as otherwise specifically provided in this Agreement, has not agreed or consented to cause or permit any of its Property whether now owned or hereafter acquired to be subject in the future (upon the happening of a contingency or otherwise), to a Lien not permitted by this Agreement.Government Regulations, etc.The use of the proceeds of and Borrower's issuance of the Note will not directly or indirectly violate or result in a violation of Section 7 of the Securities Exchange Act of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation, Regulations U, T and X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.  Borrower does not own or intend to carry or purchase any "margin stock" within the meaning of said Regulation U.Borrower has obtained all licenses, permits, franchises or other governmental authorizations necessary for the ownership of its Property and for the conduct of its business.As of the date hereof, no employee benefit plan ("Pension Plan"), as defined in Section 3(2) of ERISA, maintained by Borrower or under which Borrower could have any liability under ERISA: (i) has failed to meet the minimum funding standards established in Section 302 of ERISA; (ii) has failed to comply in a material respect with all applicable requirements of ERISA and of the Internal Revenue Code, including all applicable rulings and regulations thereunder; (iii) has engaged in or been involved in a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code which would subject Borrower to any material liability; or (iv) has been terminated if such termination would subject Borrower to any material liability.  Borrower has not assumed, or received notice of a claim asserted against Borrower for, withdrawal liability (as defined in Section 4207 of ERISA) with respect to any multi employer pension plan and is not a member of any Controlled Group (as defined in ERISA).  Borrower has timely made all contributions when due with respect to any multi employer pension plan in which it participates and no event has occurred triggering a claim against Borrower for withdrawal liability with respect to any multi employer pension plan in which Borrower participates.  All Employee Benefit Plans and multi employer pension plans in which Borrower participates are shown on Schedule 5.11(c) attached hereto.Borrower is not in violation of or receipt of written notice that it is in violation of any applicable statute, regulation or ordinance of the United States of America, or of any state, city, town, municipality, county or of any other jurisdiction, or of any agency, or department thereof, (including, without limitation, Environmental Laws or government procurement regulations), a violation of which causes or is reasonably likely to cause a Material Adverse Effect.Borrower (and each Guarantor) is current with all reports and documents required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions.  Business Interruptions.  Within five (5) years prior to the date hereof, none of the business, Property or operations of Borrower has been materially and adversely affected in any way by any casualty, strike, lockout, combination of workers, order of the United States of America, or any state or local government, or any political subdivision or agency thereof, directed against Borrower.  There are no pending or, to Borrower's knowledge, threatened labor disputes, strikes, lockouts or similar occurrences or grievances affecting Borrower.  No labor contract of Borrower is scheduled to expire prior to the Maturity Date.Names and Intellectual Property.Within five (5) years prior to the Closing Date, Borrower has conducted business under or used any other name (whether corporate or assumed) except for the names shown on Schedule 5.13(a) attached hereto.  Except to the extent that Borrower may conduct business under a name utilizing the word "Newtek" the ownership of which is with Guarantor, Borrower is the sole owner of all names listed on such Schedule 5.13(a) and any and all business done and all invoices issued in such trade names are Borrower's sales, business and invoices.  Each trade name of Borrower, including business conducted under a name utilizing the word "Newtek", represents a division or trading style of Borrower and not a separate Subsidiary or Affiliate or independent entity.All trademarks, service marks, patents or copyrights which Borrower uses, plans to use or has a right to use are shown on Schedule 5.13(b) attached hereto and Borrower has the legal authority to use such intellectual property in the conduct of its business.  Borrower is not in violation of any rights of any other Person with respect to such Property.Except as shown on Schedule 5.13(c) attached hereto: (i) Borrower does not require any copyrights, patents, trademarks or other intellectual property, or any license(s) to use any patents, trademarks or other intellectual property (other than software licenses generally available) in order to provide services to its customers in the ordinary course of business; and (ii) Lender will not require any copyrights, patents, trademarks or other intellectual property or any licenses to use the same in order to provide such services after the occurrence of an Event of Default.Other Associations.  Borrower is engaged in has interest in any joint venture or partnership with any other Person except as shown on Schedule 5.14 attached hereto.  Environmental Matters.  Except as shown on Schedule 5.15 attached hereto:To Borrower's knowledge after due inquiry, no Property presently owned, leased or operated by Borrower contains, or has previously contained, any Hazardous Substances in amounts or concentrations which (i) constitute or constituted a violation of, or (ii) could give rise to liability under, any Environmental Law.To Borrower's knowledge after due inquiry, Borrower is in compliance, and, for the duration of all applicable statutes of limitations periods, has been in compliance with all applicable Environmental Laws, and there is no contamination at, under or about any properties presently owned, leased, or operated by Borrower or violation of any Environmental Law with respect to such properties which could reasonably be expected to interfere with any of their continued operations or reasonably be expected to impair the fair saleable value thereof.Borrower has not received any notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters or compliance with Environmental Laws and Borrower has no knowledge that any such notice will be received or is being threatened.Hazardous Substances have not been transported or disposed of in a manner or to a location which are reasonably likely to give rise to liability of Borrower under any Environmental Law.No judicial proceeding or governmental or administrative action is pending, or to the knowledge of Borrower, threatened under any Environmental Law to which Borrower is, or to Borrower's knowledge will be, named as a party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding, the implementation of which is reasonably likely to have a Material Adverse Effect on  Borrower's business, financial condition, Property or prospects under any Environmental Law.Regulation O.  No director, executive officer or principal shareholder of Borrower or any Guarantor is a director, executive officer or principal shareholder of Lender.  For the purposes hereof the terms "director" "executive officer" and "principal shareholder" (when used with reference to Lender), have the respective meanings assigned thereto in Regulation O issued by the Board of Governors of the Federal Reserve System.Capital Stock.  The authorized and outstanding Capital Stock of Borrower is as shown on Schedule 5.17 attached hereto.  All of the Capital Stock of Borrower has been duly and validly authorized and issued and is fully paid and non-assessable and has been sold and delivered to the holder thereof in compliance with, or under valid exemption from, all Federal and state laws and the rules and regulations of all Governmental Authorities governing the sale and delivery of securities.  Except for the rights and obligations shown on Schedule 5.17, there are no subscriptions, warrants, options, calls, commitments, rights or agreements by which Borrower or any of the shareholders of Borrower is bound relating to the issuance, transfer, voting or redemption of shares of its Capital Stock or any pre-emptive rights held by any Person with respect to the shares of Capital Stock of Borrower.  Except as shown on Schedule 5.17, Borrower has not issued any securities convertible into or exchangeable for shares of its Capital Stock or any options, warrants or other rights to acquire such shares or securities convertible into or exchangeable for such shares.Solvency.  After giving effect to the transactions contemplated under this Agreement, Borrower is solvent, is able to pay its debts as they become due, and has capital sufficient to carry on its business and all businesses in which it is about to engage, and now owns Property having a value both at fair valuation and at present fair salable value greater than the amount required to pay Borrower's debts.  Borrower will not be rendered insolvent by the execution and delivery of this Agreement or any of the other Loan Documents executed in connection with this Agreement or by the transactions contemplated hereunder or thereunder. Perfection and Priority.  This Agreement and the other Loan Documents are effective to create in favor of Lender legal, valid and enforceable Liens in all right, title and interest of Borrower in the Collateral, and when financing statements have been filed in the offices of the jurisdictions shown on Schedule 5.19 attached hereto under Borrower's name, Borrower will have granted to Lender, and Lender will have perfected first priority (except for Liens in favor of Lender under the Term Loan Documents) Liens in the Collateral, superior in right to any and all other Liens, existing or future.Commercial Tort Claims.  As of the Closing Date, Borrower is not a party to any Commercial Tort Claims, except as shown on Schedule 3.1(a)(xiv) attached hereto.Letter of Credit Rights.  As of the Closing Date, Borrower has no rights under an outstanding letter of credit, except as shown on Schedule 5.21 attached hereto.Deposit Accounts.  All deposit accounts of Borrower are shown on Schedule 5.22 attached hereto.

