Renewable Energy Project Finance & Development team 4

I am part of team 4 and i need the only the section of roject Overview, including:
i.
High-level overview of key project agreements
ii.
Overview of key equipment used

Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
To: ENRG 8760 Class
From: Josh Herlands and Pierre Moses
Date: October 2024
Subject: Final Project – Investment Committee Memorandum, Model, and Class Presentation
As discussed, we have divided the class into small investment teams to complete the Final Project. This
memorandum outlines instructions for completing the assignment. While we are looking for certain
things to be completed during this assignment (as listed herein), please feel free to add in anything else
you believe to be relevant. Also, please ask us any questions that may arise.
While we have needed to redact certain documents and have made certain simplifying assumptions, the
solar projects with which you will be working are based on real deals on which we have worked in recent
years. As such, each project has certain aspects that make it unique and that make up the characteristics
of that particular investment.
Teams
To balance fairness, simplicity, and logistics, we have divided the class into six teams alphabetically. We
encourage you to name your teams.
Each team may decide how it would like to divide the responsibilities, but please be mindful that each
student should contribute a roughly equal share of the work. All team members should participate in
giving the presentation and answering questions from the investment committee.
Team 1
Gustavo Alvarado
Simon Brown
Leonard Carollo
Caroline Cenci
Richard Chen
Team 2
JW Cornwell
David Freeman
Katie Gemmell
Ari Gerberg
Jack Henehan
Team 3
Lindsay Ise
Samuel McIntire
Benjamin Miner
Mohamed S. Mohamed
Teboho Moloantoa
Team 4
Jason Mueller
Jake Oldewurtel
Gabriella Olivieri
David Pohl
Rishi Rattan
Team 5
Kennedy Riggs
David Schaffer
Seynabou Sylla
Hails Traficanti
Trey Tuggle
Team 6
Campbell Viles
Dylan Wallach
Eliana Winderman
Nathan Zwick
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Key Deliverables
Each team should deliver the following:
1. An operating project model showing the expected equity returns for an investment in the project
on the following bases:
a. Unlevered asset-level returns (post-tax)
b. Unlevered cash equity with third-party tax equity (pre-tax)
c. Levered cash equity with third-party tax equity and back-leverage (pre-tax)
2. An investment committee memorandum is from the point of view of a potential project acquirer
who is buying the project once it reaches COD.
This investment committee memorandum should include the following sections:
a. Relevant Market Overview
i. Providing some context for the renewables market in general and where this
project sits within it
ii. Local and State level policy needs to be well understood and articulated
b. Project Overview, including:
i. High-level overview of key project agreements
ii. Overview of key equipment used
c. Key Project Economics, including:
i. Sources & Uses of capital in various capital structure scenarios (i.e. with and
without external tax equity and/or debt)
ii. Returns in various scenarios
iii. Sensitivity analysis
1. Note: Please keep in mind that this is from the point of view of the
project acquirer (not the lender or the tax equity provider)
d. Key Risks & Mitigants
i. Review of the key risks (and any mitigants to those risks) to investing in a project
such as this (including risks/mitigants that may be specific to this particular
project)
e. Final Recommendation – to acquire or not acquire the project
The above is intended as a guide. Please feel free to add items that you think would be helpful for the
investment committee.
This memorandum may be created in either PowerPoint or Word.
3. A term sheet outlining the key commercial terms of the primary off-take agreement.
4. A term sheet outlining the key commercial terms of the primary site control agreement.
5. An in-class presentation (using PowerPoint) that presents your findings, analysis, and
recommendation to an investment committee. While there is not a firm time limit for this
presentation, please aim for 15 minutes so that all teams have adequate time to present. The
investment committee will then ask questions. In keeping with the spirit of how actual
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
investment committees often work, please keep in mind that these questions may be on any
related topic.
6. An attestation signed by all students stating that each student contributed meaningfully to the
combined model, memorandum, term sheet, and/or presentation efforts.
a. See Exhibit A for a draft of this.
Due Dates
Please plan to send us the model, investment committee memorandum, term sheets, and attestations by
Thursday, November 14. The presentations will be held on Tuesday, November 19.
Project Materials
See Exhibit B for a list of project documents and information to be provided to each team. To the extent
that you need to make additional assumptions around anything related to the project, please feel free to do
so and note the assumptions that you have made.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Exhibit A – Attestation
I attest that I have meaningfully participated in the development of the financial model, investment
committee memorandum, term sheets, and investment committee presentation for the ENRG 7860 final
project.
______________________
[Print Name]
______________________
[Print Name]
______________________
[Print Name]
______________________
[Print Name]
______________________
[Print Name]
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Exhibit B – Project Documents and Information List
Team 1 – New Jersey Solar Carport Project
Project Type and Size: 5 MWdc carport system located in New Jersey
PPA Offtaker: Investment-grade healthcare-focused group
● See redacted PPA provided
TRECs: Project is eligible for New Jersey’s original TREC program (having gotten its award in time for
the initial TREC level), and will also be eligible to sell PJM Class I RECs following the term of TREC
eligibility
Site: Project located on the offtaker’s site
● See redacted site license provided
Expected Ongoing Project Expenses:
● The project has a property tax abatement for the life of its operation
● In part because the system is a carport, year 1 O&M is expected to be in the $10/kW/year range
● Asset management expenses are expected to be approximately $4/kW/year
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in JCP&L territory
Power Market: The project is located in the PJM power market, and, if needed / desired, can enter into a
Wholesale Market Participant Agreement to sell power into PJM
Project Output: The expected year 1 output for the system is as follows:
● p50: 1,301 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known regional developer that is carrying the project
through construction
Acquisition Proposal: The developer has offered to sell the project to you at COD at a price of $3.25 / W
(and there is no option to negotiate further)
ITC Eligibility: The eligible basis is approximately 95% of the total acquisition price
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Team 2 – Massachusetts Behind-the-Meter Solar Project
Project Type and Size: 304 kWdc rooftop system located in Boston, MA
PPA Offtaker: Fortune 100 retailer with a triple net lease
● See redacted PPA provided
SMART: Project is eligible for the Massachusetts SMART program
● The SMART Incentive compensation rate is $0.0732 per kWh
● The team should conduct research to determine the SMART program term, escalator, etc.
● Note: All RECs are assigned to the utility as a requirement of SMART participation
Site: Project located on the offtaker’s building
● See redacted site lease and roof warranty provided
Expected Ongoing Project Expenses:
● The project has a PILOT of $30,000
● Year 1 O&M is expected to be $9/kW/year
● Asset management expenses are expected to be approximately $2/kW/year
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in Eversource (NSTAR) utility territory
Power Market: The project is located in the ISO New England power market, and, if needed / desired,
can sell wholesale power into ISO-NE
Project Output: The expected year 1 output for the system is as follows:
● p50: 1,202 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known regional developer that is carrying the project
through construction
Acquisition Proposal: The developer has offered to sell the project to you at COD at a price of $2.00 / W
(and there is no option to negotiate further)
ITC Eligibility: There are no required grid upgrades, and 100% of project costs are eligible basis
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Team 3 – Minnesota Community Solar Garden Project
Project Type and Size: 2.0 MWdc ground-mount system located in Minnesota
Offtakers: The project is part of the MN community solar program in Xcel Energy territory
● The project has been grandfathered into eligibility for Xcel’s 2021 Vintage Value of Solar
(“VOS”) Bill Credit Rate
● The project has 6 investment grade commercial subscribers, which all use the same form of
Subscription Agreement that is provided
Site: Project located on a single landowner’s site
● See site lease provided
Expected Ongoing Project Expenses:
● The project has a property tax abatement for the life of its operation
● Year 1 O&M is expected to be in the $7/kW/year range
● Year 1 asset management expenses are expected to be approximately $6/kW/year, which includes
the expected cost of subscriber management
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in Xcel territory
Power Market: The project is located in the MISO power market
Project Output: The expected year 1 output for the system is as follows:
● p50: 1,450 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known regional developer that is carrying the project
through construction
Acquisition Proposal: The developer has offered to sell the project to you at COD at a price of $1.65/W
(and there is no option to negotiate further)
ITC Eligibility: The eligible basis is approximately 95% of the total acquisition price
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Team 4 – California Behind-The-Meter Solar Project
Project Type and Size: 3.5 MWdc ground-mount system located in central California
Offtakers: Municipal offtaker with longstanding location.
● See redacted PPA
● RECs accrue to Seller at a price of $6/MWh only for the first 10 years of system operations
Site: Project located on a single landowner’s site
● See Easement Agreement (site lease) provided
● Site lease cost is $0 per year
Expected Ongoing Project Expenses:
● Year 1 O&M is expected to be $9.50/kW/year
● Year 1 asset management expenses are expected to be approximately $3/kW/year
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in PG&E territory.
Power Market: The project is located in the CAISO power market
Project Output: The expected year 1 output for the system is as follows:
● p50: 2,095 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known regional developer that is carrying the project
through construction
Acquisition Proposal: The developer has offered to sell the project to you at COD at a price of $1.60/W
(and there is no option to negotiate further)
ITC Eligibility: The eligible basis is approximately 95% of the total acquisition price
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Team 5 – Colorado Rooftop Project
Project Type and Size: 4 MWdc rooftop system located in Colorado
PPA Offtaker: BB+ rated owner of logistics-focused warehousing
● See redacted PPA provided
RECs: Project has received a REC award from Xcel per the Solar*Rewards Large Program. The fixed
$/REC price of this award is 103% of the price that is provided under the “Medium Program.”
