AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR PERSONAL PROPERTY between AJAX SOLAR, LLC. and THE TOWN OF WEST BRIDGEWATER

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1 AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR PERSONAL PROPERTY between AJAX SOLAR, LLC and THE TOWN OF WEST BRIDGEWATER dated DECEMBER, 2016

2 AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR PERSONAL PROPERTY. THIS AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR PERSONAL PROPERTY (this "Agreement") is made and entered into as of November, 2016 by and between AJAX SOLAR, LLC ( Developer ), and the TOWN OF WEST BRIDGEWATER, a municipal corporation duly established by law and located in Plymouth County, Commonwealth of Massachusetts (the Town ). Developer and the Town are collectively referred to in this Agreement as the Parties and are individually referred to as a Party. WHEREAS, Developer is a generation company or wholesale generation company, as such terms are defined in G.L. c. 164, 1, or otherwise an eligible counterparty under G.L. c. 59, 38H(b) (as amended); WHEREAS, Developer has entered into or will enter into a long term lease with Ajax United Drive, LLC, located at 35 United Drive, West Bridgewater, Plymouth County, Massachusetts (the Lease ), f o r t h e r e a l p r o p e r t y as shown on the plan attached as Exhibit A (the Leased Property ) and plans to build and operate a photovoltaic power plant with an expected nameplate capacity of approximately 4.1 megawatts (the Project ) on said Leased Property. A copy of the Lease is attached hereto as Exhibit B. WHEREAS, it is the intention of the Parties that Developer make annual payments to the Town for the term of this Agreement in lieu of personal property taxes on the Project, in accordance with G.L. c. 59, 38H(b) (as amended); WHEREAS, because both Developer and the Town need an accurate projection of their respective expenses and revenues with respect to the personal property that is taxable under law, the Parties believe that it is in their mutual best interests to enter into this Agreement establishing and stabilizing the payments that will be made with respect to the personal property incorporated within the Project for the term of this Agreement; WHEREAS, the Parties intend that, during the term of the Agreement, Developer will not be assessed any statutory personal property taxes to which it might otherwise be subjected under G.L. c. 59, and this Agreement will provide for the exclusive payments in lieu of such personal property taxes that Developer (or any successor owner of the Project) will be obligated to make to the Town with respect to the Project during the term hereof, provided, however, that the Parties do not intend for this Agreement to affect any direct payments for services provided by the Town, including but not limited to, water and sewer services, betterment assessments, and similar payment obligations not in the nature of real or personal property taxes or substitutes for such taxes that Developer is otherwise obligated to pay the Town; WHEREAS, the payments made hereunder in lieu of personal property taxes over the life of the Agreement are expected at inception to approximate the property tax payments that would otherwise be required under G.L. c.59 based upon the full and fair cash valuation 1

3 of the Project. WHEREAS, in consideration of the recitations set forth above, the Town has been authorized by its Town Meeting, Board of Selectmen and Board of Assessors to enter into this Agreement with Developer; and WHEREAS, the Parties have reached this Agreement after good faith negotiations. NOW THEREFORE, in exchange for the mutual commitments set forth herein and other good and valuable consideration, the parties agree as follows: 1. PILOT Term. The fiscal years with respect to which payments shall be due under this Agreement (the PILOT Term ) shall begin with Fiscal Year 1 and continue until Fiscal Year 25. For purposes hereof, Fiscal Year 1 shall mean Fiscal Year 2018; and Fiscal Year 25 shall mean the twentieth (25 th ) fiscal year following the commencement of Fiscal Year 1. The PILOT agreement will terminate upon the expiration of the 25th fiscal year. 2. Payment in Lieu of Personal Property Taxes. (a) During the PILOT Term, Developer agrees to pay to the Town and the Town agrees to accept from Developer, annual payments in lieu of personal property taxes that would otherwise be assessed by the Town against the PILOT Property and the Project and due and payable by the Developer to the Town (the Payments in Lieu of Taxes ), which Payments in Lieu of Taxes shall be made annually in the amounts set forth in the attached Exhibit C. Each Payment in Lieu of Taxes to be paid by Developer to the Town hereunder will be noted on an annual bill issued by the Town to Developer in May of each respective year during the PILOT Term or the PILOT Extension Terms, as applicable. Developer shall pay the Town the Payments in Lieu of Taxes within 30 days of the issuance of each such bill (the Due Date ). (b) In addition, in the event that this Agreement is approved at the special meeting to be held December 14, 2016, and the Town is authorized to enter into this Agreement, then Developer agrees to make a one-time payment to Town in the amount of Ten Thousand Dollars ($10,000.00) to be paid to the Town as payment for its legal fees and ancillary expenses related to this Agreement on or before May 15, In the event this Agreement is not approved at the special meeting, then no payment is owed to the Town and this Agreement shall be deemed null and void. 3. No Other Reductions or Increases Based on Depreciation or Tax Rate Changes. Except to the extent this Agreement explicitly provides otherwise, Developer agrees that the Payments in Lieu of Taxes under this Agreement will not be reduced on account of a depreciation factor or reduction in the Town's tax rate, which factors have 2

