HomeMy WebLinkAboutStaff Report 7213
City of Palo Alto (ID # 7213)
City Council Staff Report
Report Type: Action Items Meeting Date: 9/26/2016
City of Palo Alto Page 1
Summary Title: City Garages Solar Projects
Title: Review and Direction Regarding Interpretation of Planned Community
(PC) Ordinances Governing Three of the Four City Parking Garages Proposed
for Rooftop Solar Installations at 445 Bryant Street, 520 Webster Street, and
275 Cambridge Avenue and Regarding the Architectural Review Procedure for
the Three PC Zoned Garages and the Fourth Parking Garage at 475 Cambridge
Which is Zoned Public Facilities (PF), Including a Finding that the Project is
Exempt from Review Under the California Environmental Quality Act (CEQA)
From: City Manager
Lead Department: Planning and Community Environment
Recommendation:
Staff recommends that the City Council make the following determinations with regard to three
of the four City-owned garages proposed for installation of rooftop solar panels:
1. The installation of structural canopies to support solar panels will be consistent with the
Planned Community (PC) Ordinances and approved development plans for three City
garages located at 445 Bryant Street, 520 Webster Street, and 275 Cambridge, such that
no amendments are needed to these PC ordinances, and
2. The PC Ordinances for 445 Bryant Street and 520 Webster Street do not need to be
modified to allow structural canopies to exceed the 50 foot high limit.
The fourth City-owned garage proposed for installation of rooftop solar panels at 475
Cambridge Avenue is zoned Public Facilities (PF) which allows “all facilities owned or leased,
and operated or used by the City of Palo Alto...” and thus does not require a determination by
the City Council. However, staff recommends that the City Council also concur that:
3. The proposed support structures for the photovoltaic panels at all four sites may be
considered “minor” projects subject to staff level Architectural Review in accordance
with Palo Alto Municipal Code (PAMC) Section 18.76.020.
City of Palo Alto Page 2
Staff also recommends that the City Council find that:
4. The recommended actions are exempt from review under the California Environmental
Quality Act (CEQA) because Section 21080.35 of the California Public Resources Code
specifies that CEQA does not apply to the installation of a solar energy system on the
roof of an existing building or at an existing parking lot; and because the installation of
EV Chargers is categorically exempt pursuant to CEQA Guidelines Section 15303
(construction and location of limited numbers of new, small facilities and structures)
and CEQA Guidelines Section 15301 (existing facilities).
Executive Summary:
The requested action asks the City Council to interpret previously adopted ordinances,
balancing sustainability and design review objectives.
The Clean Local Energy Accessible Now (Palo Alto CLEAN) program is part of the City’s effort to
enhance the electric utility’s supply reliability by providing 3MW of local solar generation
through long-term feed-in tariff agreements. This complements other local solar programs
such as net energy metering. Following an RFP process and lease negotiation, Council approved
(on consent calendar) a 25-year lease agreement with Komuna Palo Alto LLC to install photo-
voltaic panels, electric vehicle (EV) charging systems and infrastructure for additional future EV
charging systems on four City-owned public parking garages. Since the execution of the lease,
the City has secured a grant in the amount of $240,000 to provide 40 future EV chargers
leveraging the electrical infrastructure to be installed under the terms of the lease. As
envisioned in the lease, Komuna submitted applications to the CLEAN program, and CLEAN
program power purchase agreements were executed for each of the four garages in March
2016. Consistent with the lease agreement, Komuna has filed applications for architecture
review and has concurrently filed applications for building permits.
Two of the affected garages are located downtown (520 Webster Street and 445 Bryant Street)
and are zoned Planned Community (PC). The installations on those garages would exceed the
50 foot height limit. The two other affected garages are located in the California Avenue
shopping district; one garage site is zoned PC and the other garage site is zoned Public Facility
(PF). The applicant’s project descriptions and the three operable PC ordinances are attached to
this report.
Staff is seeking Council’s agreement that the proposed structural canopies supporting the solar
panels are consistent with the PC Ordinances for the three properties identified above and that
the equipment may extend above the 50 foot height limit. Staff is also seeking the Council’s
concurrence that minor, staff level, architectural review is appropriate for all four pending
rooftop solar projects.
Background:
The timeline of events for these projects is as follows:
City of Palo Alto Page 3
An RFP was released on March 25, 2014 to solicit proposals for installation of solar
canopies and electric vehicle chargers on City garages. The RFP noted that proposed
facilities were subject to review by the Architectural Review Board and that design
enhancement exceptions might be required where applicable 50 feet height limits were
exceeded.
Council approved the lease agreement with Komuna on January 25, 2016; the staff
report viewable at: http://www.cityofpaloalto.org/civicax/filebank/documents/50612.
Bay Area Air Quality Management District approved the City’s $240,000 Charge! Grant
application was approved in May 2016 to provide a total of 40 new Level 2 electric
vehicle chargers on the four garages. The new chargers will utilize electrical
infrastructure that will be installed by Komuna under the terms of its lease.
Applications for design review were submitted as follows:
o 445 Bryant Street on June 7, 2016
o 520 Webster and 475 Cambridge on July 15, 2016
o 275 Cambridge on August 8, 2016.
Council Approved Lease
The Council-approved, 25-year lease agreement (Attachment A) with Komuna Palo Alto LLC is
for annual lease payments of $20,000 by Komuna to the City (i.e. $5,000 per garage) to:
(1) construct and operate solar photovoltaic (PV) systems on four garages, with
participation in the Palo Alto Clean Local Energy Accessible Now (CLEAN) program; and
(2) install three double-headed Level 2 Electric Vehicle (EV) Chargers and electrical
infrastructure to support an additional 20 future Level 2 EV Chargers in each of the four
garages.
Based on the City Council’s earlier direction, the lease income will be directed to the Utilities
Electric Fund to offset the cost of the CLEAN program. Installations of solar PV systems and EV
chargers and infrastructure are proposed on garages at locations noted below. The staff report
at the above link contained the below paragraph regarding planning entitlements:
“Design/Planning Review. According to terms and conditions of the Lease Agreement,
Komuna is responsible for obtaining all approvals and permits as part of the planning
entitlement and building permit process. In discussions with Planning staff it is
anticipated that the solar installations will require architectural review. The one percent
for art requirement was discussed during RFP development and staff determined the
requirement did not apply to this project as it is electrical equipment on top of a
building.”
The lease was executed on February 8, 2016_ and requires Komuna to complete installation of
the PV systems and EV chargers and infrastructure by March 28, 2017 If the length of the
permitting process makes this schedule infeasible, staff may return to Council with an
appropriate amendment to the lease.
City of Palo Alto Page 4
Planned Community Zone Uses
Three of the project sites are zoned Planned Community (PC). Ordinances for each of the PC
properties are attached as Attachments D, E and F. Pursuant to PAMC Chapter 18.38, a PC
amendment would be required for any use not listed as permitted or conditionally permitted or
for significant modifications to the approved development plan. This raises the question
whether the proposed facilities constitute a new use or a significant modification to the earlier
approval. The PC District regulations are attached (Attachment H).
The PC ordinances associated with these existing garages were established decades ago and did
not appear to anticipate the subject request to construct solar panels on the rooftop. While the
solar panels are permitted by state law, the request to construct the supporting structures is
subject to design review. The support structures must also be consistent with the applicable PC
ordinances. The development plans approved with the subject PC ordinances establish building
heights of approximately 50 feet for the structures at 520 Webster and 445 Bryant. The
proposed solar support structures on those two downtown sites would exceed the height
approved in the original development plan, and would exceed the City’s 50-foot height limit.
those two downtown garages The proposed solar support structures on the two Cambridge
sites would not exceed the height limit.
Staff is seeking Council’s determination that the proposed structural supports are consistent
with the previously approved PC ordinances and associated development plans. In other words,
staff is seeking the City Council’s agreement that the addition of the support structures for solar
panels does not constitute a new land use in conflict with the PC ordinances, and that the
structures are akin to other building features, such as chimneys, elevator equipment, exhaust
fans, cooling towers, and antennas, which the City’s Municipal Code states may exceed the
height limit by up to 15 feet. While the proposed rooftop structures are noticeably larger than
the building features described above in that they cover all or most of the parking structure top
floors, this exception combined with the city’s interest in advancing solar energy opportunities
provide a path forward to determine the proposals consistent with the PC ordinances.
If amendments to the PC ordinances are required, at least three hearings would be required
before the City Council and Planning and Transportation Commission, which would take about
six months to complete. Such an amendment is a cost recovery application and it is anticipated
that Komuna Palo Alto LLC would be expected to pay this fee. Staff understands that the
additional costs and time could jeopardize the project.
Public Facility Zone Permitted Uses
475 Cambridge Avenue is zoned Public Facilities (PF). The city’s zoning code (PAMC Section
18.28.040) allows as a permitted use “All facilities owned or leased, and operated or used, by
the City of Palo Alto....” Staff has not identified any concerns with the use of property
associated with this application. The use is permitted in the PF zone and the structure would
be below 50 feet.
City of Palo Alto Page 5
Minor Architectural Review
PAMC 18.76.020 item (2) requires Board level Architectural Review for:
new construction that requires one or more variances or use permits and in the
judgment of the Director will have a significant effect upon the aesthetic character of
the city or surrounding area,
any minor project that the Director determines will significantly alter the character or
appearance of a building or site.
The requested solar installation projects can be considered minor under PAMC 18.76.020 item
(3)(E)(ii), ‘Minor changes to a previously approved PC district development plan,’ only if the PCE
Director (or Council) determines these changes are minor. Under Section 18.76.020 (3)(E), the
term ‘minor’ is defined as “a change that is of little visual significance and does not materially
alter the appearance of previously approved improvements, is not proposed for the use of the
land in question, and does not alter the character of the structure involved. If the cumulative
effect of multiple minor changes would result in a major change, a new application for
Architectural Review approval of a major project, PC or other applicable approval is required.”
The solar panels are not subject to design review, only the support structures, consistent with
state law. Staff anticipates reviewing and processing all of the architectural review applications
as ‘minor’ projects. A request for hearing can be made for minor projects approved by the
Director, which would be reviewed by the Architectural Review Board; a decision following ARB
can be appealed to Council. Staff is seeking the City Council’s concurrence that the subject
applications can be processed consistent with the process for “minor” architectural review.
The electronic plan sets are found on ‘Building Eye’ available via the City’s website at
https://paloalto.buildingeye.com/planning
275 Cambridge Avenue (PC-4127) Before/After Images:
City of Palo Alto Page 6
Existing Proposed
275 Cambridge, Section:
475 Cambridge (not a PC) Before/After Images:
475 Cambridge, a Section:
City of Palo Alto Page 7
520 Webster Street (PC-3499) Before/After Images (from Cowper then Webster):
520 Webster Street, a Section:
445 Bryant Street (PC-4611) Before/After Images (from Florence then Bryant):
City of Palo Alto Page 8
445 Bryant Street, a Section:
Policy Implications:
The Council report of January 25, 2016 (MT 6535) noted, ‘Entering into a new lease agreement
is consistent with policies and programs in the Comprehensive Plan promoting smart energy
development and City and private sector collaboration for effective development of alternative
clean and sustainable energy programs.” If the projects do not advance, the City will miss an
City of Palo Alto Page 9
opportunity to obtain 1.3 MW toward its Palo Alto CLEAN program goal of supplying 3 MW of
its electric portfolio with local solar generation to enhance supply reliability. Since inception of
Palo Alto CLEAN in 2012, only one other application has been received – a 129 kW project also
developed by Komuna. The question before the Council this evening relates to the
compatibility of this policy objective (sustainable energy) as implemented, with other policy
objectives related to context based design and neighborhood character.
Resource Impact:
There are no significant fiscal or budget impacts associated with recommended action.
However, if there is direction to proceed with PC Ordinance amendments, there is some
concern that the project may not be able to meet its timing commitments, which may result in
termination of the lease agreement with the vendor. If the lease is terminated, funding by the
capital fund, estimated at approximately $300,000 for the electrical infrastructure
improvements would be required if the City wished to continue to pursue the grant funding
received for the EV charger installation.
Environmental Review:
No environmental review process is required for code interpretations. Approval of the Lease
Agreement did not require review under the California Environmental Quality Act: (1) for the
solar PV facilities, because section 21080.35 of the California Public Resources Code specifies
that CEQA does not apply to the installation of a solar energy system on the roof of an existing
building or at an existing parking lot; and (2) for the installation of EV Chargers, which is
categorically exempt pursuant to CEQA Guidelines section 15303 (construction and location of
limited numbers of new, small facilities and structures) and CEQA Guidelines section 15301
(existing facilities).
Attachments:
Attachment A - Komuna Lease Agreement (PDF)
Attachment B: Merged Project Descriptions (DOCX)
Attachment C: Project Plans (Councilmembers Only) (DOCX)
Attachment D: 520 Webster Ordinance PC 3499 (PDF)
Attachment E: 445 Bryant Ordinance PC4611 (PDF)
Attachment F: 275 Cambridge Ordinance PC4127 (PDF)
Attachment G: AR findings Ordinance for Council Review 9 12 19 (PDF)
Attachment H: Planned Community Chapter 18.38 (PDF)
Attachment I: 3 PC Garages "As Builts" (PDF)
Attachment J: PAMC Chapter 18.80 Zoning Adjustments (PDF)
City of Palo Alto (ID # 6535)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 1/25/2016
City of Palo Alto Page 1
Summary Title: Lease Agreement with Komuna Energy
Title: Approve and Authorize the City Manager or His Designee to Execute a
25-year Lease Agreement with Annual Lease Payments of $20,000 between
the City and Komuna Palo Alto LLC Covering Four City-Owned Parking
Structures for: (1) Construction and Operation of Solar Photovoltaic Systems,
with the Potential to be a Palo Alto Clean Local Energy Accessible Now
(CLEAN) Program Participant; and (2) Installation of City-Owned Electric
Vehicle Chargers and Infrastructure.
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council:
Approve and Authorize the City Manager or his designee to execute a 25-
year Lease Agreement (Attachment A) between the City of Palo Alto and
Komuna Palo Alto LLC (Komuna) with an annual lease payment of $20,000
covering portions of four city-owned parking structures located at 445
Bryant Street, 520 Webster Street, 475 Cambridge Avenue and 275
Cambridge Avenue in order for Komuna to: (1) Construct and operate solar
photovoltaic (PV) systems, with the potential to be a Palo Alto CLEAN
Program applicant; and (2) install City-owned Electric Vehicle (EV) Chargers
and infrastructure; and
Delegate authority to the City Manager or his designee to execute on
behalf of the City, any documents that are ministerial in nature or are
otherwise necessary to administer the Lease Agreement that are consistent
with the Palo Alto Municipal Code and City Council approved policies.
City of Palo Alto Page 2
Background
On March 25, 2014, the Public Works Department issued a Request for Proposals
(RFP) for the installation and operation of solar PV facilities at one or more of the
five city-owned parking structures. These solar PV facilities will provide local solar
electric power generation that will be purchased by the City and contribute to its
renewable portfolio needs. In addition, the RFP was structured to solicit
proposals from vendors that would be eligible for participation in the Council-
approved Palo Alto CLEAN Program.
The Palo Alto CLEAN program offers payment for the electricity generated from
Palo Alto solar PV installations where the electricity is not used on site, but is sold
to City of Palo Alto Utilities (CPAU) under the Palo Alto CLEAN Program Power
Purchase Agreement (CLEAN PPA). The CLEAN PPA establishes a fixed price per
unit of electricity delivered to the Palo Alto electric grid over a 20- or 25-year
term.
The current CLEAN Program rate is 16.5¢/kWh over the term of the CLEAN PPA.
In May 2015, Council considered recommendations from the Finance Committee
(Staff Report 5849) to reduce the CLEAN Program price for solar resources (from
16.5¢/kWh to 10.3¢/kWh or 10.4 ¢/kWh, depending on contract term length).
Council was informed that such a reduction could have implications for this
project. On May 27, 2015, Council voted, amongst other things, to continue the
CLEAN program for solar at the cost of 16.5 ¢/kWh for 3 MW as previously
approved by the Council; and to direct lease income on City owned garages from
the CLEAN program to Utilities to offset costs of the program to electric
ratepayers (Staff report 5849; Action Minutes). One important consideration in
Council’s decision to maintain the contract rate of $0.165/kWh for solar
resources, rather than reducing it to the avoided cost level as the Finance
Committee advocated, was the expectation that the Public Works Department
would soon be executing the Lease Agreement now being presented to Council
for Komuna to develop a group of solar facilities (totaling about 1.3 MW of
capacity) atop several downtown parking garages that would participate in the
CLEAN program.
Staff from Community Services, Planning and Community Environment, Public
Works, Utilities and Administrative Services Real Estate Division worked to review
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city-owned sites for their suitability for PV installation based on solar access,
property access, future redevelopment plans and historical status. Staff
concluded the parking garages have good potential for one of the first Palo Alto
CLEAN projects on city-owned sites. The solar installations would provide shade
to the top floor of each garage. The non-profit organization, Clean Coalition, was
engaged to draft an RFP to solicit proposals for installing PV systems on the city-
owned garages.
The five City-owned parking structures listed below were originally included in the
RFP to be considered for the PV installation:
Lot R – 528 High Street
Lot S/L – 445 Bryant Street
Cowper/Webster – 520 Webster Street
Cambridge – 475 Cambridge Avenue
Ted Thompson – 275 Cambridge Avenue
The RFP requested proposals to install PV systems at up to five of the city-owned
parking structures and an option to propose the installation of EV chargers at
each location as well.
On June 3, 2014, three proposals were received from Pristine Sun, THINKnrg (now
Komuna) and AltaM Energy. Proposals were reviewed by staff from Public Works,
ASD and Utilities Departments as well as consultants from Clean Coalition. The
proposals were evaluated by quantitative and qualitative factors including PV
system design and aesthetics, PV system output and the financial terms of the
lease agreement. All three companies were interviewed and Pristine Sun was
unanimously selected based on their substantial lease payment, strong project
team and history with PV projects. The other two proposals included a
significantly reduced lease payment. Negotiations began with Prisitine Sun in
early 2015. However, City and Pristine Sun were unable to structure an
agreement. The City ceased negotiations with Pristine Sun and ultimately
rejected the vendor’s proposal in June 2015 (Staff Report 5876).
Discussion
In July 2015, staff began negotiations with Komuna (formally THINKnrg). Komuna
was rated second in the RFP responses, mainly due to the reduced rent payment
City of Palo Alto Page 4
compared to the first proposer. The City was able to negotiate a higher rent
payment than previously proposed with a 25-year, rather than 20-year, PPA term
and solar installations on only four of the five parking garage rooftops. No PV
systems will be installed at Lot R parking garage located at 528 High Street due to
the high cost to develop that particular parking structure. Once the Lease is
approved, Komuna will have site control, which is required in order to submit an
application for the CLEAN Program. At that point, Komuna will apply to the
CLEAN Program to process a PPA. The estimated design size of the generating
facility is 1.3 MW, or 43 percent of the CLEAN program capacity. The final system
size is contingent upon approval of Building Permit/Plan Check review.
Summary of Key Lease Terms
Lease Term 25 years, no option to extend
Solar Project Size 1.3 MW, approximately 43% of the CLEAN Program’s
capacity
Location 4 (rather than the original 5) City Garages located in
downtown Palo Alto and near California Avenue
Rental Payments $20,000 annually for all four garages, $5,000 per garage.
No payment escalator
Buyout Option Available at years 10, 15, 20 and 25 for fair market value
Security $25,000 in more conventional security deposit that
can be used for failure to pay rent, clean property; and
Completion assurance (e.g. bond, letter of credit) at
estimated cost of construction, that City is authorized
to draw on to guarantee performance of all covenants
and conditions.
Parking Impacts
and Mitigation
Komuna starts paying rent at when the construction
commences, continuing through operational period. If
construction is delayed, in addition, liquidated
damages apply on a lump sum basis, per garage and
range from $632-$1,820 per garage, per day.
Komuna compensates City for permanent loss of
parking – which cannot exceed two spaces lost per
garage – at the City’s in lieu fee in effect at the time.
EV Chargers City to own, operate; prevailing wage requirement
included
City of Palo Alto Page 5
Developer to construct six total EV chargers (3 dual
head chargers) in three garages; install wiring for
additional twenty chargers (ten dual head chargers) in
all four garages
Next Steps If Lease Agreement approved, Komuna will have site
control and be eligible to apply for CLEAN Program
Lease Payments and Electric Vehicle Chargers
The Lease Agreement includes a total annual payment of $20,000 for the four
parking garages, or $5,000 per garage.
Based on the City Council’s direction, the lease income will be directed to the
Utilities Electric Fund to offset the cost of the CLEAN program. (Staff report 5849;
Action Minutes) This will reduce the amount by which the CLEAN program rate
exceeds the current avoided cost of solar electricity. The current CLEAN program
rate is 16.5 ¢/kWh. Successful applicants to the CLEAN Program secure this
higher rate for the term of their project, even if Council later reduces the rate.
The avoided cost of solar electricity, which is falling, is discussed in more detail in
Staff Report 5849.
Although the lease terms include lower rent than was discussed during
negotiations with the first proposer, the Lease requires installation of 18 new
Level 2 EV chargers (3 dual head chargers in three garages) and electrical
infrastructure to support an additional 80 future new Level 2 chargers (ten dual
head in all four garages). These chargers will be owned, operated and maintained
by the City.
The EV chargers and infrastructure, as well as the generating facilities, provide
value and notable benefits to the City, beyond rental revenue alone. It is difficult
to lease or use the area above the top floor in a parking garage. Here, lease of the
parking garages enables the City to use that area for which it would otherwise not
have a use, while simultaneously improving upon them in several ways. The solar
array provides shade amenities to the top level of the parking garages, which
benefit the parking district. In addition, there is community value associated with
having more EV chargers and installation of infrastructure for even more in the
future available in the City. Though use of EV chargers is currently free, the Policy
and Services Committee is expected to soon consider options for changing the
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City’s current policy of free use of EV chargers. Changes to EV charging policy may
result in additional revenues to the City related to the Lease. In addition, the
Lease is consistent with the City’s policy goals of developing local solar generation
facilities.
Buyout and System Ownership
Komuna would install and maintain the generating facilities for a term beginning
with the Lease execution and ending twenty-five years after commencement of
commercial operation of all the generating facilities. At the end of the twenty-
five year term, Komuna is required to remove the generating facilities and restore
the parking structure to the original condition. Komuna is required to post a $25K
security deposit which covers failure to pay rent, to repair damages caused by
Komuna’s acts or omissions, or expenses to clean the property upon end of the
term. In addition, Komuna must post security based on the estimated cost of
construction or $3.05 per watt. The City can draw on this completion assurance
to guarantee Komuna’s full performance of all Lease obligations.
The City has the option to buy-out one or more of the generating facilities at the
10, 15, 20 or 25 year anniversary date. If the City exercises the buy-out option,
the City will pay Komuna the fair market value of the generating facility or
facilities as determined by a third party appraiser.
Public Purpose Taking, Property Transfer and Default
The City has the right to take any or all of the properties for any public purpose at
any time during the term of the Lease. If the City takes a property for any public
purpose, the City can choose between finding an alternative City-owned site
which has substantially similar insolation and access to the grid as the existing
property or paying a termination payment (Termination Payment). If the City
finds a new site, the City will pay for the reasonable costs of removal and
reinstallation, and will reimburse Komuna for any production revenues lost in
excess of ten days. If the City does not locate an alternate site, the amount of the
Termination Payment owed is set forth as a specific lump sum amount in
Schedule 23.2 of Attachment A. The Termination Payment is different for each
generating facility and decreases each year over the term. Schedule 23.2 of
Attachment A describes the Termination Payment in detail, which is generally
near $1MM for an individual facility in year 1 and decreases to between $45K to
$81K in year 25.
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The City also has the ability to transfer any or all of the properties at any time
during the term. If the City is no longer the lessor on the property, the City would
pay Komuna the Termination Payment, unless the new lessor has reasonably
acceptable credit or the City provides reasonably acceptable credit support.
The Lease also provides that if the City defaults under the Lease, then the City will
pay a Termination Payment to Komuna. For a default to occur, the City would
need to undergo a bankruptcy-type event or to materially breach a material term
of the Lease after a 30-day cure period. An administrative or operational error or
omission is not an event of default.
If the Lease terminates and the City pays Komuna a Termination Payment,
Komuna’s CLEAN PPA for that parking facility will also terminate.
Construction Phasing/Loss of Parking
The Lease Agreement estimates that it will take six weeks to construct the
generating facility. Construction of the generating facilities may require Komuna
to temporarily restrict access to all, or portions of the parking garages’ top floors
during that time; however, the Lease Agreement anticipates that the parties will
work together to mutually agree upon a construction schedule for the generating
facilities. As part of that process the City will look to phase construction if
necessary and mitigate potential parking impacts for instance, by constructing the
facilities consecutively so that only one downtown and California Avenue garage
may be under construction concurrently. Note that Komuna starts paying rent
when generating facility construction commences, and continues to do so
through the operational period. The lease does not charge Komuna a separate
fee for the parking structure closure during the six-week construction period
above and beyond those rent payments.
In addition to working with Komuna to establish a mutually agreeable
construction schedule, the Lease imposes penalties in the form of liquidated
damages on Komuna if construction (and any related parking closures) extends
beyond the initial six week construction estimate. If construction is delayed,
Komuna must pay a penalty. After the six-week period, liquidated damages will
be assessed at a fixed daily rate per garage calculated based on the number of
impacted parking spaces multiplied by the maximum daily parking rate for each
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garage. This liquidated damages amount ranges from $632.00 per day for the 475
Cambridge Garage to $1820.00 per day for the Bryant Garage, and is described in
a table in the Lease.
While Komuna anticipates no permanent loss of parking from the generating
facility’s support infrastructure, the Lease Agreement allows for a maximum of
two parking spaces to be permanently lost for each garage. In this instance,
Komuna would pay parking elimination fees in the amount of parking in-lieu fee,
which is currently $65,475 per space. In addition, Komuna will pay for parking not
on the top floor at the then-posted daily parking rate.
Design/Planning Review
According to terms and conditions of the Lease Agreement, Komuna is
responsible for obtaining all approvals and permits as part of the planning
entitlement and building permit process. In discussions with Planning staff it is
anticipated that the solar installations will require architectural review. The one
percent for art requirement was discussed during RFP development and staff
determined the requirement did not apply to this project as it is electrical
equipment on top of a building.
Resource Impact
The PV facilities will be installed and maintained at Komuna’s expense. If the City
owed a Termination Payment as the result of a public purpose taking or a sale or
transfer of property to another entity, it is anticipated that payment of the
Termination Payment would be a negotiated part of the underlying transaction.
However, if that was not accomplished or in the case of a City default, a
Termination Payment could be a General Fund expense.
Komuna also intends to apply to the Palo Alto CLEAN program and expects to
meet all requirements of that program and secure the existing CLEAN Program
Rate of $0.165 kWh fixed over the 25-year term. No additional city funding will
be used for this project. The annual $20,000 lease payment will be directed to
the Utilities Electric Fund per Council direction. Additionally, Council
consideration of the current policy on fees for EV charging may result in
additional revenues.
Policy Implications
City of Palo Alto Page 9
Entering into a new lease agreement is consistent with policies and programs in
the Comprehensive Plan promoting smart energy development and City and
private sector collaboration for effective development of alternative clean and
sustainable energy programs.
Environmental Review
Approval of the Lease Agreement does not require review under the California
Environmental Quality Act: (1) for the solar PV facilities, because section 21080.35
of the California Public Resources Code specifies that CEQA does not apply to the
installation of a solar energy system on the roof of an existing building or at an
existing parking lot; and (2) for the installation of EV Chargers, which is
categorically exempt pursuant to CEQA Guidelines section 15303 (construction
and location of limited numbers of new, small facilities and structures) and CEQA
Guidelines section 15301 (existing facilities).
Attachments:
Attachment A - Komuna Lease Agreement (PDF)
Komuna Lease Agreement & Exhibits FINAL 1.14.2016 (PDF)
999019-eml
LEASE AGREEMENT
BETWEEN THE
CITY OF PALO ALTO
AND
KOMUNA PALO ALTO LLC
This lease agreement ("Lease") is made and entered into this _____ day of __________, 2016 (the
“Effective Date”), by and between the CITY OF PALO ALTO, a California chartered municipal corporation ("City" or “Lessor”) and Komuna Palo Alto LLC, a Delaware limited liability company
("Lessee"). City and Lessee may be referred to individually as a “Party” or collectively as the “Parties.”
RECITALS
WHEREAS, City is the owner of four (4), multi-level parking facilities in Palo Alto, California,
two (2) of which are near downtown Palo Alto and two (2) of which are near California Avenue; and
WHEREAS, City desires to lease a portion of each of the four (4) parking facilities to Lessee for the purpose of installing, constructing, operating and maintaining a solar powered electric generating
project to be owned, maintained and operated by Lessee for the Term of this Lease; and
WHEREAS, City also desires and Lessee also has agreed to install three (3) electric vehicle
chargers capable of charging six vehicles in each of three (3) of the four (4) parking facilities, and to
install wire, conduit, switchgear and any electrical capacity upgrades necessary to support an additional ten (10) electric vehicle chargers capable of charging upon full installation twenty (20) vehicles in each of
the four (4) parking facilities, which upon installation will be owned, maintained and operated by City;
and
WHEREAS, Lessee desires to lease portions of the parking facilities from City in order to install,
construct, maintain and operate such solar powered electric generating project, and to gain the necessary
access to install such electric vehicle chargers, conduit and switchgear; and
WHEREAS, the leasehold rights granted to Lessee by the City in this Lease combine Ground
Floor Area and Air Rights Parcels; and
WHEREAS, the City desires to purchase from Lessee and Lessee desires to sell to the City the entire energy output of the Generating Facility pursuant to the terms and conditions of a Power Purchase
Agreement for Eligible Renewable Energy Resource under the Palo Alto Clean Local Energy Accessible Now Program (the “CLEAN PPA”); and
WHEREAS, following a competitive selection process consistent with the requirements of
section 2.30 of the Palo Alto Municipal Code, the City Council authorized the City to enter into this Lease with Lessee on ____________, 2016.
NOW, THEREFORE, in consideration of these Recitals and the following covenants, terms, and
conditions, Lessee and City mutually agree as follows:
LEASE PROVISIONS
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1. INTERPRETATION; EXHIBITS.
1.1. Interpretation.
1.1.1. The captions of the various sections, paragraphs and subparagraphs of this
Lease are for convenience only and shall not be considered or referred to in resolving questions of interpretation.
1.1.2. In construing or interpreting this Lease, the word "or" shall not be construed as exclusive and the word "including" shall not be limiting.
1.2. Recitals. The Recitals set forth above are true and correct and are hereby incorporated into this Lease as if fully set forth herein.
1.3. Exhibits. The following Exhibits are attached to and made part of this Lease as if fully set forth herein.
Exhibit “A” – DEFINITIONS Exhibit “B” – DESCRIPTION OF SITE
Exhibit “C” – DESCRIPTION OF PREMISES
Exhibit “D” – IMPROVEMENTS Exhibit “E” – WORK SCHEDULE
Exhibit “F” – MEMORANDUM OF LEASE
Exhibit “G” – INSURANCE REQUIREMENTS Exhibit “H” - FORM OF CLEAN PPA
Exhibit “I” - FORM OF CLEAN PPA INTERCONNECTION AGREEMENT Exhibit “J” - FORM OF LENDER CONSENT AND AGREEMENT
2. DEFINITIONS.
Capitalized terms used in the Lease and not otherwise defined herein have the meanings set forth
in Exhibit “A” (Definitions), which is attached to and made part of this Lease as if fully set forth herein.
3. LEASE.
City hereby leases to Lessee, in accordance with the terms and conditions hereafter set forth, a
bundle of rights consisting of Air Rights Parcels and Ground Floor Areas (both of which are described more specifically in Exhibit “C” (Description of Premises)) of the Property necessary
to allow for the installation, maintenance, operation of the Generating Facility and installation of
the EV Chargers and Infrastructure (which upon installation shall be owned, maintained and operated by City). Unless specifically provided in this Lease, Lessee accepts the Property “as-is”
on the Effective Date of this Lease.
4. TERM, TERMINATION.
4.1. Term.
4.1.1. Definition. This Lease shall commence on the Effective Date and shall
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remain in effect until, for each of the four (4) Properties:
4.1.1.1. The Operations Period has expired (the “Term”); or 4.1.1.2. The Lease has been terminated by either the City or Lessee in
accordance with the terms of this Lease. 4.1.2. Fifty-Year Limit. Notwithstanding the provisions of this section, under no
circumstances shall the Term of this Lease extend beyond fifty (50) years, consistent with section 7 of the City Charter.
4.2. Termination. The City, in its sole discretion, shall have the right to terminate this Lease as follows:
4.2.1. Public Purpose. If the City determines that it requires any individual, any combination or all parking garage facilities or portions thereof included in
the Site at any time or multiple times during the Term for any public purpose
as determined by City in its sole discretion, upon sixty (60) days prior written notice to Lessee, the City may in its sole discretion:
4.2.1.1. Find an alternative City owned replacement site or sites, that has or have substantially similar insolation and reasonably
acceptable access to the utility grid (with appropriate upgrades or
otherwise), that Lessee may use for the Generating Facility or Generating Facilities, as applicable; provided, however, that the
City shall pay for the reasonable costs of removal, lost revenue from production (for any down time exceeding ten (10) days)
and costs of reinstallation of the Generating Facility (including
interconnection and utility related fees) or Generating Facilities from the existing Site to the new site (after which such new
parking garage facility or facilities shall thereafter be referred to
as the “Site”); provided further that Lessee shall use commercially reasonable efforts to remove and reinstall the
Generating Facility or Generating Facilities without delay and
endeavor to minimize lost production time; or
4.2.1.2. Terminate the Lease with respect to any individual or all parking
garage facilities included in the Site and pay Lessee within sixty (60) days the termination value set forth on Schedule 23.2
attached hereto; provided that Lessor and Lessee each agree that
termination of this Lease with respect to any individual or all parking garage facilities included in the Site shall cause a
termination of the CLEAN PPA with respect to such individual or all parking garage facilities included in the Site.
4.2.2. Hazardous Materials. In the event that: 4.2.2.1. Any anticipated use of the Property by Lessee involves the
generation or storage, use, treatment, disposal, or release of
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Hazardous Materials;
4.2.2.2. Lessee has been required by any lender or governmental authority to take remedial action in connection with Hazardous Materials contaminating the Property, or the Site, if the
contamination resulted from Lessee’s actions, omissions or use of the Property; or
4.2.2.3. Lessee is subject to an investigation or enforcement order issued by any governmental authority in connection with the release,
use, disposal, or storage of a Hazardous Materials on the
Property or Site.
4.2.3. Event of Default. City may terminate this Lease following an Event of
Default in accordance with section 23 of this Lease.
4.3. Buyout Option for Generating Facilities. At certain points during the Term or at
expiration of the Term, the City may elect a Buyout Option for any one, any combination, or all of the four (4) Generating Facilities:
4.3.1. Buyout Option Price for all Generating Facilities. On the tenth (10th), fifteenth (15th), twentieth (20th), and twenty-fifth (25th) anniversary of the
earliest individual Generating Facility to achieve its Commercial Operation
Date, the City has the option to purchase all four (4) Generating Facilities on the Properties at a price determined to be the fair market value of all four (4)
Generating Facilities as of such anniversary date, as applicable, calculated according to Section 4.3.3.3.
