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HomeMy WebLinkAboutItem No. 13 Reso SRCEA 1st Amend to Solar Power Purchase AgreementCity of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake - elsinore.org °"` In - City Council Agenda Report File Number: TMP 20 -0018 Agenda Date: 1/12/2021 Version: 1 Status: Approval Final In Control: City Council / Successor Agency File Type: Council Consent Calendar Agenda Number: 13) Adoption of Resolution Authorizing the City of Lake Elsinore Representatives to the Southwest Riverside County Energy Authority (SRCEA) to Approve the First Amendment to Solar Power Purchase Agreement, First Amendment to Sublease Agreement, and First Amendment to License Use Agreement; and Approving the Amended and Restated Guaranty of Solar Power Purchase Aareement by the Citv of Lake Elsinore and Authorizina Execution and Delivery of Same Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE AND AS A MEMBER OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (SRCEA), APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY BY RESPONSIBLE OFFICERS OF THE FIRST AMENDMENT TO SOLAR POWER PURCHASE AGREEMENT, FIRST AMENDMENT TO SUBLEASE AGREEMENT, AND FIRST AMENDMENT TO LICENSE AGREEMENT, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AMENDED AND RESTATED GUARANTY OF POWER PURCHASE AGREEMENT. City of Lake Elsinore Page 1 Printed on 1/7/2021 CITY OF i14 LADE L LSII` 0P, E DREAM EXTREME- REPORT TO CITY COUNCIL To: Honorable Mayor and Members of the City Council From: Grant Yates, City Manager Jason Simpson, Assistant City Manager Prepared by: Michael Bracken, Economic Development Consultant to the City of Lake Elsinore Date: January 12, 2021 Subject: Adoption of Resolution Authorizing the City of Lake Elsinore Representatives to the Southwest Riverside County Energy Authority (SRCEA) to Approve the First Amendment to Solar Power Purchase Agreement, First Amendment to Sublease Agreement, and First Amendment to License Use Agreement; and Approving the Amended and Restated Guaranty of Solar Power Purchase Agreement by the City of Lake Elsinore and Authorizing Execution and Delivery of Same Recommendation Adopt A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE AND AS A MEMBER OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (SRCEA), APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY BY RESPONSIBLE OFFICERS OF THE FIRST AMENDMENT TO SOLAR POWER PURCHASE AGREEMENT, FIRST AMENDMENT TO SUBLEASE AGREEMENT, AND FIRST AMENDMENT TO LICENSE AGREEMENT, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AMENDED AND RESTATED GUARANTY OF POWER PURCHASE AGREEMENT. Background and Overview On October 17, 2017, the City Council of the City of Lake Elsinore approved the City, acting as a member of the Southwest Riverside County Energy Authority ( SCREA), to enter into a Solar Power Purchase Agreement, Sublease Agreement, License Agreement and also authorized the City Manager to execute a guaranty of the Power Purchase Agreement. The City of Temecula approved similar documents at their May 10, 2016 meeting. These Agreements provided the ability for the Cities of Temecula and Lake Elsinore to purchase power for a variety of City facilities from a solar power generation facility to be constructed on land in the Santa Margarita Ecological Reserve in Temecula. Resolution Approving Amendment to Solar Power Purchase Agreement, etc. January 12, 2021 Page 2 The cost of the electricity from this solar power generating facility to the City was initially estimated to be approximately 10% less than the cost of electricity available to the City from Southern California Edison (SCE). As electricity rates increase over time, the savings to the City would increase correspondingly (as the City, acting through the SRCEA, entered into a fixed rate purchase agreement/arrangement). The project has a significant background that predates the City's 2017 approval. The solar power generating facility is part of a leased property held by SMER Research 1, LLC pursuant to a ground lease with San Diego State University, the owner of the Santa Margarita Ecological Reserve for the land commonly known as the "Santa Margarita Ecological Reserve SOLAR Initiative Research Site." SMER Research and San Diego State University entered into the ground lease on October 21, 2014 for use of the site for solar projects. Electricity will be generated by the collection of sunlight onto an array of photovoltaic (PV) cells that are ground- mounted onto posts. Sufficient electricity will be generated to serve several of the City of Lake Elsinore's facilities including City Hall, the Cultural Center, Launch Pointe, and the Maintenance Yard. The photovoltaic cells are similar to those now being used in home solar energy systems and in commercial scale solar fields that have been constructed in such places as Imperial, Riverside and San Bernardino counties. Because the site is outside of Lake Elsinore's municipal boundaries, Public Utilities Code Section 2830 mandates that the City of Lake Elsinore be part of a joint powers authority (JPA) in which the site is within the boundaries of one of the JPA's member organization. This requirement was the impetus for the formation of the SRCEA. The City's fundamental role (acting through the SRCEA) in this solar project is only as a purchaser of electricity. SMER Research was tasked with the design the solar project, obtaining all required permits from the California Public Utilities Commission, San Diego State University (and the California State University System), City of Temecula and any /all other regulatory /resource protection agencies at its sole cost, expense and time. Discussion Following the 2017 approvals, the project was sold to Biostar LLC. In working with Biostar on the completion of construction and preparing for operation, the parties determined the savings projection would fall short of what the original developer (Go- Green) had represented over the life of the project. Changes to the Power Purchase Agreement were proposed that would benefit both parties by maintaining significant savings — and, at least in the near term, offer greater savings to the City -- while also avoiding a potentially protracted legal dispute. In short, the start rate for the Power Purchase Agreement will now be 8.42 cents per kWh, 15% lower than the current rate for energy (also known as generation charges), which are currently about 9.9 cents per kWh (kilowatt hour). Increases are capped at a flat 2% per annum. By way of comparison, SCE's average rate of increase on the utility generation tariff has exceeded 6% over the last five years. Another issue also arose necessitating negotiations by the parties; the Renewable Energy Self - Generation Bill Credit Transfer Indifference Mechanism Amended Settlement Agreement between SCE and certain RES -BCT customers (the "Settlement Agreement ") put limitations on the "grandfathering" or use of "Legacy - Time -of -Use " rate schedules. Due to the reduction in Resolution Approving Amendment to Solar Power Purchase Agreement, etc. January 12, 2021 Page 3 value of solar credits at the end of the legacy period in year 2027, SRCEA has "opted -in" to receive certain mitigation payments. Under the Settlement Agreement SRCEA's generating account and benefitting accounts will be reverted to a grandfathered tariff upon interconnection and energizing of the Generation Facility, and will remain on such grandfathered rate schedule through the indifference period which ends on July 31, 2027. SRCEA is entitled to receive a lump sum payment (the "Indifference Payment ") after the first year of generation has taken place that will be equivalent to the present value of 5 -years worth of credits had the system been on the grandfathered rate schedule for another 5- years. Since the energy rate will be significantly lower at the end of the legacy rate period, SRCEA will pass through the Indifference Payment to Biostar. The Indifference Payment is estimated to be approximately $1 Million. Additionally, the amendment also takes into account a "reset" of rates to a significantly lower figure at the end of a legacy rate period, whereby the tariff rate will be an estimated 7.65 cents per kWh while the City will be paying 15% less or 6.5 cents per kWh. Finally, the term of the Agreement will change from 20 years with two (2) five -year options to a fixed 30 year term. To effectuate these new provisions, an Amendment to the Power Purchase Agreement has been prepared. As the final site layout for interconnection equipment modestly changed, a modification is needed to the Sublease Agreement and the fixed term requires an amendment to the License Agreement. Finally, as the Power Purchase period has changed, the City's guaranty has been amended to reflect that change and will need new authorization. Biostar continues to work with SCE to complete construction. The basic solar facility is now constructed and simply awaiting