View the PDF version Google Docs PDF Viewer
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Power Purchase Agreement
Sunwealth LLC
And
City of Muskegon
2067 Massachusetts Avenue, Suite 540
Cambridge, MA, 02140
Main: 617-752-7322
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
POWER PURCHASE AGREEMENT
This POWER PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of March [30], 2023 (the "Effective Date") by and between Sunwealth LLC, a Delaware
limited liability company ("Seller"), and the City of Muskegon, Michigan ("Purchaser"). Each
of Seller and Purchaser are sometimes referred to as a "Paiiy" and collectively as the "Parties."
RECITALS
WHEREAS, Seller intends to build, own and operate a photovoltaic solar electrical
generation system on the Premises that is described in detail in Exhibit B (the "System," as fmiher
defined in Exhibit A of this Agreement); and
WHEREAS, the Premises are owned by the City of Muskegon, Michigan ("Host"); and
WHEREAS, Host and Seller are patties to that certain Rooftop System Site Lease
Agreement dated of even date herewith (the "Site Lease"), pursuant to which Host has leased to
Seller the Premises (as defined in the Site Lease) and granted to Seller certain easements over,
across, through, under, about and on the Premises for the installation, maintenance, and operation
of the System;
WHEREAS, Seller desires to generate, sell and deliver to Purchaser, and Purchaser desires
to purchase and receive from Seller, all electricity that may be generated by the System for the
Term of this Agreement (as defined in A1iicle 2, below) and otherwise on the terms and subject to
the conditions set fo1ih herein; and
NOW, THEREFORE, in consideration of the promises and the mutual covenants and
agreements herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:
AGREEMENT
1. DEFINITIONS
1.1 DEFINITIONS AND RULES OF INTERPRETATION. Unless otherwise
required by the context in which any term appears: (a) capitalized terms used in this Agreement
shall have the meanings specified in this Exhibit A; (b) the singular shall include the plural and
vice versa· (c) references to "articles" "sections" "schedules" "annexes" "appendices' or
' ' ' ' '
"exhibits", if any, shall be to A1iicles, Sections, Schedules, Annexes, Appendices or Exhibits
hereof; (d) all references to a paiiicular entity shall include a reference to such entity's successors
and permitted assigns; (e) the words "herein," "hereof and "hereunder" shall refer to this
Agreement as a whole and not to any paiiicular Article or subparagraph hereof; (f) all accounting
terms not specifically defined herein shall be construed in accordance with generally accepted
accounting principles in the United States of America, consistently applied; (g) the words
"include," "includes" and "including" mean include, includes and including "without limitation;"
(h) references to this Agreement shall include a reference to all appendices, annexes, schedules
and exhibits hereto as the same may be amended, modified, supplemented or replaced from time
to time; and (i) the masculine shall include the feminine and neuter and vice versa.
40253870. l/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
2. INITIAL TERM; ADDITIONAL TERMS; TERMINATION; END OF TERM
2.1 Contract Term. The Contract Term of this Agreement shall commence on the
Effective Date and, unless sooner terminated in accordance with the terms hereof, shall continue
until a date that is twenty-five (25) years from the first day of the month following the month in
which the Commercial Operation Date of the System occurs (the "Expiration Date").
2.2 Additional Terms. Not less than sixty (60) days before the Expiration Date of the
then current Contract Term or Additional Term, the Parties may agree to extend the Agreement
for up to two (2) additional terms of five (5) years each (each, an "Additional Term"). If the Parties
agree to extend the Contract Term for an Additional Term, this Agreement shall continue in full
force and effect pursuant to the terms and conditions set forth herein, except that the Energy Rate
to be applicable during such Additional Term will be set at a rate that is no higher than fifteen
percent (15%) lower than the all-inclusive average rate paid by Purchaser for electricity and
delivery of electricity from both (if applicable) the Utility and any retail suppliers supplying
electricity to Purchaser as of the date that the Additional Term commences (the "Utility Rate").
The Energy Rate shall be reset on each annual anniversary of such Additional Term's Effective
Date thereafter, based on the then-current all-inclusive rate paid by Purchaser for electricity and
delivery of electricity.
2.3 Early Termination. Either Paiiy shall have the right, but not the obligation, to
te1minate this Agreement (in whole or in part) prior to the Expiration Date only upon the
occurrence of:
(a) an unstayed order of a court or administrative agency having the effect of
subjecting the sales of Energy Output to federal or state regulation of prices
and/or service;
(b) the termination of a Lease by its terms and conditions for any reason prior
to the Expiration Date; or
(c) In the event that the Notice to Proceed Date has not occurred within one
year of the Effective Date, either Party may terminate this Agreement upon
thi1iy (30) days' written notice to the other pmiy delivered at any time prior
to the actual Notice to Proceed Date; provided, however, that the foregoing
date shall be extended on a day-for-day basis for any Force Majeure
occurring after the Effective Date and prior to the Notice to Proceed Date.
2.4 End of Term. In the event Purchaser declines to exercise its Purchase Option
provided in Article 7 of this Agreement, in connection with the final Purchase Option during the
Contract Term, then, at least thirty (30) days before the expiration of the Contract Term, the Parties
shall, if desired, use commercially reasonable efforts to negotiate and document an extension of
the Contract Term.
2.5 Obligations upon Termination, Early Termination or Expiration. If Purchaser does
not exercise its option to purchase the Systems pursuant to Article 7 or terminates the Agreement
pursuant to A1iicle upon the expiration or termination of this Agreement, Seller shall remove the
System from the Site at Seller's expense within one hundred eighty (180) days of that expiration
2 Proprietary and Confidential
40253870. l/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
or termination. In such event, Seller shall remove the Systems and restore the Sites in accordance
with Good Industry Practices.
2.6 System Removal. At the conclusion of the Contract Term, if the Purchaser does not
exercise its right to purchase the System, or in the event the Pmiies fail to reach agreement
regarding an extension of the Agreement, then Seller shall, within one hundred eighty ( 180) days
after the date of expiration of the Contract Term, remove the System from the Premises, provided
that Seller shall not be required to remove electrical wiring or infrastructure, or any portion of the
System below grade level. Other than as specifically provided otherwise herein or in the Site Lease,
the removal of the System shall be at the cost of Seller.
3. PURCHASE AND SALE OF ENERGY.
3 .1 Sale of Energy. Beginning on the Commercial Operation Date for the System, and
subject to the terms and conditions of this Agreement, Seller shall sell to Purchaser and Purchaser
shall purchase from Seller all of the Energy, as and when the same is produced, at the Energy Price
in effect at the time of delivery as identified in Exhibit D. Subject to any provision of this
Agreement, Seller shall deliver the Energy to the Delivery Point, and Purchaser shall accept the
Energy so delivered for the full Contract Term.
(a) If, for any reason, Purchaser's electric requirements are less than the
System's Energy Output, Purchaser shall accept all Energy produced by
System pursuant to the terms of this Agreement. To the extent permitted by
law, Purchaser may deliver any excess Energy to the Utility in accordance
with the Net Metering Rules or Net Metering Agreement entered with the
Utility. Seller shall provide reasonable assistance to Purchaser in mrnnging
and coordinating such deliveries or exchanges; provided, that Seller shall
not be responsible for any necessary third-pmiy costs.
(b) To the extent that Purchaser's electricity requirements exceed the System's
Energy Output, Purchaser shall purchase such excess electricity from
Utility. Purchaser acknowledges that this Agreement is in no way intended
to replace Purchaser's Utility electrical service. Such service shall remain
Purchaser's primary source of electricity and, subject to Reliability
requirements of Section 4.9, no minimum level of Energy production is
guaranteed by Seller hereunder. Purchaser shall be responsible for all tariffs,
applicable taxes, penalties, ratcheted demand or similar charges assessed by
Utility for transmission and distribution service and other services
necessary to meet its full energy requirements.
(c) The estimated production of the System is set forth in Exhibit C ("Estimated
Production"). Purchaser shall be entitled to utilize the entire Energy Output
of the System; provided, however, that subject to the System Reliability
requirements of Section 4.9, Seller shall not be required to deliver a
minimum amount, or any other specific quantity, of Energy from the
System. Anything herein to the contrary notwithstanding, there is no
3 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
guarantee that Purchaser will realize any energy cost savings as result of
this Agreement or the purchase of Energy from the System.
(d) Following the Commercial Operation Date, in the event the System fails to
generate any Energy for ninety (90) consecutive days for reasons other than
Force Majeure, system upgrades pursuant to Section 4.7, Purchaser's breach
of this Agreement or Host's breach of the Site Lease (an "Unexcused
Outage") then, beginning on the 91 st day and for each subsequent
consecutive day of an Unexcused Outage, Seller will pay the Purchaser on
a monthly basis in arrears the positive difference, if any, between the Energy
Rate Purchaser would have paid for Energy Output for the System and the
Utility Rate of the quantities of Energy Output that Purchaser obtains to
replace the estimated energy output that would have been achieved. Utility
generated electricity realized over the prior six months until the end of such
Unexcused Outage. Subject to Sections 2.4 and 2.5, this Section shall be
Purchaser's sole and exclusive remedy for any Unexcused Outage. In the
Event the System fails to generate Energy for three hundred sixty (360)
consecutive days, then either Party may terminate this Agreement upon
thirty (30) days' written notice to the other Party delivered at any time prior
to the date on which the System resumes generating Energy. Termination
under this Section shall not constitute Early Termination or Breach on
behalf of the Purchaser.
(e) THE PARTIES AGREE THAT IT WOULD BE EXTREMELY
DIFFICULT OR IMPRACTICABLE UNDER THE PRESENTLY
KNOWN AND ANTICIPATED FACTS AND CIRCUMSTANCES TO
ASCERTAIN AND FIX THE AMOUNT OF ACTUAL DAMAGES
THAT WOULD BE SUFFERED DUE TO UNEXCUSED OUTAGES,
INCLUDING THOSE LASTING MORE THAN 180 DAYS.
THEREFORE, THE PARTIES ACKNOWLEDGE THAT THE
AMOUNTS DESCRIBED IN SECTION 3.l(d) ARE A FAIR AND
REASONABLE DETERMINATION OF THE AMOUNT OF DAMAGES
WHICH WOULD BE SUFFERED BY PURCHASER FOR UNEXCUSED
OUTAGES, AND THAT SUCH AMOUNTS DO NOT CONSTITUTE A
PENALTY.