BORROWER'S AFFIRMATIVE COVENANTS

Borrower covenants that until all of the Obligations are paid and satisfied in full, that:

Payment of Taxes and Claims.  Borrower shall pay, before they become delinquent, all taxes, assessments and governmental charges, or levies imposed upon it, or upon Borrower's Property, and all claims or demands of materialmen, mechanics, carriers, warehousemen, landlords and other Persons, entitled to the benefit of statutory or common law Liens which, in any case, if unpaid, would result in the imposition of a Lien upon its Property; provided however, that Borrower shall not be required to pay any such tax, assessment, charge, levy, claim or demand if the amount, applicability or validity thereof, shall at the time, be contested in good faith and by appropriate proceedings by Borrower, and if Borrower shall have set aside on its books adequate reserves in respect thereof, if so required in accordance with GAAP; which deferment of payment is permissible so long as no Lien other than a Permitted Lien has been entered and Borrower's title to, and its right to use, its Property are not materially adversely affected thereby. Maintenance of Properties and Corporate Existence.Property.  Borrower shall maintain its Property in good condition (normal wear and tear excepted) make all necessary renewals, replacements, additions, betterments and improvements thereto and will pay and discharge when due the cost of repairs and maintenance to its Property, and will pay all rentals when due for all real estate leased by Borrower.Property Insurance, Public and Products Liability Insurance.  Borrower shall maintain insurance (i) on all insurable tangible Property against fire, flood, casualty and such other hazards (including, without limitation, extended coverage, workmen's compensation, boiler and machinery, with inflation coverage by endorsement) and (ii) against public liability, product liability and business interruption, in each case in such amounts, with such deductibles and with such insurers as are customarily used by companies operating in the same industry and geographic area as Borrower.  At or prior to Closing, Borrower shall furnish Lender with duplicate original policies of insurance or such other evidence of insurance as Lender may require, and any certificates of insurance shall be issued on Accord Form-27.  In the event Borrower fails to procure or cause to be procured any such insurance or to timely pay or cause to be paid the premium(s) on any such insurance, Lender may do so for Borrower, but Borrower shall continue to be liable for the same.  The policies of all such casualty insurance shall contain standard Lender's Loss Payable Clauses (and, with respect to liability and interruption insurance, additional insured clauses) issued in favor of Lender under which all losses thereunder shall be paid to Lender as Lender's interest may appear.  Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without thirty (30) days prior written notice to Lender and shall insure Lender notwithstanding the act or neglect of Borrower.  With respect to any single claim which exceeds $500,000 or any series of claims in any twelve month period which in the aggregate $1,500,000, Borrower hereby appoints Lender as Borrower's attorney-in-fact, exercisable at Lender's option to endorse any check which may be payable to Borrower in order to collect the proceeds of such insurance and any amount or amounts collected by Lender pursuant to the provisions of this Section may be applied by Lender, in its sole discretion, to any Obligations or to repair, reconstruct or replace the loss of or damage to Collateral as Lender in its discretion may from time to time determine.  Borrower further covenants that all insurance premiums owing under its current policies have been paid.  Borrower shall notify Lender, immediately, upon Borrower's receipt of a notice of termination, cancellation, or non-renewal from its insurance company of any such policy.  In addition Borrower shall, consistent with the requirements of the SBA, cause each SBA 7(a) Loan Obligor to maintain Borrower as a named as additional insured or loss payee, as appropriate, in all such policies.Financial Records.  Borrower shall keep current and accurate books of records and accounts in which full and correct entries will be made of all of its business transactions, and will reflect in its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP.  Borrower shall not change its fiscal year end date without the prior written consent of Lender.Corporate Existence and Rights.  Borrower shall do (or cause to be done) all things necessary to preserve and keep in full force and effect its existence, good standing, rights and franchises.Compliance with Laws.  Borrower shall be in compliance with any and all laws, ordinances, governmental rules and regulations, and court or administrative orders or decrees to which it is subject, whether federal, state or local, (including, without limitation, Environmental Laws and government procurement regulations) and shall obtain any and all licenses, permits, franchises or other governmental authorizations necessary to the ownership of its Property or to the conduct of its businesses, which violation or failure to obtain causes or could cause a Material Adverse Effect.  Borrower shall timely satisfy all assessments, fines, costs and penalties imposed (after exhaustion of all appeals, provided a stay has been put in effect during such appeal) by any Governmental Authority against Borrower or any Property of Borrower.  Without limiting the foregoing, Borrower shall cause the Required Procedures, the SBA 7(a) Note Receivable Documents and all actions and transactions by Borrower in connection therewith (a) to comply with SBA Rules and Regulations, and (b) to comply with all other requirements of all Applicable Laws except where the failure to comply with such other requirements of any Applicable Law reasonably could not be expected to result in a Material Adverse Effect.Business Conducted.  Borrower shall continue in the business presently operated by it using its best efforts to maintain its customers and goodwill.  Borrower shall not engage, directly or indirectly, in any material respect in any line of business materially different from the businesses conducted by Borrower immediately prior to the Closing Date.Litigation.  Borrower shall give prompt notice to Lender of any litigation claiming in excess of One Hundred Thousand Dollars ($100,000.00) from Borrower, or which is reasonably likely to have a Material Adverse Effect.Issue Taxes.  Borrower shall pay all taxes (other than taxes based upon or measured by any Lender's income or revenues or any personal property tax), if any, in connection with the issuance of the Notes and the recording of any lien documents.  The obligations of Borrower hereunder shall survive the payment of Borrower's Obligations hereunder and the termination of this Agreement. Bank Accounts.  Borrower and each Guarantor shall maintain its primary depository and disbursement account(s) with Lender.Employee Benefit Plans.  Borrower shall (a) fund all of its Pension Plan(s) in a manner that will satisfy the minimum funding standards of Section 302 of ERISA, (b) furnish Lender, promptly upon Lender's request, with copies of all reports or other statements filed with the United States Department of Labor, the PBGC or the IRS with respect to all Pension Plan(s), or which Borrower, or any member of a Controlled Group, may receive from the United States Department of Labor, the IRS or the PBGC, with respect to all such Pension Plan(s), and (c) promptly advise Lender of the occurrence of any reportable event (as defined in Section 4043 of ERISA, other than a reportable event for which the thirty (30) day notice requirement has been waived by the PBGC) or prohibited transaction (under Section 406 of ERISA or Section 4975 of the Internal Revenue Code) with respect to any such Pension Plan(s) and the action which Borrower proposes to take with respect thereto.  Borrower will make all contributions when due with respect to any multi employer pension plan in which it participates and will promptly advise Lender upon (x) its receipt of notice of the assertion against Borrower of a claim for withdrawal liability, (y) the occurrence of any event which, to Borrower's knowledge, would trigger the assertion of a claim for withdrawal liability against Borrower, and (z) upon the occurrence of any event which, to Borrower's knowledge, would place Borrower in a Controlled Group as a result of which any member (including Borrower) thereof may be subject to a claim for withdrawal liability, whether liquidated or contingent.Financial Covenants.

During the term of the Loan, Borrower shall comply with the following financial covenants which shall be tested on Parent together with its consolidated subsidiaries:

A Fixed Charge Coverage Ratio of at least: (A) 1.25:1 for fiscal year 2010, and (B) 1.50:1 for fiscal year 2011 and thereafter through the Maturity Date, to be tested, on a rolling four quarter basis, as of December 31, 2010 based upon numbers for the quarter ended December 31, 2010 and, thereafter, quarterly; and

A minimum EBITDA  of: (A) $6,500,000 for fiscal year 2010, (B) $7,300,000 the twelve month period ending June 30, 2011, (C) $8,000,000 for fiscal year 2011; and (D) $9,000,000 for fiscal year 2012; and 

There shall be at least $4,000,000.00 in unrestricted cash on the consolidated balance sheet of the Parent at all times. 