Site: Project located on one of the offtaker’s warehouses, over which it has control via a 25-year lease
● See redacted site easement provided
Expected Ongoing Project Expenses:
● The project has a property tax abatement for the life of its operation
● Year 1 O&M is expected to be in the $7/kW/year range
● Asset management expenses are expected to be approximately $4/kW/year
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in Xcel territory
Power Market: The project is located in CO, which does not have a wholesale power market
Project Output: The expected year 1 output for the system is as follows:
● p50: 1,439 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known national developer that is carrying the project
through construction
Acquisition Proposal: The developer has offered to sell the project to you at COD at a price of $1.70 / W
(and there is no option to negotiate further)
ITC Eligibility: The eligible basis is approximately 95% of the total acquisition price
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Renewable Energy Project Finance & Development – Tulane University – ENRG 8760
Team 6 – Community Lighthouse Project (New Orleans, LA)
Project Type and Size: 250 kW-dc rooftop PV system plus 120 / 220 kWh battery storage system
Services Agreement Offtaker: Non-profit community center operator
● See redacted Services Agreement provided
RECs: Assume that RECs accrue to Seller at a price of $25/MWh only for the first 10 years of system
operations
Site: Project located on the roof of the community center, which is owned by the debt-free non-profit
offtaker
● See redacted site easement provided as an exhibit to the Services Agreement
Expected Ongoing Project Expenses:
● The project qualifies for a full property tax exemption
● Year 1 O&M is expected to be in the $15/kW/year range (covering both the PV and ESS)
● Asset management expenses are expected to be approximately $4/kW/year
● Assume that insurance premiums are ~0.25% of the project value
Interconnection: The project is located in Entergy New Orleans territory
Power Market: The project is located in the MISO power market
Project Output: The expected year 1 output for the system is as follows:
● p50: 1,332 kWh / kWp
● p90: Approximately 94% of p50 value
● p99: Approximately 89% of p50 value
Equipment and EPC: The project utilizes “Tier 1” equipment and is being constructed by a well-known
EPC firm pursuant to a fixed-price, turnkey EPC agreement
Developer: The project was developed by a well-known national developer that is carrying the project
through construction
Acquisition Proposal: The actual cost to acquire the project is $825,000, but the project has already
received a $200,000 grant from a local foundation. In light of the grant, the developer has offered to sell
the project to you at COD at a price of $625,000 (and there is no option to negotiate further)
ITC Bonus Adders: The project qualifies for both the low-income community adder (10%) and the
energy community adder (10%), bringing the project’s total ITC percentage to 50%
ITC Eligibility: The eligible basis is approximately 95% of the total acquisition price
Tax Equity and Debt Financing: You should assume you can get third-party tax equity and debt
financing on roughly the same terms that we had presented as an example in class
Asset Useful Life & Inverter Replacement: The useful life of the system has been estimated at 35 years,
with the inverters needing to be replaced every 13 years. The cost for these inverters is currently $0.05/W.
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Solar Power Purchase Agreement
This Solar Power Purchase Agreement (this “Agreement”) is entered into by and between Purchaser (“Purchaser”) and Seller (“Seller”)
(each a “Party” and collectively the “Parties”) as of [DATE] (the “Effective Date”).
Purchaser:
Name
and
Address
Phone
E-mail
Premises
Ownership
Tax Status
Project Name
Seller:
Name
and
Address
Phone
E-mail
Additional Seller
Information
[Municipal Offtaker]
[Address TBD]
Purchaser [ X ] owns [ ] leases the
Premises.
[Project Company]
List Premises Owner, if different from
Purchaser: N/A
Tax-Exempt
[TBD]
RECITALS
WHEREAS, Purchaser desires to reduce energy consumption and operational expenses through the installation of energy generation
technologies;
WHEREAS, Purchaser has assigned specific areas on Purchaser properties (each one, a Premises as defined below) on which the solar
measures (each one, a System as defined below) will be constructed;
WHEREAS, Seller desires to provide such upgrades, design, supply, and installation services, all in accordance with the terms and
conditions set forth in this Agreement;
WHEREAS, Seller is a full-service construction company with the technical capabilities to provide services to the Purchaser, including,
but not limited to, engineering, design, procurement, construction management, installation, construction, financing, training,
monitoring and verification, maintenance, operation, and repair;
NOW THEREFORE, in consideration of the mutual promises set forth below, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
This Agreement sets forth the terms and conditions of the purchase and sale of solar generated electricity from the solar panel system
described in Exhibit 2 (the “System”) and installed on the real property comprising Purchaser’s premises described or depicted in
Schedule A to Exhibit 2 (the “Premises”), including any buildings and other improvements on the Premises other than the System (the
“Improvements”).
The exhibits listed below are incorporated by reference and made part of this Agreement.
Exhibit 1
Exhibit 2
Exhibit 3
Exhibit 4
Exhibit 5
Exhibit 6
Pricing
System Description, Scope of Work, Delivery Point and Premises
General Terms and Conditions
Easement Agreement
Rate Sheet
Authorized Signator
IN WITNESS WHEREOF, the parties enter into this Agreement as of the Effective Date.
PURCHASER: [Purchaser]
SELLER: [Seller]
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Exhibit 1
Pricing
1.
Initial Term: 20 years, beginning on the Commercial Operation Date (as defined in Section 5(d) of Exhibit 3) (the “Initial
Term”).
2.
Contract Price:
Contract
Year
1
$0.0650
2
$0.0650
3
$0.0650
4
$0.0650
5
$0.0650
6
$0.0650
7
$0.0650
8
$0.0650
9
$0.0650
10
$0.0650
11
$0.0650
12
$0.0650
13
$0.0650
14
$0.0650
15
$0.0650
16
$0.0650
17
$0.0650
18
$0.0650
19
$0.0650
20
$0.0650
$/kWh
The first Contract Year shall commence on the Commercial Operation Date, and each subsequent Contract Year shall commence on the
anniversary of the Commercial Operation Date.
3.
Contract Price Assumptions. The Contract Price is based on the following assumptions:
a.
A payment or performance bond is [ X ] is not [ ] being issued to Purchaser under this Agreement.
b.
[Reserved].
c.
Statutory prevailing wage rates (e.g., Davis-Bacon) do [ ] do not [X ] apply.
d.
All prices in this Agreement are calculated based on an upfront rebate of $0 or REC value of $0/kwh produced.
e.
The Contract Price is inclusive of Seller’s Taxes (as defined in Section 3(d) of Exhibit 3) at the rates in effect as of the
Effective Date (to the extent that such rates are known or knowable by Seller on the Effective Date).
4821-7908-7691.1
f.
Contract Price and Schedule assumes one (1) review cycle by Purchaser of the equipment layout drawings, one (1) review
cycle by Purchaser of final design documentation, and one (1) final set of as-built drawings delivered to Purchaser in
electronic format and hard copy.
g.
Existing parking lot condition: Working surface is assumed to be structurally sufficient to support all work activities such
that damage from the weight of typical equipment expected for this scope of work, such as: reach forks, concrete trucks,
drill rigs, etc. will not occur. Subcontractor will verify existing conditions on site prior to construction activities and will
advise the Contractor of any concerns. Contractor acknowledges that normal tire marks caused by equipment during
construction operations will occur and will not be required to be removed by Subcontractor. Any landscape or hardscape
damaged by Subcontractor will be repaired by Subcontractor resulting from unavoidable and/or negligent action.
h.
Schedule and Contract Price assumes Purchaser will review and provide comments on drawings within 10 business days.
i.
Contract Price is based on code approved conduit and wiring methods.
j.
Contract Price assumes that Seller will not encounter any rock during trenching and excavating.
k. Contract Price assumes that Seller will not encounter any ground water during trenching and excavating.
l.
Wiring from PV panels to combiners is USE cable and not placed in raceways.
m. Grounding as required by NEC.
n.
AC and DC wiring to be aluminum where possible.
o.
Steel Volatility Clause: The cost of steel at time of execution of this contract is high and volatile. Contractor and
Subcontractor will collaborate to minimize the impact of steel cost, but contract price is expected to require adjustment to
accommodate steel costs at time of steel shipment.
p.
Contract Price is based on module pricing and availability at time of contract and may require adjustments or substitution
of equipment at time of construction.
q.
Contract price is based on assumption of Purchaser meeting all financing and underwriting requirements and approval for
PPA financing.
r.
Contract Price is based on site parking being available to all Seller and Subcontractor employees.
s.
Contract Price is based on straight time Monday to Friday (no holidays) work week, 40 hours per week between 6:00 AM
and 6:00 PM.
t.
Contract Price and schedule assumes that Purchaser will receive all necessary easements within 45 business days after the
Effective Date.
u.
Contract Scope assumes there are no existing encumbrances or easements on the site.
4.
Contract Price Exclusions. Unless Seller and Purchaser have agreed otherwise in writing, and except as otherwise provided
in Section 2(c) of Exhibit 3, the Contract Price excludes the following:
a.
Unforeseen groundwork (including excavation and circumvention of underground obstacles). Upgrades or repair to
customer or utility electrical infrastructure (including client or utility service, transformers, substations, poles, breakers,
reclosers, and disconnects).
b.
Seller will not be responsible for damage to unidentified underground utility lines and will require the contractor/owner to
signSeller’s “authorization to Proceed” form prior to the start of excavation activities)
c.
Vehicle and/ or pedestrian control
d.
Removal of tire marks
e.
Transportation and secured storage of PV panels
f.
Price is subject to revision if a Notice to Proceed is not issued within 90 days
g.
Buy American (must be made known at time of bid)
h.
Hard Rock Drilling, Underground Obstructions, Caving Soils, Casing, and/ or Water Mitigation. *NOTE: The client
should consider carefully whether Seller should “attempt” to drill when conditions are present such that it can be reasonably
assumed that subsurface conditions are likely to result in Seller’s inability to drill successfully. Under this scenario, costs
to the client will be lower if a sub driller is engaged from the beginning. No credit from Seller will be available, if an “illadvised” attempt to have Seller drill is made. Following are rates that will apply: See Exhibit 5
i.
Snow removal, tree removal, tree trimming, mowing and any landscape improvements.
j.