4 been anticipated by the Parties and are reflected in the payment amounts set forth in Exhibit C, and the Town agrees that the Payments in Lieu of Taxes will not be increased on account of an inflation factor or increase in the Town's tax rate, which factors have been anticipated by the Parties and are reflected in Exhibit C. 4. Improvements or Additions: Retirements. To the extent that Developer, at its sole option, makes any capital improvements to the Project, or adds additional personal property after the Commercial Operation Date, the remaining Payments in Lieu of Taxes will be adjusted to address any increase in value as described in Section 5. To the extent that Developer retires or removes any capital improvements from the Project or retires or removes any personal property from the Project after the Commercial Operation Date, the remaining Payments in Lieu of Taxes will be decreased as described in Section 5. Notwithstanding the foregoing, consistent with applicable Massachusetts Department of Revenue regulations, only the addition of equipment after the Commercial Operation Date that adds value to the Project (not including replacement of existing equipment, machinery and pollution control equipment which is exempted from local property taxes) will lead to an increase in the Payments in Lieu of Taxes due under this Agreement. No additional Payments in Lieu of Taxes or any other real or personal property taxes or assessments will be due or required for (i) replacement of personal property or equipment or machinery that is non-functional, obsolete or is replaced solely due to wear and tear or casualty or as part of scheduled or unscheduled maintenance or (ii) pollution control equipment or other property that is exempted from taxation by the provisions of G.L. c. 59, 5(44) or other applicable laws or regulations in effect from time to time, or (iii) equipment installed as required by or in response to any statute, law, regulation, consent decree, order or case mandating additional control of any emission or pollution. 5. Calculation of Adjustment. To the extent that, after the Commercial Operation Date, Developer makes capital improvements to the Project or adds new personal property or equipment to the Project that would increase the value of the Project under applicable Massachusetts Department of Revenue regulations, the remaining annual Payments in Lieu of Taxes under this Agreement will be increased by the product of the then current commercial property tax rate per $1,000 multiplied by the actual cost of the capital improvement or additional personal property, adjusted over time to reflect depreciation in the manner shown on Exhibit C. For example, if the actual cost of the capital improvement is $200,000, then the cost of $200,000 would be multiplied by the then current applicable commercial property tax rate per $1,000, adjusted over time to reflect the depreciation in the manner shown on Exhibit C, resulting in an additional annual Payment in Lieu of Taxes. To the extent that, after the Commercial Operation Date, Developer retires property from the Project, the remaining annual Payments in Lieu of Taxes under this Agreement will be decreased by the product of the then current commercial property tax rate per $1,000 multiplied by the depreciated original cost (net book value) of such retired property. In the event that new property or equipment added to the Project replaces existing property or equipment, the depreciated original cost (net book value) of the existing property or equipment will be deducted from the actual value of the new property or equipment for purposes of the Payment in Lieu of Tax adjustment. 3

5 6. Inventory Within six (6) months after the Commercial Operation Date, Developer shall provide the Town with a comprehensive inventory of all personal property incorporated into the Project and the Parties shall thereafter agree on a mutually acceptable inventory of personal property (the Personal Property ) incorporated into the Project as of the Commercial Operation Date (the Inventory ). The Inventory will itemize and indicate all Personal Property subject to taxation and adjustment pursuant to Section 4 and all Personal Property exempted from taxation and adjustment pursuant to Section 4. The general categories for the Inventory are listed in Exhibit D. The Parties agree that the categories include all costs for taxable items that will be incurred by Developer in completing the Project. The Town, its officers, employees, consultants and attorneys will have the right to inspect the Project in connection with the preparation of the Inventory. Developer will update the Inventory annually on or before September 30 of each year, and an updated written Inventory will be provided to the Town on or before October 31 of each year. The Town, its officers, employees, consultants and attorneys will have the right to periodically inspect the Project on reasonable prior written notice to Developer, subject to the Town's agreeing to comply with all Developer safety requirements, and to review documents in the possession of Developer that relate to the inventoried property for the purpose of verifying that Developer has accurately updated the Inventory. 7. Payment Collection. The provisions of G.L. c.60 will govern the establishment of liens and the collection of any Payments in Lieu of Taxes provided for in this Agreement as though said payments were personal property taxes due and payable to the Town. 8. Tax Status; Separate Tax Account. The Town agrees that, during the term of this Agreement, the Town will not assess Developer for any personal property taxes with respect to the Project or the Personal Property to which Developer might otherwise be subject under Massachusetts law, and the Town agrees that this Agreement will exclusively govern the payments of all ad valorem personal property taxes that Developer will be obligated to make to the Town with respect to the Project and the Personal Property, provided, however, that this Agreement is not intended to affect, and will not preclude, other assessments of general applicability by the Town for betterments and for services provided by the Town to the Project, including but not limited to, water and sewer services. The Town agrees that no personal property taxes will be due from or assessed to Developer with regard to the Project or the associated Personal Property other than the Payments in Lieu of Taxes described in this Agreement. 9. Successors and Assigns; Recording. This Agreement will be binding upon, and shall be assigned to, the successors and assigns of Developer, provided that such successor or assign is an eligible counterparty to this Agreement under G. L. c. 59, 38H(b) (as amended) or is a Designated Third Party (as defined in the Lease) and the obligations created hereunder will run with the Leased Property and the Project. In the event that Developer sells, transfers, leases or assigns the Leased Property or all or substantially all of its interest in the Project, this Agreement 4