During the term of the Loan, guarantor Universal Processing Services of Wisconsin LLC (d/b/a Newtek Merchant Solutions) shall comply with the following financial covenants which shall be tested on the basis of the results of the Electronic Payment Processing segment:

A minimum EBITDA of: (A) $4,900,000 for fiscal year 2010, (B) $5,000,000 the twelve month period ending June 30, 2011, (C) $5,250,000 for fiscal year 2011; and (D) $5,600,000 for fiscal year 2012.  

During the term of the Loan, each of Borrower and Crystaltech shall comply with the following respective financial covenants which shall be tested on each of them and their respective consolidated subsidiaries: 

A minimum EBITDA for Borrower of: (A) $1,900,000  for fiscal year 2010, (B) $2,200,000 the twelve month period ending June 30, 2011, (C) $2,400,000 for fiscal year 2011; and (D) $2,600,000 for fiscal year 2012; and 

A minimum EBITDA for Crystaltech of: (A) $6,591,000  for fiscal year 2010, (B) $7,000,000 the twelve month period ending June 30, 2011, (C) $7,300,000 for fiscal year 2011; and (D) $8,000,000 for fiscal year 2012.

Financial and Business Information; Other Reports.  Borrower shall deliver or cause to be delivered to Lender the following: 

Financial Statements and Collateral Reports.  Such data, reports, statements and information, financial or otherwise, as Lender may reasonably request, including, without limitation: 

Within forty five (45) days after the end of each Fiscal Quarter, financial information regarding Parent and its consolidated subsidiaries, certified by the Chief Financial Officer of Parent, consisting of consolidated (i) unaudited balance sheets as of the close of such Fiscal Quarter and the related statements of income and cash flows for that portion of the Fiscal Year ending as of the close of such Fiscal Quarter; (ii) unaudited statements of income and cash flows for such Fiscal Quarter, setting forth in comparative form the figures for the corresponding period in the prior year and on a trailing twelve month basis, and (iii) including an income statement for Parent on a consolidated basis by business segment as currently reported by Parent, all prepared in accordance with GAAP (subject to normal year-end adjustments).  Within forty five (45) days after the end of each Fiscal Quarter, the actual results of operations of Borrower for the Fiscal Quarter, compared to the Projections for such Fiscal Quarter.

Within ninety (90) days after the end of each Fiscal Year, audited Financial Statements for Parent and its Subsidiaries on a consolidated basis, consisting of balance sheets, cash flow statements and statements (including statements on a business segment basis) of income and retained earnings and, setting forth in comparative form in each case the figures for the previous Fiscal Year, which Financial Statements shall be prepared in accordance with GAAP and certified without qualification, by an independent certified public accounting firm of national standing and acceptable to Lender. 

Within fifteen (15) days after the end of each Fiscal Month a Borrowing Base Certificate, which shall include detailed reporting as to eligibility of Financed SBA Loans. 

Management Letters. Within five (5) Business Days after receipt thereof by any Credit Party, copies of all management letters, exception reports or similar letters or reports received by such Credit Party from its independent certified public accountants.Governmental Reports.  Borrower agrees that, if requested by Lender, it shall promptly furnish Lender with copies of all reports filed with any federal, state or local Governmental Authority.Notice of Event of Default.  Promptly upon a director or executive officer of  Borrower obtaining knowledge of the existence of any condition or event which constitutes a Default or an Event of Default under this Agreement, Borrower shall provide Lender with a written notice specifying the nature and period of existence thereof and what action Borrower is taking (and proposes to take) with respect thereto.Notice of Claimed Default.  Promptly upon receipt by Borrower of a notice of default, oral or written, given to Borrower by any creditor for Indebtedness for borrowed money, or otherwise holding long term Indebtedness of Borrower in excess of Fifty Thousand Dollars ($50,000.00), Borrower shall give notice of the same to Lender.Securities and Other Reports.  If Borrower shall be required to file reports with the Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, Borrower shall promptly upon its becoming available, provide Lender with one copy of each financial statement, report, notice or proxy statement sent by Borrower to stockholders generally, and, a copy of each regular or periodic report, and any registration statement, or prospectus in respect thereof, filed by Borrower with any securities exchange or with federal or state securities and exchange commissions or any successor agency.Officers' Certificates.  Along with each set of financial statements and or reports delivered to Lender pursuant to Section 6.8 hereof, Borrower and each corporate Guarantor, shall deliver to Lender a certificate ("Compliance Certificate") from the chief financial officer, chief executive officer or president of Borrower and each corporate Guarantor (and as to certificates accompanying the annual financial statements of Borrower and each corporate Guarantor, also certified by Borrower's independent certified public accountant) setting forth: Event of Default. That the signer has reviewed the relevant terms of this Agreement, and has made (or caused to be made under his/her supervision) a review of the transactions and conditions of Borrower and each corporate Guarantor from the beginning of the accounting period covered by the financial statements being delivered therewith to the date of the certificate, and that such review has not disclosed the existence during such period of any condition or event which constitutes a Default or an Event of Default or, if any such condition or event exists, specifying the nature and period of existence thereof and what action Borrower and/or each corporate Guarantor has taken or proposes to take with respect thereto.Covenant Compliance; The information (including detailed calculations) required in order to establish that Borrower is in compliance with the requirements of Section 6.7 of this Agreement, as of the end of the period covered by the financial statements delivered.Audits and Inspection.  Borrower shall permit any of Lender's officers or other representatives to visit and inspect upon reasonable notice during business hours any of the locations of Borrower, to examine and audit all of Borrower's books of account, records, reports and other papers, to make copies and extracts there from and to discuss its affairs, finances and accounts with its officers, employees and independent certified public accountants all at Borrower's expense at the standard rates charged by Lender for such activities, plus Lender's reasonable out-of-pocket expenses (all of which amounts shall be Expenses).  Borrower acknowledges that Lender intends to conduct such audits at least twice annually. Blocked Account.  On or before the Closing Date and until the Maturity Date, Borrower shall establish a blocked account with Lender ("Blocked Account"), and deposit and/or shall cause to be deposited directly into such Blocked Account all payments swept from the Trust Account in a manner consistent with the Cash Management System.Information to Participant.  Lender may divulge to any participant, assignee or co-lender or prospective participant, assignee or co-lender it may obtain in the Loan or any portion thereof, all information, and furnish to such Person copies of any reports, financial statements, certificates, and documents obtained under any provision of this Agreement, or related agreements and documents.Material Adverse Developments.  Borrower agrees that immediately upon obtaining knowledge of any development or other information outside the ordinary course of business (and excluding matters of a general economic, financial or political nature) which would reasonably be expected to have a Material Adverse Effect it shall give to Lender telephonic notice specifying the nature of such development or information and such anticipated effect.  In addition, such verbal communication shall be confirmed by written notice thereof to Lender on the same day such verbal communication is made or the next Business Day thereafter.Places of Business.  Borrower shall give thirty (30) days prior written notice to Lender of any changes in the location of any of their respective places of business, of the places where records concerning their Accounts or where its Inventory are kept, or the establishment of any new, or the discontinuance of any existing place of business; provided that Borrower may not establish any place of business outside of the United States.Commercial Tort Claims.  Borrower will immediately notify Lender in writing in the event that Borrower becomes a party to or obtains any rights with respect to any Commercial Tort Claim.  Such notification shall include information sufficient to describe such Commercial Tort Claim, including, but not limited to, the parties to the claim, the court in which the claim was commenced, the docket number assigned to such claim, if any, and a detailed explanation of the events that gave rise to the claim.  Borrower shall execute and deliver to Lender all documents and/or agreements necessary to grant Lender a security interest in such Commercial Tort Claim to secure the Obligations.  Borrower authorizes Lender to file (without Borrower's signature) initial financing statements or amendments, as Lender deems necessary to perfect its security interest in the Commercial Tort Claim.Letter of Credit Rights.  Borrower shall provide Lender with written notice of any letters of credit for which Borrower is the beneficiary.  Borrower shall execute and deliver (or cause to be executed or delivered) to Lender, all documents and agreements as Lender may require in order to obtain and perfect its security interest in such letters of credit.Inter-Company and Shareholder Loans.  All inter-company loans to Borrower from a Guarantor or from any officer, director or employee, or affiliates shall be subordinate to this Loan.Separateness Covenant.  Borrower agrees and covenants that:

Borrower will maintain Borrower's separate existence and identity and will take reasonable steps to make it apparent to third parties that Borrower is an entity with assets (in particular the Pledged Shares (as defined in the Pledge Agreement)) and liabilities distinct from those of each Guarantor.

