Turnkey Engineering, Procurement And Construction Agreement

EXHIBIT 10.1

CONFIDENTIAL TREATMENT REQUESTED

--

CONFIDENTIAL PORTIONS OF THIS DOCUMENT HAVE BEEN REDACTED AND HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION












TURNKEY



ENGINEERING, PROCUREMENT AND CONSTRUCTION





AGREEMENT



FOR



SOLAR PHOTOVOLTAIC GENERATING FACILITY



BETWEEN



FLORIDA POWER & LIGHT COMPANY,

as FPL



AND



SUNPOWER CORPORATION, SYSTEMS,

as Contractor



Dated as of July 3, 2008














TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION

AGREEMENT FOR

SOLAR PHOTOVOLTAIC GENERATING FACILITY



TABLE OF CONTENTS



Page
ARTICLE I. GENERAL MATTERS 1
1.1 Defined Terms 1
1.2 Interpretation 13
1.3 Appendices 14
1.4 Order of Precedence 15
1.5 Language 15
ARTICLE II. RETENTION OF CONTRACTOR 15
2.1 Retention of Contractor 15
2.2 Status of Contractor; No Partnership 15
2.3 Subcontractors and Vendors. 16
ARTICLE III. CERTAIN OBLIGATIONS AND RESPONSIBILITIES OF CONTRACTOR 17
3.1 Scope of Work; Applicable Standards. 17
3.2 Control and Method of the Work. 19
3.3 Compliance with Law 19
3.4 Certain Matters Pertaining to Job Site. 19
3.5 FPL Access to Job Site 21
3.6 Inspection and Testing of Work in Progress. 21
3.7 No Waiver of Responsibility 22
3.8 Defective Work 22
3.9 Clean-Up. 22
3.10 Obtaining, Maintaining and Identifying Permits 23
3.11 Labor. 24
3.12 Project Management and Contractor's Representative. 25
3.13 Temporary Office Quarters. 26
3.14 Cooperation with Other Contractors/Community. 26
3.15 Protection and Safety. 26
3.16 Environmental Matters. 27
3.17 Fire Prevention. 29
3.18 Religious and Archaeological Resources 29
3.19 Reports, Plans and Manuals. 29
3.20 Drawings, Engineering Data and Other Materials. 31
3.21 Operating and Maintenance Manuals 32
3.22 Training of O&M Personnel. 32
3.23 Accounting Information; Financial Reporting Requirements 33
3.24 Contractor Taxes. 33
3.25 Claims and Liens for Labor and Materials 34
3.26 Spare Parts Availability. 34
3.27 Contractor's Obligation to Notify 35
3.28 Construction Utilities 35
3.29 Lines and Grades 35
3.30 Temporary Structures 36
3.31 Weatherproof Coverings 36
3.32 Intellectual Property Rights. 36
3.33 Emergencies 37
3.34 [Intentionally Deleted] 37
3.35 Wastewater, Potable Water 37
3.36 [Intentionally Deleted] 37
3.37 Start Up Process 37
3.38 Accommodations Regarding Testing 37