interconnection construction to "power -up." If the City Council for the City of Lake Elsinore approves the attached Resolution and the City of Temecula City Council take the same action (also scheduled for January 12, 2021), the SRCEA JPA will likely meet prior to the end of the month (January 2021) to consider similar actions. It is anticipated that the power generation facility will come online and begin producing power prior to the end of the first quarter of 2021 (March 31, 2021). Fiscal Impact The above - reference agreements do not impose any cost or expenses on the City or the SRCEA except with respect to the purchase of the generated electricity. The City will realize a savings in electrical energy costs by purchasing electricity generated by the solar generating facility. All costs related to the solar generating facility and the interconnection facilities to so that the generated electricity is credited towards the electricity used at various City facilities will be paid by SMER Research. As noted above, savings to the City will increase to the extent SCE increases its rates. The City's projected savings would be $812,000 over the life of the project, using a very conservative 2% escalation for SCE energy rates. Looking at the 5 -year trend based on SCE's increases for utility generation, there has been a 6.98% average increase. Continuation of that trend would result in an estimated savings of $4,475,000. Actual savings will likely be somewhere between those values. While it is not possible to precisely predict how SCE and the California Public Utilities Commission will structure rates into the future, the benefit to the community stands firm at any overall average rate increase of just 2 %. Further, looking at a variety of historic rate increase models, it appears Resolution Approving Amendment to Solar Power Purchase Agreement, etc. January 12, 2021 Page 4 that increases have averaged between 3.2% and 6.98% over the last 5 -10 years depending on rate /tariff type. Exhibit A — Resolution No. 2021 - B — First Amendment to Solar Power Purchase Agreement C — First Amendment to Sublease Agreements D — First Amendment to License Agreement E — Amended and Restated Guaranty (City of Lake Elsinore) RESOLUTION NO. 2021- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ACTING AS THE LEGISLATIVE BODY OF CITY OF LAKE ELSINORE AND AS A MEMBER OF THE SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY (SRCEA), APPROVING AND AUTHORIZING THE EXECUTION AND DELIVERY BY RESPONSIBLE OFFICERS OF THE FIRST AMENDMENT TO SOLAR POWER PURCHASE AGREEMENT, FIRST AMENDMENT TO SUBLEASE AGREEMENT, AND FIRST AMENDMENT TO LICENSE AGREEMENT, AND APPROVING AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE AMENDED AND RESTATED GUARANTY OF POWER PURCHASE AGREEMENT Whereas, the City Council (the "Council ") of the City of Lake Elsinore (the "City ") has authorized the formation of the Southwest Riverside County Energy Authority ( "SRCEA "), a joint exercise of powers authority duly organized and existing under and pursuant to that certain Joint Powers Agreement by and between the City of Lake Elsinore (the "City ") and the City of Temecula, under the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the California Government Code (the "Act "); and Whereas, the City of Lake Elsinore, acting through the SRCEA, desires to participate in the Local Government Renewable Self- Generation Program pursuant to Public Utilities Code Section 2830 wherein Southern California Edison ( "SCE ") offer a tariff (commonly referred to as the "The Renewable Energy Self- Generation Bill Credit Transfer Program" or "RES -BCT" tariff) which allows a local government to generate electricity at one "generating account" and transfer any available bill credit to one or several "benefiting accounts "; and Whereas, the City Council has, through its adoption of Resolution No. 2017 -113 on October 10, 2017, previously authorized its representatives to the SRCEA to approve and authorize the execution and delivery of a Solar Purchase Agreement, Sublease Agreement, License Agreement and approved and authorized the City Manager to execute the guaranty of the Power Purchase Agreement; and Whereas, SMER Research 1, LLC has constructed /installed an electricity grid- connected photovoltaic solar power plant on a portion of the Santa Margarita Ecological Reserve owned by San Diego State University and utilize such plant in connection with the RES -BCT; and Whereas, the solar power plant for the benefit of the City account will have generating capacity of approximately 1.055MW (1,840,475 kilowatt hours) of electricity and an adjacent facility that is also proposed that will produce about 2.614MW (4,560,454 kilowatt hours) of electricity for the benefit of the City of Temecula account; and Whereas, SMER Research 1, LLC and San Diego State University would also engage in research at the Santa Margarita Ecological Reserve that would benefit future renewable energy development and habitat restoration in Riverside County; and Whereas, the City Council desires to authorize its representatives to the SRCEA to approve and authorize the execution and delivery of certain amendments to the previously approved agreements, namely the First Amendment to Solar Power Purchase Agreement, First Amendment to Sublease Agreement, First Amendment to License Agreement, (as such terms are defined below), the forms of which are on file in the Office of the City Clerk; and CC Reso. No. 2021 - Page 2 of 4 Whereas, the City Council desires to approve and authorize execution and delivery of the Amended and Restated Guaranty of Solar Power Purchase Agreement. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE DOES HEREBY FIND, DETERMINE AND ORDER AS FOLLOWS: Section 1. In accordance with the California Environmental Quality Act (CEQA), the approvals of the proposed First Amendment to Power Purchase Agreement, First Amendment to Sublease Agreement, First Amendment to License Agreement and Amended and Restated Guaranty do not require further CEQA review. SMER Research 1, LLC has constructed an electricity grid - connected photovoltaic solar power plant on a portion of the Santa Margarita Ecological Reserve owned by San Diego State University. Potential environmental impacts were analyzed as part of San Diego State University's approval of that construction and installation. The City did not approve any facilities for the generation of electricity and is not participating in the construction of any structures or facilities for the generation of electricity. The proposed amendments modify agreements which only provide for the purchase of electricity by the City of Lake Elsinore from SMER Research 1, LLC. The amendments to the Sublease Agreement and License Agreement with respect to the solar generating site are only pass - throughs of the obligations of and benefits to SMER Research 1, LLC of the existing Ground Lease between SMER Research 1, LLC and San Diego State University dated October 21, 2014 and do not provide for any new or modified structures or facilities or new or modified uses beyond those designated in the Ground Lease. CEQA Guideline section 13578(c) recognizes that an initial project approval includes future discretionary approvals and each subsequent discretionary approval for an approved project does not trigger a new requirement to comply with CEQA: "(c) The term "project" refers to the activity which is being approved and which may be subject to several discretionary approvals by governmental agencies. The term `project' does not mean each separate governmental approval." Moreover, the City is only approving the terms and conditions for the purchase of electricity. Consequently, there is no possibility that the proposed amendments will have a significant effect on the environment. Section 2. The form of the First Amendment to Solar Power Purchase Agreement between SMER Research 1 and SRCEA is hereby approved. The designated members of the City Council (and /or designated alternate) serving as the City's representatives on the SRCEA's Board of Directors (each, a "Responsible Officer "), are hereby authorized to approve and take such other actions as are necessary to execute and deliver the First Amendment to the Power Purchase Agreement in the form on file with the Office of the City Clerk with such changes, insertions and omissions as may be approved by the Responsible Officers, with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof. Section 3. The form of the First Amendment to Sublease Agreement between SMER Research 1, LLC and SRCEA is hereby approved. The Responsible Officers are hereby authorized to approve and take such other actions as are necessary to execute and deliver the First Amendment to Sublease Agreement in the form on file with the Office of the City Clerk with such changes, insertions and omissions as may be approved by the Responsible