Not in limitation of the generality of the foregoing, Borrower agrees as follows: 

Borrower will not inadvertently commingle its assets in any material respects with those of any other Person and shall take all reasonable steps to maintain its assets in a manner that facilitates their identification and segregation from those of each Guarantor; 

Borrower shall take all reasonable steps to prevent any of Borrower's funds from at any time being pooled with any funds of each Guarantor and shall not maintain joint bank accounts or other depository accounts to which Guarantors have access;

Borrower will conduct its business in its own name and from an office separate (or otherwise internally distinguishable) from that of Guarantors;

Borrower will maintain separate corporate records and books of account from those of any other Person;

Borrower will maintain separate financial statements from those of any other Person; provided, however, financial information about Borrower may be contained in consolidated financial statements issued by Parent;  

Borrower will pay its own liabilities, including the salaries of its own employees, consultants and agents, from its own funds and bank accounts; 

Borrower will compensate Guarantors at market rates for any services that such parties render to Borrower; and 

Borrower will observe the formalities of a corporation in all material respects. 

Borrower as Servicer.  Borrower shall at its own expense service all of the SBA 7(a) Note Receivables, including (i) the billing, posting and maintaining of complete records applicable thereto, and (ii) subject to applicable SBA Rules and Regulations, the taking of such action with respect thereto as Borrower may deem advisable.Negotiable Collateral.  Borrower shall cause the original of each SBA 7(a) Loan Note to be delivered to FTA or such other Person designated in accordance with the Multi-Party Agreement and to be dealt with as provided therein. Subject to the Multi-Party Agreement, in the event that any other Collateral, including proceeds, is evidenced by or consists of collateral readily negotiable, and if and to the extent that perfection of priority of Lender's security interest is dependent on or enhanced by possession, Borrower shall, immediately upon the request of Lender, shall endorse and deliver physical possession of such negotiable collateral to Lender.Collection of SBA 7(a) Note Receivables, Accounts, General Intangibles and Chattel Paper.  Subject in each case to the Multi-Party Agreement, at any time after the occurrence and during the continuation of a Default or Event of Default under this Agreement or any other Loan Document, Lender or Lender's designee may (a) notify SBA 7(a) Loan Obligors or other obligors that SBA 7(a) Note Receivables, Accounts, Chattel Paper, or General Intangibles have been assigned to Lender or that Lender has a security interest therein, or (b) collect the 7(a) Loan Receivables, Accounts, Chattel Paper or General Intangibles directly and charge the collection costs and expenses to the Loan Account. Subject in each case to the Multi-Party Agreement, Borrower agrees that it will hold in trust for Lender, as Lender's trustee, any payments with respect to or in connection with SBA 7(a) Note Receivables or SBA 7(a) Note Receivable Collateral that it receives and immediately will deliver said payments with respect to or in connection with SBA 7(a) Note Receivables or SBA 7(a) Note Receivable Collateral to a replacement servicer appointed or approved by the SBA or, at the request of Lender with the SBA's consent to Lender, in each case, in their original form as received by Borrower.Records.  Borrower shall maintain accurate and materially complete records regarding all SBA 7(a) Note Receivables, including without limitation all SBA 7(a) Note Receivables which have been guaranteed by the principals of the respective SBA 7(a) Loan Obligors; provided that in no event shall such records fail to comply with the requirements of the SBA Rules and Regulations.Due Diligence.  Borrower shall cooperate fully with Lender in connection with Lender's due diligence, from time to time, with respect to property proposed by Borrower as Collateral and SBA 7(a) Note Receivable Collateral. Lender shall be entitled to procure such appraisals, brokers' price opinions, lien search reports, tax filing reports, title reports, evaluations or other reports, certifications or information as it may require in connection with its evaluation or re-evaluation of any Collateral.Multi-Party Agreement; Trust Account Agreement; Blocked  Account Agreement.  Borrower shall comply in a timely manner with all of its obligations and agreements under the Multi-Party Agreement, the Trust Account Agreement and the Blocked Account Agreement, including without limitation, providing complete and accurate instructions, in accordance with the terms of the Blocked Account Agreement.REO Property.  Promptly upon acquisition of any REO Property, the applicable Credit Party shall execute such deeds of trust, mortgages and other documentation with respect to such Credit Party's interest in such REO Property, and to the extent, if any, required by SBA Rules and Regulations, obtain and deliver or cause to be delivered to Lender, an appraisal that is compliant with the requirements of FIRREA, a mortgagee policy of title insurance, environmental report, engineering report or other documentation as Lender may reasonably request in connection therewith.Foreclosure (or Deed in Lieu) Regarding SBA 7(a) Note Receivable Collateral.  Borrower shall notify Lender of sending or recording any notice of default on a SBA 7(a) Note Receivable within fifteen (15) days of such sending or recording, and notify Lender thereof in writing with each Borrowing Base Certificate delivered to Lender. Borrower shall also notify Lender in writing with each Borrowing Base Certificate delivered to Lender, the date upon which any notice of foreclosure sale was recorded and the initial date set for related foreclosure sale.  In the case of a notice of foreclosure sale, Borrower will also notify Lender in writing of the recordation of any related notice of trustee sale within five (5) days of recordation thereof, and include in such notice the date first set for sale. Promptly upon consummation of any such foreclosure or trustee sale, or any deed or bill of sale in lieu of foreclosure, retention of collateral in satisfaction of debt or similar transaction, Borrower shall deliver to Lender true and complete copies of all documentation executed (in the case of notices, postings and the like), or to be executed (in the case of deeds, bills of sale or other documents related to consummation of such transaction or transfer of such property), by Borrower in respect thereof.  In the event Borrower intends or expects, by means of any such foreclosure, deed or bill of sale in lieu of foreclosure, retention of collateral in satisfaction of debt or similar transaction, to acquire title to any personal property included in the SBA 7(a) Note Receivable Collateral, Borrower shall, contemporaneously upon acquiring such title, execute and deliver to Lender such security agreements, financing statements or other documents as may be required by Lender in order to maintain Lender's interest therein (Borrower hereby appoints Lender as its attorney-in-fact, and grants Lender a special power of attorney, coupled with an interest, to execute any such security agreements, financing statements or other documents, in Borrower's name and on its behalf, and file and record same as required to perfect Lender's interest therein).  If permitted by applicable SBA Rules and Regulations, Borrower will not acquire title to, or take possession of, any such real property unless Borrower has determined, based on an environmental site assessment prepared by a credentialed consultant acceptable to Lender who regularly conducts environmental audits, either that such real property, including all improvements thereon, is in compliance with all applicable Environmental Laws and that there are no circumstances present on such real property relating to the use, management or disposal of any Hazardous Materials for which investigation, testing, monitoring, containment, clean-up or remediation could be required under any Environmental Law, or that the cost of any such actions is justified and appropriate in relation to the liquidation value of such real property.Eligible SBA 7(a) Note Receivables.  Each Eligible SBA 7(a) Guaranteed Note Receivable and each Eligible SBA 7(a) Non-Guaranteed Note Receivable will (i) represent bona fide existing obligations created by the lending of money by Borrower to SBA 7(a) Loan Obligors in the ordinary course of Borrower's business, and (ii) be unconditionally owed to Borrower without defenses, disputes, offsets or counterclaims, or rights of return or cancellation and is secured by SBA 7(a) Note Receivable Collateral in accordance with the Required Procedures.  Each Eligible SBA 7(a) Guaranteed Note Receivable and each Eligible SBA 7(a) Non-Guaranteed Note Receivable will be documented on Approved Forms in accordance with the Required Procedures.  Unless otherwise clearly disclosed to Lender in writing prior to submission to Lender for evaluation for eligibility, Borrower will not have received notice of (a) actual or imminent bankruptcy, insolvency, or material impairment of the financial condition of any SBA 7(a) Loan Obligor regarding any Eligible SBA 7(a) Guaranteed Note Receivable or any Eligible SBA 7(a) Non-Guaranteed Note Receivable or (b) actual or threatened litigation regarding the validity or enforceability of any Eligible SBA 7(a) Guaranteed Note Receivable or any Eligible SBA 7(a) Non-Guaranteed Note Receivable or the validity, enforceability or priority of any SBA 7(a) Note Receivable Collateral.  With respect to each Eligible SBA 7(a) Guaranteed Note Receivable and each Eligible SBA 7(a) Non-Guaranteed Note Receivable, Borrower will, no later than the respective funding date of the Financed SBA Loan, have taken the steps required to perfect Borrower's Liens in any SBA 7(a) Note Receivable Collateral for such Eligible SBA 7(a) Guaranteed Note Receivable or Eligible SBA 7(a) Non-Guaranteed Note Receivable, as applicable, against the applicable SBA 7(a) Loan Obligor in all applicable jurisdictions.  Unless otherwise clearly disclosed to Lender in writing prior to or simultaneously with submission to Lender for evaluation for eligibility, Borrower represents that it will be the sole legal and beneficial owner of each Eligible SBA 7(a) Guaranteed Note Receivable, and that no participation interest or other ownership interest (legal, beneficial or otherwise) has been sold or is otherwise outstanding with respect thereto.  Compliance.  The Required Procedures, the SBA 7(a) Note Receivable Documents and all actions and transactions by Borrower in connection therewith will comply in all material respects with all Applicable Laws.  Borrower covenants and agrees that each Financed SBA Loan shall comply with the following: (a) all conditions precedent to the effectiveness of the SBA Guaranty with respect thereto shall have been met; (b) Borrower shall have perfected its security interests and Liens in and to all underlying collateral; (c) it shall conform to all SBA Rules and Regulations; and (d) it shall have been originated by Borrower.