3 .2 Environmental Attributes and Incentives.
(a) Environmental Attributes. Seller shall have all right, title, and interest in
and to all Environmental Attributes attributed to the System. At Seller's
expense, Purchaser agrees to cooperate with Seller in any applications for
Environmental Attributes related to the System.
(b) Environmental Incentives. Seller shall have all right, title, and interest in
and to all Environmental Incentives attributed to the System. Any
Environmental Incentive attributed to the System that is initially credited or
paid to Purchaser shall be assigned by Purchaser to Seller without delay. At
4 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Seller's expense, Purchaser agrees to cooperate with Seller m any
applications for Environmental Incentives related to the System.
(c) Purchaser Assistance with Environmental Attributes and Incentives.
Purchaser shall promptly assist and cooperate with Seller in acquiring and
maintaining in effect all necessary permits and approvals for the System
from Governmental Authorities relating to Environmental Attributes and
Incentives. If informed by Seller, Purchaser shall comply with all laws,
regulations and rules relating to acquiring and maintaining Environmental
Attributes and Environmental Incentives. Purchaser shall deliver to Seller
copies of any documentation related thereto that is required by law to be in
the name or physical control of Purchaser. Seller shall reimburse Purchaser
for its reasonable and necessary third-party costs incurred in relation to
Purchaser's assistance with such matters.
(d) Impairment of Environmental Attributes and Incentives. Purchaser shall
not take any intentional action or suffer any omission that would have the
effect of reducing or impairing the value to Seller of the Environmental
Attributes and Environmental Incentives. Acknowledging that Purchaser is
not an expe1i in Environmental Attributes and Incentives, Purchaser shall
use commercially reasonable effo1is to seek counsel and advice from an
expert when engaging in any matter that could reasonable be perceived as
affecting the Systems, and to promptly notify Seller of any event, action or
omission that could have the effect of reducing or impairing the value of the
Environmental Attributes and Environmental Incentives. Upon the
occurrence of any such event, action or omission, Purchaser shall consult
with Seller as necessary to prevent reduction or impairment of the value of
Environmental Attributes and Environmental Incentives.
3.3 Estimated Purchaser Savings. Purchaser acknowledges that the Calculation of
Estimated Benefits is solely an estimate of the ongoing costs and benefits that Purchaser may
anticipate. Purchaser specifically acknowledges that the Calculation is an estimate based upon
several variables that may change, resulting in a change in the amount and nature of the benefits.
4. THE SYSTEM.
4.1 Installation, Operation, and Maintenance of the System. Seller shall be responsible
for the installation, operation, and maintenance of the System in a manner consistent with the Site
Lease. If the supply of Energy from the System is interrupted as a result of malfunction or other
shutdown, Seller shall use commercially reasonable eff01is to remedy such interruption. Both
Parties shall comply with all applicable laws and regulations relating to the operation of the System
and the generation and sale of Energy, including obtaining and maintaining in effect all relevant
approvals and permits.
4.2 Interconnection with Utility.
(a) The System will be interconnected by the Utility with the electrical grid.
5 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
(b) RESERVED
(c) Seller shall have sole responsibility for resolving any disputes with Utility
regarding the amount of energy production from the System, and shall also
have sole discretion over any such resolution.
(d) Purchaser shall be solely responsible for resolving any disputes with Utility
regarding the rate applied to Energy production and the amount paid by
Utility to Purchaser, as defined and governed by the applicable tariff. Any
conflict between the terms of this Agreement and the Tariff shall be
resolved in favor of the tariff.
(e) Seller agrees and acknowledges that this Agreement represents the
agreement between the Parties with respect to the interconnection of the
Systems to the Purchaser's Electrical System, and for Energy to flow from
the System to the applicable Point of Delivery. Seller shall, at no cost to
Purchaser, apply for and pay all application fees associated with the
interconnection of the System to Purchaser's Electrical System at the Site.
Seller shall also be responsible to procure and pay for all equipment
necessary to interconnect the System to Purchaser's Electrical System.
(f) Purchaser agrees and acknowledges that Purchaser shall be responsible to
pay for costs related to the interconnection between Purchaser and the
Utility's Electrical System, including (a) any upgrades to Purchaser's
Premises or the Utility's distribution system that are necessary for
interconnection and (b) the costs of any studies that may be required by the
Utility with respect to such upgrades.
4.3 Maintenance of Health and Safety. Seller shall take all reasonable safety
precautions with respect to the operation, maintenance, repair, and replacement of the System and
shall comply with all applicable health and safety laws, rules, regulations, and permit requirements.
If Seller becomes aware of any circumstances relating to the Premises or the System that creates
an imminent risk of damage or injury to any Person or any Person's property (and, should
Purchaser become aware of such circumstances, Purchaser shall promptly notify Seller with
respect thereto), Seller shall take prompt action to prevent such damage or injury and shall
promptly notify Purchaser. Such action may include disconnecting and removing all or a p01iion
of the System, or suspending the supply of Energy to Purchaser.
4.4 Assistance with Permits and Licenses. Upon Seller's request, Purchaser shall assist
and cooperate with Seller, to acquire and maintain approvals, permits, and authorizations or to
facilitate Seller's compliance with all applicable laws and regulations related to the construction,
installation, operation, maintenance, and repair of the System, including providing any building
owner or occupant authorizations, signing and processing any applications for permits, local utility
grid interconnection applications and utility easements, and rebate applications as are required by
law to be signed by Purchaser. Purchaser shall also deliver to Seller copies of any necessary
approvals, permits, rebates, or other financial incentives that are required by law in the name or
6 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
physical control of Purchaser. Seller shall reimburse Purchaser for reasonable and necessary third-
paiiy costs incurred by Purchaser in relation to Purchaser's assistance with such matters.
4.5 Commercial Operation Date. Seller shall use commercially reasonable efforts to
cause the installation of the System to be completed and to achieve a Commercial Operation Date
on or before December 31, 2023 (the "Target COD"). In the event that the Systems has not
achieved Commercial Operation Dates on or before the Target COD, the Seller will pay the
Purchaser on a monthly basis in arrears the positive difference, if any, between the Energy Rate
Purchaser would have paid for Energy Output for the System and the Utility Rate of the quantities
of Energy Output that Purchaser obtains to replace the estimated energy output that would have
been achieved" measured on a daily basis from the Target COD date until the Commercial
Operation Date for the subject System. The Parties may agree to amend this Agreement to revise
the Target COD (the "Revised Target COD"). In the event that the System has not achieved the
Commercial Operation Date on or before the Revised Target COD, the Parties may, in their
discretion, negotiate to amend this Agreement to further revise the Target COD, along with any
other provisions of this Agreement affected by the failure to achieve the Commercial Operation
Date on or before the Revised Target COD. Seller shall deliver notice to Purchaser (5) days prior
to the occurrence of the Commercial Operation Date.
(a) Conditions to Commercial Operation. Seller will notify Purchaser in writing
when the System has achieved Commercial Operation. This notification
shall provide documented evidence of the satisfaction or occurrence of all
of the conditions set f01ih in this Section 4.5 (the "Conditions") and shall
include a declaration by Seller to that effect. In the event of a dispute
regarding the Commercial Operation Date, such dispute will be resolved
subject to Section 16.2. The Conditions are:
(i) The System is capable of delivering Energy Output to the Point of
Delivery;
(ii) Seller has provided a list of the System's major equipment, showing
the make, model and nameplate capacity of such equipment, and has
ce1iified the nameplate capacity of the System;
(iii) The System has, if applicable, demonstrated the reliability of its
communications systems; and
(iv) Seller has certified that all permits, consents, licenses, approvals,
and authorizations required to be obtained by Seller from any
Governmental Authority or Utility to operate the System in
compliance with applicable law and this Agreement have been
obtained and are in full force and effect and that Seller is in
compliance with the terms and conditions of this Agreement in all
material respects.
7 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
4.6 Notice of Damage. Purchaser shall promptly notify Seller of any physical
conditions or other circumstances of which Purchaser becomes aware that indicate there has been
or might be damage to or loss of the use of the System or that could reasonably be expected to
adversely affect the System. Failure to provide notice under this Section 4.6 shall not be a material
breach of this Agreement.
4. 7 System Upgrades. At any time, following notice to Purchaser, Seller may upgrade
the System; provided that the upgraded System complies with this Agreement and applicable laws
and, provided further, that if any System upgrade would increase the annual Estimated Production
by more than ten percent (10%) percent, then Seller shall obtain Purchaser's prior written consent
before performing the System upgrade. In order to perform any System upgrades, Seller may
disconnect the System and interrupt Energy deliveries, provided that Seller shall complete such
upgrades and re-connect the System within 180 days of commencing the upgrades.
4.8 Site and System Maintenance and Repair. Site System Maintenance and Repair
obligations are detailed in the Site Lease.
4.9 System Reliability. Beginning on the Commercial Operation Date, and continuing
through the end of the Term, the System's Energy Output capacity shall be not less than eighty-
five percent (85%) of the Estimated Production identified in Exhibit B (the "Guaranteed Minimum
Generating Capacity"), as measured over any three (3) consecutive Commercial Operation Years
(the "Energy Measurement Period"), for any reason other than (i) Purchaser's breach of its
obligations under this Agreement or the Lease, (ii) a System upgrade or Downgrade that has been
agreed to in writing, or (iii) a Force Majeure event. In the event the Energy Output delivered to
Purchaser over any Energy Measurement Period is less than the Guaranteed Minimum Generating
Capacity for such period, then Seller shall, within fifteen (15) days following the end of such
Energy Measurement Period, pay to Purchaser an amount equal to the product of (A) the difference
between the Guaranteed Minimum Generating Capacity and the actual Energy Output delivered,
and (B) the difference, if any, between Purchaser's average Utility Rate over such Energy
Measurement Period minus the applicable Contract Price for such period.
S. PAYMENT
5.1 Consideration for Energy Delivered. As consideration for the delivery of Energy
by Seller, Purchaser shall pay for Energy delivered hereunder at the applicable Energy Price.
5 .2 Invoicing. Seller shall be responsible for reading the Electric Metering Devices at
the end of each calendar month. Seller shall invoice Purchaser for Energy on a monthly basis.