Officers, with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof. Section 4. The form of the First Amendment to License Agreement between SMER Research 1, LLC and SRCEA is hereby approved. The Responsible Officers are hereby authorized to approve and take such other actions as are necessary to execute and deliver the First Amendment to CC Reso. No. 2021 - Page 3 of 4 License Agreement in the form on file with the Office of the City Clerk with such changes, insertions and omissions as may be approved by the Responsible Officers, with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof. Section 5. The form Amended and Restated Guaranty of Solar Power Purchase Agreement is hereby approved. The City Manager is hereby authorized to approve and take such other actions as are necessary to execute and deliver the Amended and Restated Guaranty of Solar Power Purchase Agreement in the form on file with the Office of the City Clerk with such changes, insertions and omissions as may be approved by the City Manager, with the advice of the City Attorney, such approval to be conclusively evidenced by the execution and delivery thereof. Section 6. The Responsible Officers, and each of them, are authorized and directed, for and in the name and on behalf of the City and as the City's representatives serving on the SRCEA's Board of Directors, to take all actions necessary and convenient to implement the agreements described in this resolution and to enter into such additional agreements as may be necessary and convenient to implement the agreements, including but not limited to, executing estoppel certificates, operating memoranda and agreements, certifications, escrow and similar agreements and actions. the balance of this page intentionally left blank CC Reso. No. 2021 - Page 4 of 4 Section 7. This Resolution shall take effect from immediately upon its adoption. Passed and Adopted this 12th day of January, 2021. Robert E. Magee, Mayor Attest: Candice Alvarez, MMC City Clerk STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, Candice Alvarez, MMC, City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2021- was adopted by the City Council of the City of Lake Elsinore, California, at the regular meeting of January 12, 2021, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: Candice Alvarez, MMC City Clerk First Amendment To Solar Power Purchase Agreement (Sublease Area 2) This First Amendment to Solar Power Purchase Agreement (Sublease Area 2) (the "Amendment ") is dated as of January _, 2021 (the "Amendment Effective Date ") and is by and between SMER Research 1, LLC, a California limited liability company (the "Power Provider ") and Southwest Riverside County Energy Authority, a California Joint Powers Authority ( "Purchaser "). A. Purchaser and Power Provider are parties to that certain Solar Power Purchase Agreement (Sublease Area 2) dated May 9, 2018 (the "PPA ") (capitalized terms not otherwise defined herein shall be as defined in the PPA unless otherwise designated); B. Purchaser participates in the Local Government Renewables Self - Generation Program pursuant to Public Utilities Code Section 2830 wherein Southern California Edison ( "SCE ") offers a tariff which allows a local government to designate one retail service account as a "generating account" and transfer any available generation credits produced by electricity exported to the grid by a solar facility to one or several designated "benefitting accounts ", subject to an annual true up to a designated benefitting account (the "Renewable Energy Self- Generation Bill Credit Transfer Program" or "RES - BCT"); C. Purchaser has opted -in to receive certain mitigation payments under that certain Renewable Energy Self- Generation Bill Credit Transfer Indifference Mechanism Amended Settlement Agreement between SCE and certain RES -BCT customers (the "Settlement Agreement "); D. Under the Settlement Agreement (1) Purchaser's generating account and benefitting accounts will be reverted to a grandfathered tariff upon interconnection and energizing of the Generating Facility, and will remain on such grandfathered rate schedule through the indifference period which ends on July 31, 2027, and (2) Purchaser or the City of Lake Elsinore is entitled to receive a lump sum payment (the "Indifference Payment ") after the first year of generation has taken place and will be equivalent to the present value of 5 -year worth of credits had the system been on the grandfathered rate schedule for another 5- years; E. Purchaser submitted Form 14 -789 to SCE on 2020 under the RES -BCT program designating the initial benefiting service accounts for the City of Temecula and City of Lake Elsinore; and F. Purchaser and Power Provider desire to amend the PPA to reflect the Settlement Agreement, certain agreed rate adjustments and treatment of the Indifference Payment, the term of the PPA, the benefitting account designations and such other matters as set forth herein. @BCL @AOOEFF29 NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Power Provider and Purchaser, intending to be legally bound, agree as follows: 1. Amendment to Section 3: Purchase and Sale of Power. Section 3 is hereby amended and restated as follows: (a) Purchase and Sale. Throughout the PPA Term, Purchaser shall purchase and accept delivery from Power Provider, and Power Provider shall sell and deliver to Purchaser, the entire Energy Output in such amounts as may be generated from time to time. Purchaser shall not resell any of the Energy Output. (b) Purchase Price. Purchase shall pay to Power Provider the Purchase Price for the duration of the PPA Term for all of the Energy Output delivered hereunder throughout the PPA Term. Such amount shall be paid in accordance with the terms of Section 8 hereof (c) Taxes. If any taxes are assessed against the generation, sale, delivery or consumption of Energy Output, or if taxes that are, or are in the nature of, property or ad valorem taxes, including without limitation, possessory interest taxes, if any, are assessed in respect of the Generating Facility, Power Provider shall be responsible for all such amounts due, including any taxes assessed thereon, in accordance with the terms of Section 8. Notwithstanding the above, Purchaser may not assess a tax on Power Provider's activities in Mmill -lI (d) Fees. If any fees are assessed by the Utility by reason of this PPA, or any supporting agreement, on any Purchaser account which is receiving credits for Energy Output from the Generating Facility, including but not limited to Departing Load Charges, application fees, one time set -up fees, monthly billing fees, or review fees, the Power Provider shall be responsible for all such amounts. Notwithstanding the above, Purchaser may not assess any fees on Power Provider's activities in any way. (e) Applicable Rate Adjustments. (i) Prior to July 31, 2027, the Applicable Rate shall be increased as of the first day of each Relevant Period by an amount equal to 2% of the prior year's Applicable Rate. (ii) On August 1, 2027, the Applicable Rate shall be adjusted (increased or decreased) as of August 1, 2027 to be equal to: the product of (1) the 2027 Applicable Tariff Rate as of August 1, 2027, and (2) 85 %; provided that the Applicable Rate shall not be less than 6.5 cents; and 6 (iii) Beginning on the first day of each Relevant Period thereafter, the Applicable Rate shall be increased as of the first day of each Relevant Period by an amount equal to 2% of the prior year's Applicable Rate. (f) Benefitting Account Designations under RES -BCT Program. (i) Authority to Amend Account Designations and Exhibit B. Purchaser and Power Provider agree that on an annual basis, and subject to the limitations set forth in Section 3(f)(ii), Purchaser may request changes to the benefitting account designations for the service accounts of the City of Lake Elsinore and the City of Temecula; provided that any such requested change must reflect an allocation of 100% of the power produced by the Combined Generating Facility. Purchaser agrees to provide a copy of the approved SCE benefitting account designations to Power Provider within two business days following SCE approval. Schedule 1 and Exhibit B will be amended to reflect changes to the benefitting accounts by Purchaser following approval of such changes by SCE under the RES -BCT program. (ii) Restrictions on Changes to Account Designations. Purchaser agrees that no changes to the benefitting account or true -up account designations under the RES -BCT program will be submitted to SCE unless and until Power Provider and Purchaser approve the changes to the benefitting account designations, and the corresponding changes to this Agreement for any changes or new service accounts designated as benefitting accounts. Purchaser agrees that no changes will be made to the benefitting account designations if such designation would result in a decrease in or recapture of any Indifference Payments. 