4.3.2. Buyout Option for Individual Generating Facilities. The City may exercise its Buyout Option provided in Section 4.3.1 with respect to any individual
Generating Facility, in its discretion. The Buyout Option price for each
individual Generating Facility will be calculated by determining the fair market value of all four (4) Generating Facilities as of such anniversary date,
as applicable, calculated according to Section 4.3.3.3. and multiplying such
value by a fraction that is (A) the Generating Facility’s capacity as of the commencement of operations of that Generating Facility over (B) the total
capacity of all such Generating Facilities on the date each commenced
operations.
4.3.3. Exercise of Buyout Option; Notice; Fair Market Value.
4.3.3.1. For all four (4) Generating Facilities. If the City desires to
exercise its Buyout Option for all four (4) Generating Facilities at once, City will, no later than six (6) months prior to the applicable anniversary date of the Generating Facility with the
earliest Commercial Operation Date, notify Lessee of City’s election to exercise its Buyout Option for all four (4) Generating Facilities.
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4.3.3.2. For an individual Generating Facility. If the City desires to exercise this Buyout Option for an individual Generating
Facility, City will, no later than six (6) months prior to the applicable anniversary date of the Commercial Operation Date for that Generating Facility, notify Lessee of City’s election to
exercise its Buyout Option. 4.3.3.3. “Fair Market Value”. The “fair market value” of the Generating
Facilities shall be determined by an independent, third party appraiser mutually agreed upon by Lessor and Lessee having
substantial experience in the valuation of solar facilities similar
to the Generating Facility or Generating Facilities, as applicable. If Lessor and Lessee are unable to agree, then each of Lessor and
Lessee shall designate an appraiser who shall designate a third
appraiser having substantial experience in the valuation of solar facilities similar to the Generating Facility or Generating
Facilities, as applicable, to perform the fair market value
appraisal. The reasonable costs of such fair market value appraisal shall be borne by Lessor.
4.4. Removal of Generating Facility.
4.4.1. Except where a Buyout Option is exercised with respect to the relevant
Generating Facility, for any individual, or for all four (4) Properties as applicable, Lessee shall at its sole expense, remove the Generating Facility
and all its associated equipment and materials completely and vacate the Property and restore the Property to its original conditions, within ninety (90)
days of:
4.4.1.1. Upon expiration of the Term; or
4.4.1.2. Upon termination.
4.4.2. The Parties expect reasonable wear and tear; provided, however, that Lessee
shall repair to the reasonable satisfaction of City any damage to the Property
caused by the Generating Facility or its removal.
4.4.3. Before departure, Lessee shall return any of City’s keys or personal property
to City in good, clean and sanitary condition, reasonable wear and tear excepted.
4.4.4. Lessee shall allow City to inspect the Property to verify the condition of the Property and its contents. At City’s request, Lessee agrees to participate in a
walk-through inspection of the Property to verify the Property’s condition. 4.4.5. City shall provide Lessee with reasonable access to perform the necessary
removal activities.
4.4.6. Upon City request, the usual and customary lighting, plumbing, utility and
heating fixtures shall remain upon the Property upon termination or
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expiration of this Lease.
RENT.
4.5. Rent. Lessee agrees to pay Rent to the City during the Term of this Lease on the
schedule and in the amounts set forth in this Lease. 4.5.1. Schedule.
4.5.1.1. Annual, Payable in Advance. Lessee agrees to pay City Rent in
the amounts set forth in section 5.1.2.3. Rent shall be paid on an
annual basis, in advance for the upcoming year on July (1st) of each year.
4.5.1.2. Proration. Rent due for any partial year hereunder shall be prorated.
4.5.2. Amount.
4.5.2.1. Definitions.
4.5.2.1.1. “Initial Period” means, for each individual Property,
the period commencing on the Effective Date and
continuing until the commencement date of the Construction Period.
4.5.2.1.2. “Construction Period” means, for each individual
Property, the Scheduled Construction Period, plus
the Delayed Construction Period, if any.
4.5.2.1.3. “Scheduled Construction Period” means the period
commencing on the Construction Start Date for the Generating Facility identified in Exhibit “E” (Work
Schedule) for the Property continuing through the
date by which Lessee is set to achieve the Commercial Operation Date for the Generating
Facility, according to Exhibit “E” (Work Schedule).
4.5.2.1.4. “Delayed Construction Period” means, for each
individual Property, the period commencing the day
following the date Lessee was due to achieve its Commercial Operation Date for the Generating
Facility according to Exhibit “E” (Work Schedule) to this Lease continuing through the date Lessee takes to actually achieve its Commercial Operation
Date for the Generating Facility. 4.5.2.1.5. “Operations Period” means, for each individual
Property, the period commencing with the actual
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Commercial Operation Date for the Generating Facility, continuing until the twenty-fifth (25th)
anniversary of such Commercial Operation Date. 4.5.2.2. Initial Period Rent. The Rent during the Initial Period for all
Properties is zero dollars ($0.00). 4.5.2.3. Construction Period Rent; Operations Period Rent.
4.5.2.3.1. Amount. The Rent during the Construction Period
and the Operations Period is as set forth below:
PROPERTY
RENT Construction Period Operations Period
(per year)
PRO RATA
SHARE OF
TOTAL RENT
AMOUNT
475 Cambridge
Garage $5,000 25%
275 Cambridge Garage $5,000 25%
Webster Garage $5,000 25%
Bryant Garage $5.000 25%
TOTAL RENT
AMOUNT $20,000 100%
4.5.2.3.2. Calculation. The Rent during the Construction Period and the Operations Period for each individual
Property is calculated based on that Property’s pro rata share of the Total Rent Amount.
4.5.2.4. Delayed Construction Period Penalties. In addition to Lessee’s obligation to pay Rent during Delayed Construction Period(s), if
any, Lessee is also subject to Delay Liquidated Damages during
the Delayed Construction Period, pursuant to section 6.2 of this Lease.
4.6. Rent Payment Procedures.
4.6.1. Rent shall be due and payable by Lessee promptly upon receipt of an invoice
from City therefore and rent shall be delivered to City’s Revenue Collections Division, 250 Hamilton Avenue, PO Box 10250, Palo Alto, CA 94303. This
designated place of payment may be changed at any time by City upon ten
(10) days advanced written notice to Lessee.
4.6.2. Lessee agrees that acceptance of any late or incorrect Rent or other payment submitted by Lessee shall not constitute an acquiescence or waiver by City and shall not prevent City from enforcing section 5.4 (Late Charge) or any
other remedy provided in this Lease. Rent payments shall be effective upon
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receipt by City.
4.6.3. Acceptance of Rent shall not constitute approval of any unauthorized sublease or use, nor constitute a waiver of any non-monetary breach by Lessee.
4.6.4. City may apply any payment received from Lessee at any time against any obligation due and owing by Lessee under this Lease, regardless of any
statement appearing on or referred to in any remittance from Lessee or any prior application of such payments.
4.7. Partial Payment. The receipt by City of a partial payment of any amount due to City endorsed as payment in full will be deemed to be a partial payment only. City may
accept and deposit said check without prejudice to its right to recover the balance. Any
endorsements or statements on the check or any letter accompanying the check shall not be deemed an accord and/or satisfaction. Lessee's obligation (without prior notice or
demands) to pay Rent and all other amounts due hereunder shall be absolute and
unconditional, and not subject to any abatement, set off, defense, recoupment or reduction.
4.8. Late Charge.
4.8.1. Lessee acknowledges late payment of Rent will cause City to incur costs not
contemplated by this Lease, the exact amount of such costs being extremely difficult and impracticable to fix. Such costs include, without limitation,
processing, accounting and late charges that may be imposed on City.
4.8.2. Therefore, if City does not receive any installment of Rent due from Lessee
within ten (10) days after the date such Rent is due, Lessee shall pay to City an additional sum of five percent (5%) of the overdue Rent as a late charge.
4.8.3. The Parties agree this late charge represents a fair and reasonable estimate of the costs City will incur by reason of late payment of Rent by Lessee.
4.8.4. Acceptance of any late charge shall not constitute a waiver of any Lessee Event of Default with respect to the overdue amount, nor prevent City from
exercising any of the other rights and remedies available to City.
5. PARKING FEES
5.1. Parking Elimination Fees. The Parties agree that if the installation, maintenance and/or operation of the Generating Facilities cause any permanent loss of use or reduction of up
to two (2), but no more than two (2), parking spaces at each individual Site at any time during the Term, Lessee shall compensate Lessor for such loss of parking spaces in an amount equal to (a) the fee set forth under the heading, “Parking in lieu for the
Downtown Assessment District,” on the municipal fee schedule entitled, “City of Palo Alto Development Impact Impacts,” in effect at the time such loss initially occurs (the “In-Lieu Parking Fee”), multiplied by (b) the number of permanently eliminated parking
spaces (the “Parking Elimination Fees”). The In-Lieu Parking Fee is updated annually by
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City. As of June 14, 2015, the In-Lieu Parking Fee is sixty five thousand, four hundred and seventy-five dollars ($65,475.00) per parking space. Lessee shall pay City any
Parking Elimination Fees promptly after receipt of an invoice therefor. Notwithstanding any provision to the contrary, the installation, maintenance and/or operation of the Generating Facilities shall not cause a permanent loss of more than two (2) parking
spaces per individual Site. 5.2. Delay Liquidated Damages.
5.2.1. In the event that Lessee enters the Delayed Construction Period, Lessee shall
pay City the Delay Liquidated Damages as set forth in section 6.2.2. Lessee
shall pay City such Delay Liquidated Damages every fourteen (14) days after receipt of an invoice therefor while in the Delayed Construction Period.
5.2.2. During the Delayed Construction Period, Lessee will be assessed Delay Liquidated Damages on a daily basis according to the table set forth
immediately below. Such Delay Liquidated Damages shall be cumulative
and apply to and across all Properties during a Delayed Construction Period.
Property
Daily Delay Liquidated Damages
Per Property
475 Cambridge Garage
$632.00
275 Cambridge Garage
$768.00
Webster Garage
$1400.00
Bryant Garage
$1820.00
5.2.3. The Parties agree that the Delay Liquidated Damages set forth in section
6.2.2 are reasonable and represent a fair and genuine estimate of the damages that City will suffer if Lessee enters the Delayed Construction Period. The
Parties acknowledge that it would be impracticable or extremely difficult to
fix actual damages in such circumstances, and therefore they have deemed the Delay Liquidated Damages set forth above to be the amount of damage
sustained by City upon the occurrence of such circumstances.
6. SECURITY DEPOSIT.
6.1. Amount. Lessee agrees to provide City with a Security Deposit of twenty-five thousand dollars ($25,000.00).
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6.2. Use of Security Deposit. Within ten (10) days of the Effective Date of this Lease, Lessee
shall deliver to City its Security Deposit. City may use these funds as are reasonably necessary to remedy any Lessee’s failure to pay Rent, to repair damages caused by Lessee’s acts or omissions, or expenses incurred to clean the Property upon termination
of tenancy. 6.3. Reinstatement of Security Deposit. If any portion of the Security Deposit is used towards
Rent or damages at City's sole discretion, Lessee agrees to reinstate the total Security Deposit upon receipt of ten (10) days written notice from City.
6.4. Return of Security Deposit. City agrees to provide the balance of Security Deposit, if any, to Lessee’s last known address within thirty (30) days of the completion of surrender
and removal at all four (4) Properties.
7. USE OF PROPERTY.
7.1. Required Uses. Throughout the term of this Lease, Lessee shall provide the following uses, services and activities (“Required Uses”) at the Property: installation, operation and
maintenance of the Generating Facility in Exhibit “D” (Improvements) of this Lease, and
installation of EV Chargers and Infrastructure, also described in Exhibit “D” (Improvements) for City ownership.
7.2. Permitted Uses. Lessee may not use the Property for any purpose other than the Required Uses without City's prior written consent, which consent may be withheld in the City’s
sole and absolute discretion.
7.3. Prohibited Uses. Lessee shall not use Property for any purpose not expressly permitted
hereunder.
7.3.1. Lessee shall not create, cause, maintain or permit any nuisance or waste in,
on, or about the Property, or permit or allow the Property to be used for any unlawful or immoral purpose. Lessee shall not do or permit to be done
anything in any manner which unreasonably disturbs the users of the City
Property or the occupants of neighboring property. Specifically, and without limiting the above, Lessee agrees not to cause any unreasonable odor, noise,
vibration, power emission, or other item to emanate from the Property.
7.3.2. No materials or articles of any nature shall be stored outside upon any
portion of the Properties. Lessee will not use Property in a manner that
increases the risk of fire, cost of fire insurance or improvements thereon.
7.3.3. No unreasonable sign or placard shall be painted, inscribed or placed in or on said Property; and no tree or shrub thereon shall be destroyed or removed or other waste committed of said Property.
7.3.4. No bicycles, motorcycles, automobiles or other mechanical means of transportation shall be placed or stored anywhere on the Property except for
the garage or driveway. No repair, overhaul or modification of any motor
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vehicle shall take place on the Property or the street in front of said Property.
7.3.5. Lessee, at its own expense, shall keep the Property in as good condition as it was at the beginning of the terms hereof, except damage occasioned by ordinary wear and tear, and except damage to the publically accessible areas,
roof, sidewalks and underground plumbing, which is not the fault of Lessee. 7.4. Condition and Use of Property. City makes no warranty or representation of any kind
concerning the condition of the Property, or the fitness of the Property for the use intended by Lessee, and hereby disclaims any personal knowledge with respect thereto, it
being expressly understood by the Parties that Lessee has personally inspected the
Property, knows its condition, finds it fit for Lessee’s intended use, accepts it as is, and has ascertained that it can be used exclusively for the Required Uses, and any Permitted
Uses authorized by City.
8. HAZARDOUS MATERIALS.
8.1. Use of Hazardous Materials Prohibited. Lessee shall not cause or permit any Hazardous Material (as defined in Exhibit “A” (Definitions)) to be brought upon, kept or used in or
about the Property by Lessee, its agents, employees, contractors or invitees.
8.2. City’s Right to Perform Tests. At any time during the Term, City shall have the right to
enter upon the Property in order to conduct tests of water, soil and other relevant media
or substances to assess the environmental condition of the Property.
9. UTILITIES AND OPERATING EXPENSES.
9.1. Lessee shall fully and promptly pay for all expenses associated with Lessee’s use of the
operation Property, including but not limited to the furnishing of gas, water, sewer, electricity, telephone service, garbage pickup and disposal, landscaping installation and
maintenance, and other public utilities associated with the Required Uses or Permitted
Uses by Lessee.
9.2. Subject to Lessee’s obligation to pay for such utilities service set forth in section 10.1 of
this Lease, City shall furnish to the Properties reasonable quantities of gas, electricity, water, sewer and refuse collections services as required for Lessee’s and City’s continued
use. However, if City is required to construct new, improved or additional installations in
connection with utilities, including, without limitation, wiring, plumbing, conduits, transformers, and mains, resulting from the Required Use or Permitted Use by Lessee,
Lessee shall pay to City the total cost of such new, improved or additional installations in
the amounts and in accordance with any schedule set forth in the City’s Utilities Rules and Regulations, as the same may be amended from time to time.
10. TAXES.
10.1. Payment of Real Property Taxes. Lessee shall pay Lessee’s share of all Real Property Taxes that become due and payable to City on or before the later of ten (10) days prior to the delinquency thereof or three (3) days after the date on which Lessee receives a copy
of the tax bill and notice of City’s determination hereunder. Lessee’s liability to pay Real
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Property Taxes shall be prorated on the basis of a three hundred sixty-five (365) day year to account for any fraction or portion of a tax year included in the Lease term at the
commencement or expiration or termination of the Lease. 10.2. Revenue and Taxation Code. Lessee specifically acknowledges it is familiar with section
107.6 of the California Revenue and Taxation Code. Lessee realizes that a possessory interest subject to property taxes may be created, agrees to pay any such tax, and hereby waives any rights Lessee may have under said California Revenue and Taxation Code
section 107.6.
10.3. Personal Property Taxes. Lessee shall pay before delinquent, or if requested by City,
reimburse City for, any and all taxes, fees, and assessments associated with the Property, the personal property contained on the Property and other taxes, fees, and assessments
regarding any activities which take place at the Property. Lessee recognizes and
understands in accepting this Lease that its interest therein may be subject to a possible possessory interest tax that City or County may impose on such interest and that such tax
payment shall not reduce any rent due City hereunder and any such tax shall be the
liability of and be paid by Lessee.
11. CONTRACTORS, CONSULTANTS; WORK HOURS
11.1. Contractors, Consultants.
11.1.1. Any contractor or consultant engaged by Lessee to install, construct, operate or maintain the Generating Facility or Generating Facilities, or to install the
EV Chargers and Infrastructure must be properly licensed.
11.1.2. Lessee agrees to advise the City of any contractors or consultants involved in
the installation or construction of the Improvements in advance of the commencement of the Construction Period for the Generating Facility or the
installation and construction of EV Chargers and Infrastructure.
11.1.3. Lessee is responsible for the conduct of its contractors and consultants, and
any subcontractors thereto, and City shall have no contractual relationship
with any such contractors or consultants.
11.1.4. All Lessee’s contractors and consultants must carry public liability and
property damage insurance, standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, during the period of
construction consistent with requirements set forth in Section 27 (Insurance).
Such insurance shall contain waiver of subrogation clauses in favor of City and Lessee in accordance with the Provisions of Exhibit “G” (Insurance
Requirements). 11.2. Work Hours.
11.2.1. Except for emergency situations or unplanned outages, Lessee shall cause all installation, construction, maintenance or operations work to be performed as
authorized by Lessee’s permit. All such work shall be in a manner that
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minimizes interference with City and City’s employees, visitors, tenants, licensees and their customers to the extent commercially practicable. Lessee
shall notify the Lease Administrator at least seventy two (72) hours in advance of such work, including where such activities could result in the loss of or limitation of access to the Site. Lessee shall schedule such activities in
coordination with the City to minimize said loss or limitation of access to the Site.
11.2.2. Except as expressly set forth in Exhibit “E” (Work Schedule), the Property, and the Site shall remain open for business to during the Construction Period
and the Operations Period.
11.2.3. As set forth in section 5 (Rent) and section 6 (Parking Fees) of this Lease,
Lessee shall compensate the City for any loss of access, or exclusive use by
Lessee, of common areas and associated parking spaces at the Site. If Lessee or any of its agents, suppliers or subcontractors parks any vehicles in
parking spaces not on the top floor of any Site, Lessee shall compensate City
for such temporary parking usage at the daily posted parking rate then in-effect for such Site during the Term.
12. OWNERSHIP OF IMPROVEMENTS.
12.1. Generating Facilities. Title to the Generating Facility placed on the Property by Lessee
shall be held by Lessee during the Term, subject to City’s exercise of its Buyout Option.
12.1.1. In the event City exercises its Buyout Option, Lessee shall take whatever actions are necessary to transfer fee title ownership of the Generating Facility
placed by Lessee on the Property to City, free and clear from any lien, or
monetary or other encumbrances.
12.1.2. Should this Lease be terminated for any reason prior to the expiration of the
Term, other than as a result of the City exercising its Buyout Option as provided for in section 4.3, all the Generating Facility placed by Lessee on
the Property shall remain under the ownership of Lessee and shall be
removed by Lessee in accordance with section 4.4 of this Lease.
12.1.3. City acknowledges and agrees that:
12.1.3.1. Notwithstanding that the Generating Facilities are a fixture on
the Property, the City has no ownership interest in the
Generating Facilities, other than as set forth in this Lease (Buyout Option) and Lessee is the exclusive owner and operator
of the Generating Facilities; 12.1.3.2. The Generating Facilities, may not be sold, leased, assigned,
mortgaged, pledged or otherwise alienated or encumbered (collectively, a “Transfer”) with the fee interest or leasehold
rights to the Property by City; and
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12.1.3.3. Nothing shall prevent or limit City’s right to Transfer the Property or the Site; provided, however that:
12.1.3.3.1. City agrees to give Lessee at least fifteen (15) days written notice prior to any Transfer of all or a
portion of the Property or the Site identifying the transferee, the portion of the Property or the Site to be transferred and the proposed date of transfer; and
12.1.3.3.2. City agrees that this Lease and any right-of-way
granted hereunder shall run with the Property and
the Site and survive any Transfer of the Property or the Site; provided that if and solely if a Transfer of
the Property by the City causes a change to the
Lessor, this Lease shall terminate and the termination value on Schedule 23.2 for the
applicable year for each Generating Facility shall be
payable by Lessor and Lessor and Lessee hereby agree that the CLEAN PPA as to each Site or all
Sites, as applicable, shall terminate, unless Lessee
otherwise agrees that the new Lessor has acceptable credit quality, which agreement shall not be
unreasonably withheld or Lessor provides reasonably acceptable credit support.
12.2. EV Chargers.
12.2.1. Lessor hereby grants Lessee the right to install and the right to locate the EV
Chargers and Infrastructure, and Lessee hereby agrees to install the EV Chargers and Infrastructure. To the extent practicable, Lessee agrees to
work with City to install the EV Chargers and Infrastructure near existing
chargers or in alternate locations that have the potential to maximize construction, operational or other efficiencies for City as directed by City.
12.2.2. Upon completion of installation of EV Chargers and Infrastructure by Lessee:
12.2.2.1. Lessee has no ownership interest in the EV Chargers and Infrastructure, and City is the exclusive owner of the EV
Chargers and Infrastructure.
12.2.2.2. Lessee shall take commercially reasonable actions as are
necessary to transfer fee title ownership of the EV Chargers and Infrastructure placed by Lessee on the EV Chargers and Infrastructure to City, free and clear from any lien, or monetary
or other encumbrances, along with the transfer of any applicable warranties, guarantees, interests or other contracts, held by
Lessee to City.
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12.2.2.3. The EV Chargers and Infrastructure shall be powered by electricity provided by City at the City’s sole expense.
13. INSTALLATION AND CONSTRUCTION IMPROVEMENTS (GENERATING
FACILITIES AND EV CHARGERS AND INFRASTRUCTURE) BY LESSEE.
13.1. Installation and Construction of Improvements.
13.1.1. City Consent. City hereby consents to the installation on the Property of the Improvements by Lessee, including the Generating Facilities and EV
Chargers and Infrastructure, as shown in Exhibit “D” (Improvements).
Lessee shall use commercially reasonable efforts to cause the installation and construction of such Improvements in accordance with the specifications set
forth in Exhibit “D” (Improvements) and Exhibit “E” (Work Schedule)
attached to this Lease.
13.1.2. Performance. Lessee shall be responsible for the installation of the
Improvements, including all costs associated with the installation of the Improvements. Within thirty (30) days of the Effective Date, Lessee shall
commence pre-installation activities relating to the Improvements, which
shall include, without limitation and as applicable to the specific Improvement involved, using commercially reasonable efforts to:
13.1.2.1. Obtain financing for construction of the Improvements, if necessary;
13.1.2.2. Execute all contracts, and agreements required for the
installation and operation of the Improvements, including, for the
Generating Facility, the CLEAN PPA;
13.1.2.3. Execute all agreements required for Utility interconnection of the
Generating Facility, including the CLEAN PPA Interconnection Agreement; and
13.1.2.4. Obtain, at no additional cost and expense to City, all Permits necessary for the installation and operation of the Improvements.
Lessee is responsible for and City agrees to cooperate in
Lessee’s seeking any and all Permits Lessee finds necessary or desirable for the installation of the Improvements.
Lessee will carry out the activities set forth in this section in accordance with all applicable laws, rules, codes and ordinances and in such a manner as will
not unreasonably interfere with City’s operation or maintenance of the Site as a parking facility.
13.1.3. Construction Standards. 13.1.3.1. Lessee shall in a good, efficient and workmanlike manner, cause
to be designed, constructed, and installed within the Property, at
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no cost to City, appropriate equipment, materials and services to adequately accommodate the Improvements and the Required
Uses and Permitted Uses (if any) under this Lease. 13.1.3.2. Lessee shall prepare the plans and specifications for approval by
the City’s Building Division and Planning & Community Development Divisions as required by the Palo Alto Municipal Code.
13.1.3.3. Lessee shall obtain approval of all such plans and specifications
and shall cause the construction of all Improvements to be
completed within twelve (12) months of the effective date set forth in the CLEAN PPA.
13.1.3.4. All design and construction performed by or on behalf of Lessee shall materially and substantially conform to the approved plans,
specifications, construction and architectural standards approved
by City and contained in Exhibit “D” (Improvements).
13.1.3.5. All work shall be performed in a manner that complies with all
applicable governmental permits, laws, ordinances and regulations, and shall meet all other requirements contained in
this Lease. 13.1.3.6. Lessee shall, and shall cause its contractors to, keep the Site
reasonably clear of debris, waste, material and rubbish and to comply with reasonable safety procedures established by City for
the conduct of business on the Site.
13.1.3.7. Lessee shall keep the Property free and clear of all claims and
liens resulting from construction done by or for Lessee.
13.1.4. Cost of Improvements. Lessee shall pay all costs for construction done or
caused to be done by Lessee on the Property as permitted or required by this
Lease. Promptly after completion of construction, Lessee shall provide to the Lease Administrator a statement of the reasonable and actual costs of
construction for the Improvements described in Exhibit “D”, which statement
shall be certified as to accuracy and signed by Lessee under penalty of perjury.
13.1.5. Assurance of Completion.
13.1.5.1. For the Construction of the Improvements. The estimated construction cost of the Improvements set forth in Exhibit “D” to be constructed by Lessee is $3.05 per Watt. Within thirty (30)
days of the Effective Date of this Lease, Lessee shall furnish to the Lease Administrator evidence that assures City that sufficient monies are available to Lessee to complete the construction of
the Improvements. The amount of such assurance shall be at
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least the estimated construction cost. Evidence of such assurance shall take one of the forms set out below and City is authorized
to draw on such assurances to guarantee Lessee’s full and faithful performance of all of the terms, covenants, and conditions of this Lease:
13.1.5.1.1. Completion Bond;
13.1.5.1.2. Performance bond, labor and material bonds, supplied by Lessee’s contractor or contractors,
provided the bonds are issued jointly to Lessee and
City;
13.1.5.1.3. Irrevocable letter of credit from a financial
institution; or
13.1.5.1.4. Any combination of the above.
13.1.5.2. Additional Construction or Alteration. Prior to commencement
of any construction or alteration expected to cost more than ten
thousand dollars ($10,000.00), Lessee shall furnish the Lease Administrator evidence that assures City that sufficient monies
will be available to Lessee to complete the proposed work. Such
assurance may be in the form identified in section 14.1.5.1.1 to section 14.1.5.1.4 of this Lease.
13.1.5.3. All bonds and letters of credit must be issued by a company
qualified to do business in the State of California and be
acceptable to the Lease Administrator. All bonds and letters of credit shall be in a form acceptable to the Lease Administrator,
and shall insure faithful and full observance and performance by
Lessee of all of the terms, conditions, covenants, and agreements relating to the construction of Improvements or other alterations
in accordance with this Lease.
13.1.6. Certificate of Inspection. Upon completion of construction of any building,
the Generating Facilities and the EV Chargers and Infrastructure, Lessee
shall submit to the Lease Administrator a Certificate of Inspection, verifying that the construction was completed in conformance with Title 20 of the
California Code of Regulations for residential construction, or in
conformance with Title 24 of the California Code of Regulations for non-residential construction.
13.1.7. As Built Plans. Lessee shall provide the Lease Administrator with a complete set of reproducible “as built plans” reflecting actual construction
within or upon the Property upon completion of any: (i) new construction; (ii) structural alterations; or (iii) non-structural alterations costing more than twenty-five thousand dollars ($25,000.00), which shall include, by way of
clarification but not of limitation, the Generating Facilities and the EV
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Chargers and Infrastructure.
14. MAINTENANCE AND OPERATION OF GENERATING FACILITIES BY LESSEE
14.1. Maintenance.
14.1.1. City Responsibilities.
14.1.1.1. Site. City shall be responsible for the maintenance and repair of the overall Site, other than the Generating Facility, including
main support systems not exclusively serving the Lessee’s
facilities, such as electrical system repair, painting, structural repairs, and all maintenance of landscaped areas.
14.1.1.2. EV Chargers and Infrastructure. City shall be responsible for maintenance of all EV Chargers and Infrastructure, which are to
be solely owned by City following Lessee’s installation.
14.1.1.3. Common Areas. City shall maintain or cause to be maintained,
including repair and replacement as necessary, all Common
Areas serving the Property.
14.1.2. Lessee Responsibilities. Lessee shall maintain, at Lessee’s expense, all
Generating Facilities, including all related equipment, furnishings and trade fixtures upon the Property in a safe, clean, wholesome, and sanitary
condition required for the maintenance and operation of a first-class business of the type to be conducted pursuant to this Lease. Lessee agrees to promptly
(and in no case later than within thirty (30) days written notice from City)
paint, clean, and abate graffiti, to the complete satisfaction of City, and in compliance with all applicable laws, throughout the term of this Lease.
14.1.3. Waiver of Civil Code. Lessee expressly waives the benefit of any statute now or hereinafter in effect, including the provisions of sections 1941 and 1942 of
the Civil Code of California, which would otherwise afford Lessee the right
to make repairs at City’s expense or to terminate this Lease because of City’s failure to keep Property in good order, condition and repair. Lessee further
agrees that if and when any repairs, alterations, additions or betterments shall
be made by Lessee as required by this paragraph, Lessee shall promptly pay for all labor done or materials furnished and shall keep the Property free and
clear of any lien or encumbrance of any kind whatsoever. If Lessee fails to
make any repairs or perform any maintenance work for which Lessee is responsible within a reasonable time (as determined by the City in the City’s
sole discretion) after demand by the City, City shall have the right, but not the obligation, to make the repairs at Lessee’s expense; within ten (10) days of receipt of a bill, Lessee shall reimburse City for the cost of such repairs,
including a fifteen percent (15%) administrative overhead fee. The making of such repairs or performance of maintenance by City shall in no event be construed as a waiver of the duty of Lessee to make repairs or perform
maintenance as provided in this section.
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14.2. Operation.
14.2.1. Generating Facility.
14.2.1.1. Lessee shall be solely responsible for operation and maintenance of the Generating Facility (subject, however, to the obligations and responsibilities of City herein). Lessee’s obligation shall
include, without limitation, the obligation to promptly make or pay (as determined by City) for any repairs to the Property or to
the Site to the extent directly caused by Lessee, its employees,
agents, contractors or subcontractors.
14.2.1.2. Lessee shall bear all risk of loss with respect to the Generating
Facility, except:
14.2.1.2.1. As set forth elsewhere in this Lease; or
14.2.1.2.2. For actions or negligence by the City or it agents and
employees.
14.2.1.3. Lessee shall operate the Generating Facilities so as to keep such
Generating Facilities in good operating condition and repair, in
compliance with all applicable laws, and in accordance with generally accepted practices of the electric industry, in general,
and the solar generation industry in particular.
14.2.2. EV Chargers and Infrastructure. City shall be responsible for operation of all
EV Chargers and Infrastructure, which are to be solely owned by City following Lessee’s installation.
15. RELOCATION
15.1. City may request to move the Generating Facility on either a temporary or permanent
basis to another location on the Site or to another site owned by City.
15.2. For any such relocation that is required due to Site work or another purpose unrelated to
the Generating Facility, the City is responsible for all associated reasonable costs of
removal and reinstallation and must proceed diligently.
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16. ALTERATIONS BY LESSEE
Lessee shall not make any alterations or modifications to the Property without obtaining the prior written consent of the Lease Administrator. Lessee may, at any time and at its sole expense, install and place business fixtures and equipment within the Property provided such fixtures and
installation have been reviewed and approved by the Lease Administrator.
17. REPRESENTATIONS AND WARRANTIES; COVENANTS
17.1. Representations and Warranties. On the Effective Date, each Party represents and
warrants to the other Party that:
17.1.1. It is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its formation;
17.1.2. The execution, delivery and performance of this Lease is within its powers,
have been duly authorized by all necessary action and do not violate any of
the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it;
17.1.3. This Lease and each other document executed and delivered in accordance with this Lease constitutes its legally valid and binding obligation
enforceable against it in accordance with its terms;
17.1.4. It is not bankrupt and there are no proceedings pending or being
contemplated by it or, to its knowledge, threatened against it which would result in it being or becoming bankrupt;
17.1.5. There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect
its ability to perform its obligations under this Lease; and
17.1.6. It is acting for its own account, has made its own independent decision to
enter into this Lease and as to whether this Lease is appropriate or proper for
it based upon its own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing
the merits of, and understands and accepts, the terms, conditions and risks of
this Lease.
17.2. Covenants. Each Party covenants that, during the Term:
17.2.1. It shall continue to be duly organized, validly existing and in good standing
under the laws of the jurisdiction of its formation;
17.2.2. It shall maintain (or obtain from time to time as required, including through
renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Lease; and
17.2.3. It shall perform its obligations under this Lease in a manner that does not
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violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like
applicable to it.
18. HOLD HARMLESS, INDEMNIFICATION.
18.1. General Indemnification. Lessee agrees to protect, defend (with counsel acceptable to City), hold harmless and indemnify City, its City Council, commissions, officers, agents,
volunteers, and employees from and against any claim, injury, liability, loss, cost, penalties, forfeiture, and/or expense and/or damage, however same may be caused,
including all costs and reasonable attorney's fees in providing a defense to any claim
arising therefrom for which City shall become legally liable arising from Lessee’s or its contractors, consultants, agents or assigns negligent, reckless, or wrongful acts, errors, or
omissions with respect to or in any way connected with this Lease together with
reasonable attorneys' fees and all costs and expenses reasonably incurred by City in negotiating, settling, defending or otherwise protecting against such claims. This
indemnity shall be in addition to the Hazardous Materials Indemnity and Indemnity for
claims arising out of construction contained in this Lease and shall survive shall survive the expiration of or early termination of the Lease Term.
18.2. Indemnity for Claims Arising Out of Construction. Lessee agrees to protect, defend (with counsel acceptable to City), hold harmless and indemnify City, its City Council,
commissions, officers, agents, volunteers, and employees from and against any claim,
injury, liability, loss, cost, penalties, forfeiture, and/or expense or damage arising out of work performed on the Property by Lessee or its contractors, consultants, agents or
assigns, together with reasonable attorneys' fees and all costs and expenses reasonably incurred by City in negotiating, settling, defending or otherwise protecting against such
claims.
18.3. Hazardous Materials Indemnity. Lessee shall protect, defend (with counsel acceptable to
City), hold harmless, and indemnify the City, its City Council, commissions, officers,
agents, volunteers, and employees harmless from and against any and all claims, injuries, liabilities, costs, penalties, forfeitures, losses, and/or expenses or damages, including
without limitation, diminution in value of the Property or Site, damages for the loss or
restriction on use of the rentable or usable space or of any amenity of the Property or Site, damages arising from any adverse impact or marketing of the Property or Site and sums
paid in settlement of claims, response costs, cleanup costs, site assessment costs,
attorneys’ fees, consultant and expert fees, judgments, administrative rulings or orders, fines, costs of death of or injury to any person, or damage to any property whatsoever
(including, without limitation, groundwater, sewer systems, and atmosphere), arising
from, caused, or resulting, either prior to or during the Lease Term, in whole or in part, directly or indirectly, by the presence or discharge in, on, under, or about the Property by
Lessee, Lessee’s agents, employees, licensees, or invitees or at Lessee’s direction, of Hazardous Material, or by Lessee’s failure to comply with any law applicable to the use, storage or disposal of Hazardous Materials, whether knowingly or by strict liability. For
purposes of the indemnity provided herein, any acts or omissions of Lessee or its employees, agents, customers, sublessees, assignees, contractors, or subcontractors of Lessee (whether or not they are negligent, intentional, willful or unlawful) shall be
strictly attributable to Lessee. Lessee’s indemnification obligations shall include, without
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limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary Hazardous Materials management plan, investigation, repairs, cleanup or
detoxification or decontamination of the Property or Site, and the presence and implementation of any closure, remedial action or other required plans, and shall survive the expiration of or early termination of the Lease Term.