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TABLE OF CONTENTS

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3.39 Access 37
3.40 Nature of Obligations 37
ARTICLE IV. CERTAIN OBLIGATIONS OF FPL 37
4.1 Permits 37
4.2 Interconnection Facilities 38
4.3 FPL Obligations in Scope of Work 38
4.4 [Intentionally Deleted] 38
4.5 Access to Property Site 38
4.6 [Intentionally Deleted] 38
4.7 Description of Property Site 38
4.8 Notice of Financial Closing 38
4.9 FPL Taxes 38
4.10 FPL's Cooperation 38
4.11 FPL's Representative 39
4.12 [Intentionally Deleted] 39
4.13 Operation and Maintenance 39
ARTICLE V. PROJECT SCHEDULE 39
5.1 Commencement of Work 39
5.2 Notice to Proceed 39
5.3 Project Schedule. 40
5.4 Acceleration of Work 41
5.5 Liquidated Damages 42
ARTICLE VI. CHANGE ORDERS 42
6.1 Change Order at FPL's Request. 42
6.2 Change Orders Requested by Contractor. 43
6.3 Changes to Contract Price; Disputes 44
6.4 Information Requests 44
6.5 Minor Changes 44
ARTICLE VII. CONTRACT PRICE; PAYMENTS TO CONTRACTOR 45
7.1 Contract Price 45
7.2 Requests for Payment 45
7.3 General Provisions For Payments. 46
7.4 Intentionally Deleted. 47
7.5 Letters of Credit 47
7.6 Liens. 48
ARTICLE VIII. TITLE, RISK OF LOSS AND POSSESSION 49
8.1 Clear Title 49
8.2 Risk of Loss 49
ARTICLE IX. INSURANCE 49
9.1 Contractor Insurance Policies 49
9.2 Form of Contractor Insurance Policies. 51
9.3 Qualified Insurers 51
9.4 Certificates of Insurance 52
9.5 Inspection of Contractor Insurance Policies 52
9.6 Subcontractors' Insurance 52
9.7 Remedy on Failure to Insure 52


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9.8 Management of Insurance Policies 52
9.9 FPL Insurance Policies 52
9.10 Form of FPL's Policies 53
9.11 Contractor's Assistance 54
9.12 Responsibility for Safe Delivery of Materials of Contractor 54
9.13 No Limitation on Liability 54
9.14 FPL Controlled Insurance Program 54
ARTICLE X. SYNCHRONIZATION, TESTS, MECHANICAL COMPLETION, PROVISIONAL ACCEPTANCE AND FINAL ACCEPTANCE 54
10.1 General. 54
10.2 Synchronization 55
10.3 Mechanical Completion 55
10.4 Performance Tests 56
10.5 Performance Shortfalls. 56
10.6 Punch List. 57
10.7 Provisional Acceptance. 58
10.8 Final Acceptance of the Plant 58
10.9 Changes in Guaranteed Dates 59
10.10 Revenues 59
ARTICLE XI. CONTRACTOR GUARANTEES AND LIQUIDATED DAMAGES 59
11.1 Completion Guarantee. 59
11.2 Schedule Liquidated Damages. 59
11.3 Final Acceptance Performance Level; Guaranteed Performance Level. 60
11.4 *** . 60
11.5 Payment of Liquidated Damages. 61
11.6 Determination of Performance. 62
11.7 Absolute Obligations 62
11.8 *** 62
ARTICLE XII. CONTRACTOR'S WARRANTIES 62
12.1 Warranties. 62
12.2 Repair of Nonconforming Work. 65
12.3 Proprietary Rights 66
12.4 Repairs and Testing by FPL. 66
12.5 Vendors and Subcontractors 67
12.6 Assignment of Warranties 67
12.7 Survival of Warranties 67
ARTICLE XIII. REPRESENTATIONS 67
13.1 Representations and Warranties. 67
13.2 Survival of Representations and Warranties 69
ARTICLE XIV. FORCE MAJEURE AND FPL CAUSED DELAY 69
14.1 Definition of Force Majeure Event 69
14.2 Notice of Force Majeure Event 71
14.3 Delay from Force Majeure Event 71
14.4 Removal of Force Majeure 72
14.5 Notice of FPL Caused Delay 72
14.6 Delay from FPL Caused Delay 72
14.7 Performance Not Excused 73


*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.