2. Amendments to Section 4: PPA Term; Termination. Section 4 is hereby amended and restated as follows: (a) PPA Term. Unless terminated early in accordance with the terms hereof, the term of this Agreement (the "PPA Term ") shall commence on the PPA Effective Date and the Parties' respective purchase and sale obligations under this Agreement with respect to Energy Output from the Generating Facility shall commence at 0000 hours on the Commercial Operation Date; and each shall continue in effect until 2400 hours on the date that is thirty (30) years after the Commercial Operation Date. Notwithstanding the foregoing, the PPA Term shall automatically expire upon the expiration of the "Term" of the Ground Lease Agreement (as defined therein), if such expiration occurs on or after the expiration of the "Initial Term" of the Ground Lease Agreement (as defined therein). (b) fReservedl. 9 3. Amendment to Section 8: Invoices, Payment and Credits. Section 8 is hereby amended and restated as follows: 8. Invoices, Payment and Credits (a) Power Provider shall deliver to Purchaser an invoice at the address set forth in Section 17 by the fourteenth (14th) Business Day of each calendar month (or upon a monthly schedule mutually acceptable to Purchaser and Power Provider), stating the Energy Output delivered to Purchaser during the preceding calendar month and the applicable Purchase Price, and calculating the total amount due to Power Provider. Without offset for any amount owed or claimed to be owed by Power Provider, other than the reduction for any credit allowed as set forth in Section 8(b), Purchaser shall pay the amount due to Power Provider by wire transfer or ACH payment, on or before thirty (30) days following the date of the invoice, which shall be referred to as the "Due Date." If the Due Date is a bank holiday, publicly designated holiday, or a weekend, payment shall be due on the next following Business Day. Any undisputed amount remaining unpaid after the Due Date shall bear interest at the Default Rate. Invoices and payments schedule shall commence following Commercial Operation. (b) If in any Relevant Period the total energy produced by the Combined Generating Facility exceeds 6,300,000 kWh (with the amount of such production in excess of 6,300,000 kWh referred to herein as the "Excess Production "), and the Purchaser is unable to apply the Generation Credits created as a result of the Excess Production to the Benefitting Accounts, the Purchaser shall be entitled to a credit against the purchase of energy, referred to herein as the "Excess Production Credit." Purchaser will not be entitled to an Excess Production Credit if there is no Excess Production for such Relevant Period, and nothing in this Section 8(b) is intended to provide Purchaser any credits attributable to the first 6,300,000 kWh produced by the Combined Generating Facility during each Relevant Period. (i) If for any Relevant Period the Applied Generation Credits for the Combined Generating Facility exceeds the Expected Production Credit Value, but is less than the total sum of the Generation Credits, the Excess Production Credit shall be equal to (1) the value of the forfeited unused Generation Credits for the Combined Generating Facility after application of the applicable true -up provisions for the Relevant Period under the RES -BCT schedule (referred to as Forfeited Bill Credits), multiplied by the (2) the quotient derived by dividing the Applicable Rate by the Credit Rate and (3) the allocation percentage attributable to the City of Lake Elsinore, as set forth in Section 8(c). (ii) If for any Relevant Period the Applied Generation Credits for the Combined Generating Facility is less than the Expected Production Credit Value, and is less than the total sum of the Generation Credits for the Combined Generating Facility, the Excess Production Credit shall be equal to (1) the CI excess of the total Generation Credits for the Combined Generating Facility over the Expected Production Credit Value, multiplied by the (2) the quotient derived by dividing the Applicable Rate by the Credit Rate and (3) the allocation percentage attributable to the City of Lake Elsinore, as set forth in Section 8(c). (iii) If amount of energy produced by the Combined Generating Facility is less than 6,300,000 kWh the Excess Production Credit shall be zero. The Excess Production Credit attributed to Purchaser, if any, will be applied in twelve (12) equal portions by Power Provider as a credit on the monthly invoices issued with respect to the immediately following Relevant Period. (c) Purchaser shall provide to Power Provider within 30 days after the final true -up credit has been determined with respect to each Relevant Period, (1) proof of all Generation Credits, (2) the calculation of any Forfeited Generation Credits, with all backup support, and (3) if different than the allocation reflected in Exhibit B for the most recent relevant period, the allocation of the Excess Production Credit between the City of Temecula and City of Lake Elsinore. 4. Amendment to Section 15: Force Majeure. Section 15 is hereby amended to delete the following words from Section 15)c)(iv) and Section 15(d)(1): or the end of any Extension PPA Term 5. Amendment to Section 17: Notices. Power Provider's notice address is hereby amended and restated as follows: If to Power Provider: SMER Research 1, LLC 9400 Reeds Road, Ste 150 Overland Park, KS 66207 (No notice copies required) 6. A new Section 34 is added to the Agreement as follows: 34. Indifference Payments Purchaser, and Guarantor, if applicable, each agree to pay Power Provider an amount equal to 100% of the Indifference Payment received by Purchaser or Guarantor, whether received as a bill credit or as a cash payment. Pursuant to the Settlement Agreement, "Indifference payments will be applied as a one -time lump sum bill credit to the Generating Account (w/ the customer having the option to cash out any credit balance via check after the initial bill credit is applied)." Purchaser agrees to promptly request a check for any credit balance. Funds due the Purchase Provider pursuant to this section 5 shall be conveyed to the Power Provider within five (5) business days following receipt of the Indifference Payment check from SCE. 7. A new Section 35 is added to the Agreement as follows: 35. Covenants of Purchaser Purchaser agrees that it will use commercially reasonable best efforts to implement appropriate revisions to the Benefitting Account designations under the RES -BCT program to maximize the Purchaser usage of the Generation Credits and to limit the amount of Excess Production Credits. Purchaser agree not to take actions that would create a material negative impact on the ability of Purchaser or its members agencies to designate Benefitting Accounts that will utilize the Generation Credits. 8. A new Section 36 is added to the Agreement as follows: 36. Buy -Out Option Beginning on the fifth anniversary of the first day of the month following the Commercial Operation Date, Purchaser shall have the option to purchase the Generating Facility, provided that Purchaser is not then in default under this Agreement and that Power Provider receives the prior written approval of the lessor under the Ground Lease Agreement and Power Provider's lender. Customer may elect to purchase the System by providing 60 days advance written notice to Power Provider. This purchase option may be exercised only if the Purchaser purchases the entire Combined Generating Facility, and assumes all of Power Provider's obligations under the Ground Lease Agreement. If Purchaser elects to so purchase the Generating Facility, the purchase price shall be the Termination Value. Not less than one- hundred- and- eighty (180) days prior to the exercise of the purchase option, Purchaser shall provide written notice to Power Provider of Purchaser's exercise thereof. Upon the exercise of the foregoing purchase option plus receipt of the Termination Value, and all other amounts then owing by Purchaser to Power Provider, the parties will execute all documents necessary to cause title to the Generating Facility to pass to Purchaser as -is, where -is; provided, however, that Power Provider shall remove any encumbrances placed on the System by Provider. 9. Amendment to Exhibit A: Definitions and Rules of Interpretation. Exhibit A of the PPA is hereby deleted and replaced in its entirety with the Amended and Restated Exhibit A attached to this Amendment. 10.Amendment to Exhibit B: Generating Facility Specifications. Exhibit B of the PPA is hereby deleted and replaced in its entirety with the Amended and Restated Exhibit B attached to this Amendment. n 11.Amendment to Exhibit C: Termination Values. Exhibit C of the PPA is hereby deleted and replaced in its entirety with the Amended and Restated Exhibit C attached to this Amendment. In accordance with Section 13(c) of the PPA, each member agency of Purchase is responsible for the Termination Value proportionate to that member agency's Energy Allocation at the time that the PPA Event of Default occurs. The Parties agree to update Exhibit C following changes to the benefitting account designations for the service accounts of the City of Lake Elsinore and the City of Temecula under Section 3(f) to reflect the changes. 