Decorative fencing and/or any visual screening materials, decorative enhancements to solar support structures (including
painting, paint matching, masonry/stone work, and any lighting not required to meet the minimum code compliance).
k. Removal of existing lighting, light poles, or concrete light post bases except where noted in proposal Assumptions and
Exclusions.
l.
Roof membrane maintenance or reroofing work.
m. Structural upgrades to the Improvements, including ADA upgrades.
n.
Pothole of existing underground utilities
o.
Pavement replacement due to failure of existing while constructing site.
p.
Painting of purlins, conduits, or any other attached equipment/hardware to the structure columns/beams/blocking except
where noted in proposal Assumptions and Exclusions.
q.
Landscape or irrigation restoration.
r.
Removal of above/below grade obstructions.
s.
Costs associated with damaged utilities not marked by utility or shown on customer provided as-built drawings.
t.
Installation of public information screen or kiosk (including accompanying internet connection, power supply, technical
support, and ADA access).
u.
Changes in System design caused by any inaccuracy or ambiguity in information provided by Purchaser, including
information regarding Purchaser’s energy use, the Premises, and the Improvements, including building plans and
specifications.
v.
Plumbing, Fire Sprinklers, Fire and Life Safety equipment and its components.
w. Warranty, repair and/or upgrade of the existing mechanical, plumbing and electrical systems, air distribution and control
systems found in disrepair or not compliant to code. Any and all systems and structure defects repairs/replacements as a
result of pre-existing condition.
x.
Upgrade of the existing site electrical service capacity.
y.
Any upgrades to existing parking lots, sidewalks, etc. unless otherwise included in scope.
z.
Drill hole casing, water mitigation, or Rock drilling.
aa. Hazardous material abatement and/or removal of any kind.
bb. Stormwater Pollution Prevention Plan (SWPPP).
cc. Americans with Disabilities Act (ADA) improvements including curb cutting, truncated dome installation, repainting,
restriping, or installation of new signs unless otherwise provided in the scope of work.
dd. California Solar Initiative (CSI) Incentive application fees (if applicable).
ee. Tree Mitigation Costs.
ff. String level monitoring.
gg. Relocation and modification of underground utilities.
hh. Premium time (except for utility tie-in).
ii.
Field painting – lot striping, conduit painting, etc. above and beyond any items altered during construction or otherwise
specified in the scope of work.
jj. Asphalt (fog, coating, and striping)
kk. Any costs associated with temporary, part time or full-time site security.
ll.
Other Fees (plan check, utility permits, parking, etc.).
mm.
Any items not specified in this scope.
5.
Early Termination Payment Schedule:
Contract Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Early Termination Payment
$4,000,000
$3,000,000
Exhibit 2
System Description, Scope of Work, Delivery Point and Premises
1.
Premises Location:
Purchaser
[TBD]
2.
System Size (DC kW): 3.5 MW (DC)
3.
System Description (Please include the type of Module, Inverter, and Racking that will be used):
[ X ] Ground Mount
Module:
Inverter:
Racking:
3.1
[ ] Roof Mount [ X ] Canopy Structure [ ] Other: __________________
Boviet Solar, BVM7612M-530-H-HC-BF-or Similar
CPS SCA60KTL-DO/US-480 or Similar
[TBD]
SCOPE OF WORK
In general, the PV Systems will consist of the following:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
PV modules
PV module support structure
Inverter(s)
System electrical protection
Electrical disconnects
Control and monitoring systems
Outdoor rated equipment enclosures
Cables, wires, jumpers, connectors, system grounding and associated trenching and/or boring
Equipment foundations
Lighting (If Required by AHJ)
Signage
A. ENGINEERING DESIGN SERVICES
Seller shall be responsible for detailed design and operational coordination of equipment and materials installed for the System. Seller
shall conform to Industry Standard and Applicable Law. The following design services shall be provided by Seller:
i.
Civil Engineering design, including the preparation of the following:
ii.
Site Plan
iii.
Geotechnical Report (if required)
iv.
Structural Engineering Design, including:
a. Foundations and other structural concrete
b. PV module support structural design
c. Structural design calculations, as required
v.
Mechanical Systems design, as required.
vi.
Electrical Systems design, including:
a. PV modules
b. Inverter
c. DC combiners, disconnects, fuses, and wiring
d. AC breakers and disconnects
e. Revenue metering
f. Enclosures, conduit, and wiring
g. Communications and control systems as described herein
h. Other electrical systems included in the scope of work
B. PERMITS
Seller shall obtain, pay for, and shall file on a timely basis any documents required to obtain Applicable Permits except those permits
that are the responsibility of the Purchaser (“Purchaser Permits”). Purchaser shall obtain, pay for, and shall file on a timely basis, any
documents required to obtain all such Purchaser Permits.
Applicable Permits include:
o Fire Marshall
o General Construction and Building Permits.
Purchaser Permits include:
o CEQA (Categorical Exemption certified by the Purchaser is assumed for this project)
o Easements required to complete the work.
o All other permits required for construction of the System, except for Applicable Permits
C. PROCUREMENT
Seller shall procure all materials and equipment included in the scope of work for the installation of a complete System under this
Work Order.
D. CONSTRUCTION SERVICES
The following services shall be provided by Seller as part of the general construction activities:
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
Civil construction, including surveying, clearing, grubbing, excavation, trenching, and backfill.
Structural construction, including foundations, concrete work, grouting, anchors, erection of PV racks, shade structures,
and other support structures
Electrical construction, including PV modules, combiners, inverter, disconnects, wiring, breakers, metering, control and
monitoring systems, telecom systems, and lighting systems as required for a complete System
Safety services, including on-site safety equipment, personnel training, and safety monitoring of construction activities
Support services, including Seller’s trailers, shaded worker rest areas, restroom facilities
Coordination with Purchaser’s staff for site access, laydown, and storage with minimal interference with operations
Operator training services
Construction inspections, material verification, and testing as required
Lawful Disposal of refuse, spoils, chemicals, and waste materials associated with construction activities
Testing and start-up services for electrical and control systems included in the scope of work. Testing shall include preoperational functional tests, equipment calibration, and insulation resistance tests. All necessary test equipment and
instrumentation will be provided.
Miscellaneous consumable materials required to erect the System
Coordination with Purchaser’s Staff and Representatives, including all inspections and submittals.
E. DOCUMENTATION SUBMITTALS
Seller will prepare and submit designs, drawings, and specifications to the Purchaser for review and approval. Purchaser shall review
the documents and provide any comments in writing to Seller within ten (10) Business Days after receipt of such documents (the
“Design Review Period”). Seller will proceed with the assumption that Purchaser has approved the documents if no comments are
received within ten (10) Business Days. Any comments provided by Purchaser after ten (10) Business Days that result in re-work shall
constitute a Change Order. Purchaser shall consolidate all comments for each review cycle such that Seller does not receive comments
in separate submittals at different times from various Purchaser personnel. Any re-work as a result of receiving comments in separate
submittals shall constitute a Change Order. To the extent consistent with Applicable Law and Industry Standards, Seller will
incorporate Purchaser comments into the final designs, drawings, and specifications (the “Construction Documents”), as applicable.
Seller shall submit such revised documents to Purchaser for additional Design Review Periods, which shall not extend longer than ten
(10) Business Days, until Purchaser approves such revised documents subject to the terms of the Agreement.
The following list is not all inclusive but defines the Contract Documents that are required to be submitted by Seller for review and
approval by the Purchaser.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
Facility drawing with Project improvements drawn to scale (Site Plan)
Electrical design package including:
a. Single Line AC and DC diagrams
b. Communication, Monitoring and Control schematics
c. Electrical Circuit and Conduit schedule
d. Electrical Equipment installation plans
e. Lighting plan, if required
f. Placard schedule
g. Equipment data sheets
Structural Calculations package including:
a. Ground structural elements for ground-mount systems
b. Equipment foundations and enclosures
System energy production calculations and software model based on Site Plan
Approved Applicable Permits
Geotechnical report including Project applicable soil properties (if required)
Project Schedule
Environment, Health and Safety Plan
System Manual with specifications, startup, commissioning and testing procedures for relevant equipment.
System Operation and Maintenance manual (O&M plan)
As-Builts (Record Drawings)
Professional Engineer Wet Stamps and signatures on final design documents:
a. Electrical Design package
b. Structural Calculation package
Interconnection Agreement with Local Utility
Documentation for Rate Change with Local Utility
F. PERFORMANCE TEST
Seller is responsible for conducting the Performance Test of the complete System, including PV modules, inverters, metering,
controls, and accessories. Seller shall provide all test equipment and special instrumentation required for the tests.
Seller shall operate the System during the Performance Tests. Purchaser shall be entitled to be present during any Performance Test.
Upon completion of any Performance Test, Seller shall submit promptly the relevant certificate containing the results of such
Performance Test to Purchaser’s Representative as soon as practicable, but in any event within five (5) Business Days. Purchaser’s
Representative shall promptly review such certificate and the results set forth therein and shall determine whether the Performance
Test has been successfully completed within five (5) Business Days following receipt of such certificate.
If the System fails to satisfy any Performance Test, Purchaser’s Representative shall execute the certificate including the Performance
Test that failed. Seller shall repeat the Performance Test one or several times before Final Completion of the System. Seller shall take
all corrective actions so that the System may successfully complete the Performance Tests, without prejudice to Purchaser’s rights and
remedies in accordance with this Agreement.
The Performance Test is the ability of the System to demonstrate Actual System Power Output is consistent with the Nameplate Rated
Capacity during the test period commencing immediately after Substantial Completion and permission has been provided by the local
utility.
Actual System Power Output generated has been estimated based on the actual utility rates & billing structure at this time. Minor
changes or modifications to the utility rate structure may positively or negatively affect financial benefits. Utility billing structure is
out of Seller’s control.