18.4. Waiver of Claims. Lessee waives any claims against City for injury to Lessee’s business or any loss of income therefrom, for damage to Lessee’s property, or for injury or death
of any person in or about the Property, from any cause whatsoever, except to the extent caused by City’s active negligence or willful misconduct.
18.5. Notice. Lessee shall give City immediate notice of any claim or liability indemnified against under this Lease.
19. FORCE MAJEURE, DAMAGE AND DESTRUCTION.
19.1. Nontermination and Nonabatement. Except as provided herein, no destruction or damage
to the Property by fire, windstorm or other casualty, whether insured or uninsured, shall entitle Lessee to terminate this Lease. City and Lessee waive the provisions of any
statutes which relate to termination of a lease when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
19.2. Force Majeure. Force Majeure shall excuse the performance by Lessee for a period equal
to the prevention, delay, or stoppage, except the obligations imposed with regard to Rent to be paid by Lessee pursuant to this Lease.
19.3. Restoration of Property by Lessee.
19.3.1. Destruction Due to Risk Covered by Insurance. If, during the term, the Property is totally or partially destroyed from a risk covered by the insurance
described in Section 27 (Insurance), rendering the Property totally or
partially inaccessible or unusable, Lessee shall restore the Property to substantially the same condition as it was in immediately before destruction
(“Restoration”), whether or not the insurance proceeds are sufficient to cover
the actual cost of Restoration. Such destruction shall not terminate this Lease. If the laws existing at that time do not permit the Restoration, either
party can terminate this Lease immediately by giving notice to the other
Party.
19.3.1.1. Minor Loss. If, during the term of this Lease, the Property is
destroyed from a risk covered by the insurance described in Section 27 (Insurance), and the total amount of loss does not
exceed twenty thousand dollars ($20,000.00), Lessee shall make the loss adjustment with the insurance company insuring the loss. The proceeds shall be paid directly to Lessee for the sole
purpose of making the Restoration of the Property in accordance with this Lease.
19.3.1.2. Major Loss-Insurance Trustee. If, during the term of this Lease,
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the Property is destroyed from a risk covered by the insurance described in Section 27 (Insurance), and the total amount of loss
exceeds twenty thousand dollars ($20,000.00), Lessee shall make
the loss adjustment with the insurance company insuring the loss and on receipt of the proceeds shall immediately pay them to an
institutional lender or title company as may be jointly selected by the Parties ("the Insurance Trustee").
19.3.2. Destruction Due to Risk Not Covered by Insurance. If, during the term, the Property is totally or partially destroyed from a risk covered by the insurance
described in Section 27 (Insurance), rendering the Property totally or
partially inaccessible or unusable, Lessee shall engage in Restoration of the Property, whether or not the insurance proceeds are sufficient to cover the
actual cost of restoration. Such destruction shall not terminate this Lease. If
the laws existing at that time do not permit the Restoration, either Party can terminate this Lease immediately by giving notice to the other Party.
19.3.2.1. If the cost of Restoration exceeds ten percent (10%) of the then replacement value of the Property totally or partially destroyed,
Lessee can elect to terminate this Lease by giving notice to City
within sixty (60) days after determining the restoration cost and replacement value. If Lessee elects to terminate this Lease, City,
within thirty (30) days after receiving Lessee's notice to
terminate, can elect to pay to Lessee, at the time City notifies Lessee of its election, the difference between ten percent (10%)
of the replacement value of the Property and the actual cost of Restoration, in which case Lessee shall restore the Property. On
City's making its election to contribute, each Party shall deposit
immediately the amount of its contribution with such institutional lender or title company as may be jointly selected by
the Insurance Trustee. If the destruction does not exceed ten
percent (10%) of the then replacement value of the Property, Lessee shall immediately deposit the cost of restoration with the
Insurance Trustee as provided in Exhibit “G” (Insurance). This
Lease shall terminate if Lessee elects to terminate this Lease and City does not elect to contribute toward the cost of Restoration
as provided in this section.
19.3.2.2. If the Property is destroyed from a risk not covered by the
insurance described in Section 27 (Insurance), and Lessee has
the obligation to engage in Restoration of the Property as provided in section 20.3.2 of this Lease, both Parties shall
deposit with the Insurance Trustee their respective contributions toward the cost of Restoration. All sums deposited with the Insurance Trustee shall be held for the following purposes and
the Insurance Trustee shall have the following powers and duties:
19.3.2.2.1. The sums shall be paid in installments by the
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Insurance Trustee to the contractor retained by Lessee as construction progresses, for payment of
the cost of Restoration. 19.3.2.2.2. A ten percent (10%) retention fund shall be
established that will be paid to the contractor on completion of Restoration, payment of all costs, expiration of all applicable lien periods, and proof
that the Property is free of all mechanics' liens and lienable claims.
19.3.2.2.3. Payments shall be made on presentation of certificates or vouchers from the architect or
engineer retained by Lessee showing the amount
due. If the Insurance Trustee, in its reasonable discretion, determines that the certificates or
vouchers are being improperly approved by the
architect or engineer retained by Lessee, the Insurance Trustee shall have the right to appoint an
architect or an engineer to supervise construction
and to make payments on certificates or vouchers approved by the architect or engineer retained by the
Insurance Trustee. The reasonable expenses and charges of the architect or engineer retained by the Insurance Trustee shall be paid by the insurance
trustee out of the trust fund. Both Parties shall promptly execute all documents and perform all acts
reasonably required by the Insurance Trustee to
perform its obligations under this section.
19.3.2.2.4. If the sums held by the Insurance Trustee are not
sufficient to pay the actual cost of Restoration, Lessee shall deposit the amount of the deficiency
with the Insurance Trustee within fifteen (15) days
after request by the Insurance Trustee indicating the amount of the deficiency. Any undisbursed funds
after compliance with the provisions of this section
shall be delivered to City to the extent of City's contribution to the fund, and the balance, if any,
shall be paid to Lessee. All actual costs and charges
of the Insurance Trustee shall be paid by Lessee.
19.3.2.3. If the Insurance Trustee resigns or for any reason is unwilling to act or continue to act, City shall substitute a new trustee in the
place of the designated Insurance Trustee. The new trustee must
be an institutional lender or title company.
19.3.3. Procedure for Restoring the Property.
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19.3.3.1. When Lessee is obligated to engage in Restoration of the Property or a portion of the Property, within sixty (60) days
Lessee at its cost shall prepare final plans, specifications, and working drawings complying with applicable laws that will be necessary for restoration of the Property. The plans,
specifications, and working drawings must be approved by City. City shall have thirty (30) days after receipt of the plans and specifications and working drawings to either approve or
disapprove the plans, specifications, and working drawings and return them to Lessee. If City disapproves the plans,
specifications, and working drawings, City shall notify Lessee of
its objections and City's proposed solution to each objection. Lessee acknowledges that the plans, specifications, and working
drawings shall be subject to approval of the appropriate
governmental authorities and that they will be prepared in such a manner as to obtain that approval.
19.3.3.2. The Restoration shall be accomplished as follows:
19.3.3.2.1. Lessee shall complete the Restoration within sixty
(60) working days after final plans and specifications and working drawings have been
approved by the appropriate governmental authorities and all required Permits have been obtained (subject to a reasonable extension for
delays resulting from causes beyond Lessee's reasonable control).
19.3.3.2.2. Lessee shall retain a licensed contractor that is bondable. The contractor shall be required to carry
public liability and property damage insurance,
standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements,
during the period of construction consistent with
requirements set forth in Section 27 (Insurance). Such insurance shall contain waiver of subrogation
clauses in favor of City and Lessee in accordance
with the Provisions of Exhibit “G” (Insurance Requirements).
19.3.3.2.3. Lessee shall notify City of the date of commencement of the Restoration at least ten (10)
days before commencement of the Restoration to enable City to post and record notices of non-
responsibility. The contractor retained by Lessee
shall not commence construction until a completion bond and a labor and materials bond have been
delivered to City to insure completion of the
construction.
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19.3.3.3. Lessee shall accomplish the restoration in a manner that will
cause the least inconvenience, annoyance, and disruption at the Property.
19.3.3.4. On completion of the Restoration Lessee shall immediately record a notice of completion in Santa Clara County.
19.3.3.5. The Restoration shall not be commenced until sums sufficient to cover the cost of Restoration are placed with the Insurance
Trustee as provided in section 20.3.1.2 of this Lease.
20. SIGNS.
Lessee shall not place, construct, maintain, or allow any signs upon the Property without prior written consent of City.
21. ASSIGNMENT AND SUBLETTING.
21.1. City's Consent Required.
21.1.1. No Assignment Without Consent.
21.1.1.1. Lessee shall neither assign this lease, nor any interest therein, and shall neither sublet nor encumber the Property or any part
thereof, nor any right or privilege appurtenant thereto, nor allow or permit any other person(s) to occupy or use the Property, or
any portion thereof, without the prior written consent of City.
21.1.1.2. Any assignment, subletting, encumbrances, occupation, or use
contrary to the provisions of this Lease shall be void and shall
constitute breach of this Lease. City may assign any of its rights hereunder without notice to Lessee.
21.1.1.3. At City’s request, Lessee shall promptly deliver financial statements, information and other evidence satisfactory to City
regarding any proposed assignment or change of control under
this Section 22.1.
21.1.2. Consent.
21.1.2.1. Any direct or indirect change of control of Lessee (whether
voluntary or by operation of law) shall be deemed an assignment and shall require the prior written consent of City which may be withheld in its sole discretion.
21.1.2.2. Lessee shall be permitted to assign this Lease as collateral for any financing or refinancing of the Generating Facilities with the
prior written consent of Lessor, which consent shall not be
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unreasonably withheld, conditioned or delayed. If Lessor gives its consent, such consent shall be in a form substantially similar
to the form of “Lender Consent and Agreement” attached hereto as Exhibit “J”.
21.1.3. No Consent Subject to Creditworthiness Test. Notwithstanding the foregoing, no Consent and Agreement shall be required for:
21.1.3.1. Any assignment or transfer of this Lease by the Lessee to an affiliate of the Lessee, provided that such affiliate’s
creditworthiness is equal to or better than that of Lessee, as
reasonably determined by Lessor; or
21.1.3.2. Any assignment or transfer of this Lease by the Lessee to a
person succeeding to all or substantially all of the assets of Lessee, provided that such person’s creditworthiness is equal to
or greater than that of Lessee, as reasonably determined by the
Lessor.
21.1.4. Assignment.
21.1.4.1. Written notification of any assignment or transfer of this Lease
shall be given to the Lessor.
21.1.4.2. This Lease shall be binding upon any permitted assignee or
successor of Lessee.
21.1.4.3. Consent by City to one assignment, subletting, occupation or use
by another person shall not be deemed to be consent to any subsequent assignment, subletting, occupation or use by another
person.
21.1.4.4. No assignment, subletting, or encumbrance by Lessee shall
release it from or in any way alter any of Lessee's obligations
under this Lease.
21.2. Hazardous Materials. Without limiting City’s authority to withhold its consent in other
circumstances, it shall not be unreasonable for City to withhold its consent to an assignment or sublet to a proposed assignee or sublessee if:
21.2.1. Any anticipated use of the Property by any proposed assignee or sublessee involves the generation or storage, use, treatment, disposal, or release of
Hazardous Material in any manner or for any purpose; 21.2.2. The proposed assignee or sublessees has been required by any prior landlord,
lender, or governmental authority to take remedial action in connection with Hazardous Material contamination at a property, if the contamination resulted from such assignee or sublessee’s action, omission or other use of
the property in question; or,
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21.2.3. The proposed assignee or sublessee is subject to an enforcement order issued
by any governmental authority in connection with the release, use, disposal or storage of a Hazardous Material.
21.3. No Release of Lessee. No subletting or assignment as approved by City shall release Lessee of Lessee’s obligation or alter the primary liability of Lessee to pay Rent and to perform all other obligations by Lessee hereunder. The acceptance of Rent by City from
any other person shall not be deemed to be a waiver by City of any provision hereof. In the event of default by any assignee of Lessee or any successor of Lessee in the
performance of any of the terms hereof, City may proceed directly against Lessee without
the necessity of exhausting remedies against said assignee.
22. EVENT OF DEFAULT; REMEDIES.
22.1. Event of Default. The occurrence of any one or more of the following events shall
constitute a material default, or breach of this Lease by Lessee (“Lessee Event of
Default”):
22.1.1. Abandonment. Abandonment of the Property by Lessee as defined by
California Civil Code section 1951.3;
22.1.2. Failure to Pay Rent; Other Payments. Failure by Lessee to make any
payment of Rent or any other payment (including, without limitation Parking Fees, if any) required to be made by Lessee hereunder, as provided in this
Lease, where such failure continues for a period of ten (10) business days after City provides Lessee with written notice thereof. In the event City
serves Lessee with a Notice to Pay Rent or Quit pursuant to applicable
Unlawful Detainer statutes (“Notice to Pay Rent or Quit”), such Notice to Pay Rent or Quit shall also constitute the notice required by this
subparagraph;
22.1.3. Failure to Satisfy Lease Obligations. Failure by Lessee to observe or
perform any of the Representations, Warranties or Covenants set forth in
section 18 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect where such failure shall
continue for a period of thirty (30) days after City provides Lessee with
written notice thereof; provided, however, that if the nature of Lessee’s failure is such that more than thirty (30) days are reasonably required for its
cure, then a Lessee Event of Default shall not have occurred if Lessee
demonstrates to City’s reasonable satisfaction that it has commenced such cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion. Notwithstanding the foregoing, a Lessee Event of Default shall not occur under this section 23.1.3 if the failure to observe or perform any of the Representations, Warranties or Covenants set forth in
Section 18 of this Lease or any of the material covenants, conditions or provisions of this Lease in any material respect is caused by an error or omission of an administrative or operational nature.
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22.1.4. Assignment to Creditors; Debtor Status; Bankruptcy and Seizure.
22.1.4.1. Making, by Lessee, of any general arrangement or assignment for the benefit of creditors;
22.1.4.2. Becoming a “Debtor” as defined in 11 U.S.C. §101, as the same may be amended from time to time, (unless, in the case of a petition filed against Lessee, the same is dismissed within sixty
(60) days);
22.1.4.3. The appointment of a bankruptcy trustee or receiver to take
possession of all or substantially all of Lessee’s assets located at or on the Property or of Lessee’s interest in this Lease where
possession is not restored to Lessee within thirty (30) days; or
the attachment, execution or other judicial seizure of all or substantially all of Lessee’s assets located at or on the Property
or of Lessee’s interest in this Lease, where such seizure is not
discharged within thirty (30) days.
22.1.5. Construction of Generating Facility. Failure, by Lessee to diligently pursue
construction of the Generating Facility, including where the Delayed Construction Schedule Period results in loss or limited access to the Property
or the Site that lasts more than ninety (90) days. Such time period may be
extended by City, in its sole discretion, in writing prior to expiration the ninety (90) day period.
22.1.6. Failure to Achieve Commercial Operation Date. Failure by Lessee to
complete construction of all Generating Facilities within 12 months of the
effective date set forth in the CLEAN PPA.
22.2. Lessor Event of Default; Remedies of Lessee. The occurrence of any one or more of the
following events shall constitute a material default, or breach of this Lease by Lessor (“Lessor Event of Default”):
22.2.1. Failure to Satisfy Lease Obligations. Failure by Lessor to observe or perform any of the Representations, Warranties or Covenants set forth in section 18 of
this Lease or any of the material covenants, conditions or provisions of this
Lease in any material respect where such failure shall continue for a period of thirty (30) days after Lessee provides City with written notice thereof;
provided, however, that if the nature of Lessor’s failure is such that more
than thirty (30) days are reasonably required for its cure, then a Lessor Event of Default shall not have occurred if Lessor demonstrates to Lessee’s
reasonable satisfaction that it has commenced such cure within said thirty (30) day period and thereafter diligently prosecutes such cure to completion. Notwithstanding the foregoing, a Lessor Event of Default shall not occur
under this section 23.2.1 if the failure to observe or perform any of the Representations, Warranties or Covenants set forth in Section 18 of this Lease or any of the material covenants, conditions or provisions of this Lease
in any material respect is caused by an error or omission of an administrative
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or operational nature.
22.2.2. Assignment to Creditors; Debtor Status; Bankruptcy and Seizure.
22.2.2.1. Making, by Lessor, of any general arrangement or assignment
for the benefit of creditors; 22.2.2.2. Becoming a “Debtor” as defined in 11 U.S.C. §101, as the same
may be amended from time to time, (unless, in the case of a petition filed against Lessor, the same is dismissed within sixty
(60) days);
22.2.2.3. The appointment of a bankruptcy trustee or receiver to take
possession of all or substantially all of Lessor’s assets located at
or on the Property or of Lessor’s interest in this Lease where possession is not restored to Lessor within thirty (30) days; or
the attachment, execution or other judicial seizure of all or
substantially all of Lessor’s assets located at or on the Property or of Lessor’s interest in this Lease, where such seizure is not
discharged within thirty (30) days.
22.2.3. Lessee Remedies. In the event of any Lessor Event of Default under this
Lease, this Lease and the CLEAN PPA shall terminate and Lessor shall pay
within thirty (30) days the termination value specified on Schedule 23.2 for each of the Generating Facilities for the year corresponding with when a
Lessor Event of Default occurs, plus any reasonable out of pocket expenses of Lessee.
22.3. Termination of CLEAN PPA. Any termination of the CLEAN PPA shall cause this Lease to terminate; provided, however, that in no such event shall the Lessor owe the
Lessee the termination value specified on Schedule 23.2, other than as set forth in
Sections 4.2.1.2, 13.1.3.3.2 and 23.2.3.
22.4. Remedies of City. In the event of any Lessee Event of Default, City may at any time
thereafter, following any notice required by statute, and without limiting City in the exercise of any right or remedy which City may have by reason of such Event of Default
or breach:
22.4.1. Termination. Terminate Lessee’s right to possession of the Property by any
awful means, in which case this Lease shall terminate and Lessee shall
immediately surrender possession of the Property, but not the Improvements, to City. In such event, City shall be entitled to recover from Lessee all
damages incurred by City by reason of the Event of Default or breach, including but not limited to:
22.4.1.1. The cost of recovering possession of the Property and all Improvements constructed thereon;
22.4.1.2. Expenses of reletting, including necessary renovation and
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alteration of the Property and the Improvements constructed thereon;
22.4.1.3. Reasonable attorneys’ fees;
22.4.1.4. The worth, at the time of the award of the unpaid Rent that had been earned at the time of termination of this Lease; and
22.4.1.5. The worth, at the time of award of the amount by which the unpaid Rent for the balance of the term after the time of such
award exceeds the amount of such rental loss for the same period
that Lessee proves could be reasonably avoided.
22.4.2. Continue Lease. Maintain Lessee’s right to possession, in which case this
Lease shall continue in effect whether or not Lessee shall have abandoned the Property. In such event, City shall be entitled to enforce all of City’s
rights and remedies under this Lease, including the right to recover Rent and
other fees and payments as they become due hereunder.
22.4.3. Other Remedies. Pursue any other remedy now or hereafter available to City
under the laws or judicial decisions of the State of California. City shall have all remedies provided by law and equity.
22.5. No Relief from Forfeiture After Event of Default. Lessee waives all rights of redemption or relief from forfeiture under California Code of Civil Procedure sections 1174 and
1179, and any other present or future law, in the event Lessee is evicted or City otherwise lawfully takes possession of the Property by reason of any Event of Default or breach of
this Lease by Lessee.
22.6. Disposition of Abandoned Personal Property. If the Lessee fails to remove any personal
property belonging to Lessee from the Property within forty-five (45) days after of the
expiration or termination of this Lease, such personal property shall at the option of City be deemed to have been transferred to City. City shall have the right to remove and to
dispose of such personal property without liability to Lessee or to any person claiming
under Lessee, and the City shall have no need to account for such personal property.
23. INTEREST ON PAST-DUE OBLIGATIONS.
Except as expressly provided herein, any amount due City when not paid when due shall bear
interest at the lesser of ten percent (10%) per year or the maximum rate then allowable by law
from the date due.
24. HOLDING OVER. If Lessee remains in possession of the Property or any part thereof after the expiration of the
Term, including any Extension Term (if any), such occupancy shall be a tenancy from month-to-month with all the obligations of this Lease applicable to Lessee and at a monthly rental obligation of two (2) times the Operations Period Rent or, as applicable, the Extension Term
Rent, in effect at the time of expiration. Nothing contained in this Lease shall give to Lessee the
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right to occupy the Property after the expiration of the term, or upon an earlier termination for breach.
25. ACCESS.
25.1. For Lessee. 25.1.1. Ingress & Egress. City hereby grants to Lessee, for the Term as defined in
Section 4.1, a non-exclusive right-of-way for vehicular and pedestrian ingress and egress to the Property or the Improvements to the extent required
by Lessee and as mutually agreed upon by the Parties.
25.1.2. Access to Sunlight. Lessee shall not cause or permit any interference with
the Generating Facility’s access to sunlight; as such access exists as of the
Effective Date.
25.1.3. Exclusive Access. Lessee is granted no exclusive access to the Property.
25.2. For City
25.3. Primary Use as Parking Structure. Lessee acknowledges and agrees that the Site, including the Property, retains primary use as a public parking structure operated
by the City or it’s assignee at City’s sole discretion and with associated public
and operator access.
25.4. Access for Inspection. City and City’s agents shall have the right to open or enter Lessee facilities on the Property at reasonable times, upon not less than
twenty-four (24) hours prior notice to Lessee, for the purpose of inspecting same,
showing same to prospective City, lenders or lessees, and making such alterations, repairs, improvements, or additions to the Property as City may deem
necessary. City may at any time place on or about the Property any ordinary
“For Sale” signs and City may at any time during the last one hundred twenty (120) days of the Term hereof place on or about the Property any ordinary “For
Lease” signs, all without rebate of Rent or other fees, or liability to Lessee.
25.5. Security Measures. City shall have the right to require a reasonable security
system, device, operation, or plan be installed and implemented to protect the
Property or the Improvements. Should City, in its sole discretion, require Lessee to install such a security system associated with access to the Lessee’s
Improvements, Lessee agrees to bear the sole cost and expense of any security
system, device, operation or plan and the installation and implementation thereof. Lessee shall obtain City’s prior approval before installing, implementing or
changing any City approved security system, device, operation or plan. 25.6. New Locks. Lessee may install new locks on all exterior doors of the Lessee’s
Improvements, including exclusive equipment and facilities. Lessee shall advise City of such action and shall provide City with keys to said locks. Upon termination, Lessee shall leave new locks that shall become the Property of City.
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26. INSURANCE.
26.1. Lessee's responsibility for the Property begins immediately upon delivery and Lessee, at its sole cost and expense, and at no cost to City, shall purchase and maintain in full force and effect during the entire term of this Lease insurance coverage in amounts and in a
form acceptable to City as set forth in Exhibit “G” (Insurance Requirements) attached hereto and incorporated herein by reference. Said policies shall be maintained with respect to Lessee’s employees, if any, and all vehicles operated on the Property. The
policies shall include the required endorsements, certificates of insurance and coverage verifications as described in Exhibit “G” (Insurance Requirements). Lessee also agrees
to secure renter's liability insurance.
26.2. Lessee shall deposit with the Lease Administrator, on or before the effective date of this
Lease, certificates of insurance necessary to satisfy City that the insurance provisions of
this Lease have been complied with, and to keep such insurance in effect and the certificates therefore on deposit with City during the entire term of this Lease. Should
Lessee not provide evidence of such required coverage at least three (3) days prior to the
expiration of any existing insurance coverage, City may purchase such insurance, on behalf of and at the expense of Lessee to provide six months of coverage.
26.3. City shall retain the right at any time to review the coverage, form, and amount of the insurance required hereby. If, in the opinion of the City’s risk manager (or comparable
official), the insurance provisions in this Lease do not provide adequate protection for City and for members of the public using the Property, the Lease Administrator may require Lessee to obtain insurance sufficient in coverage, form, and amount to provide
adequate protection as determined by the City’s risk manager. City's requirements shall be reasonable and shall be designed to assure protection from and against the kind and
extent of risk that exists at the time a change in insurance is required.
26.4. The Lease Administrator shall notify Lessee in writing of changes in the insurance
requirements. If Lessee does not deposit copies of acceptable insurance policies with
City incorporating such changes within sixty (60) days of receipt of such notice, or in the event Lessee fails to maintain in effect any required insurance coverage, Lessee shall be
in default under this lease without further notice to Lessee. Such failure shall constitute a
material breach and shall be grounds for immediate termination of this Lease at the option of City.
26.5. The procuring of such required policy or policies of insurance shall not be construed to limit Lessee’s liability hereunder nor to fulfill the indemnification provision and
requirements of this Lease. Notwithstanding the policy or policies of insurance, Lessee
shall be obligated for the full and total amount of any damage, injury, or loss caused by or connected with this Lease or with use or occupancy of the Property.
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27. RESERVATION OF AVIGATIONAL EASEMENT.
City hereby reserves for the use and benefits of the public, a right of avigation over the Properties for the passage of aircraft landing at, taking off, or operating from the adjacent airport operated by the County of Santa Clara. Lessee releases the City from all liability for noise, vibration, and
any other related nuisance.
28. EMINENT DOMAIN.
28.1. If all or any part of the Properties (or the building in which the Properties are located) is
condemned by a public entity in the lawful exercise of its power of eminent domain, this
Lease shall cease as to the part condemned. The date of such termination shall be the effective date of possession of the whole or part of the Properties by the condemning
public entity.
28.2. If only a part is condemned and the condemnation of that part does not substantially
impair the capacity of the remainder to be used for the purposes required by this Lease,
Lessee shall continue to be bound by the terms, covenants, and conditions of this Lease. However, the then monthly rent shall be reduced in proportion to the diminution in value
of the Properties. If the condemnation of a part of the Properties substantially impairs the
capacity of the remainder to be used for the purposes required by this Lease, Lessee may:
28.2.1. Terminate this Lease and thereby be absolved of obligations under this Lease which have not accrued as of the date of possession by the condemning public entity; or
28.2.2. Continue to occupy the remaining Properties and thereby continue to be
bound by the terms, covenants and conditions of this Lease. If Lessee elects
to continue in possession of the remainder of the Properties, the monthly rent shall be reduced in proportion to the diminution in value of the Properties.
28.2.3. Lessee shall provide City with written notice advising City of Lessee’s choice within thirty (30) days of possession of the part condemned by the
condemning public entity.
28.3. City shall be entitled to and shall receive all compensation related to the condemnation,
except that Lessee shall be entitled to:
28.3.1. That portion of the compensation which represents the value for the
remainder of the Lease term of any Lessee-constructed improvements taken
by the condemning public entity, which amount shall not exceed the actual cost of such improvements reduced in proportion to the relationship of the
remaining Lease term to the original Lease term, using a straight line approach; and
28.3.2. Any amount specifically designated as a moving allowance or as compensation for Lessee’s personal property.
Lessee shall have no claim against the City the value of any unexpired term of this Lease.
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29. POST-ACQUISITION TENANCY.
Lessee hereby acknowledges that Lessee was not an occupant of the Property at the time the Property was acquired by City. Lessee further understands and agrees that as a post-acquisition
Lessee, Lessee is not eligible and furthermore waives all claims for relocation assistance and benefits under federal, state or local law.
30. DISPUTE RESOLUTION.
30.1. Unless otherwise mutually agreed to, any controversies between Lessee and City
regarding the construction or application of this Lease, and claims arising out of this Lease or its breach shall be submitted to mediation within thirty (30) days of the written
request of one Party after the service of that request on the other Party.
30.2. The Parties may agree on one mediator. If they cannot agree on one mediator, the Party
demanding mediation shall request the Superior Court of Santa Clara County to appoint a
mediator. The mediation meeting shall not exceed one day (eight (8) hours). The Parties may agree to extend the time allowed for mediation under this Lease.
30.3. The costs of mediation shall be borne by the Parties equally.
30.4. Mediation under this section is a condition precedent to filing an action in any court. In
the event of litigation arising out of any dispute related to this Lease, the Parties shall each pay their respective attorney's fees, expert witness costs and cost of suit, regardless
of the outcome of the litigation.
31. NON-LIABILITY OF OFFICIALS AND EMPLOYEES OF THE CITY.
No official or employee of City shall be personally liable for any default or liability under this
agreement.
32. NON-DISCRIMINATION
32.1. Non-discrimination in Lease Activities. Lessee agrees that in the performance of this Lease and in connection with all of the activities Lessee conducts on the Property, it shall
not discriminate against any employee or person because of the race, skin color, gender,
age, religion, disability, national origin, ancestry, sexual orientation, housing status, marital status, familial status, weight or height of such person. Lessee acknowledges that
is familiar with the provisions set forth in Section 2.30.510 of the Palo Alto Municipal
Code relating to nondiscrimination in employment and Section 9.73 of the Palo Alto Municipal Code relating to City policy against arbitrary discrimination.
32.2. Human Rights Policy. In connection with all activities that are conducted upon the Properties, Lessee agrees to accept and enforce the statements of policy set forth in
Section 9.73.010 which provides: “It is the policy of the City of Palo Alto to affirm, support and protect the human rights of every person within its jurisdiction. These rights include, but are not limited to, equal economic, political, and educational opportunity;
equal accommodations in all business establishments in the city; and equal service and
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protection by all public agencies of the city.”
33. INDEPENDENT CONTRACTOR.
It is agreed that Lessee shall act and be an independent contractor and not an agent nor employee
of City.
34. CONFLICT OF INTEREST.
34.1. Lessee shall at all times avoid conflict of interest or appearance of conflict of interest in
performance under this Lease. Lessee warrants and covenants that no official or
employee of City nor any business entity in which any official or employee of City is interested:
34.1.1. Has been employed or retained to solicit or aid in the procuring of this agreement; or
34.1.2. Will be employed in the performance of this agreement without the divulgence of such fact to City.
34.2. In the event that City determines that the employment of any such official, employee or business entity is not compatible with such official's or employee's duties as an official or
employee of City, Lessee upon request of City shall immediately terminate such
employment.
34.3. Violation of this provision constitutes a serious breach of this Lease and City may terminate this Lease as a result of such violation.
35. MEMORANDUM OF LEASE.1
Following execution of this Lease, either party, at its sole expense, shall be entitled to record the
Memorandum of Lease in the form attached hereto as Exhibit “F” (Memorandum of Lease) in the official records of Santa Clara County, which Memorandum shall be executed
contemporaneously with this Lease. Upon termination or expiration of this Lease, Lessee shall
execute and record a quitclaim deed as to its leasehold interest.
36. ESTOPPEL CERTIFICATE. Lessee shall, from time to time, upon at least thirty (30) days
prior written notice from City, execute, acknowledge and deliver to City a statement in writing:
36.1. Certifying this Lease is unmodified and in full force and effect, or, if modified, stating the
nature of the modification and certifying that the Lease, as modified, is in full force and effect, and the date to which the rental and other charges, if any, have been paid; and,
36.2. Acknowledging that there are not to Lessee’s knowledge, any defaults, or stating if any defaults are claimed, any statement may be relied upon by any prospective City or
encumbrancer of the City Property.
1 NTD: Note to Palo Alto – Memo of Lease needs to be prepared.
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37. LIENS.
Lessee agrees at its sole cost and expense to keep the Property free and clear of any and all claims, levies, liens, encumbrances or attachments. Notwithstanding the Generating Facility’s
presence as a fixture on the site, Lessee shall not directly or indirectly cause, create, incur, assume or suffer to exist any mortgage, pledge, lien (including mechanics’, labor or materialman’s lien), charge, security interest, encumbrance or claim on or with respect to the
Generating Facility or any interest therein. Lessee also shall pay promptly before a fine or penalty may attach to the Generating Facility any taxes, charges or fees of whatever type of any payments
for which Lessee is responsible.
38. SECURITY.
Lessee shall provide and take reasonable measures for security of the Improvements installed on the Property.
39. NOTICES. All notices to the Parties shall, unless otherwise requested in writing, be sent as follows:
39.1. To City:
City of Palo Alto
Attention: Hamid Ghaemmaghami 250 Hamilton Avenue
Palo Alto, CA 94301 Phone: (650) 329-2264
Email: hamid.thaemmaghami@cityofpaloalto.org
39.2. To Lessee:
Name: Zach Rubin Address: 329 Middlefield Rd
Palo Alto, CA 94301
Phone: 650-847-1191 Email: zrubin@komunaenergy.com
39.3. All notices may be served on one Party by the other in person, by first class mail, or by certified mail whether or not said mailing is accepted the other Party. If notice is sent via
facsimile, a signed, hard copy of the material shall also be mailed. The Business Day the
facsimile was sent shall control the date notice was deemed given if there is a facsimile machine generated document on the date of transmission. A facsimile transmitted after
1:00 p.m. on a Friday shall be deemed to have been transmitted on the following Monday. These addresses shall also be used for service of process.
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40. TIME.
Time shall be of the essence in this Lease.
41. AMENDMENTS.
No alteration or variation of the terms of this Lease shall be valid unless made in writing and signed by the Parties to this Lease.
42. SIGNING AUTHORITY.
If this Lease is not signed by all Lessees named herein, the person actually signing warrants that he/she has the authority to sign for the others.
43. SURRENDER OF LEASE NOT MERGER.
The voluntary or other surrender of this Lease by Lessee, or a mutual cancellation thereof, shall
not work a merger, and shall, at the option of City, terminate all or any existing subleases or subtenancies, or may, at the option of City, operate as an assignment of any and all such subleases
or subtenancies.
44. INTEGRATED DOCUMENT.
This Lease, including any Exhibits attached hereto, embodies the entire agreement between City and Lessee. No other understanding, agreements, conversations or otherwise, with any officer,
agent or employee of City prior to execution of this Lease shall affect or modify any of the terms or obligations contained in any documents comprising this Lease. Any such verbal agreement
shall be considered as unofficial information and in no way binding upon City. All agreements
with City are subject to approval of the City Council before City shall be bound thereby.
45. WAIVER.
Waiver by City of one or more conditions of performance, of an Event of Default, or of any
breach of a condition under this Lease shall not be construed as a waiver of any other condition of
performance or subsequent Events of Default or breaches. The subsequent acceptance by a Party of the performance of any obligation or duty by another Party shall not be deemed to be a waiver
of any term or condition of this Lease. The exercise of any remedy, right, option or privilege
hereunder by City shall not preclude City from exercising the same or any and all other remedies, rights, options and privileges hereunder and City's failure to exercise any remedy, right, option or
privilege at law or equity, or otherwise which City may have, shall not be construed as a waiver.
46. SEVERABILITY CLAUSE.
If any provision of this Lease is held to be illegal, invalid or unenforceable in full or in part, for
any reason, then such provision shall be modified to the minimum extent necessary to make the
provision legal, valid and enforceable, and the other provisions of this Lease shall not be affected thereby.
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47. NO CONSTRUCTION AGAINST DRAFTING PARTY
The Parties agree that this Lease shall be fairly interpreted in accordance with its terms without any strict construction in favor of or against any other Party.
48. GOVERNING LAW. This Lease shall be governed and construed in accordance with the statutes and laws of the State
of California.
49. VENUE.
In the event that suit shall be brought by any Party to this Lease, the Parties agree that venue shall
be exclusively vested in the state courts of the County of Santa Clara.