Seller shall deliver each invoice within thirty (30) Business Days after the end of each monthly
billing period. Each invoice shall set out the amount of Energy delivered in kWh during such
billing period, the then-applicable Energy Price, and the total amount then due to Seller, including
any taxes assessed on the sale of Energy to Purchaser, offsets for amounts due from Seller to
Purchaser pursuant to Section 3 .1, and credits due to Purchaser under Section 3 .2 . The amount
due shall be prorated for any partial month during the Contract Term. Such invoice shall include
sufficient detail so that Purchaser can reasonably confirm the accuracy of the invoice including,
among other details, beginning and ending meter readings. Purchaser shall pay the amount due to
8 Proprietary and Confidential
40253870. l/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Seller on a net forty-five (45) basis after receipt of each invoice. Payments not made within 45
days ofreceipt of Seller's invoice shall be subject to interest at the Interest Rate until paid.
5.3 Disputed Amounts. A Party may in good faith dispute the accuracy of any invoice
(or any adjustment to any invoice) under this Agreement at any time within thirty (30) days
following the receipt of the invoice (or invoice adjustment). In the event of such a dispute, such
Party shall nonetheless pay the full amount of the applicable invoice or invoice adjustment on the
applicable payment due date, except as expressly provided otherwise elsewhere in this Agreement,
and to give written notice of the objection to the other Party. Any required refund following
resolution of such dispute shall be made within five ( 5) Business Days after final resolution thereof,
together with interest accrued at the Interest Rate from the original payment due date to the date
refunded.
5.4 Books and Records. To facilitate payment and verification, each Party shall
maintain all books and records necessary for billing and payments, including copies of all invoices
under this Agreement, for a period of at least two (2) years, and Seller shall grant Purchaser
reasonable access to those books, records, and data at the principal place of business of Seller.
Purchaser may examine such books and records relating to transactions under, and administration
of, this Agreement, at any time during the period the records are required to be maintained, upon
request with reasonable notice and during normal business hours, however not more than once per
year.
5.5 Change in Law. The Parties acknowledge and agree that the Energy Price is based
on assumptions related to the availability to the Seller of the Environmental Incentives. In the
event of the elimination or alteration of one of more Environmental Incentives or any other change
in law that results in a material adverse economic impact on Seller in respect to this Agreement,
the Parties shall work in good faith to amend this Agreement within thirty (30) Business Days after
such elimination or alteration as may be reasonably necessary to restore the allocation of economic
benefits and burdens contemplated hereunder by the Parties. If the Parties fail to enter into such
an amendment by the end of such thirty (30) Business Day period, Seller may terminate this
Agreement without penalty, and Seller shall remove the System from the Premises within one
hundred eighty ( 180) days of such termination.
6. DELIVERY; CURTAILMENT; INSOLATION; METERING.
6.1 Delive1y. The System Point of Delivery shall be at the point of connection, as
depicted on Exhibit B. Seller shall deliver Energy Output hereunder in the form of three-phase
sixty-cycle alternating current at or exceeding the quality standards of the Utility. Seller shall bear
the risk of electric losses up until the Point of Delivery and shall be responsible for costs required
to deliver the Energy Output to the Point of Delivery, but shall not be bear any risk of loss after
the Energy Output has been delivered to the Point of Delivery.
6.2 Purchaser's Failure to Accent Delivery. On and after the Commercial Operation
Date, if, there exists no breach or default by Seller under this Agreement and Purchaser fails to
accept all or any amount of the Energy Output for the applicable System for any reason other than
an event of Force Majeure, such event shall constitute a Purchaser Cmiailment and be treated in
accordance with Section 6.3, below.
9 Proprietary and Confidential
40253870. l/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
6.3 Cmiailment.
(a) Each Party shall have the right to request curtailment of Energy Output
upon sufficient prior written notice, and Energy Output shall be curtailed
pursuant to such request. The Parties agree that each Party will be allotted
four (4) four (4) hour curtailments per Commercial Operation Year for any
reason (the "Cmiailment Allotment'). The Pmiies agree that if the number
or duration exceed the Curtailment Allotment during periods when one
Pmiy invokes such curtailment option (i) the requesting Party shall be
liable for Liquidated Damages in the manner set fo1ih below; and (ii) Seller
shall have no right to remarket the Energy Output that is curtailed. Subject
to the provisions set forth in the Lease with respect to a relocation of a
System, the remedy provided in this Section 6.3 shall be the sole and
exclusive remedy of Seller for any such voluntary curtailment requested
by Purchaser. Seller will have no obligation to reimburse Purchaser if the
Curtailment Allotment is not used and the Paiiies agree there will be no
carry forward from one year to the next.
(b) If Seller exceeds its Curtailment Allotment, it shall pay the Purchaser on a
monthly basis in arrears the positive difference, if any, between the Energy
Rate Purchaser would have paid for Energy Output for the System and the
Utility Rate of the quantities of Energy Output that Purchaser obtains to
replace the estimated energy output that would have been achieved.
(c) If Purchaser exceeds its Cmiailment Allotment, it shall pay the Seller on a
monthly basis in arrears an amount equal to the average Energy Output of
the prior three months, prorated for the duration of the exceeded
Cmiailment Allotment.
6.4 Electric Metering Devices.
(a) Metering of Delive1y. Seller shall measure the amount of Energy supplied
to Purchaser at the Delivery Point using a commercially available, revenue-
grade metering system. Such meter shall be installed and maintained at
Seller's cost. Purchaser shall cooperate with Seller to enable Seller to have
reasonable access to the meter as needed to inspect, repair, and maintain
such meter. At Seller's option, the meter may have standard industry
telemetry and/or automated meter reading capabilities to allow Seller to
read the meter remotely. If Seller elects to install telemetry allowing for
remote reading, Purchaser shall allow for the installation of necessary
communication lines and shall reasonably cooperate in providing access for
such installation. The meter shall be kept under seal, such seal to be broken
only when the meter is to be tested, adjusted, modified, or relocated. In the
event that either Party breaks a seal, such Pmiy shall notify the other Party
as soon as practicable.
10 Proprietary and Confidential
40253870. l/063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
(b) Back-Up Metering. Either Purchaser or Seller may elect to install and
maintain, at the installing Party's own expense, backup metering devices
("Back-Up Metering") in addition to the Electric Metering Devices, which
installation and maintenance shall be performed in a manner acceptable to
Purchaser. The installing Party, at its own expense, shall inspect and test
Back-Up Metering upon installation and at least annually thereafter. The
installing Party shall provide the other Party with reasonable advance notice
of, and permit a representative of such Party to witness and verify, such
inspections and tests, provided, however, that such Party shall not
unreasonably interfere with or disrupt the activities of the installing Party
and shall comply with all applicable safety standards. Upon request, the
installing Paiiy shall perform additional inspections or tests of Back-Up
Metering and shall permit a qualified representative of the other Party to
inspect or witness the testing of Back-Up Metering, provided, however, that
such other Paiiy shall not unreasonably interfere with or disrupt the
activities of the installing Party and shall comply with all applicable safety
standards. The actual expense of any such requested additional inspection
or testing shall be borne by the Paiiy requesting the test, unless, upon such
inspection or testing, Back-Up Metering is found to register inaccurately by
more than the allowable limits established in this Article, in which event the
expense of the requested additional inspection or testing shall be borne by
the installing Paiiy. If requested in writing, the installing Party shall provide
copies of any inspection or testing repo1is to the requesting Party.
(c) Net Metering. Seller shall deliver all Energy Output generated by the
System to Purchaser at the applicable Delivery Point. Purchaser shall be
responsible for delive1y of any Energy Output generated by the System that
is not consumed by Purchaser at the Site pursuant to the then applicable
Utility net metering requirements. Seller shall provide reasonable assistance
to Purchaser in applying for and establishing the Utility net metering
agreements that may be necessary. Purchaser shall reimburse Seller for its
reasonable and necessary third-paiiy costs incurred in relation to Seller's
assistance with such matters.
(d) Meter Verification. On each of the fifth, tenth, fifteenth and twentieth
anniversaries of the Commercial Operation Date, or earlier at Seller's
discretion, Seller shall test the meter and provide copies of any related test
results to Purchaser. The tests shall be conducted by a qualified independent
third party. Seller shall notify Purchaser seven (7) days in advance of each
such test, and shall permit Purchaser to be present during such tests. If a
meter is inaccurate, Seller shall promptly cause the meter to be repaired or
replaced. If a meter is accurate or inaccurate by two percent (2%) or less,
then Purchaser shall pay the costs of the meter testing. If a meter is
inaccurate by more than two percent (2% ), then Seller shall pay for the costs
of the meter testing. If a meter is inaccurate by more than two percent (2%)
and the duration of such inaccuracy is known, then prior invoices shall be
adjusted accordingly and any amounts owed to Purchaser shall be credited
11 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
against future invoices for Energy deliveries. If a meter is inaccurate by
more than two percent (2%) and it is not known when the meter inaccuracy
commenced, then prior invoices shall be adjusted for the amount of the
inaccuracy on the basis that the inaccuracy persisted during the twelve-
month period preceding the test and any amounts owed to Purchaser shall
be credited against future invoices for Energy deliveries.
7. OPTION TO PURCHASE SYSTEM.
7 .1 Grant of Purchase Option. Seller hereby grants to Purchaser the right and option to
purchase all of the Seller's right, title, and interest in and to the System on the terms set fo1ih herein
("Purchase Option"). Purchaser may exercise the Purchase Option on either the sixth (6th), tenth
(10th), fifteenth (15th) or twentieth (20th) anniversary of the Commercial Operation Date, or
simultaneously with the termination of this Agreement (collectively, the "Purchase Option
Dates"), provided that no Purchaser Event of Default, or any event which with the passage of time
will become a Purchaser Event of Default, has then occurred and is ongoing.