G. PROJECT CLOSEOUT
i. Seller shall deliver to Purchaser an owner’s manual, operator’s manual and as-built drawings for the System no later than
ninety (90) days after Substantial Completion occurs. For the avoidance of doubt, the as-built drawings shall be included
in the punchlist items.
ii. At Purchaser’s request, Seller shall provide Purchaser’s personnel with no less than four (4) hours of detailed and complete
on-site operation training with respect to the System. Purchaser’s personnel shall have the qualifications necessary to
perform their activities and will be hired by Purchaser or its Affiliate. Purchaser shall provide Seller reasonable assistance
in soliciting and obtaining any subsidies, rebates or incentives that may be available from any Governmental Authority
pursuant to or in connection with the purchase or operation of the System or otherwise.
H. PURCHASER RESPONSIBILITIES
Seller shall not be obligated to perform any work or activity beyond the scope of the work and its other obligations under this
Agreement. In particular, the following shall not be included in the Scope of Work and therefore shall be performed by Purchaser:
i.
The Purchaser shall furnish, to the extent not already provided to Seller: (a) all surveys or other information in
Purchaser’s possession that describe the physical characteristics, legal limitations, and utility locations in and around the
Site; (b) any prior environmental review documentation and all known information in Purchaser’s possession concerning
subsurface conditions, including without limitation the existence of any known Hazardous Materials, in or around the
general area of the Site where the Work will be performed; (c) all relevant information in Purchaser’s possession,
including any structural or other relevant as-built drawings and photographs, of prior construction undertaken in the
general area where the Work will be performed; (d) title reports less than one (1) year in age; and (e) any and all
easements, zoning variances, planning approvals, including any resolution of any environmental impact issues, and any
other legal authorization regarding utilization of the Site essential to the execution of the Work.
ii.
Purchaser shall provide continuous access to the Site to perform the Work according to the Construction Schedule;
iii.
Purchaser shall make water source available at the Site for construction water;
iv.
Purchaser shall select its own personnel so that it is present at the date of Substantial Completion;
v.
Purchaser shall provide communication access for system monitoring;
vi.
Purchaser shall pay for all taxes, fees, and costs required to obtain all Purchaser Permits;
vii.
Purchaser shall provide access to, and allow Seller the use of, water lines, sewer lines, storm water lines, power lines,
fuel lines, telephone and communication lines, pipelines, and drainage ditches; and
4.
Delivery Point and Premises: Schedule A to this Exhibit 2 contains one or more drawings or images depicting:
a.
The Premises, including the Improvements (as applicable);
b.
Proposed System location;
c.
Delivery point for electricity generated by the System (the “Delivery Point”);
d.
Access points needed for Seller to install and service the System (e.g., building. access, electrical room, stairs); and
e.
Construction assumptions (if any).
Schedule A
Proprietary Clause “The steel structures in this plan set have been designed by, and are proprietary to, Seller Inc. and intended for
the sole use of Seller. No part of the steel portion of this plan set may go out to bid.
Title and ownership of the design documents shall remain with Contractor who grants exclusive rights to the Owner for this specific
project only and Subcontractor has exclusive rights as the only entity allowed to build this design.
Protection of the design documents and Seller’s right to build: The steel structures and designs referred to in this contract have
been designed by, and are proprietary to, Seller Inc. and intended for the sole use of Seller. No part of the steel portion of this
agreement may go out to bid and [Client] agrees that, while Seller authorizes use of this information for construction purposes, the
designs, means and methods of construction are the intellectual and proprietary property of Seller and [Client] will protect them as
such in all regards and dealings.
LAYOUTS WILL BE INSERTED HERE
Exhibit 3
Table of Contents
Page
1.
Purchase and Sale of Electricity
Term and Termination
Billing and Payment; Taxes
Environmental Attributes, Environmental Incentives, and Tax Credits
Project Completion
Installation, Operation and Maintenance
Miscellaneous Rights and Obligations of the Parties
Relocation of System
Removal of System upon Termination or Expiration
Measurement
Default, Remedies and Damages
Representations and Warranties
Insurance
Ownership; Option to Purchase
Indemnification; Limitations of Liability and Remedies; Disclaimer of Warranties
Change in Law
Assignment and Financing.
Confidentiality
General Provisions
12.
13.
34.
45.
46.
67.
78.
99.
910.
911.
1012.
1113.
1314.
1315.
1516.
1717.
1718.
1819.
19
Exhibit 3
General Terms and Conditions
1.
Purchase and Sale of Electricity. Purchaser shall purchase from Seller, and Seller shall sell to Purchaser,
all of the electricity generated by the System during the Term (as defined in Section 2(a)). Electricity
generated by the System shall be delivered to Purchaser at the Delivery Point. Title to and risk of loss for
the electricity generated by the System passes to Purchaser from Seller at the Delivery Point. Purchaser may
purchase electricity for the Premises from other sources to the extent Purchaser’s electricity consumption
requirements at the Premises exceed the electricity output of the System. Any delivery of electricity prior to
the Commercial Operation Date (as defined in Section 5(d)) shall be treated as the delivery of limited amounts
of test energy and shall not indicate that the System has been put in Commercial Operation (as defined in
Section 5(d)) by the delivery of such test energy.
2.
Term and Termination.
a.
Effective Date; Term. This Agreement is effective as of the Effective Date. The electricity supply
period under this Agreement commences on the Commercial Operation Date and continues for the
duration of the Initial Term and any Additional Terms, unless earlier terminated as provided for in
this Agreement (collectively, the “Term”).
b.
Additional Terms. The Parties may agree in writing to extend the term of this Agreement for one
or more Additional Term(s) at a Contract Price to be agreed.
c.
Termination Due to Contract Price Adjustments or Lack of Project Viability. If, at any time
after the Effective Date and prior to the date that Seller or its installation contractor has begun
physical installation of the System on the Premises (the “Commencement of Installation”), (i)
circumstances arise which have been excluded from Contract Price calculations pursuant to Section
5 of Exhibit 1, or Seller determines that the installation of the System will not be technically or
economically viable for any other reason, and (ii) the Parties have negotiated a Contract Price
adjustment for thirty (30) days following written notice from Seller without reaching agreement,
then Seller may terminate this Agreement by providing ten (10) days’ prior written notice to
Purchaser. Neither Party shall be liable for any damages in connection with such termination. After
Commencement of Installation, the Contract Price shall not be subject to further adjustment pursuant
to Section 5 of Exhibit 1.
d.
Payment Limitations. If, during the Term of this Agreement, Purchaser is bound or deemed bound
by the provisions of any state laws concerning the sufficiency of Purchaser appropriations and the
legal ability of Purchaser to enter into binding contracts and agreements with annual obligations in
excess of annual Purchaser appropriations (“Appropriation Bound”) the provisions of Sections
2(d) – 2(g) of this Agreement shall apply. If Purchaser is Appropriation Bound, Seller and Purchaser
hereby expressly acknowledge and agree that the obligation of Purchaser to pay invoices for
electricity under this Agreement or otherwise during each fiscal year of Purchaser (each, a “Fiscal
Year”) will be legally binding solely to the extent of amounts appropriated for and legally available
to Purchaser for such purposes during such Fiscal Year. The Parties acknowledge that all payment
obligations of Purchaser under this Agreement will constitute currently budgeted expenditures. The
Parties acknowledge that all payments obligations of Purchaser under this Agreement will not
constitute a general obligation debt, an indebtedness, or multiple-fiscal year direct or indirect debt
or other financial obligation within the meaning of any constitutional or statutory provisions or
limitation. Purchaser represents to Seller, and the parties hereto acknowledge that, Purchaser is
Appropriation Bound.
e.
Event of Non-Appropriation. If Purchaser is Appropriation Bound, if by the last day of any Fiscal
Year, Purchaser has failed, for any reason, to obtain an appropriation of sufficient legally available
amounts to be used to pay invoices for electricity (as provided in this Section 2) that will be due
hereunder for and during the next ensuing Fiscal Year, then an Event of Non-Appropriation shall be
deemed to have occurred (an “Event of Non-Appropriation”). However, the Parties hereto agree
that no Event of Non-Appropriation shall be deemed to have occurred if the foregoing failure set
forth in this Section 2(e) is cured on or before the thirty-first (31st) day of the Fiscal Year for which
such Event of Non-Appropriation shall be deemed to have occurred by enactment of an
appropriation providing sufficient legally available amounts to Purchaser, or Purchaser otherwise
making sufficient money available, to pay invoices for electricity (as provided in this Section 2) that
will be due hereunder for and during such Fiscal Year.
f.
Present Expectation. If Purchaser is Appropriation Bound, it is the present intention and
expectation of Purchaser that the applicable budgetary entity, within the limits of available funds
and revenues, will make an appropriation of a sufficient amount to fund Purchaser’s obligations
hereunder during each Fiscal Year during the Term; provided, however, this expectation of
Purchaser shall not be binding upon any future applicable budgetary entity in any future Fiscal Year,
except to the extent of any previously appropriated funds. Purchaser shall use good faith efforts to
have funds properly budgeted in the general operating expense section of its budget (and not a
specific line item), appropriated, allotted, or otherwise made available for this Agreement (including
obtaining legislative and other authorizations for use of such funds) and to satisfy such conditions
in a timely manner.
g.
Notice and Effect of Event of Non-Appropriation. In an Event of Non-Appropriation occurs,
Purchaser shall promptly give notice of such Event of Non-Appropriation (the “NAE Notice”).
Within 30 days of Seller’s receipt of an NAE Notice, Seller, in its sole discretion, may: (i) terminate
this Agreement and remove the Project, or (ii) continue to operate the Project and deliver the
electricity to Purchaser or to a third party or utility company without payment by Purchaser therefore
during the applicable Fiscal Year (and each Fiscal Year thereafter until an appropriation of funds is
made). If Seller does not provide notice to Purchaser of Seller’s election within such period, Seller
shall be deemed to have elected option (ii), provided that, if Seller elects or is deemed to have elected
option (ii) it may subsequently change its election at any time upon prior written notice to Purchaser.