50. COMPLIANCE WITH LAWS.
The Parties hereto shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local governments in the performance of their rights, duties and obligations
under this Lease.
51. BROKERS.
Each Party represents that is has not had dealings with any real estate broker, finder, or other person, with respect to this lease in any manner. Each Party shall indemnify and hold harmless
the other Party from all damages resulting from any claims that may be asserted against the other Party by any broker, finder, or other person with whom such Party has or purportedly has dealt.
52. COUNTERPARTS
Any number of counterparts of this Lease maybe executed and each shall have the same force and
effect as the original.
53. NO THIRD PARTY BENEFICIARIES
Nothing in this Lease shall provide any benefit to any third party or entitle any third party to any
claim, cause of action, remedy or right of any kind, it being the intent of the Parties that this
Lease shall not be construed as a third party beneficiary contract.
54. SURVIVAL
Any provision of this Lease that expressly or by implication comes into or remains in full force
following the termination or expiration of this Lease, including, without limitation section 19 (Hold Harmless/Indemnification) shall survive the termination or expiration of this Lease.
55. PREVAILING WAGE
Lessee is required to pay general prevailing wages as defined in Subchapter 3, Title 8 of the
California Code of Regulations and Section 16000 et seq. and Section 1773.1 of the California
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Labor Code. Pursuant to the provisions of Section 1772 of the Labor Code of the State of California, the City Council has obtained the general prevailing rate of per diem wages and the
general rate for holiday and overtime work in this locality for each craft, classification, or type of worker needed to execute this Lease from the Director of the Department of Industrial Relations (“DIR”). Copies of these rates may be obtained at the Purchasing Division’s office of the City of
Palo Alto. Lessee shall provide a copy of prevailing wage rates to any staff or subcontractor hired, and shall pay the adopted prevailing wage rates at a minimum. Lessee shall comply with the provisions of all sections, including, but not limited to, Sections 1775, 1776, 1777.5, 1782,
1810, and 1813, of the Labor Code pertaining to prevailing wages.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the Parties have executed this Lease as of the Effective Date.
CITY: LESSEE:
CITY OF PALO ALTO KOMUNA PALO ALTO LLC
By: _______________________ By: __________________________
City Manager
Its: ___________________________
ATTEST:
By: ________________________
City Clerk
APPROVED AS TO FORM:
By: ________________________ Senior Deputy City Attorney
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EXHIBIT “A”
DEFINITIONS
A-1. “275 Cambridge Garage” means the City’s parking garage facility located in Palo Alto, California at 275 Cambridge Avenue.
A-2. “475 Cambridge Garage” means the City’s parking garage facility located in Palo Alto, California at 475 Cambridge Avenue.
A-3. “Access Property” means a non-exclusive right-of-way for vehicular and pedestrian ingress and egress to the Premises to the extent required by Lessee to install, maintain, and operate the
Generating Facilities, and to install the EV Chargers and Infrastructure, as mutually agreed upon
by the Parties.
A-4. “Air Rights Parcel” has the meaning set forth in Exhibit “C” (Description of Premises) attached to this Lease.
A-5. “Bryant Garage” means the City’s parking garage facility located in Palo Alto, California at 445 Bryant Street.
A-6. “Business Day” means any day other than Saturday, Sunday, or dates the City is closed for a federal, California, or City holiday.
A-7. “City” means the City of Palo Alto, a California chartered Municipal Corporation and all successors and assigns.
A-8. “CLEAN PPA” has the meaning set forth in the Recitals of this Lease.
A-9. “CLEAN PPA Interconnection Agreement” means the Interconnection Agreement that Lessee must execute with City in connection with the CLEAN PPA.
A-10. “CLEAN Program” means the Palo Alto Clean Local Energy Accessible Now Program.
A-11. “Common Areas” means those areas of the Site other than the Improvements.
A-12. “Commercial Operation Date” means the date on which Commercial Operation of the Generating
Facility begins, as specified in Exhibit “E” (Work Schedule).
A-13. “Construction Period” has the meaning set forth in section 5.1.2.1.2 of this Lease.
A-14. “Construction Period Rent” has the meaning set forth in section 5.1.2.3 of this Lease.
A-15. “Construction Start Date” means the date on which Lessee begins construction of the Generating
Facility; or in the event that a contractor is constructing the Generating Facility on Lessee’s behalf, the date Lessee delivers to contractor the Notice to Proceed for the Generating Facility.
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A-16. “Debtor” has the meaning set forth in section 23.1.4.2 of this Lease.
A-17. “Delay Liquidated Damages” has the meaning set forth in section 6.2.2 of this Lease.
A-18. “Delayed Construction Period” has the meaning set forth in section 5.1.2.1.4 of this Lease.
A-19. “Effective Date” has the meaning set forth in the Preamble to this Lease.
A-20. “Electric Vehicle Chargers and Infrastructure” or “EV Chargers and Infrastructure” means three (3) Chargepoint brand electric vehicle chargers, or an equivalent acceptable to City in its sole
discretion, each with two level 2 ports capable of charging six vehicles in each of the 275
Cambridge Garage, the 475 Cambridge Garage and the Bryant Garage; and installation of wire, conduit, switchgear and any electrical capacity upgrades necessary to support an additional ten
(10) electric vehicle chargers capable of charging upon full installation twenty (20) vehicles in
each of the 275 Cambridge Garage, the 475 Cambridge Garage, the Bryant Garage and the Webster Garage.
A-21. “EV Chargers Construction Period” has the meaning set forth in Exhibit “E” (Work Schedule).
A-22. “Force Majeure” means (a) natural phenomena, such as storms, hurricanes, floods, lightening and
earthquakes; (b) explosions or fires arising from lightening or other causes unrelated to the acts or omissions of the Lessee; (c) acts of war or public disorders, civil disturbances, riots, insurrection,
sabotage, epidemic, terrorist acts, or rebellion; and (d) acts of God. Force Majeure shall not
include equipment failures or acts or omissions of Lessee’s agents, suppliers or subcontractors, except to the extent such acts or omissions arise from Force Majeure. Changes in prices for
electricity or solar equipment shall not constitute Force Majeure. In the event any work performed by Lessee or Lessee’s contractors results in a strike, lockout, and/or labor dispute, such
strike, lockout, and/or labor dispute shall not be considered Force Majeure.
A-23. “Generating Facility” or “Generating Facilities” means, at times individually and others
collectively, the four (4), integrated systems for the generation of electricity from solar energy
with a capacity of 1.3MW to be installed, maintained, and operated by Lessee at the Property in accordance with the specifications set forth in Exhibit “D” (Improvements), consisting of, without
limitation, photovoltaic panels and associated equipment including, without limitation, controls,
meters, switches, connections, conduit, wires and connections, mounting substrates or supports, power inverters, metering and service equipment, and utility interconnections.
A-24. “Ground Floor Area” has the meaning set forth in Exhibit “C” (Description of Premises) attached to this Lease.
A-25. “Hazardous Materials” means Any toxic or hazardous substance, material or waste or any pollutant or contaminant, or infectious or radioactive material, including but not limited to, those
substances, materials, or wastes regulated now or in the future under any of the following statutes or regulations and any and all of those substances included within the definitions of “hazardous substances”, “hazardous waste”, “hazardous chemical substance or mixture”, “imminently
hazardous chemical substance or mixture,” “toxic substances,” “hazardous air pollutant”, “toxic
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pollutant” or “solid waste” in the: CERCLA or Superfund as amended by SARA, 42 U.S.C. Sec. 9601 et seq., RCRA, 42 U.S.C. Sec. 6901 et seq., CWA., 33 U.S.C. Sec. 1251 et seq., CAA, 42
U.S.C. 78401 et seq., TSCA, 15 U.S.C. Sec. 2601 et seq., the Refuse Act of 1899, 33 U.S.C. Sec.
407, OSHA, 29 U.S.C. 651 et seq.; hazardous Materials Transportation Act, 49 U.S.C. Sec. 1801
et seq., USDOT Table (40 CFR Part 302 and amendments) or the EPA Table (40 CFR Part 302
and amendments), California Superfund, Cal. Health & Safety Code Sec. 25300 et seq., Cal. Hazardous Waste Control Act, Cal. Health & Safety Code Section 25100 et seq., Porter-Cologne Act, Cal. Water Code Sec. 13000 et seq., Hazardous Waste Disposal Land Use Law, Cal. Health
& Safety Code Sec. 25220 et seq., Proposition 65, Cal. Health and Safety Code Sec. 25249.5 et
seq., Hazardous Substances Underground Storage Tank Law, Cal. Health & Safety Code Sec.
25280 et seq., California Hazardous Substance Act, Cal. Health & Safety Code Sec. 28740 et
seq., Air Resources Law, Cal. Health & Safety Code Sec. 39000 et seq., Hazardous Materials Release Response Plans and Inventory, Cal. Health & Safety Code Secs. 25500-25541, TCPA,
Cal. Health and Safety Code Secs. 25208 et seq., and regulations promulgated pursuant to said
laws or any replacement thereof, or as similar terms are defined in the federal, state and local laws, statutes, regulations, orders or rules; and any and all other substances, materials, and wastes
which are, or in the future become, regulated under applicable local, state or federal law for the
protection of health or the environment, or which are classified as hazardous or toxic substances, materials or wastes, pollutants or contaminants, as defined, listed or regulated by any federal,
state or local law, regulation or order or by common law decision, including without limitation:
Trichloroethylene, tetracholoethylene, perchloroethylene and other chlorinated solvents; any petroleum products or fractions thereof; Asbestos, Polychlorinated biphenyls; flammable
explosives; urea formaldehyde; and radioactive materials and waste.
A-26. “Improvements” means all physical construction by Lessee on the Site as described more
particularly in Exhibit “D”, including the Generating Facility and EV Chargers and Infrastructure described therein.
A-27. “In-Lieu Parking Fee” has the meaning set forth in section 6.1 of this Lease.
A-28. “Initial Period” has the meaning set forth in section 5.1.2.1.1 of this Lease.
A-29. “Initial Period Rent” has the meaning set forth in section 5.1.2.2 of this Lease.
A-30. “Insurance Trustee” has the meaning set forth in section 20.3.1.2 of this Lease.
A-31. “Lease” means this Lease Agreement between the City of Palo Alto and Komuna Palo Alto LLC,
as the same may be amended from time to time.
A-32. “Lease Administrator” means, for City the City Manager or his/her designee and, for Lessee Mr.
Zach Rubin.
A-33. “Lessee” means Komuna Palo Alto LLC, and any successors and assigns permitted pursuant to section 22 of this Lease.
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A-34. “Lessee Event of Default” has the meaning set forth in Section 23.1 of this Lease.
A-35. “Lessor Event of Default” has the meaning set forth in Section 23.2 of this Lease.
A-36. “Notice to Pay Rent or Quit” has the meaning set forth in section 23.1.2 of the Lease.
A-37. “Operations Period” has the meaning set forth in section 5.1.2.1.5 of this Lease.
A-38. “Operations Period Rent” has the meaning set forth in section 5.1.2.3 of this Lease.
A-39. “Option Exercise Notice” has the meaning set forth in section 4.1.2.3 of this Lease.
A-40. “Parking Elimination Fees” has the meaning set forth in Section 6.1 of this Lease.
A-41. “Parking Fees” means, collectively, any one-time Parking Elimination Fees and any Delay Liquidated Damages.
A-42. “Permits” means all federal, state, and City permits, licenses, certificates, approvals, variances and other entitlements necessary for the installation and operation of the Improvements.
A-43. “Premises” means that portion of the Site(s), described more particularly in Exhibit “C” on which the Improvements (described more particularly in Exhibit “D”) shall be constructed, installed and
maintained, including all installations or equipment required, as a condition of Lessee’s Permits,
for the installation, operations and maintenance of the Improvements.
A-44. “Property” or “Properties” means the Premises, described more specifically in Exhibit “C” and Access Property, collectively.
A-45. “Real Property Taxes” means:
A-45.1. All taxes, assessments, levies and other charges, general and special, foreseen and
unforeseen, now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against or with respect to:
A-45.1.1. Value, occupancy, use or possession of the Premises and/or the
Improvements;
A-45.1.2. Any improvements, fixtures, equipment and other real or personal property
of Lessee that are an integral part of the Premises; or,
A-45.1.3. Use of the Premises, Improvements public utilities or energy within the
Premises.
A-45.2. “Real Property Taxes” shall also mean all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the premises and/or the
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Improvements, new or altered excise, transaction, sales, privilege, assessment, or other taxes or charges now or hereafter imposed upon City as a result of this Lease, and all
costs and fees (including attorneys’ fees) incurred by City in contesting any real property
taxes and in negotiating with public authorities as to any real property taxes affecting the Premises. If any real property taxes are based upon property or rents unrelated to the
Premises and/or the Improvements, then only that part of such tax that is fairly allocable to the Premises and/or the Improvements, as determined by City, on the basis of the assessor’s worksheets or other available information, shall be included within the
meaning of the term “real property taxes.”
A-46. “Rent” means, collectively, the Initial Period Rent, Construction Period Rent, and the Operations
Period Rent.
A-47. “Required Uses” has the meaning set forth in section 8.1 of this Lease.
A-48. “Restoration” has the meaning set forth in section 20.3.1 of this Lease.
A-49. “Scheduled Construction Period” has the meaning set forth in section 5.1.2.1.3 of this Lease.
A-50. “Security Deposit” has the meaning set forth in section 7.1 of this Lease.
A-51. “Site” means, collectively, the four (4) City parking garage facilities that are the subject of this
Lease described more specifically in Exhibit “B” (Description of Site), including the 275
Cambridge Garage, the 475 Cambridge Garage, the Webster Garage, and the Bryant Garage.
A-52. “Term” has the meaning set forth in section 4.1.1.1 of this Lease.
A-53. “Total Rent Amount” means an annual amount of twenty thousand dollars ($20,000.00).
A-54. “Transfer” has the meaning set forth in section 13.1.3.2 of this Lease.
A-55. “Webster Garage” means the City’s parking garage facility located in Palo Alto, California at 520 Webster Street.
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EXHIBIT “B”
DESCRIPTION OF SITE
“Site” means, collectively, the four (4) City parking garage facilities that are the subject of this Lease,
including the 275 Cambridge Garage, the 475 Cambridge Garage, the Webster Garage, and the Bryant
Garage:
SITE NAME
SITE LOCATION
1 475 Cambridge Garage 475 Cambridge Avenue, Palo Alto, California
2 275 Cambridge Garage 275 Cambridge Avenue, Palo Alto, California
3 Webster Garage 520 Webster Street, Palo Alto, California
4 Bryant Garage 445 Bryant Street, Palo Alto, California
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EXHIBIT “C”
DESCRIPITION OF PREMISES
“Premises” means, collectively, that portion of each of the Sites described herein on which the Generating Facility (described more particularly in
Exhibit “D” (Improvements)) shall be constructed, installed and maintained, including all installations or equipment required, as a condition of
Lessee’s Permits, for the installation, operations and maintenance of the Generating Facility:
PREMISES NAME
GROUND FLOOR AREA
AIR RIGHTS PARCEL
Ground floor area to allow for installation,
operation and maintenance of Improvements,
including the necessary support structures and
equipment for the Generating Facility as reflected
and described more fully in Exhibit “D”
(Improvements)
Rights to use the space at the designated distance above
the Ground Floor Area of the top floor level at each Site
to allow for installation, operation and maintenance of
Generating Facilities, as reflected and described more
fully in Exhibit “D” (Improvements)
Loss of Parking Spaces NOT TO EXCEED TOP FLOOR LEVEL # AIR RIGHTS PARCEL SQ. FT.
1 475 Cambridge Garage 2 spaces 2 28,600
2 275 Cambridge Garage 2 spaces 2 27,500
3 Webster Garage 2 spaces 6 29,700
4 Bryant Garage 2 spaces 5, portion of 4 32,475
The term “Premises” shall also include any necessary Access Property to allow for Lessee’s (a) installation, construction, maintenance and
operation of the Generating Facilities; and (b) construction and installation of the EV Chargers and Infrastructure described in Exhibit “D”
(Improvements), which upon installation will be solely owned, operated and maintained by City.
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EXHIBIT “D”
IMPROVEMENTS
Lessee agrees to provide City with diagrams and detailed description of the Improvements, including the
Generating Facilities and the EV Chargers and Infrastructure in accordance with the following schedule:
1. Initial diagrams/descriptions at the planning/entitlement stage;
2. Updated diagrams/descriptions at the plan check phase; and
3. Final diagrams within four (4) days of Lessee’s receipt of its Building Permit from City.
Upon acceptance by City, each submission of such diagrams and descriptions from Lessee to City shall be
incorporated into this lease, and supersede any prior submission.
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EXHIBIT “E”
WORK SCHEDULE
WORK SCHEDULE FOR GENERATING FACILITIES
Within ten (10) days of City’s issuance of a building permit to Lessee, Lessee shall provide City with an
updated version of the Work Schedule for Generating Facilities to be signed by both City and Lessee.
The updated Work Schedule for Generating Facilities shall be substantially in the form of this Exhibit,
mutually agreeable to City and Lessee, shall identify with specificity the start and end dates of the
Scheduled Construction Period and areas of any Site to which the City will lose or have limited access
over the course of the Scheduled Construction Period. Such updated Work Schedule shall supersede this
Work Schedule for Generating Facilities
SITE NAME
SCHEDULED
CONSTRUCTION PERIOD
DESCRIPTION OF SITE AREAS WITH
LOST OR LIMITED ACCESS
Time period from Construction
Start Date to Commercial
Operation Date
1 475 Cambridge Garage 6 weeks Level 2 completely closed to third party and City pedestrian and vehicle traffic for duration of
Scheduled Construction Period
2 275 Cambridge Garage 6 weeks Level 2 completely closed to third party and City pedestrian and vehicle traffic for duration of
Scheduled Construction Period
3 Webster Garage 6 weeks Level 6 completely closed to third party and City pedestrian and vehicle traffic for duration of
Scheduled Construction Period
4 Bryant Garage 6 weeks
Level 5, and a portion of Level 4 completely closed to third party and City pedestrian and
vehicle traffic for duration of Scheduled Construction Period
CITY: LESSEE:
CITY OF PALO ALTO KOMUNA PALO ALTO LLC
By: _______________________ By: __________________________ City Manager
Its: ___________________________
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WORK SCHEDULE FOR EV CHARGERS AND INFRASTRUCTURE
Within ten (10) days of City’s issuance of a building permit to Lessee, Lessee shall provide City with an
updated version of the Work Schedule for EV Chargers and Infrastructure to be signed by both City and
Lessee. The updated Work Schedule for EV Chargers and Infrastructure shall be substantially in the form
of this Exhibit, shall be mutually agreeable to City and Lessee, shall identify with specificity the start and
end dates of the EV Charger Construction Period, any areas of any Site to which the City will lose or have
limited access over the course of the Scheduled Construction Period, any additional compensation (if any)
due from Lessee to City for loss or limitation of access. Such updated Work Scheduled shall supersede
this Work Schedule for EV Chargers and Infrastructure.
SITE NAME
EV CHARGER
CONSTRUCTION PERIOD
DESCRIPTION OF SITE
AREAS WITH LOST OR
LIMITED ACCESS
Start and Completion Date for
Lessee installation of EV
Chargers and Infrastructure
1 475 Cambridge Garage 1 week
2 275 Cambridge Garage 1 week
3 Webster Garage 1 week
4 Bryant Garage 1 week
CITY: LESSEE:
CITY OF PALO ALTO KOMUNA PALO ALTO LLC
By: _______________________ By: __________________________
City Manager
Its: ___________________________
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
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EXHIBITS
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EXHIBIT “F”
MEMORANDUM OF LEASE
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
[City of Palo Alto
Administrative Services Department, Real Estate Division
250 Hamilton Avenue
Palo Alto, CA 94303]
MEMORANDUM OF LEASE
This Memorandum of Lease (“Memorandum”) is entered into as of this ____ day of
___________, 2016, by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (“Lessor”) and KOMUNA PALO ALTO LLC, a Delaware limited liability company
("Lessee"), with respect to that certain Lease Agreement dated ________________, 2016 (“Lease”),
between Lessor and Lessee.
Pursuant to the Lease, Lessor leases to Lessee and Lessee leases from Lessor a portion of each of
the parking facilities known as the 275 Cambridge Garage, the 475 Cambridge Garage, the Bryant Garage
and the Webster Garage, located in the City of Palo Alto, County of Santa Clara, California, for the
purpose of installing constructing, operating and maintaining a solar powered electric generating facilities
on each facility (the “Generating Facilities”) to be owned, maintained and operated by Lessee, all subject
to the terms and conditions more fully set forth in the Lease.
Pursuant to the Lease, Lessor leases to Lessee and Lessee leases from Lessor a portion of each of
the parking facilities known as the 275 Cambridge Garage, the 475 Cambridge Garage and the Bryant
Garage, located in the City of Palo Alto, County of Santa Clara, California, for the purpose of installing
three (3) electric vehicle chargers capable of charging six vehicles, and a portion of each of the parking
facilities known as the 275 Cambridge Garage, the 475 Cambridge Garage, the Bryant Garage and the
Webster Garage, located in the City of Palo Alto, County of Santa Clara, California, for the purpose of
installing wire, conduit, switchgear and any electrical capacity upgrades necessary to support an
additional ten (10) electric vehicle chargers capable of charging upon full installation twenty (20)
vehicles; all of which upon installation will be owned, maintained and operated by City; and all subject to
the terms and conditions more fully set forth in the Lease.
The Lease shall commence on ____________, and shall end on the date that is twenty-five (25)
years after the commencement of commercial operation date of the all of the Generating Facilities.
Pursuant to Section 4.3 of the Lease, Lessor has the right to purchase all Generating Facilities or one or
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more individual Generating Facilities (“Buy-Out Option”) on the date that is ten (10), fifteen (15), twenty
(20) and twenty-five (25) years after commencement of commercial operation of the Generating Facilities
on the first parking facility.
This Memorandum is solely for recording purposes and shall not be construed to alter, modify,
amend or supplement the Lease, of which this is a memorandum.
Lessor and Lessee desire to have this Memorandum recorded in the Official Records of Santa
Clara County, California, in order to put interested parties on notice of the Buy-Out Option.
In Witness Whereof, the parties hereto have executed this Memorandum on the day and year first
written above.
LESSOR:
CITY OF PALO ALTO,
a California chartered municipal corporation
By: ____________________
Its: ____________________
ATTEST:
By: ________________________
City Clerk
APPROVED AS TO FORM:
By: ________________________
Senior Deputy City Attorney
LESSEE:
KOMUNA PALO ALTO LLC,
a Delaware limited liability company
By: ____________________
Its: ____________________
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Zach Rubin
EXHIBITS
LEASE AGREEMENT/CITY OF PALO ALTO & KOMUNA PALO ALTO LLC
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STATE OF CALIFORNIA )
COUNTY OF SANTA CLARA )
On ________________, before me, ___________________, a notary public in and for said County,
personally appeared _______________________________ who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to
me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
I certify under penalty of perjury under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
________________________
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EXHIBITS
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Exhibit A
475 Cambridge Garage
275 Cambridge Garage
Webster Garage
Bryant Garage
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EXHIBITS
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EXHIBIT “G”
INSURANCE REQUIREMENTS
STANDARD INSURANCE REQUIREMENTS
Insurance Requirements for Lessee:
Lessee shall purchase and maintain the insurance policies set forth below on all of its operations under this Lease at its sole cost and expense. Such policies shall be maintained for the full term of this Lease
and the related warranty period (if applicable). For purposes of the insurance policies required under this
Lease, the term "City" shall include the duly elected or appointed council members, commissioners, officers, agents, employees and volunteers of the City of Palo Alto, California, individually or
collectively.
Coverages (RL 28.1A) S
Minimum Scope of Insurance
Coverage shall be at least as broad as:
1) Insurance Services Office Commercial General Liability coverage (occurrence form
CG 0001).
2) Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, code 1 (any auto). 3) Workers' Compensation insurance as required by the State of California and
Employer's Liability Insurance (for lessees with employees).
4) Property insurance against all risks of loss to any tenant improvements or betterments
The policy or policies of insurance maintained by Lessee shall provide the following limits and coverages:
POLICY MINIMUM LIMITS OF LIABILITY
(1) Commercial General Liability $1,000,000 per each occurrence for bodily injury, personal injury and property damage
(2) Automobile Liability $ 1,000,000 Combined Single Limit Including Owned, Hired and
Non-Owned Automobiles
(3) Workers’ Compensation Statutory
Employers Liability $1,000,000 per accident for bodily injury or
disease
(4) Lessee’s Property Insurance
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Lessee shall procure and maintain property insurance coverage for:
(a) all office furniture, trade fixture, office equipment, merchandise, and all other items of Lessee’s property in, on, at, or about the Premises and the building, include property
installed by, for, or at the expense of Lessee;
(b) all other improvements, betterments, alterations, and additions to the premises.
Lessee’s property insurance must fulfill the following requirements:
(a) it must be written on the broadest available “all risk” policy form or an equivalent form
acceptable City of Palo Alto, including earthquake sprinkler leakage.
(b) for no less than ninety percent (90%) of the full replacement cost (new without deduction
for depreciation) of the covered items and property; and
(c) the amounts of coverage must meet any coinsurance requirements of the policy or
policies.
(RL 28.2)
Deductibles and Self-Insured Retentions
Any deductibles or self-insured retentions must be declared to and approved by the City. At the option of
the City either: the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects
the City, its officers, officials, employees and volunteers; or the Lessee shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.
Insurance shall be in full force and effect commencing on the first day of the term of this Lease.
Each insurance policy required by this Lease shall:
1. Be endorsed to state that coverage shall not be suspended, voided, canceled by either
party, reduced in coverage or in limits except after thirty (30) days' prior written
notice by certified mail, return receipt requested, has been given to the City.
2. Include a waiver of all rights of subrogation against the City and the members of the
City Council and elective or appointive officers or employees, and each party shall
indemnify the other against any loss or expense including reasonable attorney fees,
resulting from the failure to obtain such waiver.
3. Name the City of Palo Alto as a loss payee on the property policy.
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4. Provide that the City, its officers, officials, employees, agents and volunteers are to be covered as insureds as respects: liability arising out of activities performed by or on
behalf of the Lessee; products and completed operations of the Lessee; premises
owned, occupied or used by the Lessee; or automobiles owned, leased, hired or
borrowed by the Lessee. The coverage shall contain no special limitations on the scope of protection afforded to the City, its officers, officials, employees, agents or volunteers.
5. Provide that for any claims related to this Lease, the Lessee's insurance coverage shall
be primary insurance as respects the City, its officers, officials, employees, agents and volunteers. Any insurance or self-insurance maintained by the City, its officers,
officials, employees, agents or volunteers shall be excess of the Lessee's insurance
and shall not contribute with it.
6. Provide that any failure to comply with reporting or other provisions of the policies
including breaches of warranties shall not affect coverage provided to the City, its
officers, officials, employees, agents or volunteers.
7. Provide that Lessee's insurance shall apply separately to each insured against whom
claim is made or suit is brought, except with respect to the limits of the insurer's
liability.
8. Lessee agrees to promptly pay to City as Additional Rent, upon demand, the amount of any increase in the rate of insurance on the Premises or on any other part of
Building that results by reason of Lessee’s act(s) or Lessee’s permitting certain
activities to take place.
Acceptability of Insurers
All insurance policies shall be issued by California-admitted carriers having current A.M. Best's ratings of no lower than A-:VII.
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POWER PURCHASE AGREEMENT
ELIGIBLE RENEWABLE ENERGY RESOURCE (Palo Alto Clean Local Energy Accessible Now Program)
This Power Purchase Agreement - Eligible Renewable Energy Resource, dated, for convenience, , 20 (the “Effective Date”), is entered into by and between the CITY OF PALO
ALTO, a California chartered municipal corporation, and , a corporation (individually, a “Party” and, collectively, the “Parties”).
RECITALS
1.The Buyer has adopted and implemented its CLEAN Program, which allows an owner of a
qualifying electric generation system to sell to the Buyer the power output of a small-scale distributed generation Eligible Renewable Energy Resource, subject to the CLEAN Program’s rules and requirements.
2.The Seller owns or operates and desires to interconnect its Facility in parallel with Buyer’sDistribution System and sell the Energy produced by its Facility, net of Station Service Load, directly to the
Buyer in furtherance of the CLEAN Program.
3.The Parties do not intend this Agreement to constitute an agreement by the Buyer to provide
retail electrical service to the Seller.
4.The Parties wish to enter into a power purchase agreement for the sale and purchase of theOutput of the Facility. The Parties will enter into a separate “Interconnection Agreement” in connection
with this Agreement.
NOW THEREFORE, in consideration of the foregoing recitals and the following covenants,
terms and conditions, the Parties agree, as follows:
AGREEMENT
1.1 DEFINITIONS
The initially capitalized terms, whenever used in this Agreement, have the meanings set forth below, unless they are otherwise herein defined. The terms “include,” “includes,” and “including,” when
used in this Agreement, shall mean, respectively, “include, without limitation,“ “includes, without limitation” and “including, without limitation.”
“Agreement” means this Power Purchase Agreement – Eligible Renewable Energy Resource between the
Buyer and the Seller.
“Business Day” means any day except a Saturday, Sunday, or a day that the City observes as a regular holiday under Palo Alto Municipal Code section 2.08.100(a).
“Buyer” refers to the City of Palo Alto, California, with a principal place of business at 250 Hamilton
Avenue, Palo Alto, California 94301.
“Buyer’s Distribution System” means the wires, transformers, and related equipment used by the Buyer to deliver electric power to the Buyer’s retail customers, typically at sub-transmission level voltages or lower.
“CAISO” means the California Independent System Operator Corporation, or successor entity.
“CAISO Tariff” means the CAISO FERC Electric Tariff, as amended.
“Capacity” means the ability of a generator at any given time to produce Energy at a specified rate, as
EXHIBIT "H"
FORM OF CLEAN PPA
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measured in megawatts (“MW”) or kilowatts (“kW”), and any reporting rights associated with it.
“Capacity Attributes” means any current or future defined characteristic, certificate, tag, credit, or
ancillary service attribute, whether general in nature or specific as to the location or any other attribute of the Facility, intended to value any aspect of the Contract Capacity of the Facility to produce Energy or
ancillary services, including contributions towards Resource Adequacy (including those requirements defined in Section 40 of the CAISO Tariff) or reserve requirements (if any), and any other reliability or
power attributes.
“CEC” means the California Energy Resources Conservation and Development Commission, or successor agency.
“Certificate of RPS Eligibility” means a certificate issued by the CEC as evidence of RPS Certification of
the Facility.
“City” means the government of the City of Palo Alto, California.
“CLEAN Program” refers to the Palo Alto Clean Local Energy Accessible Now Program, a renewable energy program established by the City by adoption of resolution number , dated , of the
Palo Alto City Council, whereby the Buyer will purchase from the Seller the Output of Eligible Renewable Energy Resources that meet specified criteria set forth in the City’s applicable ordinances and resolutions.
“Commercial Operation” means the period of operation of the Facility, once the Commercial Operation Date has occurred.
“Commercial Operation Date” means the date specified in the Commercial Operation Date Confirmation Letter, which the Parties execute and exchange in accordance with this Agreement.
“Contract Capacity” means the installed electrical Capacity available upon the Commercial Operation
Date of the Facility in an amount, as specified in Exhibit “PPA-A.” “Contract Capacity” is measured at the Buyer’s revenue meter at the Delivery Point and is net of any Station Service Loads, any applicable Facility
step-up transformer losses, and distribution losses on Buyer’s Distribution System up to the Delivery Point.
“Contract Price” means the price paid by the Buyer to the Seller for the Output generated at the Facility
and received by the Buyer, as set forth in Exhibit “PPA-A.”
“CPUC” means the California Public Utilities Commission, or successor agency.
“Delivery Point” means the point of interconnection to Buyer’s Distribution System, where the Buyer accepts title to the Output.
“Delivery Term” has the meaning set forth in Section 14.2 hereof.
“Eligible Renewable Energy Resource” means an electric generating facility that is defined and qualified
as an “eligible renewable energy resource” under California Public Utilities Code Section 399.12(e) and California Public Resources Code Section 25471, respectively, as amended.
“Energy” means electrical energy generated from the Facility and delivered to Buyer’s Distribution System
with the voltage and quality required by the Buyer, and measured in megawatt-hours (“MWh”) or kilowatt- hours (“kWh”), as metered at the Delivery Point.
“Facility” means the qualifying renewable energy generation equipment and associated power conditioning
and interconnection equipment that deliver the Output to the Buyer at the Delivery Point.
“FERC” means the Federal Energy Regulatory Commission, or successor agency.
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“Forced Outage” means an unplanned outage of one or more of the Facility’s components that results in a
reduction of the ability of the Facility to produce Capacity.
“Force Majeure” means an event or circumstance, which prevents a Party from performing its obligations under this Agreement, and which is not in the reasonable control of, or the result of negligence of, the Party claiming Force Majeure, and which by the exercise of due diligence is unable to overcome or cause to be
avoided. “Force Majeure” shall include: (a) An act of nature, riot, insurrection, war, explosion, labor
dispute, fire, flood, earthquake, storm, lightning, tidal wave, backwater caused by flood, act of the public enemy, terrorism, or epidemic; (b) Interruption of transmission or generation services as a result of a
physical emergency condition (and not congestion-related or economic curtailment) not caused by the fault or negligence of the Party claiming Force Majeure and reasonably relied upon and without a reasonable source of substitution to make or receive deliveries hereunder, civil disturbances, strike, labor disturbances,
labor or material shortage, national emergency, restraint by court order or other public authority or
governmental agency, actions taken to limit the extent of disturbances on the electrical grid; or (c) Other similar causes beyond the control of the Party affected, which causes such Party could not have avoided by
the exercise of due diligence and reasonable care. A Party's financial incapacity, the Seller’s ability to sell the Output at a more favorable price or under more favorable conditions, or the Buyer’s ability to acquire the Output at a more favorable price or under more favorable conditions or other economic reasons shall
not constitute an event of Force Majeure. “Force Majeure” does not include a Forced Outage to the extent
such event is not caused or exacerbated by an event of Force Majeure, as described above, and does not include the Seller’s inability to obtain financing, permits, or other equipment and instruments necessary to
plan for, construct, or operate the Facility.
“Good Utility Practice” means those practices, methods and acts that would be implemented and followed by prudent operators of electric energy generating facilities in the western United States, similar to the
Facility, during the relevant time period, which practices, methods and acts, in the exercise of prudent and responsible professional judgment in the light of the facts known at the time the decision was made, could
reasonably have been expected to accomplish the desired result consistent with good business practices, reliability, and safety. The Seller acknowledges that its use of Good Utility Practice does not exempt it
from performing any of its obligations arising under this Agreement. “Good Utility Practice” includes, at a minimum, those professionally responsible practices, methods and acts described in the preceding
paragraph that comply with manufacturers’ warranties, restrictions in this Agreement, the interconnection requirements of Buyer, the requirements of governmental authorities, and WECC and NERC standards.