BORROWER'S NEGATIVE COVENANTS 

Borrower covenants that until all of the Obligations are paid and satisfied in full and, that:

Merger, Consolidation, Dissolution or Liquidation.

Borrower shall not engage in any Asset Sale other than: (i) Inventory sold in the ordinary course of Borrower's business; (ii) equipment that is replaced by other equipment of comparable or superior quality and value within ninety (90) days of such Asset Sale; (iii) a sale of property in one transaction or a series of transactions with a fair market value of less than One Hundred Thousand Dollars ($100,000) during any six month period; or (iv) Permitted Dispositions.Borrower shall not merge or consolidate with any other Person or commence a dissolution or liquidation.

Acquisitions.  Borrower shall not acquire all or a material portion of the Capital Stock or assets of any Person in any transaction or in any series of related transactions or enter into any sale and leaseback transaction.Liens and Encumbrances.  Borrower shall not: (i) execute a negative pledge agreement with any Person covering any of its Property; or (ii) cause or permit or agree or consent to cause or permit in the future (upon the happening of a contingency or otherwise), its Property (including, without limitation, the Collateral), whether now owned or hereafter acquired, to be subject to a Lien or be subject to any claim except for Permitted Liens.Transactions With Affiliates or Subsidiaries.  Borrower shall not enter into any transaction with any Subsidiary or other Affiliate, including, without limitation, the purchase, sale, or exchange of Property, or the loaning or giving of funds to any Affiliate or any Subsidiary unless:  (i) such Subsidiary or Affiliate is engaged in a business substantially related to the business conducted by Borrower and the transaction is in the ordinary course of and pursuant to the reasonable requirements of Borrower's business and upon terms substantially the same and no less favorable to Borrower as it would obtain in a comparable arm's length transactions with any Person not an Affiliate or a Subsidiary, and so long as such transaction is not prohibited hereunder; (ii) such transaction is intended for incidental administrative purposes; or (iii) it is a dividend. Guarantees.  Excepting the endorsement in the ordinary course of business of negotiable instruments for deposit or collection (and the joint obligations to Lender hereunder), Borrower shall not become or be liable, directly or indirectly, primary or secondary, matured or contingent, in any manner, whether as guarantor, surety, accommodation maker, or otherwise, for the existing or future Indebtedness of any kind of any Person.Distributions, Bonuses and Other Indebtedness.  Borrower shall not:  (i) declare or pay any cash bonus compensation to its officers if an Event of Default exists or would result from the payment thereof; (ii) hereafter incur or become liable for any Indebtedness other than Permitted Indebtedness; (iii) make any prepayments on any existing or future Indebtedness (other than the Obligations); or (iv) during the continuance of an Event of Default make any distributions or dividends to Parent.Loans and Investments.  Borrower shall not make or have outstanding loans, advances, extensions of credit or capital contributions to, or investments in, any Person other than Permitted Investments.Use of Lenders' Name.  Borrower shall not use Lender's name in connection with any of its business operations.  Nothing herein contained is intended to permit or authorize Borrower to make any contract on behalf of Lender.Miscellaneous Covenants.

Borrower shall not become or be a party to any contract or agreement which at the time of becoming a party to such contract or agreement materially impairs Borrower's ability to perform under this Agreement, or under any other instrument, agreement or document to which Borrower is a party or by which it is or may be bound. Borrower shall not carry or purchase any "margin stock" within the meaning of Regulations U, T or X of the Board of Governors of the Federal Reserve System, 12 C.F.R., Chapter II.

Jurisdiction of Organization.  Borrower shall not change its jurisdiction of organization.