7.2 Determination of Purchase Price. Purchaser may, on or at any time within thirty
(30) days before each Purchase Option Date, request a determination of the purchase price under
the Purchase Option (the "Purchase Price"). The Purchase Price shall be the fair market value of
the System, as determined by an independent appraiser retained by the Parties (the "Independent
Appraiser"). The Independent Appraiser shall be an individual who is a member of a national
accounting, engineering or energy consulting firm qualified by education, experience, and training
to determine the value of solar generating facilities of the size and age and with the operational
characteristics of the System, and who specifically has prior experience valuing solar energy
generating facilities. The Independent Appraiser shall be reasonably acceptable to both Seller and
Purchaser. Except as may be otherwise agreed by the Parties, the Independent Appraiser shall not
be (or within three (3) years before his or her appointment have been) a director, officer, or an
employee of, or directly or indirectly retained as consultant or adviser to, either of the Parties or
their respective Affiliates. The fair market value assessment of the System shall consider, among
other things, the income and savings associated with the System for the remaining pmiion of the
Contract Term, the terminal value of the assets and the System's past and projected performance.
The Independent Appraiser shall make a determination of the Purchase Price within thirty (30)
days of appointment (the "Price Determination"). Upon making the Price Determination, the
Independent Appraiser shall provide a written notice thereof to both Seller and Purchaser, along
with all supporting documentation detailing the method of calculation of the Purchase Price.
Except in the event of fraud or manifest error, the Price Determination shall be a final and binding
determination of the fair market value. If Purchaser wishes to exercise the Purchase Option
following the Price Determination, it shall deliver an exercise notice to Seller within ten (10) days
of receipt of the Price Determination (the "Exercise Period"). Any such exercise notice shall be
irrevocable once delivered. If Purchaser does not exercise the Purchase Option during the Exercise
Period, then the Price Determination shall be null and void, and Purchaser may not request a new
determination of the Purchase Price until the next Purchase Option Date. Each Price
Determination by an Independent Appraiser shall be at Purchaser's expense.
7.3 Terms and Date of System Purchase. Unless agreed to in writing, the Parties shall
consummate the sale of the System to Purchaser no later than forty-five (45) days following
12 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Purchaser's exercise of the Purchase Option. On the effective date of such sale (the "Transfer
Date") (a) Seller shall surrender and transfer to Purchaser all of Seller's right, title, and interest in
and to the System and shall retain all liabilities, Environmental Attributes, Environmental
Incentives, and profits arising from or relating to the System that arose prior to the Transfer Date;
(b) Purchaser shall pay the Purchase Price to Seller in readily available funds, and shall assume all
liabilities arising from or relating to the System as of and after the Transfer Date; (c) Purchaser
shall pay all amounts due under this Agreement for Energy delivered hereunder; and (d) both the
Seller and the Purchaser shall (i) execute and deliver a bill of sale and assignment of contract
rights, together with such other conveyance and transaction documents as are reasonably required
to fully transfer and vest title to the System in Purchaser, and (ii) deliver ancillary documents,
including releases, resolutions, certificates, third-paiiy consents and approvals, and such similar
documents as may be reasonably necessary to complete and conclude the sale of the System to
Purchaser. The purchase and sale of the System shall be on an "as-is, where-is" basis, and Seller
shall not be required to make any warranties or representations with regard to the System, but
Seller shall, to the extent reasonably possible, transfer or assign to Purchaser all manufacturer and
third-party warranties with respect to the System or any part thereof. Purchaser shall pay all
transaction and closing costs associated with exercise of the Purchase Option.
8. TITLE AND RISK OF LOSS.
8.1 Title. Seller shall at all times retain title to and be the legal and beneficial owner
of the System, and the System shall remain the personal property of Seller and shall not attach to
or be deemed a paii or fixture of the Premises. Seller may file one or more precautionary financing
statements in jurisdictions it deems appropriate with respect to the System in order to protect its
rights in the System.
8.2 Risk of Loss. Seller shall bear the risk of loss for the System, except to the extent
caused by the breach by Purchaser of its obligations under this Agreement, the Site Lease or the
gross negligence or intentional misconduct of Purchaser or its invitees.
8.3 System Casualty.
(a) If the System is materially damaged or destroyed prior to the fifteenth ( I 5th )
anniversary of the Commercial Operation Date (as defined in this
Agreement), the Seller shall be obligated to repair or replace the System to
produce Electric Output in substantially the same amount and quality as
produced by the System immediately before the damage or destruction.
(b) If the System is materially damaged or destroyed on or after the fifteenth
(15 th ) anniversary of the Commercial Operation Date (as defined in this
Agreement), then Seller may, but shall not be obligated to, repair or replace
the System to produce electricity in substantially the same amount and
quality as produced by the System immediately before the damage or
destruction. If Seller elects not to repair or replace the System, then this
Lease shall terminate in paii with respect to such affected System or p01iion
thereof. If Seller does not repair or replace the System, or portion thereof, it
shall remove what remains of the System and restore the Premises to a
13 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
condition that 1s reasonable similar to the condition pnor to System
installation.
(c) If Seller elects to repair or replace the System, Seller shall undertake such
repair or replacement as quickly as practicable. If Seller elects to terminate
this Agreement, the termination shall be effective immediately upon
delivery of the notice under this Section 8.3.
(d) Seller shall under all circumstances be entitled to all insurance proceeds
with respect to the System and Purchaser shall under all circumstances be
entitled to all insurance proceeds with respect to the Premises.
9. FORCE MAJEURE.
9.1 Force Majeure. To the extent either Party is prevented by an event of Force Majeure
from performing its obligations under this Agreement, such Party shall be excused from the
performance of its obligations under this Agreement, provided that:
(a) The Party claiming Force Majeure shall use commercially reasonable
effo1is to eliminate or avoid the Force Majeure and resume performing its
obligations; provided, however, that neither Paiiy is required to settle any
strikes, lockouts or similar disputes except on terms acceptable to such
Paiiy, in its sole discretion;
(b) The non-claiming Paiiy shall not be required to perform or resume
performance of its obligations to the claiming Party corresponding to the
obligations of the claiming Party excused by Force Majeure;
(c) The suspension of performance is of no greater scope and of no longer
duration than is required;
(d) the non-performing Pmiy proceeds with reasonable diligence to remedy its
inability to perform and provides weekly progress reports to the other Party
describing actions taken to end the Force Majeure;
(e) when the non-performing Paiiy is able to resume performance of its
obligations under this Agreement that Party shall give the other Pmiy
written notice to that effect; and
(f) Notwithstanding the foregoing, no Paiiy may claim relief by reason of Force
Majeure from a simple requirement to pay money due hereunder.
9.2 Notice. In the event of any delay or nonperformance resulting from an event of
Force Majeure, the Party suffering the event of Force Majeure shall, as soon as practicable, notify
the other Party in writing of the nature, cause, date of commencement thereof and the anticipated
extent of any delay or interruption in performance; provided, however, that a Party's failure to give
timely notice shall not affect such Party's ability to assert Force Majeure unless and to the extent
that the delay in giving notice prejudices the other Pmiy.
14 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
9.3 Limitations on Effect of Force Majeure. In no event will any delay or failure of
performance caused by any conditions or events of Force Majeure extend this Agreement beyond
its stated Term. In the event that any delay or failure of performance caused by conditions or events
of Force Majeure continues for an uninterrupted period of three hundred sixty-five (365) days from
its occurrence or inception, as noticed pursuant to Section 9.2, the Party not claiming Force
Majeure may, at any time following the end of such three hundred sixty-five (365) day period,
terminate this Agreement to the extent of the Force Majeure upon written notice to the affected
Party, without fmiher obligation by either Paiiy except as to costs and balances incurred prior to
the effective date of such termination. In the event of a Force Majeure event that extends beyond
such three hundred sixty-five (365) day period, the Paiiies may mutually agree to extend the period
beyond three hundred sixty-five (365) days.
10. RIGHTS AND OBLIGATIONS OF PURCHASER.
10.1 Purchaser Access. To the extent authorized by this Agreement and any applicable
Lease, Seller shall provide Purchaser with reasonable access to the System at all reasonable times
with reasonable prior written notice for purposes of maintaining any equipment which is owned or
otherwise the responsibility of Purchaser under this Agreement; provided, however, that Purchaser
shall comply with Seller's written safety guidelines and risk management procedures, copies of
which shall be provided to Purchaser by Seller upon request.
10.2 Site Lease. As of the Effective Date hereof, Purchaser and Seller have entered into
an Site Lease for access to, on, over, under and across each of the Sites for the purposes of: (a)
installing, constructing, operating, owning, maintaining, accessing, removing and replacing the
System; (b) performing all of Seller's obligations and enforcing all of Seller's rights set forth in
this Agreement; and (c) installing, using and maintaining electric lines and equipment, including
inve1iers and meters, necessary to interconnect the System to Purchaser's Electrical System at the
Site and/or to the Utility's electric distribution system or that otherwise may from time to time be
useful or necessary in connection with the construction, installation, operation, maintenance or
repair of the System. Seller shall notify Purchaser prior to entering a Site as may be required in
accordance with the terms of the Lease. During the Lease Term, Purchaser shall not interfere with
Seller's rights under the Lease and shall take all commercially reasonable steps to prevent any third
parties from interfering with such rights. Purchaser agrees that Seller, upon request to Purchaser,
may record a memorandum of Lease in the land records respecting the Lease in form and substance
reasonably acceptable to the Paiiies.
11. ADDITIONAL COVENANTS.
11.1 Liens. Purchaser shall not directly or indirectly cause, create, incur, assume or
suffer to exist any mortgage, pledge, lien (including mechanics', labor or materialman's lien),
charge, security interest, encumbrance or claim on or with respect to the System or any portion
thereof. If Purchaser breaches it obligations under this Section 11.1, it shall promptly notify Seller
in writing, shall promptly cause any lien to be discharged and released of record without cost to
Seller, and shall, to the limited extent permissible under State of Michigan Law, indemnify Seller
against all claims, losses, costs, damages, and expenses, including reasonable attorneys' fees,
incurred in discharging and releasing such lien.