If Seller elects (or is deemed to have elected) option (ii), all obligations of Purchaser under this
Agreement shall remain in full force and effect, except for the obligation to make payment for
energy delivered subsequent to the Event of Non-Appropriation. Should Purchaser receive an
appropriation for this Agreement during the continuation of the Event of Non-Appropriation, before
termination Seller has exercised option (i), Purchaser shall pay such monies to Seller for any
2
amounts due and owing under this Agreement to the extent permissible under applicable law, and
such Event of Non-Appropriation shall be deemed not to have occurred. Notwithstanding the
occurrence of any Event of Non-Appropriation or the delivery of the NAE Notice, Purchaser will
not interrupt or impair the delivery of electricity or jeopardize Seller’s sale, transfer or other
monetization of Environmental Attributes, Environmental Incentives, or Tax Credits (each as
defined in Section 4). If Seller elects option (i) above, Seller shall cause the System to be
disconnected and removed from the Premises and Purchaser shall pay to Seller all reasonable
removal costs within 30 days after receiving Seller’s invoice for such removal costs.
3.
Billing and Payment; Taxes.
a.
Monthly Charges. Purchaser shall pay Seller monthly for the electricity generated by the System
and delivered to the Delivery Point at the $/kWh rate shown in Exhibit 1 for the applicable Contract
Year (the “Contract Price”). The monthly payment for such energy will be equal to the applicable
$/kWh rate multiplied by the number of kWh of electricity generated during the applicable month,
as measured by the Meter (as defined in Section 10). Purchaser shall pay, or reimburse Seller for,
additional costs or any loss of economic value resulting from items differing from the assumptions
set forth in Section 4 of Exhibit 1.
b.
Monthly Invoices. Seller shall invoice Purchaser monthly. Such monthly invoices shall state for
the applicable month: (i) the amount of electricity produced by the System and delivered to the
Delivery Point, (ii) the rates applicable to, and charges incurred by, Purchaser under this Agreement
and (iii) the total amount due from Purchaser.
c.
Payment Terms. All amounts due under this Agreement are due and payable net thirty (30) days
following receipt of invoice. Any undisputed portion of the invoice amount not paid within such
thirty (30) day period shall accrue interest at the annual rate of two and one-half percent (2.5%)
above the Wall Street Journal Prime Rate (but not to exceed the maximum rate permitted by law).
All payments shall be made in U.S. dollars.
d.
Taxes.
i.
Purchaser’s Taxes. Purchaser is responsible for the payment of, or reimbursement of Seller
for: (i) all taxes assessed on the generation, sale, delivery, or consumption of electricity
produced by the System or the interconnection of the System to the utility’s electricity
distribution system; and (ii) real property taxes.
ii.
Seller’s Taxes. Seller is responsible for the payment of: (i) income taxes or similar taxes
imposed on Seller’s revenues due to the sale of electricity under this Agreement; and (ii)
personal property taxes imposed on the System (“Seller’s Taxes”).
3
4.
Environmental Attributes, Environmental Incentives, and Tax Credits. Seller is the owner of all
Environmental Attributes and Environmental Incentives and is entitled to the benefit of all Tax Credits, and
Purchaser’s purchase of electricity under this Agreement does not include Environmental Attributes,
Environmental Incentives, or the right to Tax Credits or any other attributes of ownership and operation of
the System, all of which shall be retained by Seller. Purchaser shall cooperate with Seller in obtaining,
securing, and transferring all Environmental Attributes and Environmental Incentives and the benefit of all
Tax Credits, including by using the electric energy generated by the System in a manner necessary to qualify
for such available Environmental Attributes, Environmental Incentives, and Tax Credits. Purchaser shall not
be obligated to incur any out–of–pocket costs or expenses in connection with such actions unless reimbursed
by Seller. If any Environmental Incentives are paid directly to Purchaser, Purchaser shall immediately pay
such amounts to Seller.
“Environmental Attributes” means any and all credits, benefits, emissions reductions, offsets, and allowances,
howsoever entitled, attributable to the System, the production of electrical energy from the System and its
displacement of conventional energy generation, including (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 related to these avoided emissions, such as Green Tag Reporting Rights and Renewable Energy Credits.
Green Tag Reporting Rights are the right of a party to report the ownership of accumulated Green Tags in
compliance with federal or state law, if applicable, and to a federal or state agency or any other party, and
include Green Tag Reporting Rights accruing under Section 1605(b) of The Energy Policy Act of 1992 and
any present or future federal, state, or local law, regulation, or bill, and international or foreign emissions
trading program. Environmental Attributes do not include Environmental Incentives and Tax Credits.
Without limiting the generality of the foregoing, Environmental Attributes include carbon trading credits,
renewable energy credits or certificates, emissions reduction credits, investment credits, emissions
allowances, green tags, tradeable renewable credits, and Green-e® products.
“Environmental Incentives” means any and all credits, rebates, subsidies, payments, or other incentives that relate
to self–generation of electricity, the use of technology incorporated into the System, environmental benefits
of using the System, or other similar programs available from the utility, any other regulated entity, the
manufacturer of any part of the System or any Governmental Authority.
“Governmental Authority” means any national, state, or local government (whether domestic or foreign), any
political subdivision thereof or any other governmental, quasi-governmental, judicial, public, or statutory
instrumentality, authority, body, agency, bureau, or entity (including the Federal Energy Regulatory
Commission or the California Public Utilities Commission), or any arbitrator with authority to bind a party
at law.
“Tax Credits” means any and all (i) investment tax credits, (ii) production tax credits, and (iii) similar tax credits or
grants under federal, state, or local law relating to the construction, ownership, or production of energy from
the System.
5.
Project Development; Force Majeure; Commercial Operation.
a.
Project Development. Seller shall diligently pursue the development and installation of the
System, subject to Section 2(c), Section 11, and the remaining provisions of this Section 5.
b.
Permits and Approvals. Seller shall use commercially reasonable efforts to obtain the following
at its sole cost and expense (each an “Approval”):
i.
any zoning, land use and building permits required for Seller to construct, install, and operate
the System; and
4
ii.
any agreements and approvals from the utility necessary in order to interconnect the System
to the Premises’ electrical system and/or to the utility’s electric distribution system.
Purchaser shall cooperate with Seller’s reasonable requests to assist Seller in obtaining such Approvals,
including the execution of documents required to be provided by Purchaser to the local utility.
c.
Force Majeure.
i.
Force Majeure Event. If either Party is unable to timely perform any of its obligations (other
than payment obligations) under this Agreement in whole or in part due to a Force Majeure
Event, that Party will be excused from performing such obligations (other than payment
obligations) for the duration of the time that such Party remains affected by the Force Majeure
Event; provided, that such Party uses commercially reasonable efforts to mitigate the impact
of the Force Majeure Event and resumes performance of its affected obligations as soon as
reasonably practical. The Party affected by the Force Majeure Event shall notify the other Party
as soon as reasonably practical after the affected Party becomes aware that it is or will be
affected by a Force Majeure Event. If the Force Majeure Event occurs during the Term and
impacts the ability of the System to deliver electricity to the Delivery Point, the Term will be
extended day for day for each day delivery is suspended due to the Force Majeure Event.
ii.
Extended Force Majeure. If a Force Majeure Event notified by either Party under paragraph
(i) above continues for a consecutive period of two hundred seventy (270) days or more within
a twelve (12) month period, then either Party may terminate this Agreement without either
Party having further liability under this Agreement except: (a) liabilities accrued prior to
termination, and (b) Seller shall remove the System as required under Section 9 (but Purchaser
shall reimburse Seller for Seller’s removal costs if the Force Majeure Event affects Purchaser
and Purchaser elects to terminate this Agreement). If Purchaser elects to terminate this
Agreement in accordance with this Section, Purchaser shall pay the applicable Early
Termination Payment (as defined in Section 11(b)(iii)). Notwithstanding the foregoing, if the
Force Majeure Event can be corrected through repair or restoration of the System or other
actions by Seller and, prior to expiration of the initial two hundred seventy (270) day period,
Seller provides written evidence to Purchaser that it is diligently pursuing such actions, then
Purchaser shall not have the right to terminate this Agreement so long as Seller continues to
diligently pursue such actions.
“Force Majeure Event” means any event or circumstance beyond the reasonable control of and
without the fault or negligence of the Party claiming a Force Majeure Event, including failure
or interruption of the production, delivery or acceptance of electricity due to: an act of god;
war (declared or undeclared); sabotage; piracy; riot; insurrection; civil unrest or disturbance;
military or guerilla action; terrorism; economic sanction or embargo; civil strike, work
stoppage, slow-down, or lock-out; explosion; fire; earthquake; abnormal weather condition or
actions of the elements; hurricane; flood; lightning; wind; drought; animals; the binding order
of any Governmental Authority (provided that such order has been resisted in good faith by all
reasonable legal means); the failure to act on the part of any Governmental Authority (provided
that such action has been timely requested and diligently pursued); unavailability of electricity
from the utility grid; and failure or unavailability of equipment, supplies or products outside
of Seller’s control or due to a Force Majeure Event.
d.
Commercial Operation. Seller shall notify Purchaser in writing when it has achieved Commercial
Operation. The “Commercial Operation Date” shall be the date specified in such notice as such
date.
“Commercial Operation” means that the System is mechanically complete, capable of providing electricity
to the Delivery Point at the nameplate capacity specified in Exhibit 2 and has permission to operate
from the relevant Governmental Authority. Seller shall provide Purchaser with documentation to
5
evidence that the System is ready to begin Commercial Operation upon Purchaser’s reasonable
request.
6.
Installation, Operation and Maintenance.
a.