DEFAULT

Events of Default.  Each of the following events shall constitute an event of default ("Event of Default"):Payments. If Borrower fails to make any payment of principal or interest (including, without limitation, mandatory prepayments pursuant to Section 2.5(d) hereof) under the Obligations on the date such payment is due and payable; or Other Charges.  If Borrower fails to pay any other charges, fees, Expenses or other monetary obligations owing to Lender arising out of or incurred in connection with this Agreement within five (5) Business Days after the date such payment is due and payable; orParticular Covenant Defaults.  If  Borrower fails any covenant or undertaking contained in this Agreement and (other than with respect to the covenants contained in Section 6.7 and Section 7 for which no cure period shall exist other than as set forth in 8.1(d) below), such failure continues for ten (10) Business Days after the occurrence thereof;Financial Covenant Defaults.  Subject to the Limitation in Section 8.7 below, if Borrower fails to perform, comply with or observe with respect to the covenants contained in Section 6.7, and such failure continues for five (5) Business Days after the occurrence thereof;Financial Information.  If any statement, report, financial statement, or certificate made or delivered by Borrower or any of its officers, employees or agents, to Lender is not true and correct, in all material respects, when made; or Delivery of SBA 7(a) Loan Notes.  Borrower shall not deliver any SBA 7(a) Loan Note to FTA pursuant to the Multi-Party Agreement by the close of business on the fifth Business Day after the funding date of any Financed SBA Loan.  Uninsured Loss.  If there shall occur any uninsured damage to or loss, theft, or destruction in excess of One Hundred Thousand Dollars ($100,000.00) in the aggregate with respect to any portion of any Property of Borrower for which Borrower has not established a cash or cash equivalent reserve in the full amount of such loss; orWarranties or Representations.  If any warranty, representation or other statement by or on behalf of Borrower contained in or pursuant to this Agreement, the other Loan Documents or in any document, agreement or instrument furnished in compliance with, relating to, or in reference to this Agreement, is false, erroneous, or misleading in any material respect when made; orAgreements with Others.   (A) If Borrower shall default beyond any grace period in the payment of principal or interest of any Indebtedness of Borrower in excess of Twenty Five Thousand Dollars ($25,000.00) in the aggregate; or (B) if Borrower otherwise defaults under the terms of any such Indebtedness if the effect of such default is to enable the holder of such Indebtedness to accelerate the payment of Borrower's obligations, which are the subject thereof, prior to the maturity date or prior to the regularly scheduled date of payment;Other Agreements with Lender.  If Borrower or any Guarantor breaches or violates the terms of, or if a default (and expiration of any applicable cure period), or an Event of Default, occurs under, any Interest Hedging Instrument or any other existing or future agreement (related or unrelated) (including, without limitation, the other Loan Documents) between Borrower or any Guarantor and Lender; orJudgments.  If any final judgment for the payment of money in excess of One Hundred Thousand Dollars ($100,000.00) in the aggregate (i) which is not fully and unconditionally covered by insurance or (ii) for which Borrower has not established a cash or cash equivalent reserve in the full amount of such judgment, shall be rendered by a court of record against Borrower and such judgment shall continue unsatisfied and in effect for a period of thirty (30) consecutive days without being vacated, discharged, satisfied or bonded pending appeal; orAssignment for Benefit of Creditors, etc.  If Borrower makes or proposes in writing, an assignment for the benefit of creditors generally, offers a composition or extension to creditors, or makes or sends notice of an intended bulk sale of any business or assets now or hereafter owned or conducted by Borrower; or Bankruptcy, Dissolution, etc.  Upon the commencement of any action for the dissolution or liquidation of Borrower, or the commencement of any proceeding to avoid any transaction entered into by Borrower, or the commencement of any case or proceeding for reorganization or liquidation of Borrower's debts under the Bankruptcy Code or any other state or federal law, now or hereafter enacted for the relief of debtors, whether instituted by or against Borrower; provided, however, that Borrower shall have forty-five (45) days to obtain the dismissal or discharge of involuntary proceedings filed against it, it being understood that during such forty-five (45) day period, Lender shall not be obligated to make Advances hereunder and Lender may seek adequate protection in any bankruptcy proceeding; orReceiver.  Upon the appointment of a receiver, liquidator, custodian, trustee or similar official or fiduciary for Borrower or for Borrower's Property; orExecution Process, etc.  The issuance of any execution or distraint process against any Property of Borrower; orTermination of Business.  If Borrower ceases any material portion of its business operations as presently conducted; orPension Benefits, etc.  If Borrower fails to comply with ERISA so that proceedings are commenced to appoint a trustee under ERISA to administer Borrower's employee plans or the PBGC institutes proceedings to appoint a trustee to administer such plan(s), or a Lien is entered to secure any deficiency or claim or a "reportable event" as defined under ERISA occurs; orInvestigations.  A determination by Lender that it is reasonable to conclude, based on one or more events which have occurred, such as an indictment, announcement of formal investigation or similar event, that Borrower is engaged, directly or indirectly, in any type of activity which would reasonably be likely to result in the forfeiture of property of Borrower to any governmental entity, federal, state or local, in an amount or of a value which would be material to Borrower's financial condition or business; orGuaranty  Agreement.  If any breach or default occurs under a Guaranty Agreement, or if a Guaranty Agreement, or any obligation to perform thereunder is terminated; orLiens.  If any Lien in favor of Lender shall cease to be valid, enforceable and perfected and prior to all other Liens other than Permitted Liens or if Borrower or any Governmental Authority shall assert any of the foregoing; orMaterial Adverse Effect.  If there is any change in Borrower's or any Guarantor's financial condition which, in Lender's reasonable good faith opinion, has or would be reasonably likely to have a Material Adverse Effect, orOther Loan Documents.  If any other Person (other than Lender) party to a Loan Document, breaches or violates any material (as determined by Lender) term, provision or condition of such Loan Document; Enforceability of Loan Documents. Any of the Loan Documents shall for any reason fail to constitute the valid and binding agreement of any Credit Party thereto, or any such Credit Party shall so assert; orSBA Status.  If Borrower shall lose, or have any material limitation imposed upon, its authority to process, close, service, collect enforce or liquidate any SBA 7(a) Loans, which material limitation may not include the loss of Borrower's status as a lender under the SBA Preferred Lender Program.Cure.  Nothing contained in this Agreement or the Loan Documents shall be deemed to compel Lender to accept a cure of any Event of Default hereunder.Rights and Remedies on Default.In addition to all other rights, options and remedies granted or available to Lender under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or otherwise available at law or in equity, upon or at any time after the occurrence and during the continuance of an Event of Default Lender may, in its discretion, cease making Advances hereunder, terminate the Loan and declare the Obligations immediately due and payable, all without demand, notice, presentment or protest or further action of any kind (it also being understood that the occurrence of any of the events or conditions set forth in Sections 8.1(k),(l) or (m) shall automatically cause an acceleration of the Obligations).In addition to all other rights, options and remedies granted or available to Lender under this Agreement or the Loan Documents (each of which is also then exercisable by Lender), or otherwise available at law or in equity, upon or at any time after the acceleration of the Obligations following the occurrence of an Event of Default (other than the rights with respect to clause (iv) below which Lender may exercise at any time after an Event of Default and regardless of whether there is an acceleration), Lender may, in its discretion, exercise all rights under the UCC and any other applicable law or in equity, and under all Loan Documents permitted to be exercised after the occurrence of an Event of Default, including the following rights and remedies (which list is given by way of example and is not intended to be an exhaustive list of all such rights and remedies):

the right to take possession of, send notices regarding and collect directly the Collateral, with or without judicial process (including without limitation the right to notify the United States postal authorities to redirect mail addressed to Borrower to an address designated by Lender); orby its own means or with judicial assistance, enter Borrower's premises and take possession of the Collateral, or render it unusable, or dispose of the Collateral on such premises in compliance with subsection (e) below, without any liability for rent, storage, utilities or other sums, and Borrower shall not resist or interfere with such action; orrequire Borrower at  Borrower's expense to assemble all or any part of the Collateral (other than real estate or fixtures) and make it available to Lender at any place designated by Lender; ortake additional reserves against the Borrowing Base; or

the right to enjoin any violation of Section 7.1, it being agreed that Lender's remedies at law are inadequate.

Borrower hereby agrees that a notice received by it at least seven (7) days before the time of any intended public sale or of the time after which any private sale or other disposition of the Collateral is to be made, shall be deemed to be reasonable notice of such sale or other disposition.  If permitted by applicable law, any perishable inventory or Collateral which threatens to speedily decline in value or which is sold on a recognized market may be sold immediately by Lender without prior notice to Borrower.  Borrower covenants and agrees not to interfere with or impose any obstacle to Lender's exercise of its rights and remedies with respect to the Collateral, after the occurrence of an Event of Default hereunder.  Lender shall have no obligation to clean up or prepare the Collateral for sale.  If Lender sells any of the Collateral upon credit, Borrower will only be credited with payments actually made by the purchaser thereof, that are received by Lender.  Lender may, in connection with any sale of the Collateral specifically disclaim any warranties of title or the like.

Nature of Remedies.  All rights and remedies granted Lender hereunder and under the Loan Documents, or otherwise available at law or in equity, shall be deemed concurrent and cumulative, and not alternative remedies, and Lender may proceed with any number of remedies at the same time until all Obligations are satisfied in full.  The exercise of any one right or remedy shall not be deemed a waiver or release of any other right or remedy, and Lender, upon or at any time after the occurrence of an Event of Default, may proceed against Borrower, at any time, under any agreement, with any available remedy and in any order.  Set-Off.  If any bank account of Borrower with Lender or any participant is attached or otherwise liened or levied upon by any third party, Lender (and such participant) shall have and be deemed to have, without notice to Borrower, the immediate right of set-off and may apply the funds or amount thus set-off against any of Borrower's Obligations hereunder.Limitation on Remedies.Notwithstanding, anything else to the contrary contained herein, with respect to an Event of Default under Section 6.7 hereof, Lender agrees that it shall not be entitled to exercise its rights under Section 8.3(a) or 8.3(b), provided that, Lender is expressly permitted to take additional reserves against the Borrowing Base, or to impose the Default Rate on the Loan.  The foregoing limitation shall not apply if there shall have occurred any other Event of Default hereunder in which case Lender's right of action shall not be impaired.   Furthermore during such Event of Default nothing shall be deemed to limit Lender's right to pursue any action against any Guarantor.Notwithstanding any provision of Section 8.3(a) and (b), any exercise of the rights and remedies of Lender solely as it relates to the Loan and Borrower under Section 8.3(a) and (b) may be subject to the provisions of the Multi-Party Agreement.