15 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
11.2 Additional Purchaser Financial Information. If requested by Seller, Purchaser shall
deliver within one hundred-eighty (180) days following the end of each fiscal year, a copy of
Purchaser's annual report containing audited consolidated financial statements with footnotes for
such fiscal year. In all cases such financial statements shall be for the most recent accounting
period and prepared in accordance with generally accepted accounting principles consistently
applied; provided, however, that if any such financial statements are not available on a timely basis
due to a delay in preparation or certification, such delay shall not by itself constitute a Purchaser
Event of Default so long as Purchaser diligently pursues the preparation, ce1iification and delivery
of the statements. [NTD - adjust for unaudited or public entity financial reporting]
11.3 Performance Assurance; Downgrade Event. If at any time Seller, in its sole
judgment, determines that Purchaser's or Purchaser's Performance Assurance provider's
creditworthiness or performance under this Agreement has or will become unsatisfactory, or if
Purchaser or Purchaser's Performance Assurance provider experiences a Downgrade Event, then
Seller may by written notice require Purchaser to provide Performance Assurance within fifteen
(15) Business Days. Purchaser shall obtain and maintain such Performance Assurance, unless
otherwise agreed upon by Seller in writing.
12. REPRESENTATIONS AND WARRANTIES.
12. l Representations and Warranties of Purchaser. Purchaser represents and warrants
to Seller that:
(a) Purchaser has the requisite legal capacity to enter into this Agreement and
fulfill its obligations hereunder, that the execution and delivery by it of this
Agreement and the performance by it of its obligations hereunder have been
duly, and that, subject to compliance with and obtaining all required
governmental approvals under any applicable regulatory laws or regulations
governing the sale or delivery of Energy, the entering into of this Agreement
and the fulfillment of its obligations hereunder does not contravene any law,
statute or contractual obligation of Purchaser;
(b) This Agreement constitutes Purchaser's legal, valid and binding obligation
enforceable against it 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;
(c) No suit, action or arbitration, or legal administrative or other proceeding is
pending or has been threatened against the Purchaser that would have a
material adverse effect on the validity or enforceability of this Agreement
or the ability of Purchaser to fulfill its commitments hereunder, or that could
result in any material adverse change in the business or financial condition
of Purchaser;
(d) No governmental approval (other than any governmental approvals which
have been previously obtained) is required in connection with the due
16 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
authorization, execution and delivery of this Agreement by Purchaser or the
performance by Purchaser of its obligations hereunder which Purchaser will
be unable to obtain in due course; and
(e) The public entity financial reporting statements of Purchaser for the most
recent three calendar years, together with any unaudited interim financial
statements of Purchaser, (i) have each been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the respective periods covered thereby, except as otherwise expressly noted
therein; and (ii) present fairly and accurately the financial condition of
Purchaser as of the dates thereof and results of its operations for the periods
covered thereby. Purchaser further represents and warrants to Seller that
since the date of the most recent of the above-referenced financial
statements, there has been no material adverse change in Purchaser's
financial condition, business, operations or prospects.
12.2 Representations and Warranties of Seller. Seller represents and wmrnnts to
Purchaser that:
(a) Seller has the requisite corporate, patinership or limited liability company
capacity to enter into this Agreement and fulfill its obligations hereunder,
that the execution and delivery by it of this Agreement and the performance
by it of its obligations hereunder have been duly authorized by all requisite
action of its stockholders, partners or members, and by its board of directors
or other governing body, and that, subject to compliance with and obtaining
all required governmental approvals under any applicable regulatory laws
or regulations governing the sale or delivery of Energy, the entering into of
this Agreement and the fulfillment of its obligations hereunder does not
contravene any law, statute or contractual obligation of Seller;
(b) this Agreement constitutes Seller's legal, valid and binding obligation
enforceable against it 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;
(c) No suit, action or arbitration, or legal administrative or other proceeding is
pending or has been threatened against the Seller that would have a material
adverse effect on the validity or enforceability of this Agreement or the
ability of Seller to fulfill its commitments hereunder, or that could result in
any material adverse change in the business or :financial condition of Seller;
and
(d) Neither the System nor any of Seller's services provided to Purchaser
pursuant to this Agreement infringe on any third pmiy's intellectual
property or other proprietary rights.
17 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
13. DEFAULTS/REMEDIES.
13 .1Seller Event of Default. Each of the following events shall constitute a "Seller
Event of Default":
(a) Seller fails to pay to Purchaser any amount when due under this Agreement
and such failure remains uncured for ten (10) Business Days following
notice of such failure to Seller; or
(b) Seller materially breaches any other term of this Agreement (i) if such
breach is capable of being cured within thi1iy (30) days after Purchaser's
notice to Seller of such breach and Seller has failed to cure the breach within
such thirty (30) day period, or (ii) if Seller has diligently commenced work
to cure such breach but that breach is not capable of cure within such thirty
(30) day period, Seller may request a fmiher one hundred fifty (150) day
period (such aggregate period not to exceed one hundred eighty (180) days
from the date of Purchaser's notice) to cure the breach.
(c) Seller making a general assignment of its assets that is not in accordance
with the terms of this Agreement (Excepting any general assignment for the
benefit of creditors that is explicitly permitted by this Agreement);
(d) Seller's dissolution, liquidation or filing of a voluntary petition in
bankruptcy or insolvency or for reorganization or arrangement under the
bankruptcy laws of the United States or under any insolvency act of any
state, or after the filing of a case in bankruptcy or any proceeding under any
other insolvency law against the Seller, the Seller's failure to obtain a
dismissal of such filing within sixty (60) calendar days after the date of such
filing;
(e) Any express representation or warranty furnished by Seller in connection
with this Agreement was false or misleading in any material respect when
made, unless the fact, circumstance or condition that is the subject of such
representation or warranty is made true within thirty (30) calendar days after
the Purchaser has given the Seller written notice thereof; provided,
however, that if the fact, circumstance or condition that is the subject of
such representation or wananty cannot be corrected within thi1iy (30)
calendar days; or if such fact circumstance or condition being otherwise
than as first represented does not materially adversely affect the Purchaser,
then Seller shall have additional time, but in any event not longer than
ninety (90) days, to cure the default if it commences in good faith within
such thi1iy (30) calendar day cure period to correct the fact, circumstance
or condition that is the subject of such representation or warranty and it
diligently and continuously proceeds with all due diligence to correct the
fact, circumstance or condition that is the subject of such representation or
warranty; or
18 Proprietaiy and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
(t) A failure to maintain insurance required under this Agreement, which is not
corrected within thi1iy (30) days;
13 .2 Purchaser's Remedies. If a Seller Event of Default has occurred and is continuing,
Purchaser may terminate this Agreement by written notice to Seller following the expiration of the
applicable cure period, and may exercise any other remedy it may have at law or equity, including,
in the event such Seller Event of Default occurs and is continuing after the sixth (6th) anniversary
of the Commercial Operation Date, exercising the Purchase Option.
13.3 Purchaser Event of Default. Each of the following events shall constitute a
"Purchaser Event of Default":
(a) Purchaser fails to pay to Seller any amount when due under this Agreement
and such breach remains uncured for ten (10) Business Days following
notice of such breach to Purchaser;
(b) (i) Purchaser commences a voluntary case under any bankruptcy law;
(ii) Purchaser fails to controve1i in a timely and appropriate manner, or
acquiesces in writing to, any petition filed against Purchaser in an
involuntary case under any bankruptcy law; (iii) any involuntary
bankruptcy proceeding commenced against Purchaser remains undismissed
or undischarged for a period of sixty (60) days; or Purchaser becomes
structurally insolvent such that it becomes generally unable to meet its
financial obligations as and when they fall due;
(c) Purchaser breaches any of its obligations under the Site Lease;
(d) Purchaser breaches any of its obligations under Section 3 .2;
(e) Purchaser fails to secure the release of any lien imposed on the System in
violation of Section 11.1 more than 15 days following notice thereof; or
(t) Purchaser breaches any other material term of this Agreement and such
breach remains uncured for thi1iy (30) days following notice of such breach
to Purchaser, or such longer cure period as may be agreed to by the Parties.
13 .4 Seller's Remedies. If a Purchaser Event of Default has occurred and is continuing,
Seller may terminate this Agreement by written notice to Purchaser following the expiration of the
applicable cure period. Upon termination of the Agreement by Seller, Purchaser shall pay a
Termination Payment to Seller equal to the amount set forth in the table attached hereto as Exhibit
F for the applicable contract year (the "PPA Damages"). Notwithstanding any provision in this
Agreement to the contrary, if no notice of dispute has been issued within thirty (30 days) in the
case of a billing dispute or thirty-six (36) months in all other cases after the Seller learns of the
Dispute (the "Claims Period"), the Dispute and all claims related thereto shall be deemed waived
and the Seller shall thereafter be barred from proceeding thereon. For purposes of this Section,
"the Seller learns of the Dispute" when, as to any paiiicular Dispute, it has actual knowledge or
should have known of the occurrence giving rise to the Dispute and a reasonable belief that the
Purchaser is at least partially responsible for any damages arising from that occurrence. Any claim
19 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
reasonably arising out of a claim for which notice of a dispute was timely provided shall not be
deemed to be waived if "the Seller learns of the Dispute," or a previously undiscovered but related
liability, at a later date unless the Seller fails to raise the claim within the then reestablished Claims
Period.
13.5 Waiver of Consequential Damages. EXCEPT AS SPECIFICALLY PROVIDED
HEREIN, THE PARTIES AGREE THAT TO THE FULLEST EXTENT ALLOWED BY LAW,
IN NO EVENT SHALL EITHER PARTY BE RESPONSIBLE OR LIABLE, WHETHER IN
CONTRACT, TORT, WARRANTY, OR UNDER ANY STATUTE OR ON ANY OTHER
BASIS, FOR SPECIAL, INDIRECT, INCIDENTAL, MULTIPLE, PUNITIVE, EXEMPLARY
OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST PROFITS OR LOSS OR
INTERRUPTION OF BUSINESS, ARISING OUT OF OR IN CONNECTION WITH THE
SYSTEM OR THIS AGREEMENT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE PPA DAMAGES SHALL NOT BE CONSIDERED CONSEQUENTIAL
DAMAGES AND SHALL NOT BE SUBJECT TO THE LIMITATIONS SET FORTH IN THIS
SECTION. (REMAINS SUBJECT TO APPROVAL BY THE CITY OF MUSKEGON)
13.6 Limitation of Liability. TO THE EXTENT PERMITTED BY LAW, SELLER'S
MAXIMUM LIABILITY UNDER THIS AGREEMENT (WHETHER IN CONTRACT,
WARRANTY, INDEMNITY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE)
SHALL IN NO EVENT EXCEED THE AMOUNT OF THE AGGREGATE PAYMENTS
MADE AND OR TO BE MADE BY PURCHASER TO SELLER PURSUANT TO SECTION 4
OF THIS AGREEMENT CALCULATED. (REMAINS SUBJECT TO APPROVAL BY THE
CITY OF MUSKEGON THIS INCLUDES NO LIMITATION TO PURCHSER LIABILITY.