12. Miscellaneous. Except as otherwise expressly modified herein, the terms and provisions of the PPA shall continue in full force and effect. This Amendment may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one agreement. Signature pages of this Amendment transmitted by electronic mail in portable document format will have the same legal effect as a manually executed signature page. This Amendment shall be governed and construed in accordance with the laws of the State of California. 7 The undersigned cause their duly authorized representatives to execute this Amendment as of the Amendment Effective Date. SMER RESEARCH 1, LLC go William P. Love, Manager SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY go ATTEST: Candice Alvarez, MMC, Authority Secretary APPROVED AS TO FORM: David H. Mann, Authority Counsel Jason Simpson, Executive Director n. Amended and Restated Exhibit A Definitions and Rules of Interpretation 1. Definitions. "2027 Applicable Tariff Rate" means, with respect to the Generating Account, the weighted average (weighted based on the prior year production during each TOU Period) of the following rates: (A) the product of (1) the actual TOU Period(s) kWh or kW, as applicable, exported to the grid during the immediately preceding Relevant Period for the Generating Account, and (2) the applicable SCE tariff rate for each such TOU Period (not including delivery and transmission charges) for the Generating Account; divided by the total kWh exported to the grid by such for the Generating Account during the immediately preceding Relevant Period. "Applied Generation Credits" means, for any Relevant Period, the sum of the Generation Credits applied to the designated Benefitting Accounts under the RESBCT schedule, including the true -up designation. "Affiliate" means, when used with reference to a specified Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the specified Party. "Agreement" has the meaning given in the preamble. "Applicable Rate" means, (i) as of the Amendment Effective Date, 8.42 cents per kWh, as thereafter adjusted for the annual increase under Section 3(g)(i), and (ii) on August 1, 2027, the greater of 6.5 cents per kWh or the rate calculated under Section 3(g)(ii), as thereafter adjusted for the annual increase under Section 3(g)(iii). " Benefitting Account" means, an electric account authorized to receive generation credits produced by electricity exported to the grid by the Generating Facility interconnected under the Schedule RES -BCT. "Business Day" means any day on which Federal Reserve member banks in San Francisco, California are open for business. "City of Temecula (Sublease Area 1) PP A" means that certain Solar Power Purchase Agreement by and between Power Provider and Purchaser regarding Sublease Area 1 at the Site. "Code" means the Internal Revenue Code of 1986, as amended. "Combined Generating Facility" means Generating Facility and the Generating Facility as defined in the City of Temecula (Sublease Area 1) PPA "Commercial Operation" means the condition existing when (i) the Generating Amended and Restated Exhibit A - 1 Facility is mechanically complete and operating in accordance with the specifications set forth in Exhibit B, and (ii) energy is delivered to the Energy Delivery Point. "Commercial Operation Date" means the date on which Power Provider notifies Purchaser in accordance with Section 2(a) that the Generating Facility has achieved Commercial Operation. "Completion Activities" has the meaning given in Section 2(c). "CPUC" means the California Public Utilities Commission. "Credit Rate" means the value of all Generation Credits divided by the actual total energy production for the Relevant Period for the Combined Generating Facility. "Default Rate" means the lesser of one percent (1 %) per month or the maximum rate permitted by applicable law. "Due Date" has the meaning given in Section 8. "Energy Allocation" means the percentage of total energy production from the Generating Facility allocated to the Purchaser, as set forth on Exhibit B, as may be amended from time to time. "Energy Delivery Point" means the energy delivery point within the Site's electrical system on Purchaser's side of the Site's Utility meter, as designated in the Interconnection Agreement, as shown in the single -line drawing attached as Exhibit E. "Energy" means the electrical output generated by the Generating Facility. "Energy Output" means the total quantity of the actual net energy generated by the Generating Facility (measured in kWh -ac) and delivered to the Energy Delivery Point, in any given period of time. Energy Output does not include the Retained Environmental Financial Incentives or the Green Attributes. "Environmental Laws" means all federal, state, local and regional laws, statutes, ordinances, orders, rules and regulations relating to the protection of human health or the environment including, without limitation, the Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental Response Compensation and Liability Act of 1980, the Hazardous Materials Transportation Act, the Safe Drinking Water Act, the Clean Water Act, the Clean Air Act, the Toxic Substances Control Act, and any other applicable federal, state or local law now in force or hereafter enacted relating to waste disposal or environmental protection with respect to hazardous, toxic, or other substances generated, produced, leaked, released, spilled or disposed of at or from the Site, as any of the same may be amended or supplemented from time to time, and any regulation promulgated pursuant thereto. "Expected Production Credit Value" means, for any Relevant Period, the product of 6,300,000 kWh and the Credit Rate. Amended and Restated Exhibit A - 2 "Extension PPA Term" has been deleted from the Agreement and is no longer applicable. "Force Maieure" has the meaning given in Section 15. "Generating Account" means, the designated retail service account located on the Premises and interconnected with the Generating Facility under the Schedule RES -BCT. "Generation Credit" means, the monetary value of bill credits produced by the electricity exported to the electric grid by the Generating Facility. "Generating Facility" means an electricity grid- connected photovoltaic, solar power plant with the specifications shown in Exhibit B, and all associated electric power generation equipment, controls, meters, switches, connections, conduits, wires and other equipment that may be necessary to connect such solar power plant to the Energy Delivery Point and to supply electricity to Purchaser at the Energy Delivery Point. "Green Attributes" means any and all credits, benefits, emissions reductions, offsets and allowances, howsoever entitled, attributable to the generation of the Energy Output from the Generating Facility, and its displacement of conventional energy generation. Green Attributes include but are not limited to Renewable Energy Certificates, 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 REC Reporting Rights. Green Attributes do not include (i) any Energy, capacity, reliability or other power attributes from the Generating Facility, (ii) the Retained Environmental Financial Incentives, (iii) fuel - related subsidies or "tipping fees" that may be paid to Power Provider to accept certain fuels, or local subsidies received by the generator for the destruction of particular preexisting pollutants or the promotion of local environmental benefits, or (iv) emission reduction credits encumbered or used by the Generating Facility for compliance with local, state, or federal operating and /or air quality permits. "Ground Lease Agreement" means the certain Ground Lease Agreement between the Trustees of the California State University San Diego State University and SMER Research 1, LLC, dated as of October 21, 2014 (SDSU Agreement 40096313), and any amendments thereto. "Indifference Pavment" is defined in Recital D to the First Amendment. "Indemnified PPA Party" has the meaning given in Section 12(a). Amended and Restated Exhibit A - 3 "Indemnifying PPA Party" has the meaning given in Section 12(a). "Interconnection Agreement" means an interconnection agreement entered into by and between Purchaser and the Utility, as in effect on the PPA Effective Date, substantially in the form attached to the PPA as Exhibit D or such other approved form as may be in effect immediately prior to the Commercial Operation Date or as otherwise applicable during the PPA Term. "Interconnection Facilities" means collectively to include all facilities and equipment between the Generating Facility and the Point of