1. PURPOSE OF THE AGREEMENT
Joint Venture Revenue Share Agreement
PURPOSE OF THE AGREEMENT
To accelerate ADC to market by leveraging the mature Energy Services COntract (ESCO)
industry in high-value domestic and international markets based upon
the mechanism of an Energy Savings Performance Contract (ESPC).
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Joint Venture ESCO Agreement Confidential

2. Part 1. Domestic ESCO Market
The domestic ESCO market is currently $8.5 billion (est.) across all market segments.
The lighting share of the ESCO market represents 3% ($255 million) of ESCO market share.
Lighting as % of ESCO Market Share,
LINEAR LED LIGHTING REPRESENTS A NEW GENERATION OF LIGHTING
TECHNOLOGY THAT WILL INCREASE LIGHTING AS % OF ESCO MARKET SHARE.
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Joint Venture ESCO Agreement Confidential

3. 1.1. Domestic ESCO Market (1990-2020)
2016 REVENUE PROJECTIONS
$8.5 BILLION (est.)
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Joint Venture ESCO Agreement Confidential

4. 1.2. VALUE OF REMAINING DOMESTIC MARKET & FINANCE METHODS
Finance Methods by Market Segment
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Confidential Joint Venture ESCO Agreement

5. Part 2. International ESCO Market
The international ESCO market is currently is measured in two general markets:
G-20 / OCED Nations
ROW (Rest of World)
Lighting as % of ESCO Market Share follows similar patterns as in the U.S.
THE INTERNATIONAL MARKET SHARE IN LINEAR LED LIGHTING
WILL MIRROR U.S ESCO MARKET SHARE TRENDS.
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Joint Venture ESCO Agreement Confidential

6. assuming 4-year payback and market transformation to LED lighting.
2.1. G-20 / OECD ESCO MARKET (PRELIMINARY)
Value of remaining global ESCO lighting market is estimated at $559 billion,
assuming 4-year payback and market transformation to LED lighting.
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Joint Venture ESCO Agreement Confidential

7. 2.2. International ESCO Market Share (ROW)LL
SECTOR
LIGHTING 3%
Estimated Annual Actual 2012: $ 3.9 billion
Targeted Annual: $16.8 billion
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Joint Venture ESCO Agreement Confidential

8. Part 3. Linear Lighting Segment of ESCO Market
Solid-State or Light-Emitting-Diode (LED) lighting is targeted to replace fluorescent lighting in most lighting applications by 2035 with a 52% reduction in energy usage. The ADC direct current (DC) power system offers a reduction in energy usages of 78% or more, offering greater value to the consumer.
ADC Power Systems can cross over to additional high-value ESCO market segments.
ADC Power System technologies will INCREASE lighting AS THE
% OF MARKET SHARE in U.S. and international ESCO markets.
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Joint Venture ESCO Agreement Confidential

9. 3.1. LED LIGHTING FORECAST (US)
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Joint Venture ESCO Agreement Confidential

10. 3.2. LINEAR SUBMARKET SIZE – 1 BILLION TUBES
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Joint Venture ESCO Agreement Confidential

11. Part 4. Case Study Methodology
BENCHMARKING AGAINST INDUSTRY PRACTICES
Case study methodology for LED linear submarket segment will benchmark ADC power systems against: (a) previous generations of linear T12, T8 and T5 lighting; (b) current (AC) LED linear T12, T8 and T5 lighting; and (c) ADC lighting installation data.
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Joint Venture ESCO Agreement Confidential

12. 4.1. ePROJECT DEVELOPMENT & MANAGEMENT5
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Joint Venture ESCO Agreement Confidential LL

13. 4.2. BENCHMARKING ESCO LED LINEAR SUBMARKET SEGMENT
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Joint Venture ESCO Agreement Confidential

14. 4.2. MANAGING ESCO LED LINEAR SUBMARKET SEGMENT AT-SCALE
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Joint Venture ESCO Agreement Confidential

15. ESCO PROJECT MODEL & REVENUE PROJECTIONS
Part 5. Operating Methodology & Revenue Share Agreement
ESCO PROJECT MODEL & REVENUE PROJECTIONS
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Joint Venture ESCO Agreement Confidential

16. 5.1. ESCO (ESPC) PROJECT MODEL (DOMESTIC & INTERNATIONAL)
ESCO Project Revenue Share
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Joint Venture ESCO Agreement Confidential

17. 5.2. LED LINEAR LIGHTING ESPC PROJECT PROFILE & REVENUE SHARE
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Joint Venture ESCO Agreement Confidential

18. Joint Venture ESCO Agreement Confidential
5.3. LED LINEAR LIGHTING ESPC REVENUE SHARE AT-SCALE TO $BILLION IN 5-YRS.
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Joint Venture ESCO Agreement Confidential