Seller’s Obligations Regarding the System. Subject to the terms and conditions of this
Agreement, Seller shall design, engineer, install, commission, monitor, operate and maintain the
System, in each case in a good and workmanlike manner and in accordance with applicable law and
prudent solar industry practices in the state in which the Premises are located. The System shall
comply in all material respects with all applicable rules, regulations, and local building codes.
b.
System Repair and Maintenance. Seller may suspend delivery of electricity from the System to
the Delivery Point for the purpose of maintaining and repairing the System; provided that Seller
shall use commercially reasonable efforts to minimize any interruption in service to the Purchaser.
Standard scheduled and unscheduled maintenance and repairs shall be undertaken at Seller’s sole
cost and expense, except that Purchaser shall reimburse Seller for the reasonable cost of any repairs
or maintenance resulting from Purchaser’s breach of this Agreement or the acts or omissions of
Purchaser, its agents, employees, or contractors. Seller shall not be responsible for any work done
by others on any part of the System unless Seller authorizes that work in advance in writing. If Seller
incurs incremental costs to maintain the System due to conditions at the Premises or due to the
inaccuracy of any information provided by Purchaser and relied upon by Seller, the pricing,
schedule, and other terms of this Agreement will be, with the prior written consent of Purchaser
(which shall not be unreasonably withheld, conditioned, or delayed) equitably adjusted to
compensate for any work in excess of normally expected work required to be performed by Seller.
c.
Outages. Upon Purchaser’s written request, Seller shall take the System off-line for a total of fortyeight (48) daylight hours (as defined by the United States National Weather Service in the area
where the System is located) during each Contract Year (each event an “Outage” and the fortyeight (48) hour period the “Outage Allowance”). The Outage Allowance includes all Outage hours
undertaken by Seller for maintenance or repairs for which Purchaser is responsible pursuant to
Section 6(b) or requested by Purchaser under this Section 6(c) (other than due to the fault or
negligence of Seller). Purchaser’s request shall be delivered at least five (5) days in advance.
Purchaser is not obligated to accept or pay for electricity from the System for Outages up to the
annual Outage Allowance. If the aggregate hours for Outages exceed the Outage Allowance in a
given Contract Year, Seller shall reasonably estimate the amount of electricity that would have been
delivered to Purchaser during such excess Outages and Purchaser shall pay Seller for such amount
of electricity at the then applicable Contract Rate and any associated lost or recaptured
Environmental Incentives or Tax Credits and revenue from lost sales of Environmental Attributes
and penalties payments associated with the same.
d.
Maintenance of Premises. Purchaser shall, at its sole cost and expense, maintain the Premises and
Improvements in good condition and repair. Purchaser (i) shall ensure that the Premises remains
interconnected to the local utility grid at all times; and (ii) shall not permit cessation of electric
service to the Premises from the local utility. Purchaser is fully responsible for, and shall properly
maintain in full working order and good repair, the electrical infrastructure on the Purchaser’s side
of the Delivery Point, including all of Purchaser’s equipment that utilizes the System’s outputs.
Purchaser shall properly maintain in full working order all of Purchaser’s electric supply or
generation equipment that Purchaser may shut down while utilizing the System. Purchaser shall
promptly notify Seller of any matters of which it is aware pertaining to any damage to or loss of use
of the System or that could reasonably be expected to adversely affect the System. Purchaser shall
use commercially reasonable efforts to cooperate with Seller to comply with any technical standard
of the utility providing electrical power to the Purchaser.
e.
No Alteration of Premises. Purchaser shall not make any alterations or repairs to the Premises or
any Improvement which could adversely affect the operation and maintenance of the System without
the prior written consent of Seller. If Purchaser wishes to make such alterations or repairs, Purchaser
6
shall give prior written notice to Seller, setting forth the work to be undertaken (except for
emergency repairs, for which notice may be given by telephone), and give Seller the opportunity to
advise Purchaser in making such alterations or repairs in a manner that avoids damage to the System,
but, notwithstanding any such advice, Purchaser shall be responsible for all damage to the System
caused by Purchaser or its contractors. To the extent that temporary disconnection or removal of
the System is necessary to perform such alterations or repairs, such work, and any replacement of
the System after completion of Purchaser’s alterations and repairs shall be done by Seller or its
contractors at Purchaser’s cost. All of Purchaser’s alterations and repairs will be done in a good and
workmanlike manner and in compliance with all applicable laws, codes and permits.
7.
Miscellaneous Rights and Obligations of the Parties.
a.
Access Rights.
i.
License. Purchaser hereby grants to Seller and to Seller’s agents, employees, contractors and
the utility a non-exclusive, irrevocable, sub-licensable license running with the Premises (the
“Non-Exclusive License”) for access to, on, over, under and across the Premises from the
Effective Date until the date that is one hundred twenty (120) days following the date of
expiration or earlier termination of this Agreement (the “License Term”), for the purposes of
installing, operating, using, maintaining, and removing the System, performing all of Seller’s
obligations under this Agreement, enforcing all of Seller’s rights set forth in this Agreement
and otherwise as required by Seller in order to effectuate the purposes of this Agreement,
including installing, using and maintaining electric lines and equipment, including inverters
and meters, necessary to interconnect the System to Purchaser’s electric system at the Premises
and/or to the utility’s electric distribution system. In addition to the foregoing, if the System
shall be ground-mounted and located within a secure, fenced area on the Premises, Purchaser
hereby grants to Seller an exclusive, irrevocable, sub-licensable license running with the
Premises (the “Exclusive License”, and together with the Non-Exclusive License, the
“Licenses”) for purposes of the installation, operation, use, maintenance, and removal of the
System on such exclusively licensed area of the Premises during the License Term. Seller
and its employees, agents and contractors must comply with Purchaser’s site safety and
security requirements when on the Premises (other than in respect of the fenced area governed
by the Exclusive License) during the License Term. During the License Term, Purchaser shall
preserve and protect Seller’s rights under the Licenses and Seller’s access to the Premises and
shall not interfere, or permit any third parties to interfere with, such rights or access. The grant
of the Licenses hereunder shall survive the termination of this Agreement by either Party.
ii.
Easement. Purchaser agrees to enter into an Easement Agreement, in substantially the form
attached hereto as Exhibit 4, which grants Seller certain use rights and shall be recorded
against the Property (the “Easement Agreement”).
b.
OSHA Compliance. Each Party shall comply with all Occupational Safety and Health Act (OSHA)
requirements and other similar applicable safety laws and codes with respect to such Party’s
performance under this Agreement.
c.
Unanticipated Conditions. Seller has conducted a full and complete visual inspection of each
Premises, including (a) the readily apparent surface conditions of any areas where a System will be
installed in or on the ground, including areas where utilities are located such as manhole covers, pull
boxes, marked underground service areas, etc., (b) all staging, storage, delivery, and other areas
necessary to perform the work under this Agreement, (c) ingress to and egress from each Premises
for all supplies, personnel and equipment, and (d) all as-built drawings, Premises layout, easement
and other documentation provided by Purchaser to Seller as set forth in Exhibit 2 and Exhibit 4.
Seller will document and provide to Purchaser all findings in regard to the aforementioned
inspection. If any conditions exist, arise, or are discovered at the Premises that differ materially
from: (i) the information contained in the documents referenced in Exhibit 2 and Exhibit 4, (ii) the
assumption that the soils at the Premises have an allowable vertical bearing pressure of 2,000 psf
7
and a lateral bearing pressure of 300 psf/ft below natural grade, or (iii) those conditions that Seller
discovered or should have reasonably discovered based on the inspections set forth in the first
sentence of this Section 7(j), including without limitation, conditions related to Hazardous
Substances (as defined below), or archeological findings, soils conditions, or subsurface
obstructions of which Contactor was not aware on the date of this Agreement or could not
reasonably be expected to anticipate based on the inspection described above, and such conditions
involve the incurrence by Seller of any material expenses to correct or accommodate such
conditions, Seller shall submit a request for approval of a change order and payment of the related
expenses to Purchaser. Purchaser and Seller may mutually agree to reduce portions of the work
under this Agreement to offset the change order request to comply with Purchaser budget limits.
d.
Safeguarding the Premises. Purchaser shall maintain the physical security of the Premises and
Improvements in a manner to be expected of a reasonable and prudent owner or lessee of premises
and improvements similar to the Premises and Improvements in nature and location. In addition to
the foregoing, if the System shall be ground-mounted, Purchaser, at its expense, shall erect a fence
satisfactory to Seller on such portions of the Property or the Improvements on which any portion of
the System are located in order to exclude Purchaser and others from accessing such areas. Purchaser
shall not conduct or permit activities on, in or about the Premises or the Improvements that have a
reasonable likelihood of causing damage, impairment or otherwise adversely affecting the System.
Purchaser shall indemnify Seller for any loss or damage to the System to the extent caused by or
arising out of (i) Purchaser’s breach of its obligations under this Section or (ii) the acts or omissions
of Purchaser or its employees, agents, invitees, or separate contractors.
e.
Insolation. Purchaser acknowledges that unobstructed access to sunlight (“Insolation”) is essential
to Seller’s performance of its obligations and a material term of this Agreement. Purchaser shall
not in any way cause, and where possible, shall not in any way permit, any interference with the
System’s Insolation, and shall ensure that vegetation on the Premises adjacent to the System is
regularly pruned or otherwise maintained to prevent interference with the System’s Insolation. If
Purchaser discovers any activity or condition that could diminish the Insolation of the System,
Purchaser shall immediately notify Seller and cooperate with Seller in preserving and restoring the
System’s Insolation levels as they existed on the Commercial Operation Date.
f.