MISCELLANEOUS

Governing Law.  THIS AGREEMENT, AND ALL RELATED AGREEMENTS AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE WHERE LENDER'S OFFICE IDENTIFIED IN SECTION 9.8 IS LOCATED.  THE PROVISIONS OF THIS AGREEMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.  Integrated Agreement.  The Note, the other Loan Documents, all related agreements, and this Agreement shall be construed as integrated and complementary of each other, and as augmenting and not restricting Lender's rights and remedies.  If, after applying the foregoing, an inconsistency still exists, the provisions of this Agreement shall constitute an amendment thereto and shall control.  Waiver.  No omission or delay by Lender in exercising any right or power under this Agreement or any related agreements and documents will impair such right or power or be construed to be a waiver of any Default, or Event of Default or an acquiescence therein, and any single or partial exercise of any such right or power will not preclude other or further exercise thereof or the exercise of any other right, and as to Borrower no waiver will be valid unless in writing and signed by Lender and then only to the extent specified. Indemnity.

Borrower releases and shall indemnify, defend and hold harmless Lender and its respective officers, employees and agents, of and from any claims, demands, liabilities, obligations, judgments, injuries, losses, damages and costs and expenses (including, without limitation, reasonable legal fees) resulting from (i) acts or conduct of Borrower under, pursuant or related to this Agreement and the other Loan Documents, (ii) Borrower's breach or violation of any representation, warranty, covenant or undertaking contained in this Agreement or the other Loan Documents, (iii) Borrower's failure to comply with any or all laws, statutes, ordinances, governmental rules, regulations or standards, whether federal, state or local, or court or administrative orders or decrees, (including without limitation Environmental Laws, etc.), and (iv) any claim by any other creditor of Borrower against Lender arising out of any transaction whether hereunder or in any way related to  the Loan Documents and all costs, expenses, fines, penalties or other damages resulting there from, unless resulting solely from acts or conduct of Lender constituting willful misconduct or gross negligence. 

Promptly after receipt by an indemnified party under subsection (a) above of notice of the commencement of any action by a third party, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof.  The omission so to notify the indemnifying party shall relieve the indemnifying party from any liability which it may have to any indemnified party under such subsection only if the indemnifying party is unable to defend such actions as a result of such failure to so notify.  In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnified party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  Time.  Whenever Borrower shall be required to make any payment, or perform any act, on a day which is not a Business Day, such payment may be made, or such act may be performed, on the next succeeding Business Day.  Time is of the essence in Borrower's performance under all provisions of this Agreement and all related agreements and documents.  Expenses of Lender.  At the Closing and from time to time thereafter, Borrower will pay within five (5) Business Days of receipt of written demand of Lender all reasonable costs, fees and expenses of Lender in connection with (i) the analysis, negotiation, preparation, execution, administration, delivery and termination of this Agreement, and other Loan Documents and the documents and instruments referred to herein and therein, and any amendment, amendment and restatement, supplement, waiver or consent relating hereto or thereto, whether or not any such amendment, amendment and restatement, supplement, waiver or consent is executed or becomes effective, search costs, the reasonable fees, expenses and disbursements of counsel for Lender, any fees or expenses incurred by Lender under Section 6.10 for which Borrower are obligated thereunder, and reasonable charges of any expert consultant to Lender, (ii) the enforcement of Lender's rights hereunder, or the collection of any payments owing from, Borrower under this Agreement and/or the other Loan Documents or the protection, preservation or defense of the rights of Lender hereunder and under the other Loan Documents, and (iii) any refinancing or restructuring of the credit arrangements provided under this Agreement and other Loan Documents in the nature of a "work-out" or arising in connection with any insolvency or bankruptcy proceedings (including any action Lender deems necessary to protect its interest in such proceedings, or otherwise (including the reasonable fees and disbursements of counsel for Lender and, with respect to clauses (ii) and (iii), reasonable allocated costs of internal counsel) (collectively, the "Expenses");Brokerage.  This transaction was brought about and entered into by Lender and Borrower acting as principals and without any brokers, agents or finders being the effective procuring cause hereof.  Borrower represents that it has not committed Lender to the payment of any brokerage fee, commission or charge in connection with this transaction.  If any such claim is made on Lender by any broker, finder or agent or other person alleging that it is based on actions of Borrower, a Guarantor or any affiliate, officer director or employee of either of them, Borrower hereby indemnifies, defends and saves such party harmless against such claim and further will defend, with counsel satisfactory to Lender, any action or actions to recover on such claim, at Borrower's own cost and expense, including such party's reasonable counsel fees.  Borrower further agree that until any such claim or demand is adjudicated in such party's favor, the amount demanded shall be deemed an Obligation of Borrower under this Agreement.  Notices.  

Any notices or consents required or permitted by this Agreement shall be in writing and shall be deemed given if delivered in person to the person listed below or by nationally recognized overnight courier, as follows, unless such address is changed by written notice hereunder: 

If to Lender to:Capital One, N.A.,
1001 Avenue of the Americas New York, NY  10018Attention:  Brian Talty      Senior Vice President

With a copy to Bank Counsel:Troutman Sanders LLP
405 Lexington AvenueNew York, NY  10174Attention:  William D. Freedman, Esq. 

If to Borrower to:Newtek Small Business Finance, Inc.
1440 Broadway, 17th FloorNew York, NY  10018

Attention:  Peter Downs, President  

With a copy to Borrower Counsel:Legal Department
Newtek Business Services, Inc.1440 Broadway, 17th floorNew York, NY  10018

Any notice sent by Lender, or Borrower by any of the above methods shall be deemed to be given when so received.  Failure to send a copy to counsel shall not invalidate any notice otherwise properly given.

All parties  shall be fully entitled to rely upon any telecopy transmission or other writing purported to be sent by any Authorized Officer (whether requesting an Advance or otherwise) as being genuine and authorized.