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AGREEMENT FOR

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TABLE OF CONTENTS

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ARTICLE XV. TERMINATION 73
15.1 Contractor Events of Default 73
15.2 Termination by FPL Due to Contractor Default; Other Remedies. 75
15.3 Termination by FPL for Convenience. 76
15.4 Suspension by FPL for Convenience. 77
15.5 [Intentionally Deleted] 78
15.6 FPL Events of Default 78
15.7 Termination by Contractor Due to FPL Default. 79
15.8 Continuing Obligations and Remedies During Event of Default 79
15.9 Obligations Upon Termination 79
15.10 Termination and Survival of Terms 80
ARTICLE XVI. INDEMNIFICATION 80
16.1 Contractor Indemnification 80
16.2 FPL Indemnification 81
16.3 Conditions of Indemnification 82
16.4 Contributory Negligence 83
16.5 Remedies Not Exclusive 83
16.6 Payment 83
16.7 Survival of Indemnification 83
ARTICLE XVII. DISPUTE RESOLUTION 83
17.1 Friendly Consultation 83
17.2 Litigation. 83
17.3 Continuing Obligations and Rights 84
17.4 Tolling Statute of Limitations 84
17.5 Audit Rights 84
ARTICLE XVIII. MISCELLANEOUS 84
18.1 Assignment. 84
18.2 Good Faith Dealings; Authorship 85
18.3 Confidentiality. 85
18.4 Notice 87
18.5 Waiver 88
18.6 Severability 88
18.7 Governing Law 88
18.8 Entire Agreement; Amendments 88
18.9 Expenses and Further Assurances 88
18.10 No Third Party Beneficiary 89
18.11 Offset 89
18.12 Counterparts 89
18.13 Limitations of Liability 89
18.14 Time is of the Essence 90
18.15 Records Retention 90
18.16 Successors and Assigns 90
18.17 Financing Parties' Requirements 90
18.18 Financial Assurances 90
18.19 Waiver of Claims. 91
18.20 Acceptance or Rejection in Bankruptcy. 91
18.21 Contractor's License 92


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AGREEMENT FOR

SOLAR PHOTOVOLTAIC GENERATING FACILITY



TABLE OF CONTENTS

(continued)



Appendices

Appendix A Scope of Work
Appendix B Project Controls Requirements
Appendix C Critical Milestones and Milestones
Appendix D Construction and Milestone Payment Schedule
Appendix E ***
Appendix F Form of Request for Payment
Appendix G Form of Final Acceptance Certificate
Appendix H Form of Contractor Certificate for Partial Waiver of Liens
Appendix H-1 Form of Subcontractor Certificate for Partial Waiver of Liens
Appendix I ***
Appendix J Option Pricing
Appendix K Module Warranty
Appendix L Operating and Maintenance Manuals
Appendix M FPL Permits
Appendix N Termination Payment Schedule
Appendix O Project Management Team
Appendix P Legal Description of Property Site
Appendix Q Intentionally Deleted
Appendix R Form of Contractor Certificate for Final Waiver of Liens
Appendix R-I Form of Subcontractor Certificate for Final Waiver of Liens
Appendix S Form of Request for Change Order
Appendix T Intentionally Deleted
Appendix U Form of Letter of Credit
Appendix V Contractor's Exclusions
Appendix W Intentionally Deleted
Appendix X Intentionally Deleted
Appendix Y Form of Quality Assurance Programs
Appendix Z Form of Safety Plan
Appendix Z-1 Safe and Secure Workplace Policy
Appendix HH Acceptance Testing
Appendix II ***


*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.



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TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION

AGREEMENT

FOR

SOLAR PHOTOVOLTAIC GENERATING FACILITY



THIS TURNKEY ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT FOR SOLAR PHOTOVOLTAIC GENERATING FACILITY (this "Agreement"), dated as of July 3, 2008, is by and between FLORIDA POWER & LIGHT COMPANY, a Florida corporation (hereinafter called "FPL") and SunPower Corporation, Systems, a Delaware corporation (hereinafter called "Contractor").



W I T N E S S E T H :



WHEREAS, FPL wishes to construct and operate a solar photovoltaic generation facility with a minimum nominal capacity of 25 MW (net), and all services and utilities related thereto, all to be built on the Property Site (as hereinafter defined) located in DeSoto County, Florida;



WHEREAS, Contractor has represented that it is experienced and qualified in providing technical assistance, licensing, engineering, procurement, supply, construction management, construction, commissioning, start-up and testing services, and that it possesses the requisite expertise and resources to complete the Work (as hereinafter defined);



WHEREAS, Contractor has agreed to provide, through itself or through Subcontractors and Vendors (as such terms are hereinafter defined), such Work on a "turn-key" basis for the Contract Price (as hereinafter defined); and



WHEREAS, Contractor has agreed to guarantee the timely and proper completion of the Work in strict accordance with the terms and conditions hereinafter set forth.



NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, FPL and Contractor hereby agree as follows:



ARTICLE I.

GENERAL MATTERS







1.1 Defined Terms




As used in this Agreement, including the appendices, exhibits and other attachments hereto, each of the following terms shall have the meaning assigned to such term as set forth below:



1.1.1 "Affiliate" means, in relation to any Person, any other Person:




(a) Which directly or indirectly controls, or is controlled by, or is under common control with, such Person; or




(b) Which directly or indirectly beneficially owns or holds fifty percent (50%) or more of any class of voting stock or other equity interests of such Person; or




(c) Which has fifty percent (50%) or more of any class of voting stock or other equity interests that is directly or indirectly beneficially owned or held by such Person, or




(d) Who either holds a general partnership interest in such Person or such Person holds a general partnership interest in the other Person.




For purposes of this definition, the word "controls" means possession, directly or indirectly of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or otherwise.



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1.1.2 "After-Tax Basis" means, with respect to any indemnity payment to be received by any Person, the amount of such payment (the base payment) supplemented by a further payment (the additional payment) to that Person so that the sum of the base payment plus the additional payment shall, after deduction of the amount of all Federal, state, and local income Taxes required to be paid by such Person in respect of the receipt or accrual of the base payment and the additional payment (taking into account any reduction in such income Taxes resulting from Tax benefits realized by the recipient as a result of the payment or the event giving rise to the payment), be equal to the amount required to be received. Such calculations shall be made on the basis of the highest generally applicable Federal, state, and local income tax rates applicable to the corporation for whom the calculation is being made for all relevant periods, and shall take into account the deductibility of state and local income taxes for Federal income tax purposes. The foregoing calculations shall be made by the recipient Person's third party tax advisors.




1.1.3 "Agreement" has the meaning set forth in the first paragraph hereof, as same may be amended, supplemented or modified from time to time in accordance with the terms hereof.




1.1.4 "Applicable Laws" means any act, statute, law, regulation, permit, license, ordinance, rule, judgment, order, decree, directive, guideline or policy (to the extent mandatory) or any similar form of decision or determination by, or any interpretation or administration of, any of the foregoing by any Government Authority with jurisdiction over the Plant, the Job Site, the performance of the Work or other services to be performed under the Contract Documents.




1.1.5 "Applicable Permits" means any and all permits, clearances, licenses, authorizations, consents, filings, exemptions, rulings or approvals from or required by any Government Authority that are necessary for the performance of the Work or ownership or use of the Work.




1.1.6 "Applicable Standards" means those sound and prudent practices, acts, methods, specifications, codes and standards of design, engineering, assembly, erection, installation, construction, performance, safety and workmanship prudently and generally engaged in or observed by the majority of the professional engineering and construction contractors performing engineering and construction services for major, grid-connected solar electric generating facilities in the United States that, in the exercise of good judgment, would have been expected to accomplish the desired result in a manner consistent with Applicable Laws, Applicable Permits, reliability, safety, environmental protection, local conditions, economy and efficiency. Notwithstanding the foregoing, the Work or any portion thereof shall meet specifications that are at least as stringent as those set forth in Appendix A, Scope of Work, and any other specifications set forth in this Agreement.




1.1.7 "Builder's Risk Policy" has the meaning set forth in Section 9.9.4, All Risk Installation and Builder's Risk Insurance, of Article IX, INSURANCE.




1.1.8 "Business Day" means any day other than a Saturday, Sunday or a legal holiday in Florida, United States.




1.1.9 "Capability Verification Test" means the test further described in Appendix HH, Performance Testing.