6 will thereafter be assigned to and shall be binding on the purchaser, transferee or assignee, provided that such party is an eligible counterparty to this Agreement under G. L. c. 59, 38H(b) (as amended) or is a Designated Third Party (as defined in the Lease). A Notice of this Agreement will be recorded in the applicable Registry of Deeds forthwith upon execution. 10. Statement of Good Faith. The Parties agree that the payment obligations established by this Agreement were negotiated in good faith in recognition of and with due consideration of the full and fair cash value of the Project, to the extent that such value is determinable as of the date of this Agreement in accordance with G. L. c. 59, 38H(b). Each Party was represented by counsel in negotiation and preparation of this Agreement and has entered into this Agreement after full and due consideration and with the advice of its counsel and its independent consultants. The Parties further acknowledge that this Agreement is fair and mutually beneficial to them because it reduces the likelihood of future disputes over real and personal property taxes, establishes tax and economic stability at a time of continuing transition and economic uncertainty in the electric utility industry in Massachusetts and the region, and fixes and maintains mutually acceptable, reasonable and accurate payments in lieu of taxes for the Project that are appropriate and serve their respective interests. The Town acknowledges that this Agreement is beneficial to it because it will result in mutually acceptable, steady, predictable, accurate and reasonable payments in lieu of taxes for the Project. 11. Additional Documentation and Actions. Each Party will, from time to time hereafter, execute and deliver or cause to be executed and delivered, such additional instruments, certificates and documents, and take all such actions, as the other Party reasonably requests for the purpose of implementing or effectuating the provisions of this Agreement and, upon the exercises by a Party of any power, right, privilege or remedy pursuant to this Agreement that requires any consent, approval, registration, qualification or authorization of any third party, each Party will execute and deliver all applications, certifications, instruments and other documents and papers that the exercising Party may be so required to obtain. 12. Invalidity. If, for any reason, it is ever determined by the Massachusetts Appellate Tax Board or by any other court of competent jurisdiction that any material provision of this Agreement is unlawful, invalid or unenforceable then the parties shall (i) undertake best efforts to amend and or reauthorize this Agreement so as to render all material provisions lawful, valid and enforceable, and (ii) if such efforts are unsuccessful, undertake reasonable efforts, including without limitation, seeking all necessary approvals, to replicate the benefits and burdens of this Agreement in the form of a tax increment financing agreement pursuant to G.L. c. 40, Notices. All notices, consents, requests, or other communications provided for or permitted to be given hereunder by a Party must be in writing and will be deemed to have been properly given or served upon the personal delivery thereof, via courier delivery service or otherwise. Such notices shall be addressed or delivered to the Parties at their respective addresses shown below. To Developer: 5

7 Green Street Solar Inc. Attn: Scott Kerner 1360 Garrison Ave, Bronx, NY To the Town: With a copy to: Town Counsel Town Administrator Town of West Bridgewater 65 North Main Street West Bridgewater, MA Board of Assessors Town of West Bridgewater 65 North Main Street West Bridgewater, MA David T. Gay Gay & Gay, P.C. 73 Washington Street P.O. Box 988 Taunton, MA Any such addresses for the giving of notices may be changed by either Party by giving written notice as provided above to the other Party. Notice given by counsel to a Party shall be effective as notice from such Party. 14. Applicable Law. This Agreement will be made and interpreted in accordance with the laws of the Commonwealth of Massachusetts. Developer and the Town each consent to the jurisdiction of the Massachusetts courts or other applicable agencies of the Commonwealth of Massachusetts regarding any and all matters, including interpretation or enforcement of this Agreement or any of its provisions. 15. Good Faith. The Town and Developer shall act in good faith to carry out and implement this Agreement. 16. Force Majeure. Developer and the Town both recognize that there is the possibility during the term of this Agreement that all or a portion of the Property or Project may be damaged or destroyed or otherwise rendered unusable due to events beyond the control of either Party. These events are referred to as "Force Majeure". As used herein, Force Majeure includes, without limitation, the following events: a. acts of God including floods, winds, storms, earthquake, fire or other natural calamity; b. acts of war or other civil insurrection or terrorism; or 6