Use and Payment of Contractors and Subcontractors. Seller shall be permitted to use suitably
qualified, experienced, and licensed contractors and subcontractors to perform its obligations under
this Agreement. Seller shall be responsible for the quality of the work performed by its contractors
and subcontractors. Seller shall pay when due all valid charges from all contractors, subcontractors
and suppliers supplying goods or services to Seller under this Agreement and shall keep the Premises
and the Improvements free and clear of any mortgage, pledge, lien, charge, security interest,
encumbrance, or other claim of any nature (each a “Lien”) on or with respect to the Premises or the
Improvements related to such charges, other than those Liens granted hereunder or under the
Easement Agreement and Liens which Seller is permitted by law to place on the Premises or the
Improvements due to non-payment by Purchaser of amounts due under this Agreement. Seller shall
indemnify Purchaser from and against all claims, losses, damages, liabilities, and expenses resulting
from any Liens filed against the Premises or the Improvements as a result of Seller’s breach of its
obligations under this Section 7(m), provided that Seller shall have the right to contest any such
Lien, so long as it provides a statutory bond or other reasonable assurances of payment that either
remove such Lien from title to the Premises and the Improvements or that assure that any adverse
judgment with respect to such Lien will be paid without affecting title to the Premises or the
Improvements.
g.
Delivery of Financial Statements. During the Term, Purchaser shall deliver to Seller (i) its annual
audited financial statements within 180 days after the end of each Fiscal Year, (ii) its annual budget
for the succeeding Fiscal Year promptly following approval thereof, (iii) proof of appropriation of
funds for payments due hereunder with its annual budget, and (iv) such other financial statements
and information relating to the ability of Purchaser to satisfy its obligations under this Agreement
as may be reasonably requested by Seller from time to time.
8
8.
h.
Liens. Purchaser shall not directly or indirectly cause, create, incur, assume, or allow to exist any
Lien on or with respect to the System. Purchaser shall promptly notify Seller in writing of the
existence of any such Lien following discovery of same, and shall promptly (and in all events within
thirty (30) days) cause the same to be discharged and released of record without cost to Seller.
Purchaser shall indemnify Seller from and against all claims, losses, damages, liabilities, and
expenses resulting from any Liens filed against the System.
i.
Breakdown Notice. Purchaser shall promptly notify Seller following the discovery by Purchaser
of any material malfunction in the operation of the System, an interruption in the supply of electrical
energy, or anything else adversely affecting the System. Purchaser shall notify Seller immediately
upon the discovery of an emergency condition affecting the System.
Relocation of System.
If, during the Term, Purchaser ceases to conduct business operations at the Premises or vacates the Premises,
the Premises have been destroyed, or the Purchaser is otherwise unable to continue to host the System or
accept the electricity delivered by the System (other than due to a Default Event by Seller), Purchaser may
propose in writing the relocation of the System, at Purchaser’s cost, in lieu of termination of this Agreement
by Seller for a Default Event by Purchaser. If such proposal is practically feasible and preserves the economic
value of the agreement for Seller, the Parties shall seek to negotiate in good faith an agreement for the
relocation of the System. If the Parties are unable to reach agreement on relocation of the System within sixty
(60) days after the date of receipt of Purchaser’s proposal, Seller may terminate this Agreement pursuant to
Section 11(b)(ii) and exercise any and all of its remedies in accordance therewith.
9.
Removal of System upon Termination or Expiration.
Upon the expiration or earlier termination of this Agreement (provided Purchaser does not exercise its
purchase option under Section 14(b)), Seller shall, at its expense (unless expressly provided otherwise in this
Agreement), remove all of the tangible property comprising the System from the Premises (except as set forth
below) with a targeted completion date that is no later than one hundred twenty (120) days after the expiration
of the Term. The portion of the Premises where the System is located shall be returned to substantially its
original condition (excluding ordinary wear and tear), provided that, (i) if the System is ground or canopy
mounted, Seller shall not be responsible for the removal of System mounting pads or other support structures,
electric/wiring components, or any below grade structures, and (ii) if the System is roof mounted, Seller shall
not be responsible for the repair and restoration of the roof or the roof membrane. Purchaser must provide
sufficient access, space, and cooperation as reasonably necessary to facilitate System removal. If Seller fails
to remove or commence substantial efforts to remove the System by such agreed upon date, Purchaser may,
at its option, remove the System to a public warehouse and restore the Premises to its original condition
(other than ordinary wear and tear) at Seller’s cost.
10.
Measurement.
a.
Monitoring; Meter. Purchaser shall provide Seller with a sufficiently high speed internet data line
during the Term to enable Seller to monitor the System’s performance and record the electric energy
generated by the System. The System’s electricity output during the Term shall be measured by
Seller’s meter, which shall be a revenue grade meter that meets ANSI-C12.20 standards for accuracy
(the “Meter”). Purchaser shall have access to the metered electricity output data via the
[MONITORING SYSTEM] monitoring system installed and maintained by Seller as part of the
System.
b.
Meter Calibration. Seller shall calibrate the Meter in accordance with manufacturer’s
recommendations. Notwithstanding the foregoing, Purchaser may install, or cause to be installed,
its own revenue-grade meter at the same location as the Meter. If there is a discrepancy between the
data from Purchaser’s meter and the data from the Meter of greater than two percent (2%) over the
course of a Contract Year, then Purchaser may request that Seller calibrate the Meter at Purchaser’s
cost.
9
11.
Default, Remedies and Damages.
a.
b.
Default. Any Party that fails to perform its responsibilities as listed below or experiences any of
the circumstances listed below is deemed a “Defaulting Party”, the other Party is the “NonDefaulting Party” and each of the following is a “Default Event”:
i.
failure of a Party to pay any amount due and payable under this Agreement, other than an
amount that is subject to a good faith dispute, within ten (10) days following receipt of written
notice from the Non-Defaulting Party of such failure to pay;
ii.
failure of a Party to perform any material obligation under this Agreement not addressed
elsewhere in this Section 11(a) within thirty (30) days following receipt of written notice from
the Non-Defaulting Party demanding such cure; provided, that if the Default Event cannot
reasonably be cured within thirty (30) days, the cure period will be extended for a further
reasonable period of time (but not beyond ninety (90) days) if the Defaulting Party has
demonstrated prior to the end of that period that it is diligently pursuing such cure and there is
no material adverse effect to the Non-Defaulting Party resulting from such extended cure
period;
iii.
any representation or warranty given by a Party under this Agreement was incorrect in any
material respect when made and is not cured within thirty (30) days following receipt of written
notice from the Non-Defaulting Party demanding such cure;
iv.
a Party becomes insolvent or is a party to a bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or any general assignment for the
benefit of creditors or other similar arrangement or any event occurs or proceedings are taken
in any jurisdiction with respect to the Party which has a similar effect (or, if any such actions
are initiated by a third party, such action(s) is(are) not dismissed within sixty (60) days); or
v.
Purchaser (i) loses its rights to occupy and enjoy the Premises; or (ii) prevents Seller from
installing the System, delivering electric energy from the System, or performing any material
obligation under this Agreement.
Remedies.
i.
Suspension. Upon the occurrence and during the continuation of a Default Event by Purchaser,
Seller may suspend performance of its obligations under this Agreement until the earlier to
occur of the date (a) that Purchaser cures the Default Event in full, or (b) of termination of this
Agreement.
ii.
Termination. Upon the occurrence and during the continuation of a Default Event, the NonDefaulting Party may terminate this Agreement by providing five (5) days prior written notice
to the Defaulting Party; provided, that, if a Default Event under Section 11(a)(iv) occurs, the
Non-Defaulting Party may terminate this Agreement immediately.
iii.
Damages Upon Termination by Default. Upon termination of this Agreement pursuant to
Section 11(b)(ii), the Defaulting Party shall pay a termination payment to the Non-Defaulting
Party determined as follows (the “Early Termination Payment”):
1.
Termination by Seller. If Purchaser is the Defaulting Party and Seller terminates this
Agreement, the Early Termination Payment payable to Seller shall be equal to the sum
of (i) the applicable amount set forth in the Early Termination Payment Schedule set
forth in Section 6 of Exhibit 1, (ii) all direct costs (including reasonable attorneys’ fees)
reasonably incurred by Seller in connection with the Default Event; and (iii) any other
amounts previously accrued under this Agreement and then owed by Purchaser to
10
Seller. The Early Termination Payment determined under this Section 11(b)(iii)(1)
cannot be less than zero.
2.
iv.
12.
Termination by Purchaser. If Seller is the Defaulting Party and Purchaser terminates
this Agreement, the Early Termination Payment payable to Purchaser shall be equal to
the sum of (i) the present value (using a discount rate of 7% per annum) of the excess,
if any, of the reasonably expected cost of electricity from the utility over the Contract
Price for the reasonably expected production of the System for the remainder of the
Initial Term or the then current Additional Term, as applicable; (ii) all direct costs
(including reasonable attorneys’ fees) reasonably incurred by Purchaser in connection
with the Default Event; and (iii) any and all other amounts previously accrued under
this Agreement and then owed by Seller to Purchaser. The Early Termination Payment
determined under this Section 11(b)(iii)(2) cannot be less than zero.
Liquidated Damages. The Parties agree that, if either Party terminates this Agreement prior to
the expiration of the Term pursuant to Section 11(b)(ii), actual damages would be difficult to
ascertain, and the Early Termination Payment as determined in accordance with Section
11(b)(iii)(1) and Section 11(b)(iii)(2), as applicable, is a reasonable approximation of the
damages suffered by Seller or Purchaser, as applicable, as a result of early termination of this
Agreement and is not a penalty.
c.
Obligations Following Termination. If a Party terminates this Agreement pursuant to Section
11(b)(ii), then following such termination, Seller shall remove the equipment constituting the
System in compliance with Section 9 above at the sole cost and expense of the Defaulting Party,
provided, however that Seller shall not be required to remove the System following the occurrence
of a Default Event by Purchaser, unless Purchaser pre-pays the cost of removal and restoration
reasonably estimated by Seller.
d.