“Good Utility Practice” also includes the taking of reasonable steps to ensure that:
(a) Equipment, materials, resources, and supplies, including spare parts inventories, are available to meet the Facility’s needs;
(b) Sufficient operating personnel are available at all times and are adequately experienced and trained and licensed as necessary to operate the Facility properly and efficiently, and are capable
of responding to reasonably foreseeable emergency conditions at the Facility and emergencies whether caused by events on or off the Facility’s site;
(c) Preventive, routine, and non-routine maintenance and repairs are performed on a basis that ensures reliable, long-term and safe operation of the Facility, and are performed by
knowledgeable, trained, and experienced personnel utilizing proper equipment and tools; (d) Appropriate monitoring and testing are performed to ensure equipment is functioning as
designed; and (e) Equipment is not operated in a reckless manner, in violation of manufacturer’s guidelines or in
a manner unsafe to workers, the general public, or the connecting utility’s electric system or contrary to environmental laws, permits or regulations or without regard to defined limitations
such as, flood conditions, safety inspection requirements, operating voltage, current, volt ampere reactive (VAR) loading, frequency, rotational speed, polarity, synchronization, and control system
limits; and equipment and components are designed and manufactured to meet or exceed the standard of durability that is generally used for electric energy generating facilities operating in the
western United States and will function properly over the full range of ambient temperature and weather conditions reasonably expected to occur at the Facility site and under both normal and
emergency conditions.
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“Green Attributes” refers to the definition set forth in the Standard Terms and Conditions, Appendix A-2, as amended, Decision D.07-02-011, as modified by D.07-05-057, of the CPUC, which incorporates the
definition of “Environmental Attributes” set forth in the Standard Terms and Conditions, Appendix A-1, as amended, D. 04-06-014. “Green Attributes” includes any and all credits, benefits, emissions reductions,
environmental air quality credits, offsets, and allowances, howsoever entitled, attributable to the generation from the Facility, and its displacement of conventional energy generation, whether existing now or arising
in the future. “Green Attributes” includes RECs, as well as (1) any avoided emissions of pollutants to the air, soil or water, such as sulfur oxides (“SOx”), nitrogen oxides (“NOx”), carbon monoxide (“CO”) and
other pollutants; (2) any avoided emissions of carbon dioxide (“CO2”), methane (“CH4”), nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and other greenhouse gases (“GHGs”) that have
been determined by the United Nations Intergovernmental Panel on Climate Change, or otherwise by law, to contribute to the actual or potential threat of altering the Earth’s climate by trapping heat in the
atmosphere; and (3) the reporting rights to these avoided emissions such as Green Tag Reporting Rights and RECs. “Green Tag Reporting Rights” are the right of a Green Tag Purchaser to report the ownership
of accumulated Green Tags in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at the Green Tag Purchaser’s discretion, and include those Green Tag Reporting
Rights accruing under Section 1605(b) of the Energy Policy Act of 1992 and any present or future federal, state, or local law, regulation or bill, and international or foreign emissions trading program. Green Tags
are accumulated on a kWh basis and one Green Tag represents the Green Attributes associated with one (1) MWh of Energy. “Green Attributes” do not include (i) any Energy, Capacity, reliability, or other power
attributes of the Facility, (ii) production or investment tax credits associated with the construction or operation of the Facility and other financial incentives in the form of credits, grants, reductions, or
allowances associated with the Facility that are applicable to a state or federal income taxation obligation, (iii) fuel-related subsidies or “tipping fees” that may be paid to Seller to accept certain fuels, or local
subsidies received by the generator for the destruction of particular pre-existing pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered, used or created by the
Facility for compliance with or sale under local, state, or federal operating and/or air quality permits or programs. If the Facility is a biomass or landfill facility and the Seller receives any tradable Green
Attributes based on the Facility’s greenhouse gas reduction benefits or other emission offsets attributed to its fuel usage, the Seller shall provide the Buyer with sufficient Green Attributes to ensure that there are
zero net emissions associated with the production of electricity from the Facility. “Green Attributes” includes any other environmental credits or benefits recognized in the future and attributable to Energy
generated by the Facility during the Term that may not be represented by Green Tag Reporting Rights or RECs, unless otherwise excluded herein. Any Green Attributes provided under this Agreement shall be
documented by RECs, or any other representation of the environmental benefits of the Output, the monthly cumulative total of which shall be provided to the Buyer, as specified herein. “Interconnection Agreement” refers to the agreement between the Buyer and the Seller, specific to the
interconnection of the Facility to Buyer’s Distribution System.
“NERC” means the North American Electric Reliability Corporation, or successor organization.
“NCPA” means Northern California Power Agency, a California joint action agency, or successor agency.
“Output” means all Capacity associated with Contract Capacity and associated Energy made available from the Facility, as well as any Capacity Attributes, Green Attributes, or other attributes existing now or in the future associated with Contract Capacity and/or associated Energy. “Output” does not include
production or investment tax credits associated with the construction or operation of the Facility and other
financial incentives in the form of credits, grants, reductions, or allowances associated with the Facility that are applicable to a state or federal income taxation obligation.
“Planned Outage” means an outage, scheduled in advance, of one or more of the Facility’s components that results in a reduction of the ability of the Facility to produce Capacity.
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“Pre-Certification Price” means the contract price to be paid for all Energy delivered to the Buyer prior to
the RPS Certification Date, as specified in Exhibit “PPA-A”.
“Renewable Energy Credit” or “REC” has the meaning set forth in Section 399.12(h)(1) and (2) of the California Public Utilities Code, and includes a certificate of proof that one unit of electricity was generated by an Eligible Renewable Energy Resource. Currently, RECs are used to convey all Green Attributes
associated with electricity production by a renewable energy resource. RECs are accumulated on a kWh
basis and one REC represents the Green Attributes associated with the generation of 1 MWh (1,000 kWhs) from the Facility. For purposes of this Agreement, the term REC shall be synonymous with the term Green
Tag, green ticket, bundled or unbundled renewable energy credit, tradable renewable energy certificates, or any other term used to describe the documentation that evidences the renewable and Green Attributes associated with electricity production by an Eligible Renewable Energy Resource.
“Renewables Portfolio Standard” or “RPS” means the standard adopted by the State of California pursuant to Senate Bill 2 1st Extraordinary Session (SBX1 2, Chapter 1, Statutes 2011-12), and California
Public Utilities Code Sections 399.11through 399.31, inclusive, as may be amended, setting minimum renewable energy targets for local publicly owned electric utilities. “Reservation Deposit” means the monetary deposit submitted by the Seller (or the Facility sponsor on
behalf of the Seller) to secure a reservation of the CLEAN Program’s prices. The Reservation Deposit is set forth in Exhibit “PPA-A.” “Resource Adequacy” means a requirement by a governmental authority or in accordance with its FERC- approved tariff, or a policy approved by a local regulatory authority, that is binding upon either Party and
that requires that Party to procure a certain amount of electric generating capacity. “RPS Certification” means certification by the CEC that the Facility qualifies as an Eligible Renewable Energy Resource for RPS purposes, and that all Energy produced by the Facility qualifies as generation
from an Eligible Renewable Energy Resource, as evidenced by a Certificate of RPS Eligibility.
“RPS Certification Date” means the date on which the RPS Certification begins, as specified in the Certificate of RPS Eligibility.
“Seller” means with a principal place of business at
, , . “Station Service Load” means the electrical loads associated with the operation and maintenance of the Facility, which may at times be supplied from the Facility’s Energy. “Term” has the meaning set forth in Section 14.1 hereof.
“WECC” means the Western Electricity Coordinating Council, the regional entity responsible for
coordinating and promoting regional bulk electric system reliability in the Western Canada and the United States, or any successor organization.
2.0 SELLER’S GENERATING FACILITY, PURCHASE PRICE AND PAYMENT 2.1 Facility. This Agreement governs the Buyer’s purchase of the Output from the Facility,
as described in Exhibit “PPA-A.” The Seller shall not modify the Facility to increase or decrease the
Contract Capacity after the Commercial Operation Date.
2.2 Products Purchased. During the Delivery Term, the Seller shall sell and deliver, or cause to be delivered, and the Buyer shall purchase and receive, or cause to be received, the Output from the
Facility. The Seller shall not have the right to procure the Output from sources other than the Facility for sale or delivery to the Buyer under this Agreement or to substitute the Output.
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2.3 Delivery Term. The Delivery Term shall commence on the Commercial Operation Date under this
Agreement, and shall continue for an uninterrupted period of [twenty (20) or twenty-five (25)] years. This period will commence on the first day of the calendar month immediately following the Commercial
Operation Date. As evidence of the Commercial Operation Date, the Parties shall execute and exchange the “Commercial Operation Date Confirmation Letter,” attached hereto as Exhibit “PPA-B.”
The Commercial Operation Date shall be the date on which the Parties acknowledge, in writing, that the Facility starts operating and is otherwise in compliance with applicable interconnection and system
protection requirements, including the final approvals by the City’s building department official.
2.4 Payment for Products Purchased.
2.4.1 Deliveries Prior to RPS Certification Date. Once the Facility has achieved Commercial Operation, if the CEC has not issued a Certificate of RPS Eligibility for the Facility
or the Facility has not been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller for the Output by multiplying the Pre-Certification Price
by the quantity of Energy.
2.4.2 Deliveries After RPS Certification Date. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the Facility, and
the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer shall pay the Seller for all Output on or after the RPS Certification Date by multiplying the
Contract Price by the quantity of Energy.
2.4.3 True-up Upon Issuance of Certificate of RPS Eligibility. Once the Facility has achieved Commercial Operation, the CEC has issued a Certificate of RPS Eligibility for the
Facility, and the Facility has been registered with the appropriate entity for the tracking of Green Attributes, the Buyer will pay the Seller an amount equal to the difference between the Contract
Price and the Pre-Certification Price for the Output (a) that was delivered on or after the RPS Certification Date and (b) for which the Seller has already received payment at the Pre-
Certification Energy Price.
2.4.4 Energy in Excess of Contract Capacity. The Seller shall not receive payment for any Energy or Green Attributes delivered in any hour to the Buyer in excess of the following
amount of energy (in kilowatt-hours): 110% of the Contract Capacity (in kilowatts) multiplied by one hour. Any payment in excess of this amount shall be refunded to the Buyer, on demand. 2.5 Billing. The Buyer shall pay the Seller by check or electronic funds transfer, on a
monthly basis, within thirty (30) days of the meter reading date.
2.6 Title and Risk of Loss. Title to and risk of loss related to the Output shall be transferred from the Seller to the Buyer at the Delivery Point. The Seller warrants that it will deliver to the Buyer the
Output free and clear of all liens, security interests, claims, encumbrances or any interest therein or thereto by any person, arising prior to the Delivery Point. 2.7 No Additional Incentives. The Seller warrants that it has not received any other incentives funded by the Buyer’s ratepayers and it further agrees that, during the Term, it shall not seek
additional compensation or other benefits from the Buyer pursuant to the following programs of the Buyer: (a) Photovoltaic (PV) Partners Program; (b) Power from Local Ultra-Clean Generation Incentive (PLUG-
In) Program; or (c) other similar programs that are or may be funded by the Buyer’s ratepayers.
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3.0 RPS CERTIFICATION; GREEN ATTRIBUTES 3.1 CEC Certification. The Seller, at its own cost and expense, shall obtain the RPS
Certification within six (6) months of the Commercial Operation Date. The Seller shall maintain the RPS Certification at all times during the Delivery Term. The foregoing provision notwithstanding, the Seller
shall not be in breach of this Agreement and the Buyer shall not have the right to terminate this Agreement, if the Seller’s failure to obtain or maintain the RPS Certification is due to a change in California law,
occurring after the Commercial Operation Date, so long as the Seller has used commercially reasonable efforts to obtain and maintain the RPS Certification and the Seller’s actions or omissions did not contribute
to its inability to obtain and maintain the RPS Certification. 3.2 Obligation to Deliver Green Attributes. The Seller shall sell and deliver to the Buyer, and the Buyer shall buy and receive from the Seller, all right, title, and interest in and to Green Attributes
associated with Energy, produced by the Facility and delivered to the Buyer at the Delivery Point, whether now existing or that hereafter come into existence during the Term, except as otherwise excluded herein;
provided, the Buyer shall not be obligated to purchase and pay the Seller for any Green Attributes associated with any amount of the Output, that is generated by any fuel which is not renewable and which
cannot be counted for the purpose of the production of Green Attributes. The Seller agrees to sell and make all such Green Attributes available to the Buyer to the fullest extent allowed by applicable law, in
accordance with the terms and conditions of this Agreement. The Seller warrants that the Green Attributes provided under this Agreement to the Buyer shall be free and clear of all liens, security interests, claims
and encumbrances. 3.3 Conveyance of Green Attributes. The Seller shall provide Green Attributes associated with the Facility, which shall be documented and conveyed to the Buyer in accordance with the procedure
described in Exhibit “PPA-D.”
3.4 Additional Evidence of Green Attributes Conveyance. At the Buyer’s request, the Seller shall provide additional reasonable evidence to the Buyer or to third parties of the Buyer’s right, title, and
interest in the Green Attributes and any other information with respect to Green Attributes, as may be requested by the Buyer. 3.5 Modification of Green Attributes Conveyance Procedure. The Buyer may unilaterally
modify Exhibit “PPA-D” in order to reflect changes necessary in the Green Attributes conveyance procedures, so that the Buyer may be able to receive and report the Green Attributes, purchased under this
Agreement, as belonging to the Buyer.
3.6 Reporting of Ownership of Green Attributes. The Seller shall not report to any person or entity that the Green Attributes sold and conveyed to the Buyer belong to any person other than the Buyer.
The Buyer may report under any applicable program that Green Attributes purchased by the Buyer hereunder belong to it. 3.7 Greenhouse Gas Emissions. The Seller shall comply with any laws and/or regulations
regarding the need to offset emissions of GHGs by delivering to the Buyer the Energy from the Facility with a net zero GHG impact.
4.0 CONVEYANCE OF CAPACITY ATTRIBUTES 4.1 Conveyance of Resource Adequacy Capacity. The Seller shall not report to any person or
entity that the Resource Adequacy Capacity, as defined in the CAISO Tariff) associated with the Facility, if any, belongs to a person other than the Buyer, which may report that Resource Adequacy Capacity
purchased hereunder belongs to it to fulfill the Resource Adequacy requirements, as defined in Section 40 of the CAISO Tariff, as amended, or any successor program. The Seller shall take those actions described
in Section 6.0 hereof, as applicable, to secure recognition of Resource Adequacy Capacity by the CAISO.
4.2 Conveyance of Other Capacity Attributes. In addition to the obligations imposed on the
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Seller under Section 4.1, the Seller will undertake any and all actions reasonably needed to enable the
Buyer to effect the recognition and transfer of any Capacity Attributes in addition Resource Adequacy, to the extent that such Capacity Attributes exist now or will exist in the future; provided, if such actions
require any actions beyond the giving of notice by the Seller, then the Buyer shall reimburse all out-of- pocket costs and charges of such actions. 4.3 Reporting of Ownership of Capacity Attributes. The Seller shall not report to any person
or entity that the Capacity Attributes sold and conveyed to the Buyer belong to any person other than the Buyer. The Buyer may report under any such program that such Capacity Attributes purchased hereunder
belong to it.
5.0 METERING AND OPERATIONS 5.1 Timing of Outages. The Seller may not schedule or take any Planned Outage from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October. 5.2 Outage Reporting.
5.2.1 Buyer Request. The Seller is not required to report any Planned Outage or Forced
Outage, unless the Buyer first submits a written request to the Seller to commence Outage reporting. Upon receipt of such a request, the Seller shall report all subsequent Planned Outages
and the Forced Outages according to the procedures described in subsections 5.2.2 and 5.2.3, and shall continue such reporting until (a) the termination of this Agreement for any reason, or (b) the
Buyer subsequently provides written notice to the Seller that the Seller may cease such reporting in the future. 5.2.2 Planned Outage Notifications. The Seller shall notify the Buyer at least 72 hours in
advance of any Planned Outage that would result in a reduction in the effective Output of the Facility during the period over which the Planned Outage is scheduled. Notification shall be
provided by e-mail to the e-mail address (or addresses) set forth in Exhibit “PPA-F.”
5.2.3 Forced Outage Notifications. Within 24 hours of the occurrence of a Forced Outage of the Facility that impacts the ability of the Facility to produce Energy, the Seller shall
notify the Buyer of the Forced Outage, including the Capacity of the Facility that is impacted, and the expected duration of the Forced Outage. Within 24 hours of the return of the Facility to service
following the Forced Outage, the Seller shall notify the Buyer of the return-to-service details. Notification shall be made by e-mail to the address (or addresses) set forth in Exhibit “PPA-F.” 5.3 Metering. The Buyer shall furnish and install one or more standard watt-hour meters to
read Energy generated by the Facility, and it will charge a meter fee to the Seller to cover the costs associated with the meter’s purchase and installation. As requested, the Seller shall provide and install a
meter socket in accordance with the Buyer’s metering standards. The Buyer reserves the right to install additional metering equipment at its sole cost and expense.
6.0 PARTICIPATING GENERATORS 6.1 Applicability. This Section 6.0 shall apply if the Facility meets the definition of a
“Participating Generator,” as may be defined by the CAISO Tariff. This Section 6.0 shall not apply if the definition applies to the Facility only upon the election by the Seller. For the purposes of this Section 6.0,
all special terms not otherwise defined in Section 1.0 are defined in the CAISO Tariff.
6.2 Participating Generator Agreement. The Buyer will notify the CAISO of the Seller’s interconnection to Buyer’s Distribution System. If the CAISO requires it, the Seller, at its own expense,
shall negotiate and enter in to two contracts, a “Participating Generator Agreement” and a “Meter Services Agreement for CAISO Metered Entities,” with the CAISO.
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6.3 Scheduling Coordination. If the CAISO requires the Seller to enter in to a Participating
Generator Agreement, then the Seller shall designate NCPA as the Buyer’s scheduling coordinator. The Buyer, acting in its sole discretion, may replace NCPA as the scheduling coordinator for the Facility. If
NCPA ceases to be the scheduling coordinator for the Facility and the Buyer has not, upon fourteen (14) days’ prior written notice of inquiry from the Seller, appointed a replacement scheduling coordinator, then
the Seller shall have the right to appoint a replacement scheduling coordinator on the Buyer’s behalf. Thereafter, the Buyer shall enter into all reasonable and appropriate agreements with such replacement
scheduling coordinator at its own costs.
6.4 Scheduling Procedure. The Buyer may require the Seller to provide the Buyer with Energy forecasts on a periodic basis, as may be necessary for the Buyer to account for expected Facility generation in its daily power scheduling process. The requirements are set forth in Exhibit “PPA-C.”
6.5 Modification of Scheduling and Outage Notification Procedure. The Buyer may unilaterally modify Exhibit “PPA-C” to reflect changes necessary in the scheduling and Outage notification
procedures. The Buyer shall give the Seller reasonable notice of any such changes.
6.6 Provision of Other Equipment. If the Seller is required to enter into a Participating Generator Agreement with the CAISO, then the Seller, at its own cost and expense, shall provide and
maintain data transmission-grade phone line and telecommunications equipment at the meter location that complies with applicable requirements of the CAISO, the Buyer, and NCPA. Any meter installed by the
Seller shall comply at all times with the CAISO’s metering requirements. If the Seller fails to provide or maintain any such required equipment or data connection, then the Buyer shall acquire, install and maintain
the same at the Seller’s sole cost and expense.
6.7 Designation as Resource Adequacy Resource. The Buyer may submit a written request to the Seller to obtain the CAISO’s designation of the Facility as a Resource Adequacy Resource. Upon
receipt of such request, the Seller shall provide such information and undertake such steps as may be required by the CAISO in order to complete such an assessment. If the Buyer makes such a request, then
the Buyer shall be responsible for the following: (1) any costs charged to the Seller by the CAISO as a condition of applying for or receiving designation as a Resource Adequacy Resource, including any
deposits required during the study process or the cost of any related studies or deliverability assessments performed by the CAISO; (2) the capital, installation, and maintenance costs of any additional equipment
required by the CAISO as a condition of receiving designation as a Resource Adequacy Resource; (3) the costs of any Network Upgrades, as defined in the CAISO Tariff, as may be required by the CAISO,
provided, the Buyer shall receive any subsequent repayments from the CAISO or the Participating Transmission Owner related to such upgrades; and (4) any charges or penalties assessed by the CAISO as a
consequence of the Facility’s designation as a Resource Adequacy Resource.
6.8 CAISO Charges. The Buyer shall be solely responsible for paying all costs and charges associated with the receipt of Energy under this Agreement, at the Delivery Point, and for the transmission
and delivery of Energy from the Delivery Point to any other point downstream of the Delivery Point, including transmission costs and charges, competition transition charges, applicable control area service
charges, transmission congestion charges, inadvertent energy flows, any other CAISO charges related to the transmission of such Energy by the CAISO and any charge assessed or collected in the future pursuant
to any utility tariff or rate schedule, however defined, for transmission or transmission-related service rendered by or for any transmission-owning or operating entity. The Seller will undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and minimize any potential
liability, under the CAISO tariff. If and to the extent that the Seller fails to comply with the notice
provision in Exhibit “PPA-C,” concerning Outages, or with its obligations as outlined in the previous sentence, the Seller shall be wholly responsible for all imbalances, deviations, or any other CAISO charges
or penalties associated with such Outage or other CAISO Tariff obligation.
6.9 Inclusion in Metered Subsystem. At the option of the Buyer, the Facility may be included within NCPA’s metered sub-system in connection with the scheduling of power over the CAISO
grid and related functions; provided, however, that such inclusion shall have no adverse effect on the Facility’s operations or the Seller (or any such effect shall be fully mitigated by the Buyer). The Seller will
undertake any and all actions reasonably needed to allow the Buyer to comply with any obligations, and
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minimize any potential liability, under the CAISO Tariff; provided, that if such actions require any actions
beyond the giving of notice to be provided by the Buyer, then the Buyer shall reimburse the Seller for all
out-of-pocket costs and charges of such actions.
7.0 COMMERCIAL OPERATION DATE; REFUND OF RESERVATION DEPOSIT 7.1 Commercial Operation Date. The Facility shall achieve Commercial Operation by the
Commercial Operation Date deadline (the “Deadline”), which is one (1) year from the Effective Date. 7.2 Reservation Deposit. The Buyer acknowledges that, as of the Effective Date or other date established by the Buyer, the Seller has provided the Reservation Deposit to the Buyer.
7.2.1 If the Commercial Operation Date occurs on or prior to the Deadline, the Buyer
shall refund to the Seller the Reservation Deposit without interest. 7.2.2 If the Commercial Operation Date commences within seventy (70) days of the Deadline, the Seller, as liquidated damages and not as a penalty, shall relinquish its claim to a ten
percent (10%) portion of the amount of the Reservation Deposit for every full week transpiring between the Deadline and the Commercial Operation Date, but the total amount to be relinquished
to the Buyer shall not exceed 100% of the Reservation Deposit.
7.2.3 If the Facility has not achieved Commercial Operation within seventy (70) days of the Deadline, then the Buyer may terminate this Agreement without liability of either Party to the
other Party by giving written notice of termination to the Seller. 7.2.4 If the Seller gives notice of termination to terminate the Agreement before Commercial Operation occurs, then the Buyer shall refund a percentage of the Reservation
Deposit equal to the following: the percentage to be refunded will equal A/B, where A equals the number of days between the date of the Seller’s notice of termination, received by the Buyer, and
the Deadline, and B equals the number of days between the Effective Date and the Deadline.
7.3 Return of Reservation Deposit. The Buyer shall return to the Seller the Reservation Deposit, without interest, in the event that (a) the Buyer furnishes written notice of the costs of
interconnection (defined in the Interconnection Agreement to include the costs related to the Interconnection Facilities and Distribution Upgrades) to the Seller and (b) within thirty (30) days of receipt
of the notice regarding costs of interconnection, the Seller provides the Buyer with written notice that the Seller does not intend to sign the Interconnection Agreement and does intend to proceed with the project.
8.0 REPRESENTATION AND WARRANTIES; COVENANTS
8.1 Representations and Warranties. On the Effective Date, each Party represents and warrants to the other Party that:
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8.1.1 It is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its formation;
8.1.2 The execution, delivery and performance of this Agreement is within its powers, have been duly authorized by all necessary action and do not violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule,
regulation, order or the like applicable to it; 8.1.3 This Agreement and each other document executed and delivered in accordance
with this Agreement constitutes its legally valid and binding obligation enforceable against it in accordance with its terms; 8.1.4 It is not bankrupt and there are no proceedings pending or being contemplated by it
or, to its knowledge, threatened against it which would result in it being or becoming bankrupt;
8.1.5 There is not pending or, to its knowledge, threatened against it or any of its affiliates, if any, any legal proceedings that could materially adversely affect its ability to perform its obligations under this Agreement; and
8.1.6 It is acting for its own account, has made its own independent decision to enter into this Agreement and as to whether this Agreement is appropriate or proper for it based upon its
own judgment, is not relying upon the advice or recommendations of the other Party in so doing, and is capable of assessing the merits of, and understands and accepts, the terms, conditions and
risks of this Agreement.
8.2 General Covenants. Each Party covenants that, during the Term:
8.2.1 It shall continue to be duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation; 8.2.2. It shall maintain (or obtain from time to time as required, including through
renewal, as applicable) all regulatory authorizations necessary for it to legally perform its obligations under this Agreement; and 8.2.3 It shall perform its obligations under this Agreement in a manner that does not
violate any of the terms and conditions in its governing documents, any contracts to which it is a party or any law, rule, regulation, order or the like applicable to it. 8.3 Covenant by Seller. The Seller covenants that, during the Term:
8.3.1 If the Eligible Renewal Energy Resource or the Facility is considered an ‘eligible qualifying facility’ under applicable law and has a net power production capacity of greater than
one (1) megawatt, then the Seller covenants and agrees that, within thirty (30) days of the
Effective Date or longer period allowed by law, it will complete and file Form No. 556 or other similar form with FERC as the same may be required by law.”
9.0 GENERAL CONDITIONS 9.1 Facility Care and Interconnection. During the Delivery Term, the Seller shall execute
and maintain an “Interconnection Agreement” with the Buyer, whereby the Seller shall pay and be responsible for designing, installing, operating, and maintaining the Facility in accordance with all
applicable laws and regulations and shall comply with all applicable Buyer, WECC, FERC, and NERC requirements, including applicable interconnection and metering requirements. The Seller shall also comply
with any modifications, amendments or additions to the applicable tariff and protocols. The Seller also shall arrange and pay independently for any and all necessary costs under the Interconnection Agreement with
the Buyer.
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9.2 Standard of Care. The Seller shall: (a) operate and maintain the Facility in a safe manner in accordance with its existing applicable interconnection agreements, manufacturer’s guidelines, warranty
requirements, Good Utility Practice, industry norms (including standards of the National Electrical Code, Institute of Electrical and Electronic Engineers, American National Standards Institute, and the
Underwriters Laboratories, and in accordance with the requirements of all applicable federal, state and local laws and the National Electric Safety Code, as such laws and code norms may be amended from time
to time; (b) obtain any governmental authorizations and permits required for the construction and operation thereof. The Seller shall make any necessary and commercially reasonable repairs with the intent of
optimizing the availability of electricity to the Buyer. The Seller shall reimburse the Buyer for any and all losses, damages, claims, penalties, or liability that the Buyer incurs as a result of the Seller’s failure to
obtain or maintain any governmental authorizations and permits required for the construction and operation of the Facility throughout the Term. 9.3 Access Rights. The Buyer, its authorized agents, employees and inspectors shall have the
right to inspect the Facility on reasonable advance notice during normal business hours and for any purposes reasonably connected with this Agreement or the exercise of any and all rights secured to the
Buyer by law, including, without limitation, its ordinances, resolutions, tariffs, utility rate schedules or utilities rules and regulations. The Buyer shall make reasonable efforts to coordinate its emergency
activities with the safety and security departments, if any, of the Facility’s operator. The Seller shall keep the Buyer advised of current procedures for communicating with the Facility operator’s safety and security
departments. 9.4 Protection of Property. Each Party shall be responsible for protecting its own facilities from possible damage resulting from electrical disturbances or faults caused by the operation, faulty
operation, or non-operation of the other Party’s facilities and such other Party shall not be liable for any such damages so caused.
9.5 Insurance. During the Term, the Seller shall obtain and maintain and otherwise comply
with the insurance requirements, as set forth in Exhibit “PPA-E.” 9.6 Buyer’s Performance Excuse; Seller Curtailment.
9.6.1 Buyer Performance Excuse. The Buyer shall not be obligated to accept or pay for the Output during Force Majeure that affects the Buyer’s ability to accept Energy. 9.6.2 Seller Curtailment. The Buyer may require the Seller to interrupt or reduce
deliveries of Energy: (a) whenever necessary to construct, install, maintain, repair, replace, remove, or investigate any of its equipment or part of the Buyer’s Distribution System or facilities;
or (b) if the Buyer determines that curtailment, interruption, or reduction is necessary due to a System Emergency, as defined in the CAISO Tariff, an unplanned outage on Buyer’s Distribution
System, Force Majeure, or compliance with Good Utility Practice.
9.7 Notices of Outages. Whenever possible, the Buyer shall give the Seller reasonable notice of the possibility that interruption or reduction of deliveries may be required. 9.8 No Additional Loads. The Seller shall not connect any loads not associated with Station
Service Loads at the location of the Facility in a manner that would reduce Energy provided from the Facility to the Buyer hereunder. The Seller shall obtain separate retail electric service under the Buyer’s
rate schedules for the service of such additional loads.
10.0 FORCE MAJEURE 10.1 Effect of Force Majeure. A Party shall be excused from its performance under this Agreement to the extent, but only to the extent, that its performance hereunder is prevented by Force
Majeure. A Party claiming Force Majeure shall exercise due diligence to overcome or mitigate the effects
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of Force Majeure; provided, that nothing in this Agreement shall be deemed to obligate the Party affected
by Force Majeure (a) to forestall or settle any strike, lock-out or other labor dispute against its will; or (b) for Force Majeure affecting the Seller only, to purchase electric power to cure Force Majeure. 10.2 Remedial Action. A Party shall not be liable to the other Party if the Party is prevented from performing its obligations hereunder due to Force Majeure. The Party rendered unable to fulfill an
obligation by reason of Force Majeure shall take all action necessary to remove such inability with all due
speed and diligence. The nonperforming Party shall be prompt and diligent in attempting to remove the cause of its failure to perform, and nothing herein shall be construed as permitting that Party to continue to
fail to perform after that cause has been removed. Notwithstanding the foregoing, the existence of Force Majeure shall not excuse any Party from its obligations to make payment of amounts due hereunder. 10.3 Notice of Force Majeure. In the event of any delay or nonperformance resulting from
Force Majeure, the Party directly impacted by Force Majeure shall, as soon as practicable under the circumstances, notify the other Party, in writing, of the nature, cause, date of commencement thereof and
the anticipated extent of any delay or interruption in performance.
10.4 Termination Due to Force Majeure. If a Party will be prevented from performing its material obligations under this Agreement for an estimated period of twelve (12) consecutive months or
longer due to Force Majeure, then the unaffected Party may terminate this Agreement, without liability of either Party to the other, upon thirty (30) Days’ prior written notice at any time during Force Majeure.
11.0 INDEMNITY 11.1 Indemnity by the Seller. The Seller shall indemnify, defend, and hold harmless the
Buyer, its elected and appointed officials, directors, officers, employees, agents, and representatives against and from any and all losses, claims, demands, liabilities and expenses, actions or suits, including reasonable
costs and attorney’s fees, resulting from, or arising out of or in any way connected with claims by third parties associated with (A) (i) Energy delivered at the Delivery Point; (ii) the Seller’s operation and/or
maintenance of the Facility; or (iii) the Seller’s actions or inactions with respect to this Agreement, and (B) any loss, claim, action or suit, for or on account of injury, bodily or otherwise, to, or death of, persons, or
for damage to or destruction of property belonging to the Buyer or other third party, excepting only such loss, claim, action or suit as may be caused solely by the willful misconduct or gross negligence of the
Buyer, its agents, employees, directors or officers.
11.2 Indemnity by the Buyer. The Buyer shall indemnify, defend, and hold harmless the Seller, its directors, officers, employees, agents, and representatives against and from any and all losses,
claims, demands, liabilities and expenses, actions or suits, including reasonable costs and attorney’s fees resulting from, or arising out of or in any way connected with claims by third parties associated with acts of
the Buyer, its officers, employees, agents, and representatives, relating to: (A) Energy delivered by the Seller under this Agreement after the Delivery Point, and (B) any loss, claim, action or suit, for or on
account of injury, bodily or otherwise, to, or death of, persons, or for damage to or destruction of property belonging to the Seller or other third party, excepting only such loss, claim, action or suit as may be caused
solely by the willful misconduct or gross negligence of the Seller, its agents, employees, directors or officers.
12.0 LIMITATION OF DAMAGES EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT THERE IS NO WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND ANY AND ALL IMPLIED WARRANTIES ARE DISCLAIMED. LIABILITY SHALL BE LIMITED TO DIRECT
ACTUAL DAMAGES ONLY, SUCH DIRECT ACTUAL DAMAGES SHALL BE THE SOLE AND EXCLUSIVE REMEDY AND ALL OTHER REMEDIES OR DAMAGES AT LAW OR IN EQUITY
ARE WAIVED UNLESS EXPRESSLY HEREIN PROVIDED. NEITHER PARTY SHALL BE LIABLE FOR CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES,
LOST PROFITS OR OTHER BUSINESS INTERRUPTION DAMAGES, BY STATUTE, IN TORT OR
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CONTRACT, UNDER ANY INDEMNITY PROVISION OR OTHERWISE. UNLESS EXPRESSLY
HEREIN PROVIDED, AND SUBJECT TO THE PROVISIONS OF SECTION 11 (INDEMNITY), IT IS THE INTENT OF THE PARTIES THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES
AND THE MEASURE OF DAMAGES BE WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH
NEGLIGENCE BE SOLE, JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE.
13.0 NOTICES
Notices shall, unless otherwise specified herein, be given, in writing, and may be delivered by hand delivery, United States mail, overnight courier service, facsimile or electronic messaging (e-mail) to
the addresses set forth in Exhibit “PPA-F.”. Whenever this Agreement requires or permits delivery of a “notice” (or requires a Party to “notify”), the Party with such right or obligation shall provide a written
communication in the manner specified below. A notice sent by facsimile transmission or electronic mail will be recognized and shall be deemed received on the Business Day on which such notice was transmitted
if received before 5 p.m. Pacific Time (and if received after 5 p.m., on the next Business Day) and a notice by overnight mail or courier shall be deemed to have been received two (2) Business Days after it was sent
or such earlier time as is confirmed by the receiving Party unless it confirms a prior oral communication, in which case any such notice shall be deemed received on the day sent. A Party may change its addresses by
providing notice of same in accordance with this provision. A Party may request a change to Exhibit “PPA- F” as necessary to keep the information current.
14.0 TERM, TERMINATION EVENT AND TERMINATION 14.1 Term. The Term shall commence upon the execution by the duly authorized representatives
of each of the Parties, and shall remain in effect until the conclusion of the Delivery Term, unless terminated sooner pursuant to the terms and conditions of this Agreement. All indemnity rights shall
survive the termination of this Agreement for twelve (12) months.
14.2 Delivery Term. The Delivery Term of the Agreement is _______ years and is defined as the period of time from the Commercial Operation Date through the expiration or early
termination of this Agreement. 14.3 Termination Event.
14.3.1 The Buyer shall have the right, but not the obligation, to terminate this Agreement
upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The Facility has not achieved Commercial Operation within seventy (70) days following the Deadline;
(b) After the Commercial Operation Date, the Seller has not sold or delivered Energy from the Facility to the Buyer for a period of twelve (12) consecutive months; (c) If the Facility does not
obtain RPS Certification within six (6) months of the Commercial Operation Date and maintain RPS Certification as required by Section 3.2; or (d) The Seller breaches any other material
obligation of this Agreement.