1.1.10 "Change In Law" means the (A) enactment, adoption, promulgation, modification, or repeal (in each case, after the date of this Agreement but before the date of Provisional Acceptance) of any Applicable Law of any Government Authority of (i) the State of Florida (or any city, county or municipality therein) or (ii) the Federal Government of the United States to the extent such federal law, directly affects the Work performed at the Property Site or (B) the modification after the date of this Agreement of any FPL Permit, and as to both (A) and (B) that establishes requirements that materially and adversely affect Contractor's costs or schedule for performing the Work; provided, however, a change in (x) any federal, state or local Tax law or any other law imposing a Tax, duty, levy, impost, fee, royalty, or charge for which Contractor is responsible hereunder, or (y) any Applicable Law affecting the cost of Contractor's or any Subcontractor ?s or Vendor's Labor, including increases in worker's compensation rates, shall not be a Change In Law pursuant to this Agreement.




1.1.11 "Change Order" has the meaning set forth in Section 6.1, Change Order at FPL's Request, of Article VI, CHANGE ORDERS.




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1.1.12 "Changes" has the meaning set forth in Section 6.1, Change Order at FPL's Request, of Article VI, CHANGE ORDERS.




1.1.13 "Commencement Date" means the date Contractor anticipates it will construct improvements at, or deliver materials to, the Job Site that may be insured pursuant to a builder's risk policy, as set forth in a written Notice delivered by Contractor to FPL pursuant to Section 5.1.1.




1.1.14 "Confidential Information" has the meaning set forth in Section 18.3, Confidentiality, of Article XVIII, MISCELLANEOUS.




1.1.15 "Construction and Milestone Payment Schedule" means the schedule of construction/milestone completion installment payments of the Contract Price attached hereto as Appendix D.




1.1.16 "Contract Documents" means this Agreement and all appendices, exhibits incorporated into the Agreement (as set forth in Section 1.3, Appendices), as same may be amended, supplemented or modified from time to time in accordance with the terms hereof.




1.1.17 "Contract Price" means the total sum payable by FPL as stated in Section 7.1, Contract Price, for all labor, all materials, and all equipment, which sum shall be due in accordance with the terms of the Contract Documents as consideration for the timely performance of the Scope of Work to be performed by or through Contractor on a "turn-key" basis in order to complete the Project, all in strict accordance with the terms of the Contract Documents, which sum shall only be subject to adjustment in accordance with the Contract Documents, including but not limited to the adjustments contemplated in Appendix J, Option Pricing.




1.1.18 "Contractor" means SunPower Corporation, Systems, a Delaware corporation (as referenced in the opening paragraph hereof), and includes its legal successors and permitted assignees as may be accepted by FPL, in writing, pursuant to the terms of the Contract Documents.




1.1.19 "Contractor Deliverables" means each of the design criteria, system descriptions, manuals, Drawings, Final Plans, design calculations, quality assurance reports and all other material documents relating to the Project to be delivered to FPL in accordance with the requirements of the Contract Documents.




1.1.20 "Contractor Equipment" means all of the equipment, materials, apparatus, structures, tools, supplies and other goods provided and used by Contractor and its Subcontractors and Vendors for performance of the Work but which is not intended to be incorporated into the Plant.




1.1.21 "Contractor Event of Default" has the meaning set forth in Section 15.1, Contractor Events of Default, of Article XV, TERMINATION.




1.1.22 "Contractor Insurance Policies" has the meaning set forth in Section 9.1, Contractor Insurance Policies, of Article IX, INSURANCE.




1.1.23 ***




1.1.24 ***




1.1.25 "Contractor Permits" means the Applicable Permits, other than FPL Permits, to be obtained by Contractor as described in Appendix A, Scope of Work, or otherwise required pursuant to the Contract Documents.




1.1.26 "Contractor Project Engineering Manager" means the person designated by Contractor as having the responsibility, authority and supervisory power of Contractor for the engineering and design of the Plant.




1.1.27 "Contractor Project Manager" means the person designated by Contractor as having the centralized responsibility, authority and supervisory power of Contractor for design, procurement, construction, testing and start-up of the Plant, as well as all matters relating to the administration of the provisions of the Contract Documents.


*** CONFIDENTIAL MATERIAL REDACTED AND SEPARATELY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.





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