SUGGESTION OF LIMITING PURCHASE LIABILITY TO THE TERMINATION
PAYMENTS INCLUDED AS APPENDIX F.)
14. FINANCING ACCOMMODATIONS.
14.1 Purchaser Acknowledgment. Purchaser acknowledges that Seller may finance the
System and that Seller's obligations may be secured by, among other collateral, a pledge or
collateral assignment of this Agreement and a security interest in the System. In order to facilitate
any such financing, with respect to which Seller has notified Purchaser in writing of the identity
of such person's offering to provide such financing (each, a "Financing Party"), Purchaser agrees
as follows:
14.2 Consent to Collateral Assignment. Seller shall have the right to assign this
Agreement as collateral for financing or refinancing of the System, and Purchaser hereby consents
to the collateral assignment by Seller to any Financing Party of Seller's right, title, and interest in
and to this Agreement.
14.3 Financing Party's Rights Following Default. Notwithstanding any contrary term
of this Agreement:
(a) Financing Party, as collateral assignee, shall be entitled to exercise, in the
place and stead of Seller, any and all rights and remedies of Seller under
this Agreement in accordance with the terms of this Agreement. Financing
20 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Pmiy shall also be entitled to exercise all rights and remedies of secured
parties generally with respect to this Agreement and the System.
(b) Financing Pmiy shall have the right, but not the obligation, to pay all sums
due under this Agreement and to perform any other act, duty, or obligation
required of Seller hereunder or cause to be cured any default or event of
default of Seller in the time and manner provided by the terms of this
Agreement. Nothing herein requires Financing Party to cure any default of
Seller (unless Financing Pmiy has succeeded to Seller's interests) to
perform any act, duty, or obligation of Seller, but Purchaser hereby gives
Financing Pmiy the option to do so.
(c) Upon the exercise of remedies under its security interest in the System,
including any sale thereof by Financing Party, whether by judicial
proceeding or under any power of sale, or any conveyance from Seller to
Financing Party, Financing Pmiy shall give notice to Purchaser of the
transferee or assignee of this Agreement. Any such exercise of remedies
shall not constitute a Seller Event of Default.
(d) Upon any rejection or other termination of this Agreement pursuant to any
process unde1iaken with respect to Seller under the United States
Bankruptcy Code, at the request of Financing Party made within ninety
(90) days of such termination or rejection, Purchaser shall enter into a new
power purchase agreement with Financing Party or its assignee on
substantially the same terms as this Agreement.
14.4 Financing Party Cure Rights. Purchaser shall not exercise any right to terminate or
suspend this Agreement unless Purchaser has given prior written notice to each Financing Party
of which Purchaser has notice. Purchaser's notice of an intent to terminate or suspend must specify
the condition giving rise to such right. Financing Party shall have the longer of thiliy (30) days
and the cure period allowed for a default of that type under this Agreement to cure the condition;
provided that if the condition cannot be cured within such time but can be cured within the
extended period, Financing Pmiy may have up to an additional ninety (90) days to cure if Financing
Pmiy commences to cure the condition within the thirty (30) day period and diligently pursues the
cure thereafter. Purchaser's and Seller's obligations under this Agreement shall otherwise remain
in effect, and Purchaser and Seller shall be required to fully perform all of their respective
obligations under this Agreement during any cure period.
14.5 Continuation Following Cure. If Financing Party or its assignee acquires title to or
control of Seller's assets and cures all defaults existing as of the date of such change in title or
control within the time allowed by Section 14.4, then this Agreement shall continue in full force
and effect.
14.6 Notice of Defaults and Events of Default. Purchaser agrees to deliver to each
Financing Pmiy a copy of all notices that Purchaser delivers to Seller pursuant to this Agreement.
Seller agrees to deliver to each financing party a copy of all notices the Seller delivers to Purchaser
pursuant to this Agreement.
21 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
15. NOTICES. Any notice required, permitted, or contemplated hereunder shall be in writing
and addressed to the Party to be notified at the address set forth below or at such other address or
addresses as a Party may designate for itself from time to time by notice hereunder. Such notices
may be sent by personal delivery or recognized overnight courier and shall be deemed effective
upon receipt.
To Seller: To Purchaser:
Sunwealth LLC City of Muskegon
2067 Massachusetts Avenue, Suite 540 933 Terrace Street
Cambridge, Massachusetts, 02140 Muskegon,MI49440
Attention: Jonathan Abe, CEO Attention: Frank Peterson, City Manager
Phone: 617-752-7322 Phone: 231-724-6724
Email: proj [email protected] Email: [email protected]
16. GOVERNING LAW; DISPUTES.
16.1 Choice of Law. This Agreement shall be construed in accordance with the laws of
the State of Michigan, without regard to the conflicts of law principles thereof.
16.2 Disputes.
(a) Management Negotiations. In the event of any dispute arising under this
Agreement (a "Dispute"), within seven (7) days following the delivered date
of a written request by either Paiiy (a "Dispute Notice"), (i) each Party shall
appoint a representative (individually, a "Paiiy Representative", together,
the "Parties' Representatives"), and (ii) the Parties' Representatives shall
confer and then meet in person at the primary administrative offices of the
Purchaser within fourteen (14) days of delivery of the Dispute Notice if the
dispute is not settled prior to that time. The Parties' Representatives shall
meet to negotiate and attempt in good faith to resolve the Dispute quickly,
informally and inexpensively with the specific goal of reconciling
differences and allowing the Paiiies to continue in this Agreement for the
mutual benefit of both Paiiies. In the event the Parties' Representatives
cannot resolve the Dispute within fomieen (14) days after delivery of the
Dispute Notice, within fourteen (14) days following any request by either
Party at any time thereafter, each Paiiy Representative (I) shall
independently prepare a written summary of the Dispute describing the
issues and claims, (II) shall exchange its summaiy with the summary of the
Dispute prepared by the other Party Representative, and (III) shall submit a
copy of both summaries to a senior officer of the Party Representative with
authority to irrevocably bind the Party to a resolution of the Dispute, subject
to approval by Purchaser's Board of Education. The senior officers for both
Paiiies shall negotiate in good faith to resolve the Dispute, subject to any
required internal approval of any such resolution by the Parties' respective
senior management or Board of Education. If the Parties have acted in good
22 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
faith and not resolved the Dispute within ninety (90) days after delivery of
the Dispute Notice, either Parry may seek legal and equitable remedies.
During the pendency of the Parties' attempt to resolve the dispute described
in a Dispute Notice, any applicable limitations period, whether by contract
or statute, shall be tolled. Seller will not be liable for any damages, including
liquidated damages that accrue from the time the Parties reach an agreement
to the date of Board of Education action. Nothing in this Agreement shall
prevent either Patiy from pursuing judicial proceedings if (a) good faith
effmis to resolve a dispute under these procedures have been unsuccessful,
or (b) interim resort to a court of competent jurisdiction is necessary to
prevent serious and irreparable injury to a Paiiy or to others.
(b) Jurisdiction and Venue. Should management negotiations fail to resolve any
dispute, any Party may initiate dispute resolution proceedings in any state
or federal court in the State of Michigan. Each Party agrees to submit to the
personal and subject matter jurisdiction of any such comi and to waive any
challenge it may have to the laying of venue in such location by reason of
inconvenient forum or otherwise.
17. INDEMNIFICATION.
17 .1 Seller's Indemnity to Purchaser. Seller shall indemnify, defend, and hold harmless
Purchaser (including Purchaser's permitted successors and assigns) and Purchaser's directors,
officers, employees, agents and representatives (collectively, "Purchaser Indemnified Parties")
from and against any and all third-party claims, losses, costs, damages, and expenses, including
reasonable attorneys' fees, incmTed by Purchaser Indemnified Parties arising from or relating to
(i) Seller's breach of this Agreement, or (ii) Seller's negligence or willful misconduct. Seller's
indemnification obligations under this Section 17 .1 shall be subject to the limitations of Section
17.5, below.
17.2 Purchaser's Indemnity to Seller. To the limited extent permissible under Michigan
law, Purchaser shall indemnify, defend, and hold harmless Seller (including Seller's permitted
successors and assigns) and directors, officers, members, shareholders, employees and agents
(collectively, "Seller Indemnified Pa1iies") from and against any and all third-party claims, losses,
costs, damages, and expenses, including reasonable attorneys' fees, incurred by Seller Indemnified
Parties arising from or relating to (i) Purchaser's breach of this Agreement, or (ii) Purchaser's
willful misconduct. Purchaser's indemnification obligations under this Section 17.2 shall be
subject to the limitations of Section 17.5, below. Nothing herein shall be construed as a waiver of
the defense of Governmental Immunity or a waiver of statutory or constitutional limitations on
governmental indemnity.
17.3 Notice of Claims. Any Patiy seeking indemnification hereunder (the "Indemnified
Party") shall deliver to the other Paiiy (the "Indemnifying Party") a written notice describing the
facts underlying its indemnification claim and the amount of such claim (each such notice a "Claim
Notice"). Such Claim Notice shall be delivered promptly to the indemnifying Patiy that an action
at law or a suit in equity has commenced; provided, however, that failure to deliver the Claim
23 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
Notice shall not relieve the Indemnifying Party of its obligations under this Article 18, except to
the extent that such Indemnifying Party has been prejudiced by such failure.
17.4 Defense of Action. If requested by the Indemnified Party, the Indemnifying Party
shall assume on behalf of the Indemnified Party, and conduct with due diligence and in good faith,
the defense of such Indemnified Patiy with counsel reasonably satisfactory to the Indemnified
Party; provided, however, that if the Indemnifying Party is a defendant in any such action and the
Indemnified Party reasonably believes that there may be legal defenses available to it that are
inconsistent with those available to the Indemnifying Party, the Indemnified Party shall have the
right to select separate counsel to participate in its defense of such action at the Indemnifying
Party's expense. If any claim, action, proceeding or investigation arises as to which the indemnity
provided for in this A1iicle 17 applies, and the Indemnifying Patiy fails to assume the defense of
such claim, action, proceeding or investigation after having been requested to do so by the
Indemnified Party, then the Indemnified Party may, at the Indemnifying Party's expense, contest
or, with the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, settle such claim, action, proceeding or investigation. All costs and
expenses incurred by the Indemnified Party in connection with any such contest or settlement shall
be paid upon demand by the Indemnifying Party.