8 c. taking by eminent domain by any governmental entity of all or a portion of the Property or the Project. In the event an event of Force Majeure occurs during the term of this Agreement with respect to any portion of the Property or Project, that renders the Property or Project unusable for the customary purpose of the production of electricity for a period of more than ninety (90) days, then Developer may, at its election, notify the Town of the existence of this condition as well as of its decision whether or not to rebuild that portion of the Property or Project so damaged or destroyed or taken. If Developer elects not to rebuild, then it may notify the Town of its termination of this Agreement and the Property and Project will thereafter be assessed and taxed as though this Agreement does not exist. 17. Covenants of Developer. During the term of the Agreement, Developer will not voluntarily do any of the following: a. Seek to invalidate this Agreement except as expressly provided herein; b. convey by sale, lease or otherwise any interest in the premises to any entity or organization that qualifies as a charitable organization pursuant to G.L. c (Third); or c. fail to pay the Town all amounts due hereunder when due in accordance with the terms of this Agreement. 18. Covenants of the Town of West Bridgewater. During the term of this Agreement, the Town will not do any of the following: a. seek to invalidate this Agreement; b. seek to collect from Developer any property tax upon the Property or the improvements thereon in addition to the amounts established herein; c. impose any lien or other encumbrance upon the Property or the improvements thereon except as is expressly provided herein; or d. take any affirmative action in support of the bifurcation of the taxation of real and personal property. 19. Representations of Town. The Town represents and warrants to Developer that (i) it has secured all approvals of appropriate officers, boards and bodies necessary to duly authorize the execution, delivery and performance of this Agreement and its obligations hereunder, and (ii) it is not prohibited from entering into this Agreement and discharging and performing all covenants and obligations on its part to be performed under and pursuant to this Agreement by the terms, conditions or provisions of any law, any order of any court or other 7

9 agency or authority of government, or any agreement or instrument to which the Town is a party or by which the Town is bound, and (iii) this Agreement is a legal, valid and binding obligation of the Town and is enforceable in accordance with its terms. 20. Representations of Developer. Developer represents and warrants to the Town that (i) it is duly organized and validly existing as a limited liability company under the laws of the State of New York, and is authorized to conduct business in the Commonwealth of Massachusetts, and (ii) it is authorized and has the power under the laws of the Commonwealth of Massachusetts to enter into this Agreement and the transactions contemplated hereby, and to perform and carry out all covenants and obligations on its part to be performed under and pursuant to this Agreement, and (iii) the performance of its obligations hereunder will not violate, results in a breach of or constitute a default under any agreement or instrument to which Developer is a party or by which Developer is bound, and this Agreement is a legal, valid and binding obligation of Developer enforceable in accordance with its terms. [Remainder of Page Intentionally Left Blank] 8

10 EXHIBIT A For legal description, see Deed recorded with Plymouth County Registry of Deeds in Book 44081, Page 196. Sketch Plan of Property 9

11 Exhibit B Lease 10

12 Exhibit C 25 Year PILOT Schedule West Bridgewater Proposal PILOT Year Stated Cost Est Pilot Pmt Year FY18 Yr 1 $5,012,384 $154, Year 2 $146, Year 3 $139, Year 4 $132, Year 5 $125, Year 6 $119, Year 7 $113, Year 8 $107, Year 9 $102, Year 10 $97, Year 11 $92, Year 12 $87, Year 13 $83, Year 14 $79, Year 15 $75, Year 16 $71, Year 17 $67, Year 18 $64, Year 19 $61, Year 20 $58, Year 21 $55, Year 22 $52, Year 23 $49, Year 24 $47, Year 25 $45, Years 25 $2,227, Year Avg : $89,

13 Exhibit D CATEGORIES OF INVENTORY A. Real and Personal Property Subject to Taxation. All of the equipment installed for the project shall be considered personal property. This includes all solar photovoltaic panels, racking systems, ballasts, wires, conduits, inverters, transformers, utility poles, instrumentation and all other ancillary equipment. B. Real and Personal Property Exempted from Taxation Air pollution control devices. 12

AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR REAL PROPERTY AND PERSONAL PROPERTY. between. and THE TOWN OF DOUGLAS

AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR REAL PROPERTY AND PERSONAL PROPERTY between and THE TOWN OF DOUGLAS dated as of November, 2011 AGREEMENT FOR PAYMENT IN LIEU OF TAXES FOR REAL PROPERTY AND PERSONAL