Interconnection, including any modification, additions or upgrades that are necessary to physically and electrically interconnect the Generating Facility to the Distribution Provider's Distribution System. "Land Use Agreement" means the Sublease Agreement by and between Power Provider and Purchaser in substantially the same form as provided in Exhibit H. "Landlord" has the meaning given in the preamble in the Land Use Agreement. "Party" and /or "Parties" means a party or the parties to the PPA. "Permits" has the meaning given in Land Use Agreement Section 6(b). "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, trustee, estate, limited liability company, unincorporated organization, real estate investment trust, government or any agency or political subdivision thereof, or any other form of entity. "Power Provider" has the meaning given in the PPA preamble. "PPA" has the meaning given in the preamble. "PPA Effective Date" has the meaning given in the preamble to the PPA. "PPA Expiration Date" means the last day of the PPA Term. "PPA Event of Default" has the meaning given in Section 13. "PPA Term" has the meaning given in Section 4(a). "Pre- Construction Activities" has the meaning given in Section 2(b). "Premises" has the meaning given in Land Use Agreement Exhibit H. "Prudent Industry Practices" means those practices, methods and equipment, as changed from time to time, that are commonly used in the state of California in prudent electrical engineering and operations to operate photovoltaic solar generation equipment lawfully and with safety, reliability, efficiency and expedition. Prudent Industry Practices are not intended to be limited to the optimum practices, methods or equipment to the exclusion of others, but rather to those practices, methods or equipment generally Amended and Restated Exhibit A - 4 accepted or approved by a significant portion of the photovoltaic solar power industry during the relevant time period. "Purchase Price" means, the product of the Energy Output and the Applicable Rate for a given period of time. "Purchaser" has the meaning given in the PPA preamble. "Rebate Payments" means any incentive payments made to Power Provider by a third party in connection with the Generating Facility. "RECs" or "Renewable Energy Certificates" mean renewable energy certificates related to and representing Green Attributes (also known as green tags, renewable energy credits, or tradable renewable certificates), which are tradable environmental commodities in the United States and represent 1 megawatt -hour (MWh) of electricity generated from an eligible renewable energy resource. These certificates can be sold and traded and the owner of the REC can claim to have purchased renewable energy. "REC Reporting Rights" are the right of an owner of RECs to report the ownership of accumulated RECs in compliance with federal or state law, if applicable, and to a federal or state agency or any other party at its discretion, and include without limitation those REC 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. "Relevant Period" means a twelve -month period, or portion thereof, commencing on the next regular billing cycle following the date of final interconnection of the Provider's Generating Facility to SCE's electric system and on every subsequent anniversary thereof. "Retained Environmental Financial Incentives" means each of the following financial rebates and incentives that is in effect as of the PPA Effective Date or may come into effect in the future: (1) production, energy, or investment tax credits associated with the development, construction, ownership or operation of the Generating Facility, accelerated depreciation and other financial incentives in the form of credits, reductions or allowances associated with the Generating Facility or the Green Attributes that may be applied to reduce any state or federal income taxation obligations, including but not limited to the Tax Incentives, and (2) performance -based incentives under applicable state or federal law or utility programs, including but not limited to the Rebate Payments. Without limiting the foregoing, "Retained Environmental Financial Incentives" includes the right to apply for (and entitlement to receive) incentives under any demand -side management, distributed generation or energy efficiency programs offered by a utility company, a third - party provider or the State in which the Generating Facility is located, any incentive offered pursuant to a renewable energy program or any other incentive programs offered by or in the state in which the Generating Facility is located. "SCADA" has the meaning given in Section 6 a . Amended and Restated Exhibit A - 5 "Site" means the Santa Margarita Ecological Reserve, Solar Institute Research Site, Temecula, Southern Riverside County, or such other location agreed to by Power Provider and Purchaser on which the Generating Facility is to be located. "Target Commercial Operation Date" has the meaning given in Section 2(c). "Tax Incentives" means all rights to and to claim federal income tax credits under sections 45 or 48 of the Code (or a cash grant in lieu thereof) and all other federal, state and /or local tax benefits arising from the ownership of the Generating Facility, including without limitation, any special income tax deductions under the Code. "Tenant" has the meaning given in the preamble to the Land Use Agreement. "Termination Value" means, the dollar amount for the applicable PPA year as shown on Exhibit C, and is only in consideration to the initial 30 year term, and not to include any extensions of term. "TOU Period" means, each of the following time -of -use schedule periods delineated by SCE that are applied to determine applicable generation charges for energy which in the value of kWh and demand in the value of kW: (i) summer on -peak, (ii) summer mid -peak, (iii) summer off -peak, (iv) winter mid -peak, and (v) winter off -peak; and will include any additional or modified TOU period as determined by SCE after July 1, 2027. "Utility" means the electric distribution company responsible for electric energy transmission and distribution service at the Site. The Parties acknowledge and agree that, as of the PPA Effective Date, the Utility is Southern California Edison Company. 2. Rules of Interpretation. Except where otherwise expressly provided or unless the context otherwise necessarily requires: (a) Reference within an Agreement to a given Section, Subsection, clause, Exhibit or Schedule is a reference to an Section, Subsection, clause, Exhibit or Schedule of such Agreement, as the case may be, unless otherwise specified. (b) Reference within an Agreement to the terms "hereof ", "herein ", "hereto ", "hereunder" and "herewith" refer to such Agreement as a whole. (c) Reference to a given agreement, instrument, document, law, rule or regulation is a reference to that agreement, instrument, document, law, rule or regulation as modified, amended, supplemented and restated through the date as of which such reference is made, and, as to any law, rule or regulation, any successor law, rule or regulation. (d) Accounting terms have the meanings given to them by applicable U.S. generally accepted accounting principles applied on a consistent basis. Amended and Restated Exhibit A - 6 (e) Reference to a Person includes its successors and permitted assigns. (f) The singular shall include the plural and the masculine shall include the feminine, and vice versa. (g) "Includes" or "including" means "including, for example and without limitation." (h) References to "days" shall mean calendar days, unless the term "Business Days" is used. (i) Preparation of an Agreement has been a joint effort of both Parties thereto and their legal counsel and the resulting document shall not be construed more severely against one of the Parties than against the other. Q) The captions contained in an Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope or intent of the Agreement or the intent of any provision contained therein. (k) Any failure of a Party to enforce any of the provisions of an Agreement or to require compliance with any of its terms at any time during the term of an Agreement shall in no way affect the validity thereof, or any part thereof, and shall not be deemed a waiver of the right of such Party thereafter to enforce any and each of such provisions. Amended and Restated Exhibit A - 7 Amended and Restated Exhibit B Generating Facility Specifications Location: Santa Margarita Ecological Reserve SOLAR Initiative Research Site Sublease Area 2 (City of Lake Elsinore) Purchaser Generator Size (kWdc) Percent Estimated Type of Energy Energy Output Allocated Year 1 Allocated (%) City of Temecula 2494.48 kWdc 68% 4,352,632 kWh Solar PV (Sublease Area 1) City of Lake 1173.87 kWdc 32% 2,048,297 kWh Solar PV Elsinore (Sublease Area 2) Purchaser Total 3668.35 kWdc 100% 6,400,929 kWh Amended and Restated Exhibit B - 1 Amended and