17.5 Percentage Share of Negligence. It is the intent of the Parties hereto that where
fault, acts or omissions are determined to be contributory, principles of comparative negligence
will be followed and each Patiy shall bear the proportionate cost of any loss, damage, expense and
liability attributable to that Party's negligence, acts or omissions.
18. INSURANCE.
18.1 Insurance Required. Each Party shall maintain in full force and effect throughout
the Contract Term, with insurers ofrecognized responsibility authorized to do business in the State
in which the System will be located, assigned an A.M. Best rating of no less than A IX, insurance
coverage in the amounts and types set forth on Exhibit E. Each Patiy shall, within ten ( 10) days
of written request therefor, furnish current ce1iificates of insurance to the other Party evidencing
the insurance required hereunder.
18.2 Waiver of Subrogation. Each policy of insurance required hereunder shall provide
for a waiver of subrogation rights against the other Party, and of any right of the insurers to any
set-off or counterclaim or any other deduction, whether by attachment or otherwise, in respect of
that policy.
18.3 No Waiver of Obligations. The provisions of this Agreement shall not be construed
in a manner so as to relieve any insurer of its obligations to pay any insurance proceeds in
accordance with the terms and conditions of valid and collectable insurance policies. The
liabilities of the Parties to one another shall not be limited by insurance.
18.4 Certificates oflnsurance. Each Patiy shall provide the other Patiy with certificates
of insurance evidencing coverage within ten ( 10) days of the effective date of this Agreement and
at any time thereafter with thi1iy (30) days' notice.
19. MISCELLANEOUS.
24 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
19.1 Confidential Information. To the extent permitted by law, if either Party provides
confidential information, including business plans, strategies, financial information, proprietary,
patented, licensed, copyrighted or trademarked information, and/or technical information
regarding the design, operation and maintenance of the System or of Purchaser's business
("Confidential Information") to the other or, if in the course of performing under this Agreement
or negotiating this Agreement a Party learns Confidential Information regarding the facilities or
plans of the other, the receiving Paiiy shall (a) protect the Confidential Information from disclosure
to third parties with the same degree of care accorded its own confidential and proprietary
information, and (b) refrain from using such Confidential information, except in the negotiation
and performance of this Agreement. Notwithstanding the above, a Paiiy may provide such
Confidential Information to its, officers, directors, members, managers, employees, agents,
contactors and consultants (collectively, "Representatives"), and Affiliates, lenders, and potential
assignees of this Agreement (provided and on condition that such potential assignees be bound by
a written agreement or legal obligation restricting use and disclosure of Confidential Information),
in each case whose access is reasonably necessary to the negotiation and/or performance of this
Agreement. Each such recipient of Confidential Information shall be informed by the Paiiy
disclosing Confidential information of its confidential nature and shall be directed to treat such
information confidentially and shall agree to abide by these provisions. ln any event each Party
shall be liable (with respect to the other Paiiy) for any breach of this provision by any entity to
whom that Paiiy improperly discloses Confidential Information. The terms of this Agreement (but
not its execution or existence) shall be considered Confidential Information for purposes of this
Section 20.1 except as set forth in Section 20.2. All Confidential information shall remain the
properly of the disclosing Party and shall be returned to the disclosing Paiiy or destroyed after the
receiving Party's need for it has expired or upon the request of the disclosing Party.
19.2 Permitted Disclosure. Notwithstanding any other provision in this Agreement,
neither Party shall not be required to hold confidential any information that (a) becomes publicly
available other than through the receiving Paiiy, (b) is required to be disclosed to a Governmental
Authority under applicable law or pursuant to a validly issued subpoena (but a receiving Party
subject to any such requirement shall promptly notify the disclosing Party of such requirement to
the extent permitted by applicable law), (c) is independently developed by the receiving Party, (d)
becomes available to the receiving Paiiy without restriction from a third party under no obligation
of confidentiality, or (e) is required to be disclosed to comply with applicable law, subpoena or
comi order. If disclosure of information is required by a Governmental Authority, the disclosing
Pany shall, to the extent permitted by applicable law, notify the other Party of such required
disclosure promptly upon becoming aware of such required disclosure. Seller acknowledges that
Purchaser, as a public entity is subject to the Freedom of Information Act. As such, Purchaser's
compliance with the Freedom of Information Act shall not be construed as a breach of any kind of
this Agreement. If Seller does, or believes it is obligated to, disclose information to comply with
the Freedom of information Act, Seller shall have the right to challenge or dispute the disclosure
in a court of competent jurisdiction at no cost to Purchaser. Fmiher, nothing contained herein shall
be construed as the Purchaser intent or willingness to violate the Freedom of Information Act.
19.3 Taxes
(a) Tax Structure or Treatment. Notwithstanding anything to the contrary set
forth herein or in any other agreement to which the Paiiies are parties or by
25 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
which they are bound, the obligations of confidentiality contained herein
and therein, as they relate to the transaction, shall not apply to the U.S.
federal tax structure or U.S. federal tax treatment of the transaction, and
each Party (and any employee, representative, or agent of any Party hereto)
may disclose to any and all persons, without limitation of any kind, the U.S.
federal tax structure and U.S. federal tax treatment of the transaction. The
preceding sentence is intended to cause the transaction not to be treated as
having been offered under conditions of confidentiality of this Agreement
(or any successor provision) of the Treasury Regulations promulgated under
Section 601 I of the Code and shall be construed in a manner consistent with
such purpose. In addition, each Pmiy acknowledges that it has no
proprietary or exclusive rights to the tax structure of the transaction or any
tax matter or tax idea related to the transaction.
(b) Seller Responsibility. Seller shall be exclusively responsible for federal,
state and local ad valorem properly, sales, use, excise, transaction tax or any
income taxes imposed on Seller's revenues due to the sale of Energy or
construction or ownership of the System(s) under this Agreement.
Purchaser shall not be responsible for any taxes if imposed by operation of
MCL 380.1141. If, for any reason not addressed in this Agreement, Seller
does not receive Tax Credits for any period, Purchaser's payments under
this Agreement shall not be affected, and the risk of not obtaining the Tax
Credits shall be borne solely by Seller.
(c) Purchaser Responsibility. To the extent required by law, any tax applicable
to Purchaser for the sale of electricity, attributes, or capacity charges shall
be the responsibility of the Purchaser.
19 .4 Assignment and Subcontracting.
(a) Assignment. Neither Pmiy shall have the right to assign any of its rights,
duties, or obligations under this Agreement without the prior written consent of the other Party,
which consent may not be unreasonably withheld or delayed. The foregoing notwithstanding,
Seller may assign any of its rights, duties, or obligations under this Agreement, without the
consent of Purchaser, (i) to any of its Affiliates, (ii) to any Financing Pmiy on a collateral basis
or (iii) to any qualified purchaser of the System. A person shall be deemed a "qualified purchaser"
for such purposes if it can be shown to have credit at least as strong as Seller and experience with
solar energy projects at least as deep as Seller. Any assignment of this Agreement, excepting
assignment to any Financing Party on a collateral basis, shall include:
(i) An explicit assumption of all existing and future obligations of the
Transferor to be performed under this Agreement;
(ii) An explicit assumption of all existing and future obligations of the
Transferor to be perfmmed under the Site Lease, and
26 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
(b) Subcontracting. Seller may subcontract its duties or obligations under this
Agreement without the prior written consent of Purchaser, provided, that no such subcontract
shall relieve Seller of any of its duties or obligations hereunder and Seller ensures that the
subcontractors has adequate relevant experience and maintains the same insurances Seller is
required to carry herein or is covered by the Seller's insurance policies. Purchaser may reject or
remove any subcontractor based on such subcontractors conduct at the facility.
19. 5 Entire Agreement. This Agreement and the Site Lease represent the full and
complete agreement between the Parties hereto with respect to the subject matter contained herein
and supersedes all prior written or oral agreements between the Parties with respect to the subject
matter hereof.
19.6 Amendments. This Agreement may only be amended, modified, or supplemented
by an instrument in writing executed by duly authorized representatives of Seller and Purchaser.
19.7 Binding Effect. This Agreement, as it may be amended from time to time, shall be
binding upon and inure to the benefit of the Parties hereto and their respective successors-in-
interest, legal representatives, and assigns permitted hereunder.
19 .8 No Patinership or Joint Venture. Seller and Seller's agents, in the performance of
this Agreement, shall act in an independent capacity and not as officers or employees or agents of
Purchaser. This Agreement shall not impart any rights enforceable by any third party (other than
a permitted successor or assignee bound to this Agreement).
19.9 Disclaimer of Third-Party Beneficiary Rights. In executing this Agreement,
Purchaser does not, nor should it be construed to, extend its credit or financial support for the
benefit of any third parties lending money to or having other transactions with Seller. Nothing in
this Agreement shall be construed to create any duty to, or standard of care with reference to, or
any liability to, any person not a party to this Agreement. Except with respect to Financing Paiiy
rights per this Agreement, no provision of this Agreement is intended to, nor shall it in any way,
inure to the benefit of any other Person not a Party hereto, so as to constitute such Person as a third
party beneficiary under this Agreement.
19 .10 Equal Employment Opportunity Compliance Ce1iification. Seller acknowledges
that as a government contractor Purchaser may be subject to various federal laws, executive orders,
and regulations regarding equal employment opportunity and affirmative action. These laws may
also be applicable to Seller as to a subcontractor to Purchaser. All applicable equal opportunity
and affirmative action clauses shall be deemed to be incorporated herein as required by federal
laws, executive orders, and regulations, including but not limited to 41 C.F.R. §60-l.a(a)(l-7),60-
250.4 and 60-74L.4, if applicable.