14.3.2 The Seller shall have the right, but not the obligation, to terminate this Agreement upon the occurrence of any of the following, each of which is a “Termination Event”: (a) The
Buyer fails to make a payment due and payable under this Agreement within thirty (30) days after written notice that such payment is due; or (b) The Buyer breaches any other material obligation
of this Agreement. The preceding sentence notwithstanding, the Seller may terminate this Agreement without cause at any time prior to the Commercial Operation Date, subject to the
provisions of Section 7 of this Agreement. 14.4 Time to Cure. None of the events described in Section 14.2.1 and 14.2.2 shall constitute a Termination Event if the Buyer or the Seller cures the event, failure, or circumstance within thirty (30)
days after receipt of written notification sent by the other Party, seeking termination, or such longer period as may be necessary to cure so long as the Party subject to the Terminating Event is exercising diligent
efforts to cure. 14.5 Termination.
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14.5.1 Declaration of a Termination Event. If a Termination Event has occurred and is
continuing, the Party with the right to terminate shall have the right to: (a) send notice, designating a day, no earlier than thirty (30) days after such notice is deemed to be received (as provided in
Section 13), as an early termination date of this Agreement (the “Early Termination Date”), unless the Seller has timely communicated with the Buyer and the Parties have agreed to resolve the
circumstances giving rise to the Termination Event; (b) accelerate all amounts owing between the Parties; and (c) terminate this Agreement and end the Delivery Term effective as of the Early
Termination Date.
14.5.2 Release of Liability for Termination Event. Upon termination of this Agreement pursuant to this section neither Party shall be under any further obligation or subject to liability hereunder, except with respect to the indemnity provision in Section 11 hereof, which shall remain
in effect for a period of 12 months following the Early Termination Date. 14.6 No Limitation on Damages. Nothing in this Agreement shall be deemed or construed to
limit a Party’s right to recover damages from the other Party, except as otherwise provided in this Agreement.
15.0 RELEASE OF DATA Except as may be exempt from disclosure under applicable law, the Seller authorizes the Buyer to
release to any regulatory authority having jurisdiction over the Facility or a Party, or to any request made pursuant to the California Constitution or the California Public Records Act, information regarding the
Facility, including the Seller’s name and location, operational characteristics, the Term of this Agreement, the Facility resource type, the scheduled Commercial Operation Date, the actual Commercial Operation
Date, the Contract Capacity, payments made to the Seller and Energy production information. The Seller acknowledges that this information may be made publicly available.
16.0 ASSIGNMENT Neither Party shall assign this Agreement or its rights hereunder without the prior written consent
of the other Party, which consent shall not be unreasonably withheld.
16.1 Upon the written request of the Seller, the Buyer will execute a “Lender Consent and Agreement” between the Seller and the Seller’s lender(s), if any, in the form acceptable to the Parties;
provided, for illustration purposes only, an exemplar is attached hereto as Exhibit “PPA-G.”
16.2 Notwithstanding the foregoing, no Consent and Agreement shall be required for:
16.2.1 Any assignment or transfer of this Agreement by the Seller to an affiliate of the Seller, provided that such affiliate’s creditworthiness is equal to or better than that of Seller, as
reasonably determined by the non-assigning or non-transferring Party; or
16.2.2 Any assignment or transfer of this Agreement by the Seller or the Buyer to a person succeeding to all or substantially all of the assets of such Party, provided that such person’s creditworthiness is equal to or greater than that of such Party, as reasonably determined by the
non-assigning or non-transferring Party. 16.2.3 Notification of any assignment or transfer of this Agreement under Section 16.2.1
or 16.2.2 shall be given to the non-assigning or non-transferring Party in accordance with Exhibit “PPA-F.”
17.0 APPLICABLE LAW, VENUE, ATTORNEYS’ FEES, AND INTERPRETATION This Agreement will be governed by and construed in accordance with the laws of the State of
California. The Parties will comply with applicable laws pertaining to their obligations arising under this
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Agreement. In the event that an action is brought, the Parties agree that trial of such action will be vested
exclusively in the state courts of California or in the United States District Court for the Northern District of California in the County of Santa Clara, State of California. The prevailing party in any action brought to
enforce the provisions of this Agreement may recover its reasonable costs and attorneys' fees expended in connection with that action. If a court of competent jurisdiction finds or rules that any provision of this
Agreement, the Exhibits, or any amendment thereto is void or unenforceable, the unaffected provisions of this Agreement, the Exhibits, or any amendment thereto will remain in full force and effect. The Parties
agree that the normal rule of construction to the effect that any ambiguity is to be resolved against the drafting party will not be employed in the interpretation of this Agreement or any Exhibit or any
amendment thereof.
18.0 SEVERABILITY
If any provision in this Agreement is determined to be invalid, void or unenforceable by any court having jurisdiction, such determination shall not invalidate, void, or make unenforceable any other
provision, agreement or covenant of this Agreement and the Parties shall use their best efforts to modify this Agreement to give effect to the original intention of the Parties.
19.0 COUNTERPARTS; INTERPRETATION OF CONFLICTING PROVISIONS This Agreement may be executed in one or more counterparts, each of which shall be deemed an
original and all of which shall be deemed one and the same Agreement. Delivery of an executed counterpart of this Agreement by facsimile or portable document format (“PDF”) transmission will be
deemed as effective as delivery of an originally executed counterpart. Each Party delivering an executed counterpart of this Agreement by facsimile or PDF transmission will also deliver an originally executed
counterpart, but the failure of any Party to deliver an originally executed counterpart of this Agreement will not affect the validity or effectiveness of this Agreement. In the event of a conflict between the Agreement
and any, some or all of the Exhibits, the document imposing the more specific duty or obligation will prevail.
20.0 GENERAL No amendment to or modification of this Agreement shall be enforceable unless reduced to writing and
executed by both Parties. This Agreement shall not impart any rights enforceable by any third party other than a permitted successor or assignee bound to this Agreement. Waiver by a Party of any default by the
other Party shall not be construed as a waiver of any other default. The headings used herein are for convenience and reference purposes only. // // // // // //
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21. EXHIBITS
The following exhibits shall be deemed incorporated in and made a part of this Agreement.
Exhibit “PPA-A” - Facility Description, Prices, and Reservation Deposit
Exhibit “PPA-B” - Commercial Operation Date Confirmation Letter Exhibit “PPA-C” - Scheduling and Outage Notification Procedure Exhibit “PPA-D” - Green Attributes Reporting and Conveyance Procedures
Exhibit “PPA-E” - Insurance Requirements Exhibit “PPA-F” - Notices
Exhibit “PPA-G” - Form of Lender Consent and Agreement
IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed by their
authorized representatives as of the Effective Date.
CITY OF PALO ALTO SELLER APPROVED AS TO FORM
Senior Deputy City Attorney
APPROVED
City Manager
Director of Utilities
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EXHIBIT “PPA-A”
Facility Description, Rates, and Reservation Deposit
Program Rates Contract Term: Twenty (20) or twenty-five (25) years Contract rate: $0.165 per kWh for solar resources, 20-year or 25-year contract term $0.093 per kWh for non-solar resources, 20-year contract term $0.094 per kWh for non-solar resources, 25-year contract term
Pre-certification rate: $0.08 per kWh
Reservation Deposit Reservation Deposit ($20/kW of Contract Capacity) $
Service address:
Facility Description:
Contract Capacity: kW (CEC-AC), based on solar array rating (Panel rated
output at PV USA test conditions x inverter efficiency)
Facility primary fuel/technology:
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EXHIBIT “PPA-B”
Commercial Operation Date Confirmation Letter In accordance with the terms of the Power Purchase Agreement (Palo Alto CLEAN), dated
(the “Agreement”) by and between the City of Palo Alto, as the Buyer, and , as the Seller, this Confirmation Letter serves to
document the Parties’ agreement that (i) the conditions precedent to the occurrence of the Commercial Operation Date have been satisfied, and (ii) the Buyer has received Energy, as specified in the Agreement,
as of , . The actual installed Contract Capacity is kW.
This Confirmation Letter shall confirm the Commercial Operation Date, as defined in the Agreement, as of the date referenced in the preceding sentence.
IN WITNESS WHEREOF, each Party has caused this letter to be duly executed by its authorized representative as of the date of last signature provided below:
Buyer Seller
By: By:
Name: Name:
Title: Director of Utilities Title:
Date: Date:
In recognition of the Commercial Operation Date relative to the Effective Date of the Agreement by
and between the Buyer and the Seller, the Seller hereby calculates the amount to return, if any, of the Seller’s deposit, as follows: Original Reservation Deposit Amount: $
Commercial Operation Date Deadline:
□ Commercial Operation Date is prior to Deadline
□ Commercial Operation Date occurred weeks following the Deadline, meaning that %
of the Reservation Deposit is relinquished by Seller per Section 7.2.2 of the Power Purchase Agreement. Amount (if any) of Reservation Deposit to return to the Seller is: $
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EXHIBIT “PPA-C”
Scheduling and Outage Notification Procedure C.1 Applicability. This Exhibit” PPA-C” shall apply if the Facility is subject to Section 6.0
of this Agreement.
C.2 Annual Operations Forecast
C.2.1 By the tenth (10th) day September of each calendar year, the Seller will provide NCPA with an annual operations forecast detailing hourly expected generation and all proposed
planned Outages for the next calendar year. The annual operations forecast for the calendar year shall be provided by not later than ninety (90) days prior to the scheduled Commercial Operation
Date of the Generating Facility. C.2.2 NCPA may request modifications to the annual operations forecast at any time,
and the Seller shall use good faith efforts to accommodate the requested modifications. C.2.3 The Seller shall not conduct Planned Outages at times other than as set forth in
its annual operations forecast, unless approved in advance by NCPA, which approval shall not be withheld or delayed unreasonably. C.2.4 The Seller shall not schedule or conduct Planned Outages from 12:00 p.m. through 7:00 p.m. Pacific Time during the months of June through October.
C.3. Short Term Operations Forecasts
C.3.1. Quarterly Operations Forecast
C.3.1.1 By the fifth (5th) day of January, April and July of each Contract Year,
the Seller shall provide a calendar quarter-operations forecast by hour of expected generation and all proposed Planned Outages for the next full calendar quarter and the
twelve (12) months following that calendar quarter. As an example, by January 5, 2014, the Seller would provide a calendar quarter-operations forecast by hour of expected
generation for the period, April 1, 2014 through June 30, 2014, and identify all proposed Planned Outages for the period, April 1, 2014 through June 30, 2015.
C.3.1.2 NCPA will approve or require modifications to the proposed calendar
quarter-operations forecast within ten (10) days of receipt of the forecast. C.3.1.3 If required by NCPA, the Seller will provide a modified calendar quarter-operations forecast within seven (7) days after receipt of required modifications
from NCPA. C.3.2 Weekly Update
C.3.2.1 By 14:00 of each Wednesday, the Seller shall provide an electronic update, in a format specified by NCPA, to the calendar quarter-operations forecast for the
following seven (7) days (Thursday through the next Wednesday). C.3.2.2 The weekly update shall include hourly expected generation and all proposed planned Outages for the relevant seven (7) day period.
C.4 Outage Detail for Annual and Short Term Operations Forecasts. Outage information
provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, capacity out of service (kW), the equipment that is or will be out of service, and the reason for the Outage.
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C.5 General Scheduling Protocols
C.5.1 Daily Modifications to Forecasts. Unless otherwise mutually agreed, the Seller may make changes to the weekly update to the calendar quarter-operations forecast by providing
such changes to NCPA prior to 08:00 of the day that is two (2) Business Days before the active scheduling day as determined by the WECC prescheduling calendar. Example: For power that is
scheduled for generation or delivery on Friday, March 29, 2014, changes must be submitted to NCPA by 08:00 on Wednesday, March 27, 2014. C.5.2 Hourly Modifications to Active Schedules. Unless otherwise mutually agreed, the Seller may request changes to active schedules by providing such changes to NCPA with a
minimum of four (4) hours’ notice prior to the applicable CAISO market deadline (e.g. Hour
Ahead Scheduling Process (“HASP”) Scheduling deadline, as defined in the CAISO Tariff). Active day Schedule changes are not binding. Changes to active Schedules are limited to two (2) changes per day, excluding forced Outages, unless otherwise agreed to between the Parties. One
request for a Schedule change, of one-hour or multiple-hours duration, constitutes one Schedule change. Example: For power that is scheduled for generation or delivery in hour ending 15:00 (for
the period from 14:01 to 15:00), changes must be submitted to NCPA by 10:00. C.5.3. Unforeseen Circumstances. At the Seller’s request, NCPA may, but is not
required to, modify the Schedules for the Generation Facility Output due to unforeseen circumstances in accordance with the above scheduling timeline constraints described in this Exhibit PPA-C.
C.5.4. Absence of Forecasts. In the absence of forecasts and schedules as required by this Agreement or this Exhibit, NCPA shall utilize the most current information the Seller
provides in the development and submission of Schedules.
C.6 Outage Reporting Protocols
C.6.1. Notification. The Seller shall notify NCPA of all planned or forced Outages of the Generating Facility to ensure compliance with the CAISO Outage Coordination and
Enforcement Protocols. C.6.1.1 Outage information provided by the Seller shall include, at a minimum, the start time and stop time of the Outage, Capacity out of service (kW), equipment out of
service, and the reason for the Outage.
C. 6.1.2 Seller shall provide the Planned Outages not included in the annual operations forecast, the calendar quarter-operations forecast, or the weekly update, to
NCPA at least four (4) Business Days prior to the start of the requested outage.
C. 6.1.3 At any time prior to the start of a Planned Outage, the CAISO may deny the Outage due to a System Emergency (as defined in the CAISO Tariff) or as otherwise permitted under the CAISO Tariff. If NCPA receives notice that the CAISO
has denied an Outage in accordance with the CAISO Tariff, NCPA will notify the Seller as soon as possible and the Seller shall modify the planned Outage as required by the
CAISO. C.6.2 Commencement of an Outage. The Seller shall not begin any Planned Outage without the prior approval of NCPA and the CAISO.
C.6.3 Forced Outages
C.6.3.1 The Seller shall report the Forced Outages to NCPA within twenty (20)
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minutes of such Outages. C.6.3.2 The Seller’s notice of a Forced Outage sent to NCPA shall include the
reason for the Outage (if known), expected duration of the Outage, and the Capacity reduction. C.6.3.3 By the end of the next Business Day following the day on which a
Forced Outage has occurred, the Seller shall provide to NCPA a detailed written report, specifying the reason for the Outage, expected duration of such Outage, capacity
reduction, and actions taken to mitigate such Outage. C.6.4 Return to Service. The Seller shall notify NCPA as soon as possible, but in any case before the Generating Facility is returned to service. C.7 Notices. All Scheduling notices and Schedules shall be submitted to NCPA by phone,
fax or email, or other means as may be mutually agreed by the Parties, to the persons designated in Exhibit “PPA-F.”
C.8 Changes in Scheduling and Outage Procedure. The Buyer shall revise Exhibit “PPA-C,”
or, as appropriate, give written notice to the Seller regarding the revision, and issue a new Exhibit “PPA-C,” which shall then become part of the Agreement to reflect changes in the scheduling and outage
notification procedure.
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EXHIBIT “PPA-D”
Green Attributes Reporting and Conveyance Procedures D.1 Additional Definitions for the Conveyance of Green Attributes
D.1.1 “Certificate Transfers” means the process, as described in the WREGIS
Operating Rules, whereby a WREGIS account holder may request that WREGIS Certificates from a specific generating unit shall be directly deposited to another WREGIS account. D.1.2 “WREGIS Certificates” means a certificate created within the WREGIS system
that represents all Renewable and Green Attributes from one MWh of electricity generation from an Eligible Renewable Energy Resource that is registered with WREGIS. D.1.3 “WREGIS Operating Rules” means the document published by WREGIS that
governs the operation of the WREGIS system for registering, tracking, and conveying, among others, RECs produced from Eligible Renewable Energy Resources that shall be registered with
WREGIS. D.1.4 “WREGIS” means Western Renewable Energy Generation Information System. D.2 RECs. Green Attributes shall be conveyed by the Seller to the Buyer through RECs, which shall be registered tracked and conveyed to the Buyer, using WREGIS. D.3 WREGIS Registration. Prior to the Commercial Operation Date, the Buyer will register
the Facility in the Buyer’s WREGIS account on behalf of the Seller. The Buyer shall charge back to the Seller any costs of registering and maintaining the registration of the Facility with WREGIS. The Seller
shall provide to the Buyer any documents required by WREGIS and assign the Seller’s rights to register the Facility in WREGIS, using agreements provided by WREGIS. D.4 B u yer ’s W REGI S Acco unt . The Buyer shall, at its sole expense, establish and maintain
the Buyer’s WREGIS account sufficient to accommodate the WREGIS Certificates produced by the output of the Facility. The Buyer shall be responsible for all expenses associated with (A) establishing and
maintaining the Buyer’s WREGIS Account, and (B) subsequently transferring or retiring WREGIS Certificates. D.5 Qualified Reporting Entity. The Buyer shall be the Qualified Reporting Entity (as such
term is defined by WREGIS) for the Facility, and shall be responsible for providing the metered Output data to WREGIS. D.6 Reporting of Environmental Attributes. In lieu of the Seller’s transfer of the WREGIS
Certificates using Certificate Transfers from the Seller’s WREGIS account to the Buyer’s WREGIS account, the Buyer shall report the Facility as being held directly in its WREGIS account, which will
preclude the Seller from reporting the Facility in its own WREGIS account. D.6.1 By avoiding the use of Certificate Transfers, there will be no transaction costs to the Seller or the Buyer for the Certificate Transfers that would otherwise be used. D.6.2 WREGIS Certificates for the Facility will be created on a calendar month basis
in accordance with the certification procedure established by the WREGIS Operating Rules in an amount equal to the Energy generated by the Project and delivered to the Buyer in the same
calendar month. D.6.3 WREGIS Certificates will only be created for whole MWh amounts of energy generated. Any fractional MWh amounts (i.e., kWh) will be carried forward until sufficient
generation is accumulated for the creation of a WREGIS Certificate and all such accumulated
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MWh of Environmental Attributes will then be available to Buyer. D.6.4 If a WREGIS Certificate Modification (as such term is defined by WREGIS)
will be required to reflect any errors or omissions regarding the Green Attributes from the Facility, then the Buyer will manage the submission of the WREGIS Certificate Modification. D.6.5 Due to the expected delay in the creation of WREGIS Certificates relative to the
timing of invoice payments under Section 2, the Buyer will normally be making an invoice payment for the Output for a given month in accordance with Section 2 before the WREGIS
Certificates for such month may be created in the Buyer’s WREGIS account. Notwithstanding this delay, the Buyer shall have all right and title to all such WREGIS Certificates upon payment to the
Seller in accordance with Section 2. D.7 Changes in Green Attributes Reporting and Conveyance Procedures. The Buyer shall revise this Exhibit “PPA-D,” as appropriate, give written notice to the Seller regarding the revision, and
issue a new Exhibit “PPA-D,” which shall then become part of this Agreement in the event that: D.7.1 WREGIS changes the WREGIS Operating Rules (as defined by WREGIS) after the Effective Date or applies the WREGIS Operating Rules in a manner inconsistent with this
Exhibit “PPA-D” after the Effective Date; or,
D.7.2 WREGIS is replaced as the primary method that the Buyer uses for conveyance of Green Attributes, or additional methods to convey all Green Attributes, are required.
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EXHIBIT “PPA-E”
Insurance Requirements CONTRACTORS TO THE CITY OF PALO ALTO (CITY), AT THEIR SOLE EXPENSE, WILL FOR THE TERM OF THE
CONTRACT OBTAIN AND MAINTAIN INSURANCE IN THE AMOUNTS FOR THE COVERAGE SPECIFIED BELOW,
AFFORDED BY COMPANIES WITH A BEST’S KEY RATING OF A-:VII, OR HIGHER, LICENSED OR
AUTHORIZED TO TRANSACT INSURANCE BUSINESS IN THE STATE OF CALIFORNIA.
AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AS SPECIFIED,
BELOW:
REQUIRED
TYPE OF COVERAGE
REQUIREMENT MINIMUM LIMITS
EACH OCCURRENCE AGGREGATE
YES YES WORKER’S COMPENSATION AUTOMOBILE LIABILITY STATUTORY STATUTORY
YES COMMERCIAL GENERAL LIABILITY, INCLUDING PERSONAL INJURY, BROAD FORM PROPERTY DAMAGE BLANKET CONTRACTUAL, AND FIRE LEGAL
LIABILITY
BODILY INJURY
PROPERTY DAMAGE
BODILY INJURY & PROPERTY DAMAGE COMBINED.
$1,000,000 $1,000,000 $1,000,000
$2,000,000 $2,000,000 $2,000,000
YES
COMPREHENSIVE AUTOMOBILE
LIABILITY, INCLUDING, OWNED, HIRED, NON-OWNED
BODILY INJURY - EACH PERSON - EACH OCCURRENCE
PROPERTY DAMAGE
BODILY INJURY AND PROPERTY DAMAGE, COMBINED
$1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000
$1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000
NO PROFESSIONAL LIABILITY, INCLUDING, ERRORS AND OMISSIONS, MALPRACTICE (WHEN APPLICABLE), AND
NEGLIGENT PERFORMANCE
ALL DAMAGES
$1,000,000
YES
THE CITY OF PALO ALTO IS TO BE NAMED AS AN ADDITIONAL INSURED: PROPOSER, AT ITS SOLE COST AND
EXPENSE, SHALL OBTAIN AND MAINTAIN, IN FULL FORCE AND EFFECT THROUGHOUT THE ENTIRE TERM OF ANY
RESULTANT AGREEMENT, THE INSURANCE COVERAGE HEREIN DESCRIBED, INSURING NOT ONLY PROPOSER AND ITS SUBCONSULTANS, IF ANY, BUT ALSO, WITH THE EXCEPTION OF WORKERS’ COMPENSATION, EMPLOYER’S
LIABILITY AND PROFESSIONAL INSURANCE, NAMING AS ADDITIONAL INSURES CITY, ITS COUNCIL MEMBERS,
OFFICERS, AGENTS, AND EMPLOYEES.
I. INSURANCE COVERAGE MUST INCLUDE:
A. A PROVISION FOR A WRITTEN THIRTY DAY ADVANCE NOTICE TO CITY OF CHANGE IN COVERAGE
OR OF COVERAGE CANCELLATION; AND B. A CONTRACTUAL LIABILITY ENDORSEMENT PROVIDING INSURANCE COVERAGE FOR CONTRACTOR’S
AGREEMENT TO INDEMNIFY CITY – SEE, SAMPLE AGREEMENT FOR SERVICES. II. SUBMIT CERTIFICATE(S) OF INSURANCE EVIDENCING REQUIRED COVERAGE, OR COMPLETE THIS
SECTION AND IV THROUGH V, BELOW.
A. NAME AND ADDRESS OF COMPANY AFFORDING COVERAGE (NOT AGENT OR BROKER):
B. NAME, ADDRESS, AND PHONE NUMBER OF YOUR INSURANCE AGENT/BROKER:
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C. POLICY NUMBER(S):
D. DEDUCTIBLE AMOUNT(S) (DEDUCTIBLE AMOUNTS IN EXCESS OF $5,000 REQUIRE CITY’S PRIOR
APPROVAL):
III. AWARD IS CONTINGENT ON COMPLIANCE WITH CITY’S INSURANCE REQUIREMENTS, AND
PROPOSER’S SUBMITTAL OF CERTIFICATES OF INSURANCE EVIDENCING COMPLIANCE WITH THE
REQUIREMENTS SPECIFIED HEREIN.
IV. ENDORSEMENT PROVISIONS, WITH RESPECT TO THE INSURANCE AFFORDED TO “ADDITIONAL
INSURES”
A. PRIMARY COVERAGE
WITH RESPECT TO CLAIMS ARISING OUT OF THE OPERATIONS OF THE NAMED INSURED, INSURANCE AS
AFFORDED BY THIS POLICY IS PRIMARY AND IS NOT ADDITIONAL TO OR CONTRIBUTING WITH ANY
OTHER INSURANCE CARRIED BY OR FOR THE BENEFIT OF THE ADDITIONAL INSURES.
B. CROSS LIABILITY
THE NAMING OF MORE THAN ONE PERSON, FIRM, OR CORPORATION AS INSURES UNDER THE POLICY
SHALL NOT, FOR THAT REASON ALONE, EXTINGUISH ANY RIGHTS OF THE INSURED AGAINST ANOTHER,
BUT THIS ENDORSEMENT, AND THE NAMING OF MULTIPLE INSUREDS, SHALL NOT INCREASE THE TOTAL
LIABILITY OF THE COMPANY UNDER THIS POLICY.
C. NOTICE OF CANCELLATION
1. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR ANY REASON OTHER THAN THE
NON-PAYMENT OF PREMIUM, THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A THIRTY (30) DAY
WRITTEN NOTICE BEFORE THE EFFECTIVE DATE OF CANCELLATION.
2. IF THE POLICY IS CANCELED BEFORE ITS EXPIRATION DATE FOR THE NON-PAYMENT OF PREMIUM,
THE ISSUING COMPANY SHALL PROVIDE CITY AT LEAST A TEN (10) DAY WRITTEN NOTICE BEFORE THE
EFFECTIVE DATE OF CANCELLATION.
V. PROPOSER CERTIFIES THAT PROPOSER’S INSURANCE COVERAGE MEETS THE ABOVE
REQUIREMENTS:
THE INFORMATION HEREIN IS CERTIFIED CORRECT BY SIGNATURE(S) BELOW. SIGNATURE(S) MUST BE
SAME SIGNATURE(S) AS APPEAR(S) ON SECTION II, ATTACHMENT A, PROPOSER’S INFORMATION FORM.
Firm:
Signature:
Name:
(Print or type name)
Signature:
Name:
(Print or type name)
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NOTICES SHALL BE MAILED TO:
PURCHASING AND
CONTRACT ADMINISTRATION
CITY OF PALO ALTO
P.O. BOX 10250
PALO ALTO, CA 94303.
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EXHIBIT “PPA-F”
Notices
Contract Administration
BUYER: SELLER:
City of Palo Alto Utilities Resource Management
250 Hamilton Avenue Palo Alto, CA 94301
Ph: 650-329-2689 Email: UtilityCommoditySettlements@CityofPaloAlto.Org
Billing and Settlements
BUYER: SELLER: City of Palo Alto
Utilities Resource Management 250 Hamilton Avenue
Palo Alto, CA 94301 Ph: 650-329-2689
Email: UtilityCommoditySettlements@CityofPaloAlto.Org
Forecasting and Outage Reporting under Section 6 of this Agreement
Planned Outages:
BUYER: SELLER: Northern California Power Agency Real-
Time Dispatch 651 Commerce Drive
Roseville, CA 95678 Ph: 916-786-3518
Forced Outages
BUYER: SELLER:
Northern California Power Agency Real-Time Dispatch
651 Commerce Drive Roseville, CA 95678
Ph: 916-786-3518
Forecasting and Scheduling
BUYER: SELLER: Northern California Power Agency
Operations and Pre-Scheduling 651 Commerce Drive
Roseville, CA 95678 Ph: 916-786-0123
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EXHIBIT “PPA-G”
Form of Lender Consent and Agreement
This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”),
, a corporation (the “Lender),” by its agent, (the “Administrative Agent”), and , a
corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined).
RECITALS A. Borrower intends to develop, construct, install, test, own, operate and use an approximately
MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”).
B. In order to partially finance the development, construction, installation, testing, operation and
use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing
Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders
have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower. C. The City and Borrower have entered into that certain Power Purchase Agreement, dated as of
(attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Power Purchase Agreement”).
D. The City and Borrower have entered into that certain Interconnection Agreement, dated as of _ (attached hereto and incorporated herein by reference, as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the “Interconnection Agreement”). E. Pursuant to a security agreement executed by Borrower and Administrative Agent for the
Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its
obligations under the Financing Agreement and related documents (collectively, the “Financing Documents”), all of its right, title and interest in, to and under the Power Purchase Agreement and
Interconnection Agreement to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under the Financing Documents. F. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent.
AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and intending to be legally bound, the Parties agree, as follows:
1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E above, consents to an assignment of the Power Purchase Agreement and Interconnection Agreement
pursuant thereto, and agrees with Administrative Agent, as follows:
(a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any
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defaults of Borrower under the Power Purchase Agreement or Interconnection Agreement, as the
case may be, subject to applicable notice and cure periods provided in the Power Purchase Agreement and Interconnection Agreement. Upon receipt of notice from Administrative Agent,
the City agrees to accept such exercise and cure by Administrative Agent if timely made by Administrative Agent under the Power Purchase Agreement or Interconnection Agreement, as the
case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to make directly to such account as Administrative
Agent may direct the City, in writing, from time to time, all payments to be made by the City to Borrower under the Power Purchase Agreement or Interconnection Agreement, as the case may
be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Power Purchase Agreement,
Interconnection Agreement, or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a). (b) The City will not, without the prior written consent of Administrative Agent (such consent not
to be unreasonably withheld), (i) cancel or terminate the Power Purchase Agreement or Interconnection Agreement, or consent to or accept any cancellation, termination or suspension
thereof by Borrower, except as provided in the Power Purchase Agreement or Interconnection Agreement and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose
(by operation of law or otherwise) of any part of its interest in the Power Purchase Agreement or Interconnection Agreement, except as provided in the Power Purchase Agreement or
Interconnection Agreement, or (iii) amend or modify the Power Purchase Agreement or Interconnection Agreement in any manner materially adverse to the interest of the Lenders in the
Power Purchase Agreement and Interconnection Agreement as collateral security under the Security Agreement. (c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City
under or pursuant to the Power Purchase Agreement or Interconnection Agreement to Administrative Agent in accordance with the notice provisions of this Consent. The City shall
deliver any such notices concurrently with delivery of the notice to Borrower under the Power Purchase Agreement or Interconnection Agreement. To the extent that a cure period is provided
under the Power Purchase Agreement or Interconnection Agreement, Administrative Agent shall have the same period of time to cure the breach or default that Borrower is entitled to under the
Power Purchase Agreement or Interconnection Agreement, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower
under the Power Purchase Agreement or Interconnection Agreement, then as to Administrative Agent, the applicable cure period under the Power Purchase Agreement or Interconnection
Agreement shall begin on the date on which the notice is given to Administrative Agent. If possession of the Project is necessary to cure such breach or default, and Administrative Agent or
its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings, Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to
complete such proceedings so long as Administrative Agent or its designee(s) continue to perform any monetary obligations under the Power Purchase Agreement or Interconnection Agreement, as
the case may be. The City consents to the transfer of Borrower's interest under the Power Purchase Agreement and Interconnection Agreement to the Lenders or Administrative Agent or their
designee(s) or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or
Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or
grantee as the applicable party under the Power Purchase Agreement and Interconnection Agreement (provided that such Lenders or Administrative Agent or their designee(s) or
assignee(s) or purchaser or grantee assume the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement, including, without limitation, satisfaction and compliance with all credit provisions of the Power Purchase Agreement and Interconnection
Agreement, if any, and provided further that such Lenders or Administrative Agent or their
designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than
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Borrower, as reasonably determined by City). (d) In the event that either the Power Purchase Agreement or Interconnection Agreement, or both
is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City
will execute and deliver to Administrative Agent a new power purchase agreement or interconnection agreement, as the case may be, which power purchase agreement or
interconnection agreement shall be on the same terms and conditions as the original Power Purchase Agreement or Interconnection Agreement for the remaining term of the original Power
Purchase Agreement or Interconnection Agreement before giving effect to such rejection, and which shall require Administrative Agent to cure any defaults then existing under the original
Power Purchase Agreement or Interconnection Agreement. Notwithstanding the foregoing, any new renewable power purchase agreement or interconnection agreement will be subject to all
regulatory approvals required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals. (e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to
perform Borrower's obligations under the Power Purchase Agreement and Interconnection Agreement, succeed to Borrower’s interest under the Power Purchase Agreement and
Interconnection Agreement, or enter into a new power purchase agreement or interconnection agreement as provided in subparagraph 1(d) above, the recourse of the City against Administrative
Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the Power Purchase Agreement and Interconnection
Agreement, if any.
(f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to Borrower's interest under the Power Purchase Agreement and Interconnection Agreement,
Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Power Purchase Agreement or Interconnection
Agreement, except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s)
shall have the right to assign all or a pro rata interest in the Power Purchase Agreement and Interconnection Agreement to a person or entity to whom Borrower’s interest in the Project is
transferred, provided such transferee assumes the obligations of Borrower under the Power Purchase Agreement and Interconnection Agreement and has a creditworthiness equal to or better
than Borrower, as reasonably determined by the City. Upon such assignment, Administrative Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees)
shall be released from any further liability thereunder accruing from and after the date of such assignment, to the extent of the interest assigned. 2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as
of the date of this Consent:
(a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has all requisite power and authority to enter into and to perform its obligations hereunder and under
the Power Purchase Agreement and Interconnection Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance of this Consent, the Power Purchase Agreement and
the Interconnection Agreement have been duly authorized by all necessary action on its part and do not require any approvals, material filings with, or consents of any entity or person which have
not previously been obtained or made;
(c) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement is in full force and effect;
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(d) each of this Consent, the Power Purchase Agreement, and the Interconnection Agreement has
been duly executed and delivered on its behalf and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof
may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered
in a proceeding in equity or at law);
(e) there is no litigation, arbitration, investigation or other proceeding pending for which the City has received service of process or, to the City’s actual knowledge, threatened against the City
relating solely to this Consent, the Power Purchase Agreement, or the Interconnection Agreement and the transactions contemplated hereby and thereby; (f) the execution, delivery and performance by it of this Consent, the Power Purchase Agreement,
and the Interconnection Agreement, and the consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material
contract or material agreement to which it is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach
or default of which could have a material adverse effect on its ability to perform its obligations under this Consent; (g) neither the City nor, to the City’s actual knowledge, any other party to the Power Purchase
Agreement or Interconnection Agreement, is in default of any of its obligations thereunder; and (h) to the City’s actual knowledge, (i) no Force Majeure Event exists under, and as defined in, the Power Purchase Agreement or Interconnection Agreement and (ii) no event or condition exists
which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the
Power Purchase Agreement or the Interconnection Agreement. Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby. 3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be
effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent
registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private courier or delivery service with charges prepaid, and addressed as specified below: If to the City:
[ ] [ ]
[ ] Telephone No.: [ ]
Facsimile No.: [ ] Attn: [ ] If to Administrative Agent:
[ ] [ ]
[ ] Telephone No.: [ ]
Facsimile No.: [ ] Attn: [ ]
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If to Borrower:
[ ] [ ]
[ ] Telephone No.: [ ]
Facsimile No.: [ ] Attn: [ ]
Any party shall have the right to change its address for notice hereunder to any other location within the
United States by giving thirty (30) days written notice to the other parties in the manner set forth above. 4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and
benefit the successors and assigns of the Parties hereto and their respective successors, transferees and assigns (including without limitation, any entity that refinances all or any portion of the obligations under
the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their
respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with respect to its interest in the Power Purchase Agreement or Interconnection Agreement to assume, in writing
and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the Power Purchase Agreement or Interconnection
Agreement not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent
shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder.
5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California
applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent
with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent.
6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and
when executed and delivered by all the parties listed below, shall constitute a single binding agreement. 7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby. 8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges
and agrees that neither the execution of this Consent, the performance by the City of any of the obligations of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City
of performance of the Power Purchase Agreement by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Power Purchase Agreement or Interconnection
Agreement, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any of the other Financing
Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Power Purchase Agreement or Interconnection Agreement. Borrower and Administrative
Agent acknowledge hereby for the benefit of City that none of the Financing Agreement, the Security
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Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Power
Purchase Agreement.