Restated Exhibit C Termination Values Year of Contract Total Sublease Area 1 (Temecula) Sublease Area 2 Lake Elsinore 1 $11,881,317 $8,079,296 $3,802,021 2 $11,597,839 $7,886,531 $3,711,308 3 $11,308,104 $7,689,511 $3,618,593 4 $11,011,973 $7,488,142 $3,523,831 5 $10,709,305 $7,282,327 $3,426,978 6 $10,399,956 $7,071,970 $3,327,986 7 $10,083,778 $6,856,969 $3,226,809 8 $9,760,621 $6,637,222 $3,123,399 9 $9,430,330 $6,412,624 $3,017,706 10 $9,092,748 $6,183,069 $2,909,679 11 $8,747,714 $5,948,446 $2,799,268 12 $8,395,064 $5,708,644 $2,686,420 13 $8,034,630 $5,463,548 $2,571,082 14 $7,666,238 $5,213,042 $2,453,196 15 $7,289,715 $4,957,006 $2,332,709 16 $6,904,881 $4,695,319 $2,209,562 17 $6,511,551 $4,427,855 $2,083,696 18 $6,109,539 $4,154,487 $1,955,052 19 $5,698,653 $3,875,084 $1,823,569 20 $5,278,696 $3,589,513 $1,689,183 21 $4,849,470 $3,297,640 $1,551,830 22 $4,410,768 $2,999,322 $1,411,446 23 $3,962,382 $2,694,420 $1,267,962 24 $3,504,099 $2,382,787 $1,121,312 25 $3,035,699 $2,064,275 $971,424 26 $3,035,699 $2,064,275 $971,424 27 $3,035,699 $2,064,275 $971,424 28 $3,035,699 $2,064,275 $971,424 29 $3,035,699 $2,064,275 $971,424 30 $3,035,699 $2,064,275 $971,424 Termination Value reflects the amount required as payment due to a PPA Event of Default (Section 13(a)). The respective termination values for the Lease Area 1 (City of Temecula) and Lease Area 2 (City of Lake Elsinore) are proportionate to the amount of energy purchased by the JPA to benefit each City at the initiation of the Agreement. Should the proportionate energy purchased by the Purchaser JPA participants change during the term of agreement, the relative termination values would also change proportionately. Amended and Restated Exhibit C - 1 FIRST AMENDMENT TO SUBLEASE AGREEMENT (Area 2) This First Amendment to Sublease Agreement (Area 2) (the "Amendment ") is effective as of the day of , 2021 (the "Amendment Effective Date ") and is by and between SMER Research 1, LLC, a California limited liability company (the "Sublandlord ") and Southwest Riverside County Energy Authority, a California Joint Powers Authority ( "Subtenant "). Recitals A. Sublandlord (as "Power Provider ") and Subtenant (as "Purchaser ") are parties to that certain Solar Power Purchase Agreement (Area 2) dated May 9, 2018 (the "PPA "). Concurrent with the execution of this Amendment, the parties are entering into amendments to the PPA to, among other things, modify the term of the PPA. B. Sublandlord and Subtenant entered into a Sublease Agreement (Area 2) dated May 9, 2018 under which Sublandlord subleased certain property to Subtenant (the "Sublease "). Capitalized terms not otherwise defined herein shall be as defined in the Sublease. C. Sublandlord and Subtenant entered into a License Agreement (Area 2) dated May 9, 2018 under which Subtenant granted Sublandlord a license to use the subleased premises to install, own and operate the solar generating facility (the "License Agreement "). Concurrent with the execution of this Amendment, Sublandlord and Subtenant have determined to amend the License Agreement in order to modify the term and termination of the license granted therein (the "First Amendment to License Agreement," dated of even date herewith). D. Sublandlord and Subtenant desire to also amend the Sublease to clarify their intent that references to "License Agreement' is intended to mean the License Agreement (Area 2) dated May 9, 2018, as amended by the First Amendment to License Agreement and, further, reflect the revised term of the PPA and the Sublease. Sublandlord and Subtenant agree as follows: 1. Amendment to Section 2. Section 2 is hereby amended and restated as follows: 2. Term. The Term of this Sublease shall commence on the Effective Date and shall continue for a term of thirty (30) years from the "Operations Date," as that term is defined in the Master Lease. Notwithstanding the foregoing, the Term of this Sublease shall automatically expire upon the expiration of the "Term" of the Master Lease (as defined therein), if such expiration occurs on or after the expiration of the "Initial Term" of the Master Lease (as defined therein). 2. Amendment to Section 4. Section 4 is hereby amended and restated as follows: 4. License Right. During the term of this Sublease, Sublandlord shall be entitled to enter onto the Premises in accordance with the License Agreement (Area 2) dated May 9, 2018, as amended by the First Amendment @BCL @AOOEB08C 1 to License Agreement, attached as Exhibit C, and incorporated herein by this reference. 3. Amendment to Exhibit C. Exhibit C of the Sublease is hereby deleted and replaced in its entirety with the Amended and Restated Exhibit C attached to this Amendment. 4. Miscellaneous. Except as otherwise expressly modified herein, the terms and provisions of the Sublease shall continue in full force and effect. This Amendment may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one agreement. Signature pages of this Amendment transmitted by electronic mail in portable document format will have the same legal effect as a manually executed signature page. This Amendment shall be governed and construed in accordance with the laws of the State of California. [Signature page follows] 4 The undersigned cause their duly authorized representatives to execute this Amendment as of the Amendment Effective Date. SMER RESEARCH 1, LLC By: William P. Love, Manager SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY IN ATTEST: Candice Alvarez, MMC, Authority Secretary APPROVED AS TO FORM: David H. Mann, Authority Counsel Jason Simpson, Executive Director 3 Amended and Restated Exhibit C License Agreement (Area 2) dated May 9, 2018, as amended by the First Amendment to License Agreement [Attached] FIRST AMENDMENT TO LICENSE AGREEMENT (Sublease Area 2) This First Amendment to License Agreement (Sublease Area 2) (the "Amendment ") is effective as of the day of , 2021 (the "Amendment Effective Date ") and is by and between SMER Research 1, LLC, a California limited liability company ( "SMER" or "Licensee ") and Southwest Riverside County Energy Authority, a California Joint Powers Authority ( "SRCEA "). A. SMER (as "Power Provider ") and SRCEA (as "Purchaser ") are parties to that certain Solar Power Purchase Agreement (Area 2) dated May 9, 2018 (the "PPA "). Concurrent with the execution of this Amendment, the parties are entering into amendments to the PPA to, among other things, modify the term of the PPA. B. SMER and SRCEA are parties to that certain Sublease Agreement (Area 2) dated May 9, 2018 under which SMER subleased certain property to SRCEA (the "Sublease "). Concurrent with the execution of this Amendment, the parties are entering into amendments to the Sublease to, among other things, modify the term of the Sublease. C. SMER and SRCEA entered into a License Agreement regarding Sublease Area 2 (also referred to as the "License Use Agreement ") dated May 9, 2018 under which SRCEA granted SMER a license to use the subleased premises to install, own and operate the solar generating facility (the "License Agreement"). D. SMER and SRCEA desire to make a corresponding amendment to the License Agreement to reflect the revised terms of the PPA and the Sublease. SRCEA and Licensee agree as follows: Amendment to Section 2.1. Section 2.1 is hereby amended and restated as follows: 2.1. Commencement. The term of this Agreement shall commence on May 9, 2018 ( "Effective Date ") and shall continue for thirty (30) years from the "Operation Date," as that term is defined in that certain Ground Lease Agreement entered into by and between California State University, San Diego State University and SMER Research 1, LLC dated October 21, 2014, as amended. Notwithstanding the foregoing, the Term of this Agreement shall automatically expire upon the expiration of the "Term" of the Master Lease (as defined therein), if such expiration occurs on or after the expiration of the "Initial Term" of the Master Lease (as defined therein). 2. Deletion of Section 2.2. Section 2.2 is hereby deleted. 