Headings.  The headings of any paragraph or Section of this Agreement are for convenience only and shall not be used to interpret any provision of this Agreement. Survival.  All warranties, representations, and covenants made by Borrower herein, or in any agreement referred to herein or on any certificate, document or other instrument delivered by it or on its behalf under this Agreement, shall be considered to have been relied upon by Lender, and shall survive the delivery to Lender of the Notes, regardless of any investigation made by Lender or on its behalf.  All statements in any such certificate or other instrument prepared and/or delivered for the benefit of Lender shall constitute warranties and representations by Borrower hereunder.  Except as otherwise expressly provided herein, all covenants made by Borrower hereunder or under any other agreement or instrument shall be deemed continuing until all Obligations are satisfied in full.  All indemnification obligations under this Agreement, including under Section 6.4, 9.4 and 9.7, shall survive the termination of this Agreement and payment of the Obligations for a period of two (2) years.Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties.  Borrower may not transfer, assign or delegate any of its duties or obligations hereunder.  Borrower acknowledges and agrees that Lender may at any time, and from time to time, (a) sell participating interests in the Loan, and Lender's rights hereunder to other financial institutions, and (b) sell, transfer, or assign the Loan and Lender's rights hereunder, to any one or more additional banks or financial institutions, subject (as to Lender's rights under this clause (b)) to Borrower's written consent, which consent shall not be unreasonably withheld; provided that, no consent under this clause (b) shall be required if an Event of Default exists at the time of such sale, transfer or assignment.Duplicate Originals.  Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument.  Modification.  No modification hereof or any agreement referred to herein shall be binding or enforceable unless in writing and signed by both Borrower and Lender.Signatories.  Each individual signatory hereto represents and warrants that he is duly authorized to execute this Agreement on behalf of his principal and that he executes the Agreement in such capacity and not as a party. Third Parties.  No rights are intended to be created hereunder, or under any related agreements or documents for the benefit of any third party donee, creditor or incidental beneficiary of Borrower.  Nothing contained in this Agreement shall be construed as a delegation to Lender of Borrower's duty of performance, including, without limitation, Borrower's duties under any account or contract with any other Person. Discharge of Taxes, Borrower's Obligations, Etc..  Lender, in its sole discretion, shall have the right at any time, and from time to time, with at least ten (10) days prior notice to Borrower if Borrower fail to do so, to: (a) pay for the performance of any of Borrower's obligations hereunder, and (b) discharge taxes or Liens, at any time levied or placed on Borrower's Property in violation of this Agreement unless Borrower is in good faith with due diligence by appropriate proceedings contesting such taxes or Liens and maintaining proper reserves therefor in accordance with GAAP.  Expenses and advances shall be added to the Loan, and bear interest at the rate applicable to the Loan, until reimbursed to Lender.  Such payments and advances made by Lender shall not be construed as a waiver by Lender of a Default or Event of Default under this Agreement.  Withholding and Other Tax Liabilities.  In the event that any Lien, assessment or tax liability against Borrower shall arise in favor of any taxing authority, whether or not notice thereof shall be filed or recorded as may be required by law, Lender shall have the right (but shall not be obligated, nor shall Lender hereby assume the duty) to pay any such Lien, assessment or tax liability by virtue of which such charge shall have arisen; provided, however, that Lender shall not pay any such tax, assessment or Lien if the amount, applicability or validity thereof is being contested in good faith and by appropriate proceedings by Borrower.  In order to pay any such Lien, assessment or tax liability, Lender shall not be obliged to wait until such lien, assessment or tax liability is filed before taking such action as hereinabove set forth.  Any sum or sums which Lender shall have paid for the discharge of any such Lien shall be added to the Loan and shall be paid by Borrower to Lender with interest thereon at the rate applicable to the Loan, upon demand, and Lender shall be subrogated to all rights of such taxing authority against Borrower. Consent to Jurisdiction.  Borrower and Lender each hereby irrevocably consent to the non-exclusive jurisdiction of the Courts of the state where Lender's office identified in Section 9.8 is located or the United States District Court for the state where Lender's office identified in Section 9.8 is located in any and all actions and proceedings whether arising hereunder or under any other agreement or undertaking.  Borrower waives any objection which Borrower may have based upon lack of personal jurisdiction, improper venue or forum non conveniens.  Borrower irrevocably agrees to service of process by certified mail, return receipt requested to the address of the appropriate party set forth herein.Additional Documentation.  Borrower shall execute and/or re-execute, and cause any Guarantor or other Person party to any Loan Document, to execute and/or re-execute and to deliver to Lender or Lender's counsel, as may be deemed appropriate, any document or instrument signed in connection with this Agreement which reflects manifest error in its drafting or incorrectly drafted and/or signed, as well as any document or instrument which should have been signed at or prior to the Closing, but which was not so signed and delivered.  Borrower agrees to comply with any written request by Lender within ten (10) days after receipt by Borrower of such request.Advertisement.Lender, in its sole discretion, shall have the right to announce and publicize the financing established hereunder, as it deems appropriate, by means and media selected by Lender.  Such publication shall include all pertinent information relating to such financing, including without limitation, the term, purpose, pricing, loan amount, and name of Borrower.The form and content of the published information shall be in the sole discretion of Lender and shall be considered the sole and exclusive property of Lender.  All expenses related to publicizing the financing shall be the sole responsibility of Lender.Waiver of Jury Trial.  BORROWER AND LENDER EACH HEREBY WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION, AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.Consequential Damages.  Neither Lender nor agent or attorney of Lender, shall be liable for any consequential damages arising from any breach of contract, tort or other wrong relating to the establishment, administration or collection of the Obligations.Inconsistency with Term Loan Documents.  In the event of any inconsistency between the terms and conditions of this Agreement and the Loan Documents, on the one hand, and the terms and conditions of the Term Loan Agreement and the other Term Loan Documents, on the other hand, the terms and conditions of this Agreement and the Loan Documents shall govern.     USA Patriot Act.  Lender hereby notifies Borrower that pursuant to the requirements of USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act"), it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the Act.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the undersigned parties have executed this Agreement the day and year first above written.

NEWTEK SMALL BUSINESS FINANCE, INC.By:/s/Name:  Peter Downs Title:  PresidentCAPITAL ONE, N.A.,By:/s/Name: Brian Talty Title:  Senior Vice President

 

 

SCHEDULE ADEFINITION OF INELIGIBLE FINANCED SBA LOANS

The term "Ineligible Financed SBA Loans" means the portion of each SBA 7(a) Loan that is actually guaranteed by the SBA as to which any of the exclusionary criteria set forth below applies; provided, however, that Lender reserves the right, at any time and from time to time after the Closing Date, to adjust any of the criteria set forth below and to establish new criteria with respect to Eligible SBA 7(a) Loans, in its reasonable credit judgment; provided, further, however, that Lender shall provide twenty-five (25) days prior written notice to Borrower with respect to any adjustment of existing criteria or establishment of new criteria that would have the effect of reducing the availability of Advances to Borrower.Ineligible Financed SBA Loans are SBA 7(a) Loans: 

as to which all conditions precedent to the effectiveness of the SBA guaranty with respect to the applicable SBA 7(a) Loan have not been met;with respect to which the applicable SBA 7(a) Loan does not conform to all requirements of the SBA applicable to the initial approval and guaranty by the SBA thereof;with respect to which the applicable SBA 7(a) Loan, SBA 7(a) Loan Notes or SBA 7(a) Note Receivable Documents do not comply in all material respects with applicable Laws;with respect to which an event or condition has occurred that would release the SBA from its obligations to Borrower with respect to the applicable SBA 7(a) Loan, or the SBA has rejected the applicable SBA 7(a) Loan or the applicable SBA 7(a) Note Receivable Documents in any respect, or an event pursuant to which the SBA has reduced the amount of its guarantee of any of the foregoing (but in such event only to the extent of such reduction);with respect to which the applicable SBA 7(a) Loan was not originated by the Borrower;with respect to which the applicable SBA 7(a) Loan does not conform in all material respects to Borrower's written credit and underwriting guidelines, as in effect on the date the applicable SBA 7(a) Loan was underwritten, copies of which have been previously delivered to Lender;to the extent that the outstanding principal amount of any SBA 7(a) Guaranteed Note Receivable exceeded the maximum amount permitted by the SBA Act at the time the applicable SBA 7(a) Loan was underwritten;to the extent that the aggregate outstanding principal amount of both the SBA 7(a) Guaranteed Note Receivable portion and the SBA 7(a) Non-Guaranteed Note Receivable portion of the same SBA 7(a) Loan exceeded the maximum amount permitted by the SBA Act at the time the applicable SBA 7(a) Loan was underwritten, to the extent of such excess;with respect to which the applicable SBA 7(a) Loan Obligor is the subject of an insolvency proceeding or a case commenced under the Bankruptcy Code;to the extent that the subject SBA 7(a) Note Receivable has been sold pursuant to a Note Participation;with respect to which the applicable SBA 7(a) Loan does not conform in all material respects to forms provided by the SBA;with respect to which the applicable SBA 7(a) Loan is made to an employee, officer, agent, director, stockholder, or Affiliate of Borrower or any Affiliate of any thereof;with respect to which the applicable SBA 7(a) Loan has been turned over to the SBA or any other Person for servicing or collection;with respect to which the applicable SBA 7(a) Loan and the respective rights of the SBA, Lender, Borrower, and FTA with respect thereto are not subject to the terms of the Multi-Party Agreement or such other agreement with SBA and Borrower that Lender, in its sole discretion, deems acceptable;as to which any of the representations or warranties in the Loan Documents with respect to the SBA 7(a) Loan are untrue; or that is otherwise unacceptable to Lender in its reasonable credit judgment.

PAGE  ii

Exhibit 10.18.1

 

 

 

 

 

PAGE  2

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