ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

Exhibit 10.6

***CONFIDENTIAL TREATMENT REQUESTED – CONFIDENTIAL PORTIONS

OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN

SEPARATELY FILED WITH THE COMMISSION***

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

Dated as of March 26, 2007

by and between

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

as Owner

PowerLight Systems S.A.,

as Contractor

and

Solarpack Corporación Tecnológica, S.L.

 

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TABLE OF CONTENTS

 

 

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ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

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

RECITALS:

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

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

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

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

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

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

 

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

 

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

AGREEMENT:

1. Definitions.

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

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

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

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

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

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

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

 

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(a)

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

 

(b)

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

 

(c)

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

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

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

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

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

“***”

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

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

 

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

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

“Effective Date” shall mean March 20, 2007.

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

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

“Euro” shall mean the lawful currency of Spain.

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

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

 

(a)

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

 

(b)

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

 

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

 

(c)

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

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

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

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

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

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

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

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

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

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

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