Reservation of Rights. Except in the event of a termination under Section 11(b)(ii) and payment
of the Early Termination Payment, if any, determined pursuant to Section 11(b)(iii), nothing in this
Section 11 limits Seller’s right to pursue any remedy under this Agreement, at law or in equity,
including with respect to the pursuit of an action for damages by reason of a breach or Default Event
under this Agreement.
e.
Mitigation Obligation. Regardless of whether this Agreement is terminated for a Default Event,
the Non-Defaulting Party must make commercially reasonable efforts to mitigate its damages as the
result of such Default Event; provided that such obligation shall not reduce Purchaser’s obligation
to pay the full Early Termination Payment following a Default Event by Purchaser.
f.
No Limitation on Payments. Nothing in this Section 11 excuses a Party’s obligation to make any
payment when due under this Agreement, including with respect to payments for electricity that
would have been delivered to Purchaser but for a Purchaser breach or Default Event.
Representations and Warranties.
a.
Seller Representations and Warranties. Seller represents and warrants to Purchaser:
i.
Organization; Authorization; Enforceability. Seller is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its formation; the execution, delivery and
performance by Seller of this Agreement have been duly authorized by all necessary corporate,
partnership or limited liability company action, as applicable, and do not and will not violate
any law; and this Agreement is the valid obligation of Seller, enforceable against Seller in
accordance with its terms (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws now or hereafter in effect relating to
creditors’ rights generally).
11
ii.
b.
Authorizations. Seller has obtained all licenses, authorizations, consents, and approvals
required by any Governmental Authority or other third party and necessary for Seller to
execute and deliver this Agreement and perform its obligations hereunder; and Seller is in
compliance with all laws that relate to this Agreement in all material respects.
Purchaser’s Representations and Warranties. Purchaser represents and warrants to Seller the
following:
i.
Organization; Authorization; Enforceability. Purchaser is a body politic of the state in which
the Premises is located, duly organized and existing under the Constitution and laws of such
state, and is authorized under the Constitution and laws of such state to enter into this
Agreement and the transactions contemplated hereby and to perform all of its obligations under
this Agreement. The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action of Purchaser’s governing body and such action is in
compliance with all public bidding and other state and federal laws applicable to this
Agreement. This Agreement has been duly executed and delivered by and constitutes the valid
and binding obligation of Purchaser, enforceable against Purchaser in accordance with its
terms (except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other similar laws now or hereafter in effect relating to creditors’ rights
generally).
ii.
Authorizations. Purchaser has obtained all licenses, authorizations, consents, and approvals
required by any Governmental Authority or other third party and necessary for Purchaser to
execute and deliver this Agreement and perform its obligations hereunder; and Purchaser is in
compliance with all laws that relate to this Agreement in all material respects.
iii.
Licenses; Easement. (a) Purchaser has title to or a leasehold or other valid property interest in
the Premises and the Improvements such that Purchaser has the full right, power and authority
to grant the Licenses in Section 7(a) and enter into the Easement Agreement, (b) such grant of
the Licenses and the Easement Agreement does not violate any law, ordinance, rule or other
governmental restriction applicable to Purchaser or the Premises or the Improvements and is
not inconsistent with and will not result in a breach or default under any agreement by which
Purchaser is bound or that affects the Premises, and (c) if Purchaser does not own the Premises
or any Improvement on which the System is to be installed, Purchaser has obtained all required
consents from the owner of the Premises and/or Improvements, as the case may be, to grant
the Licenses and the Easement Agreement so that Seller may perform its obligations under this
Agreement.
iv.
Other Agreements. Neither the execution and delivery of this Agreement by Purchaser nor the
performance by Purchaser of any of its obligations under this Agreement conflicts with or will
result in a breach or default under any agreement or obligation to which Purchaser is a party
or by which Purchaser is bound.
v.
Accuracy of Information. All information provided by Purchaser to Seller as it pertains to (a)
the Premises, (b) the Improvements on which the System is to be installed, if applicable, (c)
Purchaser’s planned use of the Premises and any applicable Improvements, and (d) Purchaser’s
estimated electricity requirements, is accurate in all material respects.
vi.
Purchaser Status. Purchaser is not a public utility or a public utility holding company and is
not subject to regulation as a public utility or a public utility holding company.
vii. Hazardous Substances. To the best of Purchaser’s knowledge, there are no Hazardous
Substances at, on, above, below or near the Premises or the Improvements.
12
viii. Limit on Use. No portion of the electricity generated by the System shall be used to heat a
swimming pool.
13.
Insurance.
a.
14.
Insurance Coverage. At all times during the Term, the Parties shall maintain the following
insurance, as applicable:
i.
Seller’s Insurance. Seller shall maintain or cause the following to be maintained (a) property
insurance on the System for the replacement cost thereof, (b) commercial general liability
insurance with coverage of at least $[1,000,000] per occurrence and $[2,000,000] annual
aggregate, (c) employer’s liability insurance with coverage of at least $[1,000,000] and (d)
workers’ compensation insurance as required by law. Seller’s coverage may be provided as
part of an enterprise insurance program.
ii.
Purchaser’s Insurance. Purchaser shall maintain (a) commercial general liability insurance
with coverage of at least $[1,000,000] per occurrence and $[2,000,000] annual aggregate, and
(b) property insurance on the Premises and the Improvements in an amount not less than the
replacement value of the Premises and the Improvements. Seller and Financing Parties shall
be named as additional insureds under Purchaser’s commercial general liability policy.
Purchaser’s commercial general liability policy shall be endorsed to provide that it is primary.
b.
Policy Provisions. Each Party’s insurance policies shall (i) contain a provision whereby the insurer
agrees to give the other Party at least thirty (30) days (ten (10) days for non-payment of premiums)
written notice before the insurance is cancelled or terminated, (ii) be written on an occurrence basis,
and (iii) be maintained with companies either rated no less than A-VII as to Policy Holder’s Rating
in the current edition of A.M. Best’s Insurance Guide or otherwise reasonably acceptable to the
other Party.
c.
Certificates. Upon the other Party’s request, each Party shall deliver to the other Party certificates
of insurance evidencing the above required coverage. A Party’s receipt, review, or acceptance of
such certificate shall in no way limit or relieve the other Party of the duties and responsibilities to
maintain insurance as set forth in this Agreement.
d.
Deductibles. Each Party shall pay its own insurance deductibles, except in the case of claims (i)
resulting from a breach of this Agreement, in which case the breaching Party is responsible for
payment of the non-breaching Party’s deductible for any responding insurance, and (ii) covered by
an indemnity set forth in this Agreement.
Ownership; Option to Purchase.
a.
Ownership of System.
i.
Ownership; Personal Property. Throughout the Term, Seller shall be the legal and beneficial
owner of the System, including all Environmental Attributes, and the System will remain the
personal property of Seller and will not attach to or be deemed a part of, or fixture to, the
Premises or any Improvement on which the System is installed. Each of the Seller and
Purchaser agree that the Seller is the tax owner of the System and all tax filings and reports
shall be filed in a manner consistent with this Agreement. The System will at all times retain
the legal status of personal property as defined in Article 9 of the Uniform Commercial Code.
ii.
Notice to Purchaser Lienholders. Purchaser shall place all parties having a Lien on the
Premises or any Improvement on notice of the ownership of the System and the legal status or
classification of the System as personal property. If any Lien on the Premises or any
13
Improvement could reasonably be construed as prospectively attaching to the System as a
fixture of the Premises, Purchaser shall provide a disclaimer or release from the lienholder.
b.
iii.
Fixture Disclaimer. If Purchaser is the fee owner of the Premises and the Improvements,
Purchaser consents to the filing of a disclaimer of the System as a fixture of the Premises and
the Improvements in the office where real estate records are customarily filed in the
jurisdiction where the Premises and the Improvements are located. If Purchaser is not the fee
owner, Purchaser shall obtain such consent from the fee owner. For the avoidance of doubt,
in either circumstance Seller has the right to file such disclaimer.
iv.
SNDA. Upon request and if applicable, Purchaser shall deliver to Seller a subordination and
non-disturbance agreement in a form reasonably acceptable to Seller from the owner of the
Premises and/or the Improvements and any lienholder with a Lien on the Premises or the
Improvements.
v.
Eviction Notice. To the extent that Purchaser does not own the Premises or any Improvement
on which the System is installed, Purchaser shall provide to Seller immediate written notice of
receipt of notice of eviction from the Premises or applicable Improvement or termination of
Purchaser’s lease of the Premises and/or Improvement.
Option to Purchase.
i.
Exercise of Option. At the end of the 6th and 10th Contract Years and at the end of the Initial
Term and each Additional Term, so long as Purchaser is not in default under this Agreement,
Purchaser may purchase the System from Seller on any such date for a purchase price equal to
the greater of the Fair Market Value of the System or the Early Termination Payment
applicable as of the date of the transfer of title to the System. Purchaser shall notify Seller of
its intent to purchase at least ninety (90) days and not more than one hundred eighty (180) days
prior to the end of the applicable Contract Year or the Initial Term or Additional Term, as
applicable, and the purchase shall be completed prior to the end of the applicable Contract
Year or the Initial Term or Additional Term, as applicable.
ii.
Fair Market Value. The “Fair Market Value” of the System shall mean the amount that
would be paid for the System in place and in use in arm’s length transaction between a willing
and informed buyer and seller under no compulsion to transact. The Parties shall determine
the Fair Market Value by mutual agreement; provided, however, if the Parties cannot agree to
a Fair Market Value within thirty (30) days after Purchaser has delivered to Seller a notice of
its intent to purchase the System, the Parties shall select a nationally recognized independent
appraiser with experience and expertise in the solar photovoltaic industry to determine the Fair
Market Value of the System. Such appraiser shall act reasonably and in good faith to determine
the Fair Market Value of the System and shall set fo…