CITY OF PALO ALTO ADMINISTRATIVE AGENT
APPROVED AS TO FORM
Senior Deputy City Attorney
BORROWER
APPROVED
City Manager
Director of Utilities
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INTERCONNECTION AGREEMENT
This Interconnection Agreement (the “Agreement”), dated, for convenience, ____________________, 20__ (the “Effective Date”), is entered into by and between the CITY OF PALO ALTO, a California chartered municipal
corporation (the “City”), acting by and through its Department of Utilities (“CPAU”), and ABC COMPANY, a California corporation (the “Facility Owner”), located at the address stated below (the City and the Facility Owner
are referred to, individually, as a “Party”, and, collectively, as the “Parties”).
1.0 TERM
1.1 This Agreement takes effect on the Effective Date, and it will continue for a term of ten (10) years, until it
is earlier terminated, as follows: (a) the Facility Owner gives the City or CPAU thirty (30) days’ prior
written notice of termination; (b) if Operating Mode #2 or Operating Mode #3 is selected in Exhibit A, upon the effective date of termination of the Power Purchase Agreement or the Other Agreement between
the Parties; or (c) a Party effectively terminates due to a material default and breach by the other Party.
1.2 Upon a default referred to in Section 1.1(c), the non-defaulting Party shall give written notice of such event
of default to the defaulting Party. The defaulting Party shall have sixty (60) days from the receipt of notice of default in which to cure the default; provided, if the defaulting Party informs the non-defaulting Party that it cannot cure the default within the sixty-days period and it in good faith has continuously and
diligently attempted to cure the default, then, if the defaulting Party cures within six (6) months from the receipt of the notice of default, the non-defaulting Party may not terminate this Agreement.. No default shall be deemed to exist if the failure to discharge an obligation (other than the payment of money) is the
result of force majeure or an act or omission of the other Party
2.0 GENERATING FACILITY INTERCONNECTION AND METERING
2.1 The Facility Owner will install, operate, maintain, and repair the Generating Facility and use the meter(s)
that meet(s) the requirements of CPAU’s Rules and Regulations, as amended, and other applicable laws,
rules and regulations, including, without limitation, CPAU’s interconnection standards, as set forth in its Utilities Rule and Regulation 27 (“Rule 27”).
2.2 CPAU, at its sole cost and expense, may inspect and approve the installation of the Generating Facility and verify or otherwise authenticate the accuracy of the meter(s) as a condition precedent to its obligation to
interconnect.
2.3 The Facility Owner grants to the City, including CPAU, its officers, employees, agents and representatives
the non-exclusive right of ingress and egress on, over and across the Premises, upon reasonable prior notice, for the purpose of inspecting and approving the installation and operation of the Generating Facility
and authenticating the accuracy of the meter(s), or without notice, in the event of an emergency, to protect
the public health, safety and welfare, or in regard to a disconnection of the Generating Facility, if CPAU reasonably determines that a condition hazardous to person or property exists and immediate action is
necessary to protect person or property from damage or interference caused by the Facility or as a result of
the lack of properly operating protective devices of the Facility.
2.4 The Facility Owner will obtain and maintain the required governmental approvals, authorizations, permits, and any policy (or policies) of insurance, including, without limitation, commercial general liability, property, and professional liability insurance, as may be required by the City or CPAU or applicable laws.
2.5 The Facility Owner will comply with all applicable federal, state and local safety and performance
standards applicable to the Generating Facility and established by or under the National Electrical Code
(NEC), the Institute of Electrical and Electronics Engineers (IEEE) and accredited testing laboratories, including, without limitation, Underwriters Laboratories (UL), and in accordance with the applicable
orders, rules and regulations of the California Public Utilities Commission, pertaining to the safety and
reliability of electrical generating systems, and applicable City building codes.
EXHIBIT "I"
FORM OF CLEAN PPA INTERCONNECTION AGREEMENT
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2.6 Neither the City nor CPAU will be obligated to accept or pay for, and the City or CPAU may require the Facility Owner to temporarily interrupt or reduce, the delivery of available energy generated by the Generating Facility in the event of the following: (a) whenever CPAU determines that the interruption or
reduction is necessary in order for CPAU to construct, install, maintain, repair, replace, remove, investigate, or inspect any part of CPAU’s electric utility distribution system; or (b) if CPAU determines
that the interruption or reduction is necessary on account of an emergency, voluntary or involuntary outage,
force majeure, or compliance with good utility practice.
2.7 Notwithstanding any other provision of this Agreement, if CPAU determines that either (a) the operation of
the Generating Facility may threaten or endanger the public health, safety or welfare or the City or CPAU’s personnel or property, or (b) the continued operation of the Generating Facility may endanger the
operational integrity of CPAU’s electric utility distribution system, then CPAU will have the right to
temporarily or permanently disconnect the Generating Facility from CPAU’s electric utility distribution system upon the delivery of prior reasonable notice to the Facility Owner; provided, CPAU may act
without giving prior notice to the Facility Owner, if CPAU determines that it is impracticable to provide the
notice. The Generating Facility will remain disconnected until such time as CPAU is satisfied that the conditions referred to in this subsection have been corrected or sufficiently addressed.
2.8 The Facility Owner will (a) maintain the Generating Facility, which interconnects with CPAU’s electric
utility distribution system, in a safe and prudent manner and in conformance with all applicable laws, rules
and regulations, including, without limitation, the requirements of this Section 2, and (b) obtain any governmental approvals, authorizations and permits required for the construction and operation of the
Generating Facility.
2.9 The Facility Owner will reimburse CPAU for any and all losses, damages, claims, penalties, or liability that
the City or CPAU may incur or sustain as a result of the Facility Owner’s failure to obtain and maintain any
and all governmental approvals, authorizations and permits that may be required for the construction, installation, operation, repair or maintenance of the Generating Facility.
3.0 INTERCONNECTION FACILITIES, DISTRIBUTION SYSTEM UPGRADES, AND AFFECTED
SYSTEMS
3.1 The Facility Owner shall, in accordance with CPAU Rule 27 or other applicable CPAU Rule, pay, in
advance and in full, for all of CPAU’s estimated design and construction costs of the Interconnection
Facilities and the Distribution System Upgrades, which are specified in Exhibit A.
3.2 In the event that the Facility Owner owns the real property, on which the Interconnection Facilities are or
will be located, then the Facility Owner shall grant to the City and CPAU (or in the event that Facility Owner is leasing or otherwise obtaining rights to locate the Generating Facility on real property of a third
party, the Facility Owner shall obtain for the City and CPAU):
3.2.1 The right to install the Interconnection Facilities and related equipment or materials on that real
property along the most practical route, which is of sufficient width to provide the appropriate and safe clearance from all structures now or hereafter erected on that real property; and
3.2.2 The right of ingress and egress to and from that real property, as may be reasonably necessary for CPAU to operate, maintain, repair, and remove the Interconnection Facilities.
3.3 Where rights-of-entry or easements are required on or over that real property or the property of a third party for the installation of the Interconnection Facilities, the Facility Owner acknowledges and agrees that
CPAU’s obligation to install the Interconnection Facilities is expressly conditioned on the granting, without
cost to the City or CPAU, of any and all necessary rights-of-entry or easements to the City.
3.4 THE CITY MAKES NO REPRESENTATIONS, WARRANTIES, COVENANTS OR ASSURANCES WITH RESPECT TO THE DESIGN, CONSTRUCTION, DURABILITY OR SUITABILITY OF THE
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NEW INTERCONNECTION FACILITIES OR ANY PART THEREOF, WHETHER EXPRESS OR IMPLIED, AND THE CITY EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY, QUIET ENJOYMENT, AND ANY IMPLIED WARRANTY OF FITNESS FOR
A PARTICULAR PURPOSE APPLICABLE TO SUCH WORK.
3.5 The one-line diagram of the interconnection (at the Delivery Point) is described in Exhibit A. The
Interconnection Facilities are the sole and exclusive property of and shall be owned, operated, maintained, and repaired by the City and CPAU, and the Facility Owner disclaim any interest therein.
3.6 The Facility Owner shall pay CPAU for the costs of the Interconnection Facilities. The direct costs for the design and construction of the Interconnection Facilities shall be paid in advance by the Facility Owner.
The Facility Owner shall be additionally responsible for costs related to ongoing operations, maintenance, and replacement of the Interconnection Facilities.
3.7 Upon the Facility Owner’s discontinuation of use of the Interconnection Facilities due to termination of this Agreement, or otherwise, CPAU shall have the right to remove any portion of the Interconnection Facilities
from the real property on which the Interconnection Facilities are installed or located.
3.8 As may be required by applicable agreements between the City or CPAU and one or more Affected
Systems’ owners and/or operators, CPAU shall coordinate with those Affected Systems’ owners and/or
operators to support the interconnection. An “Affected System” is an electric system not owned by the City or CPAU but to which CPAU’s electric utility distribution system is connected. “Affected System”
includes, without limitation, the transmission system that is owned by the Pacific Gas and Electric
Company but is operated by the California Independent System Operator Corporation (“CAISO”). If upgrades to an Affected System are required by an Affected System owner and/or operator as a condition
of interconnection of the Generating Facility, then the Facility Owner shall be responsible for the costs of
such upgrades. The Facility Owner and each Affected System owner and/or operator shall enter into one or more agreements that provide(s) for the financing of such upgrades, as needed, and any repayment as set
forth in applicable tariffs of the Affected System’ owner and/or operator. The Facility Owner, at its own cost and expense, shall be responsible for entering into any other agreements as may be required by an Affected System’s owner and/or operator as a condition of interconnected operation and complying with
the requirements of any applicable tariffs. Such agreements may include the “Participating Generator Agreement” (ISO Tariff Appendix M) and the “Meter Services Agreement for CAISO Metered Entities” with the CAISO.
4.0 INDEMNITY
4.1 Each Party, as indemnitor, shall defend, protect, indemnify and hold harmless the other Party, as indemnitee, its elected and appointed officials, directors, officers, employees, agents and representatives of
the other Party from and against any and all losses, liability, damages, claims, costs, charges, demands, or
expenses (including any direct, indirect or consequential loss, liability, damage, claim, cost, charge, demand, or expense, and reasonable attorneys’ fees) for personal injury or death and property damage,
arising, directly or indirectly, out of or in connection with (a) the engineering, design, construction, maintenance, repair, operation, supervision, inspection, testing, protection or ownership of the indemnitor’s facilities, or (b) the making of replacements, additions, betterments to, or reconstruction of the indemnitor’s
facilities; provided, however, the Facility Owner’s duty to indemnify the City and CPAU shall not extend to any loss, liability, damage, claim, cost, charge, demand, or expense resulting from interruptions in electrical service to CPAU’s electric utility customers other than the Facility Owner. Neither Party shall be
indemnified hereunder for its loss, liability, damage, claim, cost, charge, demand, or expense arising out of or resulting from its sole negligence or willful misconduct.
4.2 Notwithstanding the foregoing indemnity, and excepting a Party’s willful misconduct or sole negligence, each Party shall be solely responsible for damage to its own facilities resulting from electrical disturbances
or faults.
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4.3 This Section 4 shall not be construed to relieve any insurer of its obligations to pay any insurance claims in accordance with the provisions of any valid insurance policy to be procured by a Party.
4.4 EXCEPT AS OTHERWISE PROVIDED IN SECTION 4.1, A PARTY SHALL NOT BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, PUNITIVE, EXEMPLARY, SPECIAL OR
INCIDENTAL DAMAGES (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF
BUSINESS, LOSS OF REVENUE, LOSS OF OPPORTUNITY OR LOSS OF DATA), HOWSOEVER CAUSED, WHETHER ARISING UNDER TORT, CONTRACT, OR OTHER LEGAL THEORY, AND
WHETHER OR NOT FORESEEABLE, THAT ARE INCURRED BY THE OTHER PARTY.
5.0 NOTICE
5.1 Any notice required to be given under this Agreement will be delivered, in writing, and electronically
mailed or delivered by the United States Postal Service, with postage prepaid and correctly addressed to the
Party, or personally delivered to the Party, at the address below. Changes to such designation may be made by notice similarly given. All written notices will be directed, as follows:
TO CITY: City of Palo Alto
Department of Utilities
250 Hamilton Ave Palo Alto, CA 94301
ATTN.: Utilities Resource Management Phone: (650) 329-2689
FAX: (650) 326-1507 Email: UtilityCommoditySettlements@CityofPaloAlto.org
TO FACILITY OWNER: ABC Company
123 Main Street
Anytown, CA 90909 ATTN: Senior Vice-President of Operations
Phone: (999) 999-9999 FAX: (999) 111-1111
Email: RenewableEnergyOperations@ABCInc.org
6.0 MISCELLANEOUS PROVISIONS
6.1 This Agreement is governed by and interpreted in accordance with the laws of the State of California as if
executed and to be performed wholly within the State of California.
6.2 Any amendment or modification to this Agreement will not be binding upon the Parties, unless the Parties
agree thereto, in writing. The failure of a Party at any time or times to require performance of any provision
hereof will in no manner affect the right at a later time to enforce the same. No waiver by a Party of the breach of any covenant, term or condition contained in this Agreement, whether by conduct or otherwise,
will be deemed or be construed as a further or continuing waiver of any such breach or a waiver of the
breach of any other covenant, term or condition, unless such waiver is stated, in writing.
6.3 This Agreement supersedes any existing agreement, to which the City and the Facility Owner are parties, under which the Facility Owner is currently operating the Generating Facility, and any such agreement shall be deemed terminated as of the date this Agreement becomes effective.
IN WITNESS WHEREOF, the Parties by their duly appointed representatives have executed this Interconnection
Agreement in Palo Alto, County of Santa Clara, as of the Effective Date.
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CITY OF PALO ALTO ABC COMPANY
_________________________________ _________________________________
City Manager President
APPROVED AS TO FORM: APPROVED:
_________________________________ _________________________________
Senior Asst. City Attorney Director of Utilities
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EXHIBIT A
PART 1. GENERATING FACILITY DESCRIPTION
1. Service address: ___________________________________, Palo Alto, CA ____________ (the “Premises”)
2. Generating Facility Description:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
3. Gross power rating of the Generating Facility ________ kW, based on:
□ Inverter rating
□ Solar array rating (Panel rated output at PV USA test conditions x inverter efficiency)
□ Generator nameplate
□ Prime mover nameplate
4. Generating Facility primary fuel/technology: ____________________________________________________
5. Net power rating of the Generating Facility: ____ kW, which is the gross power rating stated above net of
power used in the Generating Facility to power lights, motors, control systems, and other electrical loads used in operation, including losses on the Generating Facility’s electric distribution system
6. Maximum instantaneous power to be exported through the Point of Common Coupling: ______ kW
7. Generating facility is connected to the CPAU distribution system at ______ Kv
8. Operating Mode (select one of following):
□ #1 Power used on-site; no energy export or incidental energy export (default choice);
□ #2 Sale to CPAU (feed-in tariff (FIT) rate or merchant generator), which requires disclosure of
the Power Purchase Agreement # ______________;
□ #3 Other Agreement:
Description: ____________________________________________________________, which requires disclosure of the Other Agreement # ______________.
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
110927 dm 0073626 7
PART 2. INTERCONNECTION FACILITIES DESCRIPTION; ESTIMATED COSTS
□ No Interconnection Facilities are required.
□ Interconnection Facilities are required (provide information below).
1. The Interconnection Facilities Description: _______________________________________________________________________
_______________________________________________________________________ _______________________________________________________________________
2. The direct costs of the design and construction of the Interconnection Facilities shall be paid in advance by
the Facility Owner in accordance with Rule 27, as amended.
3 The Final Estimated CPAU Design and Construction Costs is $_____________.
4 The Final Estimated CPAU Operations and Maintenance Cost is $ ________________.
5. The Total Cost of Interconnection Facilities is $______________.
6. A One-line Diagram of the Interconnection is inserted as Page(s) __ through __.
7. A diagram of the Site Layout is inserted as Page(s) __ through __.
PART 3. DISTRIBUTION SYSTEM UPGRADES REQUIRED
□ No Distribution Upgrades are required.
□ Distribution Upgrades are required (provide information below). 1. Description of Distribution Upgrades: _______________________________________________________________________ _______________________________________________________________________
_______________________________________________________________________ 2. The direct costs of the design and construction of the Distribution Upgrades shall be paid in advance by the Facility Owner in accordance with Rule 27, as amended. 3. The Final Estimated CPAU Design and Construction Cost is $_____________. 4. The Final Estimated CPAU Operations and Maintenance Cost is $ ________________.
5. The Total Cost of the Distribution Upgrades is $______________. 6. A description of the Distribution Upgrades is inserted as Page(s) __ through __.
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
EXHIBIT “J”
FORM OF LENDER CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this “Consent”), dated as of , 20 , is entered into by and among the CITY OF PALO ALTO, a California chartered municipal corporation (the “City”),
, a corporation (the “Lender),” by its agent, (the “Administrative Agent”), and , a
corporation (the “Borrower”) (collectively, the “Parties”). Unless otherwise defined, all capitalized terms have the meaning given in the Contract (as hereinafter defined).
RECITALS
A. Borrower intends to develop, construct, install, test, own, operate and use an approximately
MW electric generating facility located in the city of Palo Alto in the State of California, known as the Project (the “Project”).
B. In order to partially finance the development, construction, installation, testing, operation and
use of the Project, Borrower has entered into that certain financing agreement dated as of (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Financing
Agreement”), among Borrower, the financial institutions from time to time parties thereto (collectively, the “Lenders”) , and Administrative Agent for the Lenders, pursuant to which, among other things, Lenders
have extended commitments to make loans and other financial accommodations to, and for the benefit of, Borrower.
C. The City and Borrower have entered into that certain Lease Agreement, dated as of
(attached hereto and incorporated herein by reference, as amended, amended and restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof, the
“Lease”).
D. Pursuant to a security agreement executed by Borrower and Administrative Agent for the Lenders (as amended, amended and restated, supplemented or otherwise modified from time to time, the
“Security Agreement”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Financing Agreement and related documents (collectively, the “Financing
Documents”), all of its right, title and interest in, to and under the L e a s e to Administrative Agent for the benefit of itself, the Lenders and each other entity or person providing collateral security under
the Financing Documents.
E. It is a requirement under the Financing Agreement that the Parties hereto execute this Consent.
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and intending to be legally bound, the Parties agree, as follows:
1. CONSENT TO ASSIGNMENT. The City acknowledges the assignment referred to in Recital E
above, consents to an assignment of the Lease pursuant thereto, and agrees with Administrative Agent, as follows:
(a) Administrative Agent shall be entitled (but not obligated) to exercise all rights and to cure any
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
defaults of Borrower under the Lease, as the case may be, subject to applicable notice and
cure periods provided in the Lease. Upon receipt of notice from Administrative Agent, the City agrees to accept such exercise and cure by Administrative Agent if timely made by
Administrative Agent under the Lease, as the case may be, and this Consent. Upon receipt of Administrative Agent's written instructions and to the extent allowed by law, the City agrees to
make directly to such account as Administrative Agent may direct the City, in writing, from time to time, any and all payments to be made by the City to Borrower under the Lease, as
the case may be, from and after the City’s receipt of such instructions, and Borrower consents to any such action. The City shall not incur any liability to Borrower under the Lease
or this Consent for directing such payments to Administrative Agent in accordance with this subsection (a).
(b) The City will not, without the prior written consent of Administrative Agent (such consent not
to be unreasonably withheld), (i) cancel or terminate the Lease, or consent to or accept any cancellation, termination or suspension thereof by Borrower, except as provided in the Lease
and in accordance with subparagraph 1(c) hereof, (ii) sell, assign or otherwise dispose (by operation of law or otherwise) of any part of its interest in the Lease, except as provided in the
Lease, or (iii) amend or modify the Lease in any manner materially adverse to the interest of the Lenders in the Lease as collateral security under the Security Agreement.
(c) The City agrees to deliver duplicates or copies of all notices of default delivered by the City
under or pursuant to the Lease to Administrative Agent in accordance with the notice provisions of this Consent. The City shall deliver any such notices concurrently with delivery
of the notice to Borrower under the Lease. To the extent that a cure period is provided under the Lease, Administrative Agent shall have the same period of time to cure the breach or
default that Borrower is entitled to under the Lease, except that if the City does not deliver the default notice to Administrative Agent concurrently with delivery of the notice to Borrower
under the Lease, then as to Administrative Agent, the applicable cure period under the Lease shall begin on the date on which the notice is given to Administrative Agent. If possession
of the Project is necessary to cure such breach or default, and Administrative Agent or its designee(s) or assignee(s) declare Borrower in default and commence foreclosure proceedings,
Administrative Agent or its designee(s) or assignee(s) will be allowed a reasonable period to complete such proceedings so long as Administrative Agent or its designee(s) continue to perform
any monetary obligations under the Lease, as the case may be. The City consents to the transfer of Borrower's interest under the Lease to the Lenders or Administrative Agent or their designee(s)
or assignee(s) or any of them or a purchaser or grantee at a foreclosure sale by judicial or nonjudicial foreclosure and sale or by a conveyance by Borrower in lieu of foreclosure and
agrees that upon such foreclosure, sale or conveyance, the City shall recognize the Lenders or Administrative Agent or their designee(s) or assignee(s) or any of them or other purchaser or
grantee as the applicable party under the Lease (provided that such Lenders or Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee assume the obligations of
Borrower under the Lease, including, without limitation, satisfaction and compliance with all credit provisions of the Lease, if any, and provided further that such Lenders or
Administrative Agent or their designee(s) or assignee(s) or purchaser or grantee has a creditworthiness equal to or better than
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
Borrower, as reasonably determined by City).
(d) In the event that the Lease is rejected by a trustee or debtor-in-possession in any bankruptcy or
insolvency proceeding, and if, within forty-five (45) days after such rejection, Administrative Agent shall so request, the City will execute and deliver to Administrative Agent a new
lease, which lease shall be on the same terms and conditions as the original Lease for the remaining term of the original Lease before giving effect to such rejection, and which shall
require Administrative Agent to cure any defaults then existing under the original Lease. Notwithstanding the foregoing, any new lease will be subject to all regulatory approvals
required by law. The City will use good faith efforts to promptly obtain any necessary regulatory approvals.
(e) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) elect to
perform Borrower's obligations under the Lease, succeed to Borrower’s interest under the Lease, or enter into a new lease as provided in subparagraph 1(d) above, the recourse of the City against
Administrative Agent, Lenders or their designee(s) and assignee(s) shall be limited to such Parties’ interests in the Project, and the credit support required under the lease, if any.
(f) In the event Administrative Agent, the Lenders or their designee(s) or assignee(s) succeed to
Borrower's interest under the Lease, Administrative Agent, the Lenders or their designee(s) or assignee(s) shall cure any then-existing payment and performance defaults under the Lease,
except any performance defaults of Borrower itself, which by their nature are not susceptible of being cured. Administrative Agent, the Lenders and their designee(s) or assignee(s) shall have
the right to assign all or a pro rata interest in the Lease to a person or entity to whom Borrower’s interest in the Project is transferred, provided such transferee assumes the
obligations of Borrower under the Lease and has a creditworthiness equal to or better than Borrower, as reasonably determined by the City. Upon such assignment, Administrative
Agent and the Lenders and their designee(s) or assignee(s) (including their agents and employees) shall be released from any further liability thereunder accruing from and after the date of such
assignment, to the extent of the interest assigned.
2. REPRESENTATIONS AND WARRANTIES. The City hereby represents and warrants that as of the date of this Consent:
(a) It (i) is duly formed and validly existing under the laws of the State of California, and (ii) has
all requisite power and authority to enter into and to perform its obligations hereunder and under the Lease, and to carry out the terms hereof and thereof and the transactions contemplated hereby
and thereby;
(b) the execution, delivery and performance of this Consent and the Lease have been duly authorized by all necessary action on its part and do not require any approvals, material filings
with, or consents of any entity or person which have not previously been obtained or made;
(c) each of this Consent and the Lease is in full force and effect;
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
(d) each of this Consent and the Lease has been duly executed and delivered on its behalf and
constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law);
(e) there is no litigation, arbitration, investigation or other proceeding pending for which the City
has received service of process or, to the City’s actual knowledge, threatened against the City relating solely to this Consent, the Lease and the transactions contemplated hereby and thereby;
(f) the execution, delivery and performance by it of this Consent and the Lease, and the
consummation of the transactions contemplated hereby, will not result in any violation of, breach of or default under any term of any material contract or material agreement to which it
is a party or by which it or its property is bound, or of any material requirements of law presently in effect having applicability to it, the violation, breach or default of which could have a material
adverse effect on its ability to perform its obligations under this Consent;
(g) neither the City nor, to the City’s actual knowledge, any other party to the Lease, is in default of any of its obligations thereunder; and
(h) to the City’s actual knowledge, (i) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either the City or Borrower to terminate or suspend its obligations under the Lease.
Each of the representations and warranties set forth herein shall survive the execution and delivery of this Consent and the consummation of the transactions contemplated hereby.
3. NOTICES. All notices required or permitted hereunder shall be given, in writing, and shall be effective (a) upon receipt if hand delivered, (b) upon telephonic verification of receipt if sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or three (3) Business Days after being sent registered or certified mail, return receipt requested, with proper postage affixed thereto, or by private
courier or delivery service with charges prepaid, and addressed as specified below:
If to the City: [ ]
[ ] [ ]
Telephone No.: [ ] Facsimile No.: [ ]
Attn: [ ]
If to Administrative Agent: [ ]
[ ] [ ]
Telephone No.: [ ] Facsimile No.: [ ]
Attn: [ ]
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
If to Borrower:
[ ] [ ]
[ ] Telephone No.: [ ]
Facsimile No.: [ ] Attn: [ ]
Any party shall have the right to change its address for notice hereunder to any other location within the
United States by giving thirty (30) days written notice to the other parties in the manner set forth above.
4. ASSIGNMENT, TERMINATION, AMENDMENT. This Consent shall be binding upon and benefit the successors and assigns of the Parties hereto and their respective successors, transferees and
assigns (including without limitation, any entity that refinances all or any portion of the obligations under the Financing Agreement). The City agrees (a) to confirm such continuing obligation, in writing, upon the
reasonable request of (and at the expense of) Borrower, Administrative Agent, the Lenders or any of their respective successors, transferees or assigns, and (b) to cause any successor-in-interest to the City with
respect to its interest in the Lease to assume, in writing and in form and substance reasonably satisfactory to Administrative Agent, the obligations of City hereunder. Any purported assignment or transfer of the
Lease not in conjunction with the written instrument of assumption contemplated by the foregoing clause (b) shall be null and void. No termination, amendment, or variation of any provisions of this Consent
shall be effective unless in writing and signed by the parties hereto. No waiver of any provisions of this Consent shall be effective unless in writing and signed by the party waiving any of its rights hereunder.
5. GOVERNING LAW. This Consent shall be governed by the laws of the State of California
applicable to contracts made and to be performed in California. The federal courts or the state courts located in California shall have exclusive jurisdiction to resolve any disputes with respect to this Consent
with the City, Assignor, and the Lender or Lenders irrevocably consenting to the jurisdiction thereof for any actions, suits, or proceedings arising out of or relating to this Consent.
6. COUNTERPARTS. This Consent may be executed in one or more duplicate counterparts, and
when executed and delivered by all the parties listed below, shall constitute a single binding agreement.
7. SEVERABILITY. In case any provision of this Consent, or the obligations of any of the Parties hereto, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions, or the obligations of the other Parties hereto, shall not in any way be affected or impaired thereby.
8. ACKNOWLEDGMENTS BY BORROWER. Borrower, by its execution hereof, acknowledges and agrees that neither the execution of this Consent, the performance by the City of any of the obligations
of the City hereunder, the exercise of any of the rights of the City hereunder, or the acceptance by the City of performance of the Lease by any party other than Borrower shall (1) release Borrower from any obligation of Borrower under the Lease, (2) constitute a consent by the City to, or impute knowledge to the City of, any specific terms or conditions of the Financing Agreement, the Security Agreement or any
of the other Financing Documents, or (3) except as expressly set forth in this Consent, constitute a waiver by the City of any of its rights under the Lease. Borrower and Administrative Agent acknowledge hereby
for the benefit of City that none of the Financing Agreement, the Security
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
Agreement, the Financing Documents or any other documents executed in connection therewith alter, amend, modify or impair (or purport to alter, amend, modify or impair) any provisions of the Lease.
CITY OF PALO ALTO ADMINISTRATIVE AGENT
APPROVED AS TO FORM
Senior Deputy City Attorney BORROWER
APPROVED
City Manager
Director of Utilities
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
EXHIBITS
LEASE AGREEMENT/CITY OF PALO ALTO & KOMUNA PALO ALTO LLC
Page EX-21 Rev. 11/18/15
999020‐eml
Schedule 23.2
Termination Value
Year 275 Cambridge 475 Cambridge 520 Webster 445 Bryant
1 $995,014 $1,222,788 $992,017 $683,323
2 $959,623 $1,179,296 $956,733 $659,018
3 $925,897 $1,137,849 $923,108 $635,857
4 $893,564 $1,098,115 $890,873 $613,653
5 $862,366 $1,059,775 $859,769 $592,227
6 $660,578 $811,795 $658,589 $453,650
7 $646,500 $794,494 $644,553 $443,982
8 $631,414 $775,955 $629,512 $433,622
9 $615,219 $756,052 $613,366 $422,500
10 $597,801 $734,647 $596,000 $410,538
11 $579,035 $711,585 $577,291 $397,651
12 $558,786 $686,701 $557,103 $383,745
13 $536,903 $659,808 $535,286 $368,716
14 $513,220 $630,704 $511,674 $352,452
15 $487,556 $599,165 $486,087 $334,827
16 $459,710 $564,945 $458,325 $315,704
17 $429,462 $527,773 $428,169 $294,932
18 $396,571 $487,353 $395,377 $272,344
19 $360,770 $443,356 $359,684 $247,758
20 $321,767 $395,424 $320,798 $220,972
21 $279,238 $343,160 $278,397 $191,766
22 $232,830 $286,128 $232,129 $159,895
23 $182,153 $223,850 $181,604 $125,093
24 $126,778 $155,799 $126,396 $87,064
25 $66,233 $81,395 $66,034 $45,485
DocuSign Envelope ID: 09D09B17-A2E0-4787-B4B8-67BAA0A28C3F
Certificate Of Completion
Envelope Id: 09D09B17A2E04787B4B867BAA0A28C3F Status: Completed
Subject: Please DocuSign: Komuna Lease Agreement Exhibits FINAL 1.14.2016.pdf
Source Envelope:
Document Pages: 106 Signatures: 4 Envelope Originator:
Certificate Pages: 1 Initials: 0 Janet Billups
AutoNav: Enabled
EnvelopeId Stamping: Enabled
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
250 Hamilton Ave
Palo Alto , CA 94301
janet.billups@cityofpaloalto.org
IP Address: 199.33.32.254
Record Tracking
Status: Original
1/14/2016 10:03:46 AM
Holder: Janet Billups
janet.billups@cityofpaloalto.org
Location: DocuSign
Signer Events Signature Timestamp
Zach Rubin
zrubin@komunaenergy.com
Security Level: Email, Account Authentication
(None)
Using IP Address: 24.130.60.185
Sent: 1/14/2016 10:14:13 AM
Viewed: 1/14/2016 10:17:40 AM
Signed: 1/14/2016 10:21:48 AM
Electronic Record and Signature Disclosure:
Not Offered
ID:
In Person Signer Events Signature Timestamp
Editor Delivery Events Status Timestamp
Agent Delivery Events Status Timestamp
Intermediary Delivery Events Status Timestamp
Certified Delivery Events Status Timestamp
Carbon Copy Events Status Timestamp
Notary Events Timestamp
Envelope Summary Events Status Timestamps
Envelope Sent Hashed/Encrypted 1/14/2016 10:21:50 AM
Certified Delivered Security Checked 1/14/2016 10:43:57 AM
Signing Complete Security Checked 1/14/2016 10:43:55 AM
Completed Security Checked 1/14/2016 10:43:55 AM
Applicant’s Project Description (Summary)
In a cooperative effort between Komuna Energy, MBL & Sons, Inc, and Sprig Electric, we intend
to provide the City of Palo Alto with solar shade structure attached to the top deck of four
Public Parking Garages with the primary purpose of providing the City of Palo Alto with a
renewable energy source.
445 Bryant Street Overview
A 240.32kw system will be installed per the submitted plan sets with a wide span I-beam style
design to support the solar modules.
1) Installation of elevated solar support structure on City of Palo Alto Parking Garage
a. Scope includes installation of steel support structure on the top floor of the existing parking
garage.
b. Installation of trellis “style” photovoltaic modules including open air gaps between each row
of modules and a structure design the reduces the finished height of the installation to a single
story.
c. Solar system will be interconnect to the utility and will generate clean energy back to the
grid.
2) Existing use of the parking garage will remain the same new uses will include EV charging
stations, partially shaded top floor parking and clean energy generation
3) Design concept is a wide span style of structure is designed to provide the maximum amount
of kilowatts per square foot of available parking garage deck. This is best achieved by designing
a structure that not only covers the individual parking stalls but also includes spanning across
the drive aisles of the parking deck. The I-beam structure will be painted in a color that does
not draw unnecessary attention to the structure. All of the wiring will be managed in manner to
conceal the wiring as much as possible as well.
4) Renderings provided show relationship to neighbor property and streets. And the structure
design will be fitted on the existing footprint of the top floor of the garage.
5) All materials for support structure will be steel, solar modules are glass with aluminum
framing. Modules underside have a white back and a blue top. Gaps between each module
leaving an open air style construction with no impact to existing drainage of garage
6) MBL is the structural design build contactor and Spring Electric is the design build electrical
contractor for the specified work. Conceptually the below image is from the street view of a
previous installation of the same style of structure that is intended to be installed at the Bryant
Street Parking Garage.
475 Cambridge Overview
A 378.8kw system will be installed per the submitted plan sets with a wide span I-beam style
design to support the solar modules.
1) Installation of elevated solar support structure on City of Palo Alto Parking Garage
a. Scope includes installation of steel support structure on the top floor of the existing parking
garage.
b. Installation of trellis “style” photovoltaic modules including open air gaps between each row
of modules and a structure design the reduces the finished height of the installation to a single
story.
c. Solar system will be interconnect to the utility and will generate clean energy back to the
grid.
2) Existing use of the parking garage will remain the same new uses will include EV charging
stations, partially shaded top floor parking and clean energy generation
3) Design concept is a wide span style of structure is designed to provide the maximum amount
of kilowatts per square foot of available parking garage deck. This is best achieved by designing
a structure that not only covers the individual parking stalls but also includes spanning across
the drive aisles of the parking deck. The I-beam structure will be painted in a color that does
not draw unnecessary attention to the structure. All of the wiring will be managed in manner to
conceal the wiring as much as possible as well.
4) Renderings provided show relationship to neighbor property and streets. And the structure
design will be fitted on the existing footprint of the top floor of the garage.
5) All materials for support structure will be steel, solar modules are glass with aluminum
framing. Modules underside have a white back and a blue top. Gaps between each module
leaving an open air style construction with no impact to existing drainage of garage
6) MBL is the structural design build contactor and Spring Electric is the design build electrical
contractor for the specified work. Conceptually the below image is from the street view of a
previous installation of the same style of structure that is intended to be installed at the Bryant
Street Parking Garage.
520 Webster Overview
A 376.64kw system will be installed per the submitted plan sets with a wide span I-beam style
design to support the solar modules.
1) Installation of elevated solar support structure on City of Palo Alto Parking Garage
a. Scope includes installation of steel support structure on the top floor of the existing parking
garage.
b. Installation of trellis “style” photovoltaic modules including open air gaps between each row
of modules and a structure design the reduces the finished height of the installation to a single
story.
c. Solar system will be interconnect to the utility and will generate clean energy back to the
grid.