3. Deletion of Section 2.3. Section 2.3 is hereby deleted. @BCL @AOOE54CB 1 4. Amendment to Section 5.5. Licensee's notice address is hereby amended as follows: To Licensee: SMER Research 1, LLC 9400 Reeds Road, Ste 150 Overland Park, KS 66207 Attn: William Love, Manager 5. Miscellaneous. Except as otherwise expressly modified herein, the terms and provisions of the License Agreement shall continue in full force and effect. This Amendment may be executed in counterparts, each of which will be deemed an original, but all of which together constitute one agreement. Signature pages of this Amendment transmitted by electronic mail in portable document format will have the same legal effect as a manually executed signature page. This Amendment shall be governed and construed in accordance with the laws of the State of California. [Signature page follows] @BCL @AOOE54CB 2 The undersigned cause their duly authorized representatives to execute this Amendment as of the Amendment Effective Date. SMER RESEARCH 1, LLC By: William P. Love, Manager SOUTHWEST RIVERSIDE COUNTY ENERGY AUTHORITY IN ATTEST: Candice Alvarez, MMC, Authority Secretary APPROVED AS TO FORM: David H. Mann, Authority Counsel Jason Simpson, Executive Director @BCL @AOOE54CB 3 AMENDED AND RESTATED GUARANTY OF POWER PURCHASE AGREEMENT THIS AMENDED AND RESTATED GUARANTY OF POWER PURCHASE AGREEMENT ( "Amended Guaranty ") dated as of , 2021 is executed by the City of Lake Elsinore, a California municipal corporation ( "Guarantor ") in favor of the SMER Research 1, LLC, a California limited liability company ( "Power Provider "), with reference to the following: A. Power Provider and the Southwest Riverside County Energy Authority ( "SRCEA "), a California joint powers authority (as "Purchaser ") have entered into that certain Solar Power Purchase Agreement dated as of May 9, 2018 (the "Original PPA "), as amended by the First Amendment to Power Purchase Agreement dated 2021 (the "PPA Amendment ") (as amended, the "Amended PPA "). B. As a condition to entering into the Original PPA, Power Provider required that Guarantor execute and deliver to Power Provider the Guaranty of Power Purchase Agreement dated May , 2018 (the "Original Guaranty), which Original Guaranty was to be effective as of the "Initial PPA Term" and terminate upon the expiration of the "Initial PPA Term" or, if exercised, the termination of the "Extension PPA Term" (as such terms were defined in the Original PPA). C. In connection with entering into the PPA Amendment, Power Provider has requested that Guarantor execute and deliver to Power Provider this Amended and Restated Guaranty of Power Purchase Agreement ( "Amended Guaranty "), which is to be effective as of the "PPA Term" as such term is defined in the Amended PPA and terminate upon the expiration of such "PPA Term" (the "Guaranty Termination Date "), with such period to constitute the "Guaranty Period ". NOW THEREFORE, in consideration of Power Provider entering into the Amended PPA with SRCEA, Guarantor covenants and agrees as follows: Section 1. Guaranty. During the Guaranty Period, Guarantor absolutely and unconditionally guarantees to Power Provider the timely payment of all amounts that SRCEA may owe under the Amended PPA, or any extensions, renewals, or modifications of the Amended PPA. During the Guaranty Period, Guarantor further guarantees to Power Provider the full, faithful, and timely performance by SRCEA of the Amended PPA, or any extensions, renewals, or modifications of the Amended PPA. If SRCEA shall default at in the payment of any sums, costs, or charges, or in the performance of any covenant or obligation under the Amended PPA during the Guaranty Period, then Guarantor, at Guarantor's expense, shall on demand by Power Provider fully and promptly pay all sums, costs, and charges to be paid and perform all other covenants and obligations to be performed by SRCEA pursuant to the Amended PPA. In addition, Guarantor shall on demand by Power Provider pay to Power Provider all sums due to Power Provider, including, without limitation, all interest on past due obligations of SRCEA, costs advanced by Power Provider, damages, and all expenses (including, without limitation, court costs and reasonable attorneys' fees) that may arise in consequence of SRCEA's default. Section 2. Waivers. Guarantor authorizes Power Provider, without notice or demand and without affecting Guarantor's liability under this Amended Guaranty, to: (a) consent to any extensions, accelerations, or other changes in the time for any payment provided for in the Amended PPA, or consent to any other alteration of any @BCL @AOOE8270 covenant, term, or condition of the Amended PPA in any respect, and to consent to any assignment, subletting, or reassignment of the Amended PPA; (b) take and hold security for any payment provided for in the Amended PPA or for the performance of any covenant, term, or condition of the Amended PPA, or exchange, waive, or release any security; and (c) apply this security and direct the order or manner of its sale as Power Provider may determine. Section 3. Independent Obligations. The obligations of Guarantor under this Amended Guaranty are independent of, and may exceed, the obligations of SRCEA. A separate action may, at Power Provider's option, be brought and prosecuted against Guarantor, whether or not any action is first or subsequently brought against SRCEA, or whether or not SRCEA is joined in any action, and Guarantor may be joined in any action or proceeding commenced by Power Provider against SRCEA arising out of, in connection with, or based upon the Amended PPA. Guarantor waives any right to: (a) require Power Provider to proceed against SRCEA or any other person or entity or pursue any other remedy in Power Provider's power; (b) complain of delay in the enforcement of Power Provider's rights under the Amended PPA; and (c) require Power Provider to proceed against or exhaust any security held from SRCEA or Guarantor. Guarantor waives any defense arising by reason of any disability or other defense of SRCEA or by reason of the cessation from any cause of the liability of SRCEA. Guarantor waives all demands upon and notices to SRCEA and to Guarantor, including, without limitation, demands for performance, notices of nonperformance, notices of non - payment, and notices of acceptance of this Amended Guaranty. Section 4. No Reporting Duty. Guarantor assumes full responsibility for keeping fully informed of the financial condition of SRCEA and all other circumstances affecting SRCEA's ability to perform SRCEA's obligations under the Amended PPA, and agrees that Power Provider will have no duty to report to Guarantor any information that Power Provider receives about SRCEA's financial condition or any circumstances bearing on SRCEA's ability to perform such obligations. Section 5. Continuing Guaranty. During the Guaranty Period, this Amended Guaranty shall remain in full force notwithstanding the appointment of a receiver to take possession of all or substantially all of the assets of SRCEA, or an assignment by SRCEA for the benefit of creditors, or any action taken or suffered by SRCEA under any insolvency, bankruptcy, reorganization, moratorium, or other debtor relief act or statute, whether now existing or later amended or enacted, or the disaffirmance of the Amended PPA in any action or otherwise. Section 6. Joint and Several Obligations. If this Amended Guaranty is signed, or if the obligations of SRCEA are otherwise guaranteed, by more than one party, their obligations shall be joint and several, and the release or limitation of liability of any one or more of the guarantors shall not release or limit the liability of any other guarantors. 2 Section 7. Successors and Assigns. This Guaranty shall be binding upon Guarantor and Guarantor's heirs, administrators, personal and legal representatives, successors, and assigns, and shall inure to the benefit of Power Provider and Power Provider's successors and assigns. Power Provider may, without notice, assign this Amended Guaranty, the Amended PPA, or the sums payable under the Amended PPA, in whole or in part. Section 8. Guaranty of Costs and Fees. In addition to the amounts guaranteed, Guarantor agrees to pay reasonable attorney's fees and all other costs and expenses incurred by Power Provider in enforcing this Amended Guaranty or in any action or proceeding arising out of, or relating to, this Amended Guaranty. Section 9. Governing Law. This Guaranty shall be deemed to be made under and shall be governed by California law in all respects, including matters of construction, validity, and performance, and the terms and provisions of this Amended Guaranty may not be waived, altered, modified, or amended except in a writing signed by an authorized officer of Power Provider and by Guarantor. Section 10. Severance. If any of the provisions of this Amended Guaranty shall contravene or be held invalid under the laws of any jurisdiction, this Amended Guaranty shall be construed as if it did not contain those provisions, and the rights and obligations of the parties shall be construed and enforced accordingly. Section 11. Counterparts. This Guaranty may be executed in any number of counterparts, each of which shall be a valid and binding original, but all of which together shall constitute one and the same instrument. [continues of next page] 3 Section 12. Restatement. This Amended Guaranty is an amendment and restatement of the Original Guaranty, and shall, upon the full execution of the PPA Amendment by the parties thereto, replace and supersede the Original Guaranty in its entirety. Guarantor has executed this Amended Guaranty as of the date first written above. ATTEST: City Clerk APPROVED AS TO FORM: City Attorney "GUARANTOR" CITY OF LAKE ELSINORE, a municipal corporation Grant Yates, City Manager M