2) Existing use of the parking garage will remain the same new uses will include EV charging
stations, partially shaded top floor parking and clean energy generation
3) Design concept is a wide span style of structure is designed to provide the maximum amount
of kilowatts per square foot of available parking garage deck. This is best achieved by designing
a structure that not only covers the individual parking stalls but also includes spanning across
the drive aisles of the parking deck. The I-beam structure will be painted in a color that does
not draw unnecessary attention to the structure. All of the wiring will be managed in manner to
conceal the wiring as much as possible as well.
4) Renderings provided show relationship to neighbor property and streets. And the structure
design will be fitted on the existing footprint of the top floor of the garage.
5) All materials for support structure will be steel, solar modules are glass with aluminum
framing. Modules underside have a white back and a blue top. Gaps between each module
leaving an open air style construction with no impact to existing drainage of garage
6) MBL is the structural design build contactor and Spring Electric is the design build
electrical contractor for the specified work.
275 Cambridge Overview
Not submitted
Plans Provided to Councilmembers
Not Yet Approved
160713 jb 0131537 1
Ordinance No. _______
Ordinance of the Council of the City of Palo Alto Amending Palo Alto Municipal Code
(PAMC) Title 18 (Zoning Regulations), Section 18.76.020 (Architectural Review)
The Council of the City of Palo Alto does ORDAIN as follows:
SECTION 1. Findings and Declarations. The City Council finds and declares as follows:
A. As part of the City’s annual Zoning Code update, the City desires to improve its
Architectural Review findings to ensure robust design review, to eliminate repetitive findings and to
remove outmoded and unnecessary findings.
B. On September 3 and October 1, 2015, the Architectural Review Board (ARB)
reviewed the draft updated architectural review findings and provided input. Subsequently, the
Planning and Transportation Commission (PTC) reviewed the AR findings and recommended that
Council approve them without any changes.
C. On April 11, 2016, the Council reviewed the draft findings, suggested revisions and
directed staff and the ARB to review the updated language and offer approval, feedback or changes.
D. On June 16, 2016, the ARB reviewed the updated findings and provided additional
comments.
E. On August 10, 2016, the Planning and Transportation Commission reviewed the
updated findings and concurred with the ARB and Staff’s comments.
F. On September 12, 2016, the City Council conducted a public hearing on the current
draft of the updated architectural review findings.
SECTION 2. Subdivision (d) of Section 18.76.020 of the Palo Alto Municipal Code is
amended to read as follows:
18.76.020 Architectural Review.
***
(d) Findings
Neither the director, nor the city council on appeal, shall grant architectural review approval,
unless it is found that each of the following applicable findings is met:
(1) The design is consistent and compatible with applicable elementsprovisions of the Palo Alto
Comprehensive Plan;, Zoning Code (including context-based design criteria, as applicable),
coordinated area plans (including compatibility requirements), and any relevant design
guides.
Attachment A
Not Yet Approved
160713 jb 0131537 2
(2) The project has a unified and coherent design, that:
(a) creates an internal sense of order and desirable environment for occupants, visitors,
and the general community,
(b) preserves, respects and integrates existing natural features that contribute positively
to the site and the historic character including historic local resources of the area
when relevant,
(c) is compatible with its setting,
(d) provides harmonious transitions in scale and character to adjacent land uses and
land use designations, and
(e) enhances living conditions on the site (if it includes residential uses) and in adjacent
residential areas.
(3) The design is of high aesthetic quality, using high quality, integrated materials and
appropriate construction techniques, and incorporating textures, colors, and other details
that are compatible with and enhance the surrounding area.
(4) The design is functional, allowing for ease and safety of pedestrian and bicycle traffic and
providing for elements that support the building’s necessary operations (e.g. convenient
vehicle access to property and utilities, appropriate arrangement and amount of open
space and integrated signage, if applicable, etc.).
(5) The landscape design complements and enhances the building design and its surroundings,
is appropriate to the site’s functions, and utilizes climate appropriate plant material capable
of providing desirable habitat when feasible, and that can be appropriately maintained.
(6) The project incorporates design principles that achieve sustainability in areas related to
energy efficiency, water conservation, building materials, landscaping, and site planning.
(2) The design is compatible with the immediate environment of the site;
(3) The design is appropriate to the function of the project;
(4) In areas considered by the board as having a unified design character or historical character,
the design is compatible with such character;
(5) The design promotes harmonious transitions in scale and character in areas between
different designated land uses;
(6) The design is compatible with approved improvements both on and off the site;
(7) The planning and siting of the various functions and buildings on the site create an internal
sense of order and provide a desirable environment for occupants, visitors and the general
community;
(8) The amount and arrangement of open space are appropriate to the design and the function
of the structures;
(9) Sufficient ancillary functions are provided to support the main functions of the project and
the same are compatible with the project's design concept;
(10) Access to the property and circulation thereon are safe and convenient for pedestrians,
cyclists and vehicles;
(11) Natural features are appropriately preserved and integrated with the project;
Not Yet Approved
160713 jb 0131537 3
(12) The materials, textures, colors and details of construction and plant material are
appropriate expression to the design and function and whether the same are compatible with the
adjacent and neighboring structures, landscape elements and functions;
(13) The landscape design concept for the site, as shown by the relationship of plant masses,
open space, scale, plant forms and foliage textures and colors create a desirable and functional
environment and whether the landscape concept depicts an appropriate unity with the various
buildings on the site;
(14) Plant material is suitable and adaptable to the site, capable of being properly maintained
on the site, and is of a variety which would tend to be drought-resistant and to reduce consumption
of water in its installation and maintenance;
(15) ITie project exhibits green building and sustainable design that is energy efficient, water
conserving, durable and nontoxic, with high-quality spaces and high recycled content materials. The
following considerations should be utilized in determining sustainable site and building design:
(A) Optimize building orientation for heat gain, shading, daylighting, and natural ventilation;
(B) Design of landscaping to create comfortable micro-climates and reduce heat island
effects;
(C) Design for easy pedestrian, bicycle and transit access;
(D) Maximize on site stormwater management through landscaping and permeable paving;
(E) Use sustainable building materials;
(F) Design lighting, plumbing and equipment for efficient energy and water use;
(G) Create healthy indoor environments; and
(H) Use creativity and innovation to build more sustainable environments.
(16) The design is consistent and compatible with the purpose of architectural review as set
forth in subsection (a).
SECTION 3. Adoption of this ordinance is found to be categorically exempt from the
California Environmental Quality Act under CEQA Guideline sections 15061(b)(3) (Common Sense
Exemption) and 15305 (Minor Alterations in Land Use Limitations)because: (1) the activity
(rewording of Architectural Review findings) is covered by the general rule that CEQA applies only
to projects which have the potential for causing a significant effect on the environment, and it can
be seen with certainty that there is no possibility that the activity in question may have a
significantly effect on the environment, and (2) this ‘minor alteration in land use limitations’ does
not result in any changes in land use or density.
SECTION 4. If any section, subsection, sentence, clause or phrase of the ordinance is
for any reason held to be invalid, such decision shall not affect the validity of the remaining portions
of this ordinance. The City Council hereby declares that it should have adopted the ordinance and
each section, subsection, sentence, clause or phrase thereof, irrespective of the fact that any one or
more sections, subsections, sentences, clauses or phrases be declared unconstitutional.
Not Yet Approved
160713 jb 0131537 4
SECTION 5. This ordinance shall be effective upon the thirty-first day after its passage
and adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:
__________________________ _____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
___________________________ _____________________________
Senior Asst. City Attorney City Manager
_____________________________
Director of Planning and Community
Environment
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Palo Alto Municipal Code
Chapter 18.38
PC PLANNED COMMUNITY DISTRICT REGULATIONS
Sections:
18.38.010 Specific purposes.
18.38.020 Applicability of regulations.
18.38.030 Permitted uses.
18.38.040 Conditional uses.
18.38.050 Establishment of districts.
18.38.060 Required determinations.
18.38.065 Application process.
18.38.070 Application requirements.
18.38.080 Development program statement.
18.38.090 Development plan.
18.38.100 Development schedule.
18.38.110 Action by commission.
18.38.120 Action by council.
18.38.130 Change in development schedule.
18.38.140 Failure to meet development schedule.
18.38.150 Special requirements.
18.38.160 Inspections.
18.38.170 Recycling storage.
18.38.010 Specific purposes.
The PC planned community district is intended to accommodate developments for residential,
commercial, professional, research, administrative, industrial, or other activities, including combinations of
uses appropriately requiring flexibility under controlled conditions not otherwise attainable under other
districts. The planned community district is particularly intended for unified, comprehensively planned
developments which are of substantial public benefit, and which conform with and enhance the policies and
programs of the Palo Alto Comprehensive Plan.
(Ord. 3048 (part), 1978)
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18.38.020 Applicability of regulations.
The specific regulations of this chapter, and the additional regulations and procedures established by
Chapters 18.54 to 18.99, inclusive, shall apply to all planned community districts. Notwithstanding the
regulations of Chapters 18.54 to 18.99, inclusive, where specific regulations are adopted pursuant to
Sections 18.38.110 and 16.68.120, the specific regulations so adopted shall apply to that planned
community district.
(Ord. 3108 § 22, 1979: Ord. 3070 § 3, 1978: Ord. 3048 (part), 1978)
18.38.030 Permitted uses.
Any use may be permitted in any specific PC district; provided such use shall be specifically listed as a
permitted use and shall be located and conducted in accord with the approved development plan and other
applicable regulations adopted pursuant to this chapter to govern each specific PC district.
(Ord. 3048 (part), 1978)
18.38.040 Conditional uses.
Any use may be established as a conditional use in any specific PC district, provided such use shall be
specifically listed as a conditional use subject to the provisions of Chapter 18.76 (Permits and Approvals),
and shall be located and conducted in accord with the approved development plan and other applicable
regulations adopted pursuant to this chapter to govern each specific PC district.
(Ord. 4826 § 108, 2004: Ord. 3048 (part), 1978)
18.38.050 Establishment of districts.
Planned community districts may be established, modified, or removed from the zoning map, and the
regulations applicable to any specific PC district may be established, modified, or deleted in accord with
Chapter 18.80.
All PC districts shall be identified on the zoning map with the letter coding "PC" followed by a specific
reference number identifying each separate district. All use regulations, development plans, development
schedules, and other regulatory provisions adopted pursuant to this chapter, or pursuant to Chapter 18.80,
which apply to any specific PC district, shall be considered to be a part of this title as if fully set forth in
this title, and shall be identified by reference to the corresponding designation of each specific PC district
on the zoning map.
(Ord. 3048 (part), 1978)
18.38.060 Required determinations.
The planning commission, prior to recommending approval of any PC district application, and the city
council, prior to approving an ordinance designating and regulating any PC district, shall make all of the
following required findings with respect to the application, in addition to findings required by Chapter
18.80:
(a) The site is so situated, and the use or uses proposed for the site are of such characteristics that the
application of general districts or combining districts will not provide sufficient flexibility to allow the
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proposed development.
(b) Development of the site under the provisions of the PC planned community district will result in
public benefits not otherwise attainable by application of the regulations of general districts or combining
districts. In making the findings required by this section, the planning commission and city council, as
appropriate, shall specifically cite the public benefits expected to result from use of the planned community
district.
(c) The use or uses permitted, and the site development regulations applicable within the district shall be
consistent with the Palo Alto Comprehensive Plan, and shall be compatible with existing and potential uses
on adjoining sites or within the general vicinity.
(Ord. 3048 (part), 1978)
18.38.065 Application process.
(a) The applicant for a PC district shall initially submit to the planning commission a development
program statement, development plan, and a development schedule which are described in Sections
18.38.080, 18.38.090, and 18.38.100. The plot plans, landscape development plan, and design plan in the
development plan should only be preliminary during this phase of review by the planning commission.
(b) If the planning commission acts favorably in its initial review of the PC application, the development
plan shall be submitted to the architectural review board for review, except in the case of singlefamily and
accessory uses. In this phase, a detailed plot plan, landscape development plan, and design plan of the
development plan are required. The architectural review board shall make a recommendation on the
development plan based on the findings for architectural review in Section 18.76.020 (d).
(c) The development plan as approved by the architectural review board is then returned to the planning
commission for final planning commission review and recommendation before being submitted to the city
council for final action.
(Ord. 4826 § 109, 2004: Ord. 3048 (part). 1978)
18.38.070 Application requirements.
In addition to the provisions of Chapter 18.80, each application for a PC district shall be accompanied by
a development program statement, a development plan, and a development schedule.
The development plan shall, as approved by the city council, become a part of the zoning regulations
applicable within the respective PC district. Subsequent changes in the development plan shall be made in
accord with Chapter 18.80, or, for minor changes, through the architectural review process, as set forth in
Section 18.76.020 (b)(3)(D).
The development schedule shall, as approved by the city council, become a part of the zoning regulations
applicable within the respective PC district. Subsequent changes in the development schedule, if included
as part of the regulations, shall be made in accord with Chapter 18.80 or, for minor changes, through the
architectural review process, as set forth in Section 18.76.020 (b)(3)(D); provided, that specifically
authorized changes may be made by the director pursuant to Section 18.38.130.
(Ord. 4826 § 110, 2004: Ord. 3048 (part), 1978)
18.38.080 Development program statement.
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The purpose of the development program statement shall be to describe the proposed use or uses to be
conducted in the district in a manner sufficient to enable preparation and consideration of regulations
governing permitted uses, conditional uses, site use and development regulations, offstreet parking and
loading requirements, and other special regulations which may be appropriate to govern development, use,
and maintenance of the site or sites included within the PC district.
The development program statement shall include the following:
(a) A statement by the applicant demonstrating the necessity of the application for the PC district,
including information demonstrating the compliance of the proposed development with the required
determinations set forth in Section 18.38.060;
(b) A complete listing of all uses proposed, or potentially to be included, within the PC district,
incorporating insofar as possible the terminology used in other parts of this title to define, describe, and
regulate permitted uses and conditional uses, and the definitions pertinent thereto;
(c) A complete description of the nature of uses proposed, and the conditions or characteristics of
occupancy, use, or operation, with particular reference to those conditions or characteristics which may
warrant regulation differing from those regulations which might apply to such uses if located in one or
more general districts within the city;
(d) A schedule or statement indicating number, type, floor area, number of bedrooms, and projected sale
or rental price of all housing units proposed in the district;
(e) Such additional information as the director may prescribe as necessary, in his judgment, to facilitate
review and action on the application by the planning commission, the architectural review board, and the
city council.
(Ord. 3048 (part), 1978)
18.38.090 Development plan.
The development plan submitted with the application for a PC district shall include the following, unless
waived by the director for cause:
(a) An aerial photograph of the site and adjacent land within two hundred fifty feet of the site, at a scale
to be prescribed by the director. The director may specify that information required by subsections (b)
through (i) be superimposed on the aerial photograph, or a duplicate copy thereof;
(b) A map showing any public or private streets, proposed building sites, and any areas proposed to be
dedicated or reserved for parks, parkways, paths, playgrounds, school sites, public buildings and other such
uses. Compliance with this requirement shall not be construed to relieve the applicant from compliance
with the subdivision code in Title 21, or any other applicable ordinances of the city;
(c) A map showing the existing and proposed topography of the proposed district at contour intervals as
determined appropriate by director;
(d) A land use plan for the proposed district indicating the areas proposed for each use or combination of
uses identified by the development program statement;
(e) A plot plan or plans for each building site in the proposed district, or any portion thereof, in such
form as required by the director. The required plans shall show the location of all proposed buildings and
principal site improvements, shall indicate dimensions of buildings, site lines, and improvements, and shall
indicate the location of physical or natural site features, including trees, and any changes proposed thereto.
(f) A landscape development plan, showing the boundaries and location of proposed landscaped areas
and exterior site improvements, including but not limited to lights, swimming pools, and service and refuse
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areas.
(g) A circulation plan, indicating the proposed movement of vehicles, goods, and pedestrians within the
district, and to and from adjacent public thoroughfares. Any special engineering features and traffic
regulation devices needed to insure safety or to facilitate ease of access and circulation, whether on or off
the site, shall be shown.
(h) A parking and loading plan, showing the number of spaces and the location, internal circulation and
dimensions of all parking and loading areas. The parking and loading plan shall be based upon the
requirements of Chapter 18.54, unless requested modifications to meet the needs of the individual project
are supported by traffic engineering studies or relevant data, as may be required by the director,
demonstrating the feasibility and adequacy of the plan.
(i) Preliminary design plans, including such schematic floor plans, schematic exterior elevations
and sections, and/or perspective drawings, as may be necessary to indicate the height of proposed buildings
and the general appearance of the proposed structures to the end that the entire development will have
architectural unity and will be compatible with existing and proposed neighborhood development. Such
drawings need not show final architectural detail. Construction drawings and contract plans, subsequently
submitted with applications for required permits or other construction approvals pursuant to approved PC
district regulations, shall conform substantially to the preliminary design plans, and shall be subject to all
applicable review and permit requirements in effect at the time of approval and permit issuance.
(Ord. 3108 § 20, 1979: Ord. 3048 (part), 1978)
18.38.100 Development schedule.
The development schedule submitted with the application for a PC district shall include the following:
(a) A schedule, indicating to the best of the applicant's knowledge, the approximate date on which
construction or development is expected to begin, the duration of time required for completion of the
development, and the approximate date or dates of occupancy;
(b) A phasing program, indicating, in the event the proposed development within the district is expected
to require more than two years for completion and occupancy, a logical or programmed sequence of phases
and incorporating a schedule as described in subsection (a) for each phase of development.
(Ord. 3048 (part), 1978)
18.38.110 Action by commission.
In addition to the requirements of Chapter 18.80, the planning commission shall review and consider all
materials submitted by the applicant pursuant to this chapter, and shall prepare and recommend to the city
council, as appropriate, the specific regulations to be applied within the proposed planned community
district. The specific regulations may modify those regulations contained in Chapters 18.54 to 18.99,
inclusive, as is appropriate to meet the individual district and shall include the following:
(a) Permitted Uses. A listing of all uses to be permitted generally within the district, or the uses to be
permitted in specific locations within the district as shown on the development plan;
(b) Conditional Uses. A listing of all uses to be conditionally allowed within the district, or the uses to
be permitted in specific locations within the district as shown on the development plan;
(c) Site Development Regulations. Maximum or minimum regulations, as appropriate, governing site
dimensions, required yards and distances between buildings, site coverage, building height, residential
density, and floor area ratio, open space requirements, accessory facilities and uses, and other aspects of the
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proposed development within the district. The regulations may be in text, or by reference to the
development plan, or both. In no event shall the maximum height exceed fifty feet except as provided in
Chapter 18.76 (Permits and Approvals);
(d) Parking and Loading Requirements. Regulations establishing offstreet parking and loading
requirements for the district, and governing design, location, screening, landscaping and operation of
parking and loading activities. The regulations may be by reference to Chapter 18.54, or in text if the
regulations of Chapter 18.54 are modified for the individual district, or both;
(e) Special Requirements. Additional regulations, as may be appropriate to assure a harmonious
relationship between uses within the district, and a compatible relationship with existing or potential uses
within adjoining districts, may be recommended by the commission. Such regulations may include
additional height limitations, yard requirements, landscaping and screening, provisions governing outdoor
activities, and other requirements;
(f) Development Plan and Development Schedule. The development plan submitted pursuant to Section
18.38.090 and the development schedule submitted pursuant to Section 18.38.100, as amended or approved
by the planning commission, shall be recommended for inclusion in the regulations applicable to the PC
planned community district;
(g) Definitions. Definitions applicable specifically to the regulations recommended for the district may
be included.
(Ord. 4826 § 111, 2004: Ord. 3108 § 21, 1979: Ord. 3048 (part), 1978)
18.38.120 Action by council.
In the event the city council adopts an ordinance pursuant to Chapter 18.80 establishing a specific PC
planned community district, the council shall include the regulations described in Section 18.38.110, either
as recommended by the planning commission or as modified by the council.
(Ord. 3048 (part), 1978)
18.38.130 Change in development schedule.
For good cause shown by the property owner in writing and unless otherwise specified by the specific
applicable regulations for the district, prior to the expiration of the original time schedule for the
development, the director may, without a public hearing, modify the time limits imposed by any adopted
development schedule; provided, that such modification shall not extend the schedule by more than one
year; and provided, that only one such modification may be made.
(Ord. 3048 (part), 1978)
18.38.140 Failure to meet development schedule.
Sixty days prior to the expiration of the development schedule, the director shall notify the property
owner in writing of the date of expiration and advise the property owner of Section 18.38.130. Failure to
meet the approved development schedule, including an extension, if granted, shall result in:
(a) The expiration of the property owner's right to develop under the PC district. The director shall
notify the property owner, the city council, the planning commission and the building official of such
expiration; and
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(b) The director's initiating a zone change for the property subject to the PC district in accordance with
Chapter 18.80. The property owner may submit a new application for a PC district concurrently with the
director's recommendation for a zone change.
(Ord. 3418 § 1, 1983: Ord. 3345 § 21, 1982: Ord. 3048 (part), 1978)
18.38.150 Special requirements.
Sites abutting or having any portion located with one hundred fifty feet of any RE, R1, R2, RM, or any
PC district permitting singlefamily development or multiplefamily development shall be subject to the
following additional height and yard requirements:
(a) Parking Facilities. The maximum height shall be equal to the height established in the most
restrictive adjacent zone district.
(b) All Other Uses. The maximum height within one hundred fifty feet of any RE, R1, R2, RM, or
applicable PC district shall be thirtyfive feet; provided, however, that for a use where the gross floor area
excluding any area used exclusively for parking purposes, is at least sixty percent residential, the maximum
height within one hundred fifty feet of an RM4 or RM5 district shall be fifty feet
(c) Sites sharing any lot line with one or more sites in any RE, R1, R2, RM or applicable PC district, a
minimum interior yard of 10 feet shall be required, and a solid wall or fence between 5 and 8 feet in height
shall be constructed and maintained along the common site line. Where a use in a PC district where the
gross floor area, excluding any area used exclusively for parking purposes, is at least sixty percent
residential, the interior yard shall be at least as restrictive as the interior yard requirements of the most
restrictive residential district abutting each such side or rear site line. The minimum interior yard shall be
planted and maintained as a landscaped screen.
(d) On any portion of a site in the PC district which is opposite from a site in any RE, R1, R2, RM or
applicable PC district, and separated therefrom by a street, alley, creek, drainage facility or other open area,
a minimum yard of 10 feet shall be required. Where a use in a PC district where the gross floor area,
excluding any area used exclusively for parking purposes, is at least sixty percent residential, the minimum
yard requirement shall be at least as restrictive as the yard requirements of the most restrictive residential
district opposite such site line. The minimum yard shall be planted and maintained as a landscaped screen,
excluding areas required for access to the site.
(e) Sites sharing any lot line with one or more sites in any RE, R1, R2, RM or any residential PC
district shall be subject to a maximum height established by a daylight plane beginning at a height of ten
feet at the applicable side or rear site lines and increasing at a slope of three feet for each six feet of
distance from the side or rear site lines until intersecting the height limit otherwise established for the PC
district; provided, however, that for a use where the gross floor area excluding any area used exclusively
for parking purposes, is at least sixty percent residential, the daylight planes may be identical to the
daylight plane requirements of the most restrictive residential district abutting each such side or rear site
line until intersecting the height limit otherwise established for the PC district. If the residential daylight
plane, as allowed in this section, is selected, the setback regulations of the same adjoining residential
district shall be imposed.
(Ord. 3683 §§ 12, 13, 1986: Ord. 3465 §§ 40, 44, 1983: Ord. 3418 §§ 2 and 3, 1983: Ord. 3130 §§ 11,
25(f), 1979: Ord. 3108 § 9, 1979: Ord. 3048 (part), 1978)
18.38.160 Inspections.
Each PC district shall be inspected by the building division at least once every three years for compliance
with the PC district regulations and the conditions of the ordinance under which the district was created.
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(Ord. 3345 § 23, 1982)
18.38.170 Recycling storage.
All new development, including approved modifications that add thirty percent or more floor area to
existing uses, shall provide adequate and accessible interior areas or exterior enclosures for the storage of
recyclable materials in appropriate containers. The design, construction and accessibility of recycling areas
and enclosures shall be subject to architectural review approval pursuant to Chapter 18.76 (Permits and
Approvals).
(Ord. 4826 § 112, 2004: Ord. 4069 § 12, 1992)
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Palo Alto Municipal Code
Chapter 18.80
AMENDMENTS TO ZONING MAP AND ZONING REGULATIONS
Sections:
18.80.010 Amendments
18.80.020 Changes in District Boundaries
18.80.030 Application by Property Owner
18.80.035 Application for SingleStory Overlay Districts
18.80.040 Initiation by City
18.80.050 Action by Director
18.80.060 Notice of Public Hearing
18.80.070 Action by Commission
18.80.080 Changes in Regulations
18.80.090 Recommendations by Planning Commission
18.80.100 Action by City Council
18.80.110 Resubmittal of Application
18.80.120 Prezoning
18.80.010 Amendments
This title may be amended by changing the boundaries of districts, or by changing the regulations
applicable within one or more districts, or by changing any other provision of this title, whenever the public
interest or general welfare may so require.
(Ord. 3048 (part), 1978)
18.80.020 Changes in District Boundaries
Changes in the boundaries of districts established by this title may be initiated by any one of the
following actions:
(a) By application of a property owner as provided by Section 18.80.030.
(b) By motion of the city council, or by motion of the planning commission, as provided by Section
18.80.040.
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(c) For creating or removing a singlestory combining district (S), by application of an affected property
owner as provided by Section 18.80.035, or by motion of the city council or planning commission, as
provided by Section 18.80.040.
(Ord. 4869 § 47, 2005: Ord. 3048 (part), 1978)
18.80.030 Application by Property Owner
(a) Application for a change in district boundaries may be made by the owner of record of property for
which a change is sought, or by one of the following:
(1) A purchaser of property for which a change is sought, when acting pursuant to a contract in writing
duly executed and acknowledged by both the buyer and the owner of record;
(2) A lessee in possession of property for which a change is sought, when acting with the written
consent of the owner of record;
(3) An agent of the owner of record of property for which a change is sought, when duly authorized by
the owner in writing.
(b) Application shall be made to the director on a form prescribed by the director, and shall contain the
following:
(1) A description and map showing the boundaries of existing and requested districts, and identifying
the property for which a change of district is requested;
(2) A written statement setting forth the reasons for the application and all facts relied upon by the
applicant in support thereof;
(3) Such additional information as the director may deem pertinent and essential to the application.
(c) Application for a change in district boundaries shall be accompanied by the fee prescribed by the
municipal fee schedule, no part of which shall be returnable to the applicant.
(Ord. 3048 (part), 1978)
18.80.035 Application for SingleStory Overlay Districts
An application for creation or removal of a singlestory combining district may be made by an owner of
record of property located in the singlestory overlay district to be created or removed, in accordance with
the requirements of 18.12.100 (Regulations for the Single Story Overlay (S) Combining District). Such
applications shall be considered in accordance with the provisions of this Chapter 18.80.
(Ord. 4869 § 48, 2005)
18.80.040 Initiation by City
(a) Upon its own initiative, either the city council or the planning commission may by motion initiate
application and proceedings for a change in district boundaries.
(b) A motion of the city council or the planning commission pursuant to this section may include any
public or private property, and shall be accompanied by such maps or descriptions as may be necessary to
define existing and proposed boundaries of districts, and by a statement, describing in general terms, the
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reasons for consideration of a change in district boundaries. The motion shall be directed to the director,
who shall process the application, without fee, as otherwise prescribed in this chapter.
(Ord. 3048 (part), 1978)
18.80.050 Action by Director
(a) Upon receipt of an application for change in boundaries, or upon receipt of the motion of the city
council or the planning commission, or upon the expiration of a development schedule in a PC zone, the
director shall notify the chairman of the planning commission.
(b) Upon receipt of such notice, the chairman of the commission shall, on or before the fifteenth day of
the month following the month in which the application or motion was filed, set a date for a public hearing
upon the matter at either a regular or special meeting of the commission, unless the application is a minor
change to a planned community district development plan diverted to minor architectural review under
Section 18.76.020(b)(3)(D). Nothing contained in this section modifies any provision of or authority
granted by Section 18.76.020(b)(3)(D). The hearing before the commission shall commence within ninety
days of the date of filing.
(Ord. 4826 § 136, 2004: Ord. 3345 § 22, 1982; Ord. 3048 (part), 1978)
18.80.060 Notice of Public Hearing
(a) The planning commission shall give a notice of hearing on a proposed change of district boundaries
in the following manner:
(1) Notice of the hearing shall be given by publication once in a local newspaper of general circulation
not less than twelve days prior to the date of the hearing.
(2) Additionally, excepting a citywide change in the zoning map, the city shall mail written notice of
such hearing at least twelve days prior to the date of the hearing to each owner of real property and to each
residential occupant within 600 feet of the exterior boundary of the property for which classification is
sought. Notice shall be provided as specified in Section 18.77.080. Compliance with the procedures set
forth in this section shall constitute a good faith effort to provide notice, and the failure of any owner or
occupant to receive notice shall not prevent the city from proceeding with the hearing or from taking any
action nor affect the validity of any action.
(b) The notice of public hearing shall contain the following:
(1) The exact address of the property, if known, or the location of the property, if the exact address is
not known, and the existing and requested district or districts applicable;
(2) The time, place and purpose of the hearing;
(3) A brief description, the content of which shall be in the sole discretion of the city, of the change in
district boundaries or regulations sought;
(4) Reference to the application or motion on file for particulars; and
(5) A statement that any interested person, or agent thereof may appear and be heard.
Typographical and/or publishing errors shall not invalidate the notice nor any city action.
(Ord. 4964 § 22, 2007: Ord. 3536 § 40, 1984: Ord. 3465 § 60, 1983: Ord. 3273 § 4,1981: Ord. 3048 (part),
1978)
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18.80.070 Action by Commission
(a) On the basis of evidence and testimony presented to the commission at the public hearing, the
commission may determine that the public interest will be served either by revising the area being
considered for reclassification to include properties not originally part of the application, or by giving
consideration to district classifications not originally requested by the application. The commission may,
solely at its option, consider additional properties or district classifications, or both.
(b) If the area proposed for reclassification is enlarged, or the district proposed for any parcel is changed
to a district of a less restrictive nature than originally cited in the notice of public hearing, additional notice
shall be given in accord with Section 18.80.060, and the hearing shall be continued, allowing public
consideration of and comment upon the enlarged or less restrictive proposal.
(c) If the modifications, if any, considered by the commission involve the same or a reduced area, or
involve alternative districts of a generally equivalent or more restrictive nature than originally cited in the
notice of public hearing, no additional notice or hearings shall be required.
(d) If, from the facts presented at the public hearing, including public testimony and reports and
recommendations from the director of planning and community environment or other appropriate city staff,
the commission finds that a change of district boundaries would be in accord with the purposes of this title
and in accord with the Palo Alto Comprehensive Plan, the commission may recommend such change as it
deems appropriate to the council.
(e) If the commission finds that a change of district boundaries, either as requested by an application or
as modified by the commission pursuant to this section, would not be in accord with the purposes of this
title, or would not be in accord with the Palo Alto Comprehensive Plan, the commission shall recommend
against any such reclassification.
(f) The decision of the commission shall be rendered within a reasonable time following the close of any
public hearing or hearings and the written recommendation of the commission shall be forwarded to the
council within thirty days thereof. The recommendation of the commission shall set forth fully the findings
and determinations of the commission with respect to the application.
(Ord. 3048 (part), 1978)
18.80.080 Changes in Regulations
Changes in the provision of this title other than the boundaries of districts may be initiated from time to
time, by one of the following actions:
(a) Changes in the provision of this title other than the boundaries of districts may be initiated from time
to time, by one of the following actions:
(1) By motion of the city council on its own initiative;
(2) By motion of the planning commission on its own initiative; or
(3) By application of the owner of property that would be subject to the proposed text amendment.
(b) Changes initiated by motion of the council shall be forwarded to the commission, and may be
supplemented by such explanatory material as the council may deem appropriate to facilitate review and
recommendation by the commission. A request by a property owner shall be supplemented by an
application, statement and explanatory material as required by the director under Section 18.80.030.
Changes initiated by application of a property owner shall require consideration by the planning and
transportation commission first as an initiation request to determine whether to proceed with the rezoning
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request and public hearing. If the commission so directs, the text revisions shall be reviewed pursuant to the
provisions of Section 18.80.090.
(Ord. 4964 § 23, 2007: Ord. 3048 (part), 1978)
18.80.090 Recommendations by Planning Commission
The commission shall review any proposed change in the provisions of this title, whether initiated by the
council or the commission. The planning commission shall hold a public hearing on any changes proposed
to the zoning regulations. Notice of the time and place of such hearing and the purpose thereof shall be
given by publication once in a local newspaper of general circulation not less than twelve days prior to the
date of hearing.
In the case of proposed changes initiated by the council, the commission shall forward its
recommendations to the council within a reasonable time period, but not to exceed one hundred eighty days
in any event unless extended by the council.
In the case of proposed changes initiated by the commission, the commission shall forward its
recommendations to the council at such time as it deems appropriate.
The written recommendation of the planning commission shall be submitted to the council, and shall set
forth the findings and determinations of the commission with respect to the proposed change.
Nothing in this section shall prevent the city council from changing or suspending operation of any
provision of this title for temporary periods when in the determination of the council such suspension or
change is necessary for the public health, safety or welfare. In such case, planning commission review shall
not be required.
(Ord. 4181 § 5, 1993: Ord. 3465 § 61, 1983: Ord. 3273 § 5, 1981: Ord. 3130 § 21,1979: Ord. 3048 (part),
1978)
18.80.100 Action by City Council
Upon receipt of the recommendation of the planning commission on a change of district boundaries, or
on a change to the provisions of this title other than a change in district boundaries, the council may, at its
option, give notice of a hearing in the manner provided by Sections 18.80.060 or 18.80.090, whichever is
applicable.
After consideration of the recommendation of the planning commission, and the completion of a public
hearing, if any, the council may approve, modify, or disapprove the proposed change ofdistrict boundaries
or change of any other provisions of this title. Should the council determine that a change of district
boundaries or change of any other provisions of this title shall be appropriate, such change shall be
accomplished by ordinance.
(Ord. 4826 § 137, 2004: Ord. 3273 § 6, 1981: Ord. 3048 (part), 1978)
18.80.110 Resubmittal of Application
When an application for change of district boundaries has been submitted by a property owner and
subsequently denied by the council, no new application by a property owner for the same change, or for
substantially the same change, either with respect to properties included within the proposed change or with
respect to proposed district classifications, or both, shall be filed or accepted by the director within one year
of the date of closing of the hearing before the commission, except upon a showing to the satisfaction of the
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director of a substantial change of circumstances. This provision shall not be construed to prevent the
initiation of proceedings by either the planning commission or city council in accord with Section
18.80.040 at any time.
(Ord. 3048 (part), 1978)
18.80.120 Prezoning
The determination of district classifications and district boundaries appropriate for property located
outside the city, but potentially subject to annexation, may be made in the same manner as prescribed in
this chapter for any property within the city; provided, that any ordinance duly passed by the city council
establishing or changing such classification shall become effective only upon the effective date of
annexation of such property to the city.
Upon passage of such an ordinance, the zoning map shall be revised to show the prezoned or potential
classification to become effective upon annexation, and shall identify the district or districts applicable to
such property with the label or nomenclature "PREZONED."
(Ord. 3048 (part), 1978)