19.11 Nondiscrimination. Seller shall not discriminate against an employee or applicant
for employment for employment with respect to hire, tenure, terms, conditions, or privileges of
employment, or a matter directly or indirectly related to employment, because of race, color, creed,
religion, national origin, sex, disability, age, height weight, veteran status, marital status, or any
other reason prohibited by law. A breach of this covenant shall be considered a material breach of
contract. This provision is required in accordance with MCL 37.2209.
27 Proprietary and Confidential
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
19.12 Iran Economic Sanctions Act. Pursuant to Michigan Public Act No. 517 of 2012
(the "Iran Economic Sanctions Act'') Seller ce1iifies and warrants that it is not an "Iran linked
business" within the meaning of the Iran Economic Sanctions Act and will not become an "Iran
linked business" at any time during the course of performing the work or services under the
contract. Seller further acknowledges and understands that it is required as a matter of law to
execute and notarize a separate ce1iification to the same. Submitting a false certification will
submit Seller to a civil penalty of not more than $250,000.00 or two (2) times the amount of the
contract for which the false certification was made, whichever is greater, the cost of the Purchaser's
investigation, and reasonable attorney fees, in addition to the fine. Moreover, any person
submitting a false certification shall be ineligible to perform work or services for Purchaser for
three (3) years from the date it is determined that the person submitted the false certification.
19 .13 Headings; Exhibits. The headings in this Agreement are solely for convenience
and ease of reference and shall have no effect in interpreting the meaning of any provision of this
Agreement. Any Exhibits referenced within and attached to this Agreement, including any
attachments to the Exhibits, shall be a paii of this Agreement and are incorporate by reference
herein.
19.14 Remedies Cumulative; Attorneys' Fees. No remedy herein conferred upon or
reserved to any Paiiy shall exclude any other remedy herein or by law provided, but each shall be
cumulative and in addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute. If any action, arbitration, judicial reference, or other proceeding is
instituted between the Parties in connection with this Agreement, the losing Paiiy shall pay to the
prevailing Paiiy a reasonable sum for reasonable attorneys' and experts' fees and costs incurred in
bringing or defending such action or proceeding (at trial and on appeal) and/or enforcing any
judgment granted therein.
19.15 Waiver. The waiver by either Paiiy of any breach of any term, condition, or
provision herein contained shall not be deemed to be a waiver of such term, condition, or provision,
or any subsequent breach of the same, or any other term, condition, or provision contained herein.
Any such waiver must be in a writing executed by the Party making such waiver.
19.16 Severability. If any part, term, or provisions of this Agreement is determined by an
arbitrator or court of competent jurisdiction to be invalid, illegal, or unenforceable, such
determination shall not affect or impair the validity, legality, or enforceability of any other part,
term, or provision of this Agreement and shall not render this Agreement unenforceable as a whole.
Instead, the part of the Agreement found to be invalid, unenforceable, or illegal shall be amended,
modified, or interpreted to the extent possible to most closely achieve the intent of the Parties and
in the manner closest to the stricken provision.
19.17 Survival of Obligations. Cancellation, expiration, or earlier termination of this
Agreement shall not relieve the Parties of obligations that by their nature should survive such
cancellation, expiration, or termination, prior to the term of the applicable Statute of Limitations,
including without limitation warranties, remedies, or indemnities which obligation shall survive
for the period of the applicable statute( s) of limitation.
28 Proprietary and Confidential
40253870. 1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
19.18 No Public Utility. Nothing contained in this Agreement shall be construed as an
intent by Seller to dedicate the System to public use or subject itself to regulation as a "public
utility" (as such term may be defined under any applicable law).
19 .19 Service Contract. The Parties acknowledge and agree that, for accounting and tax
purposes, this Agreement is not and shall not be construed as a capital lease and, pursuant to
Section 7701(e)(3) of the Internal Revenue Code, this Agreement is and shall be deemed to be a
service contract for the sale to Purchaser of energy produced at an alternative energy facility.
19.20 Forward Contract. The Parties acknowledge and agree that the transaction
contemplated under this Agreement constitutes a "forward contract" within the meaning of the
United States Bankruptcy Code, and the Paiiies further acknowledge and agree that each Party is
a "forward contract merchant" within the meaning of the United States Bankruptcy Code.
19 .21 Publicity. The Parties agree that each may, from time to time, issue press releases
regarding the System, provided, however that neither Paiiy shall issue a press release regarding
the System without the prior consent of the other Party, which consent shall not be unreasonably
withheld or delayed. The Parties shall cooperate with each other in connection with the issuance
of such press releases. Purchaser shall not make claims of using solar energy at the Premises.
Purchaser may publicize that it is serving as a host for the System and display photographs of the
System in its advertising and promotional materials, provided that such materials shall identify
Seller as the owner and developer of the System and shall be consistent with Section 3.2.
19.22 Counterparts and Facsimile Signatures. This Agreement may be executed in
counterparts, which shall together constitute one and the same agreement. Facsimile or pmiable
document format (".PDF") signatures shall have the same effect as original signatures, and each
Paiiy consents to the admission in evidence of a facsimile or photocopy of this Agreement in any
comi or arbitration proceedings between the Parties.
19 .23 Further Assurances.
(a) Additional Documents. Upon the receipt of a written request from the other
Party, each Party shall execute such additional documents, instruments, and
assurances and take such additional actions as are reasonably necessary and
desirable to carry out the terms and intent hereof. Neither Party shall
unreasonably withhold, condition, or delay its compliance with any
reasonable request made pursuant to this section.
(b) Certificates. From time to time, Purchaser shall provide within five
(5) Business Days after receipt of a written request from Seller an estoppel
certificate attesting, to the knowledge of Purchaser, to Seller's compliance
with the terms of this Agreement or detailing any known issues of
noncompliance, and making such other representations, warranties, and
accommodations reasonably requested by the recipient of the estoppel
ce1iificate.
[SIGNATURE PAGES FOLLOW]
29 Proprietary and Confidential
40253870.1 /063684.00052
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
IN WITNESS WHEREOF, the Parties have caused this Power Purchase Agreement to
be duly executed and delivered as of the Effective Date.
SELLER PURCHASER
Sunwealth LLC City of Muskegon
[S"""'""""'
By: J.~e1~
Name: Jonathan Abe
Title: CEO
40253870.1/063684.00052
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT A
DEFINITIONS
"Affiliate" means, with respect to any person or entity, any other person or entity
controlling, controlled by or under common control with such first person or entity. For purposes
of this definition and this Agreement, the term "control" (and correlative terms) means the right
and power, directly or indirectly through one or more intermediaries, to direct or cause the
direction of substantially all of the management and policies of a person or entity through
ownership of voting securities or by contract, including, but not limited to, the right to fifty percent
(50%) or more of the capital or profits of a partnership or, alternatively, ownership of fifty percent
(50%) or more of the voting stock of a corporation.
"Agreement" has the meaning set forth in the Preamble.
"Business Day" means any day except a Saturday, Sunday, or a Federal Reserve Bank
holiday.
"Commercial Operation Date" means the date when the System is "placed in service" for
purposes of Section 48 of the Internal Revenue Code.
"Confidential Information" has the meaning set fmih in Section 19.1.
"Contract Term" has the meaning set fmih in Section 2.1.
"Contract Year" means the twelve (12) month period commencing on the Commercial
Operation Date, and each consecutive twelve (12) month period thereafter during the Contract
Term.
"Delivery Point" means the point of interconnection between the System and the Premises'
internal electrical system.
"Downgrade Event" means Purchaser at any time (a) if rated by one of the following rating
agencies, is rated less than (i) Baa3 by Moody's Investors Service, Inc. (or its successor), or (ii)
BBB- by Standard and Poor's Rating Services, a division of McGraw-Hill (or its successor), or
(iii) "investment grade" by any other nationally recognized rating agency, or (b) fails to maintain
Performance Assurance.
"Effective Date" has the meaning set fotih in the Preamble.
"Energy" means electrical energy that is generated by the System, expressed in kWh.
"Energy Output" means the Energy generated by, or attributable to, a System and
measured at the applicable Point of Delivery, as alternating current in whole kilowatt-hours
(kWr). For the avoidance of doubt the Energy Output does not include RECs, Other Credits or
Tax Credits.
Exhibit A - 1
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
"Energy Price" means, for any Contract Year, the applicable amount set forth on Exhibit D.
"Environmental Attributes" means any and all environmental benefits, air quality credits,
emissions reductions, offsets, and allowances, howsoever entitled, attributable to energy
generation by a renewable fuel source and its displacement of energy generation by conventional,
nonrenewable, and/or carbon-based fuel sources. Environmental Attributes include, but are not
limited to, (1) any benefit accruing from the renewable nature of the generation's motive source;
(2) 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 other than those that are
regulated pursuant to state or federal law); (3) any avoided emissions of carbon dioxide (CO2),
methane (CH4), and other greenhouse gases that have been determined by the United Nations
Intergovernmental Panel on Climate Change to contribute to the actual or potential threat of
altering the Earth's climate by trapping heat in the atmosphere; (4) any property rights that may
exist with respect to the foregoing attributes howsoever entitled; (5) any green tags, renewable
energy credits or similar credits, including RECs created pursuant to applicable law ("RECs"); and
(6) any reporting rights to these avoided emissions, including, but not limited to, green tag or REC
reporting rights. Environmental Attributes do not include (i) any energy, capacity, reliability, or
other power attributes, (ii) Environmental Incentives, or (iii) emission reduction credits
encumbered or used for compliance with local, state, or federal operating and/or air quality permits.
"Environmental Incentives" means any and all financial incentives, from whatever source,
related to the construction, ownership, or operation of the System. Environmental Incentives
include, but are not limited to, (i) federal, state, or local tax credits; (ii) any other financial
incentives in the form of credits, reductions, or allowances that are applicable to a local, state, or
federal income taxation obligation; and (iii) other grants, rebates, or subsidies, including utility
incentive programs. Environmental Incentives do not include Environmental Attributes.
"Estimated Production" has the meaning set forth in Section 3.l(c).
"Exercise Period" has the meaning.set forth in Section 7.2.
"Financing Party" has the meaning set forth in Section 14.1.
"Force Majeure" means any act or event that delays or prevents a Party from timely
performing obligations under this Agreement or from complying with conditions required under
this Agreement if such act or event, despite the exercise of reasonable efforts, cannot be avoided
by, and is beyond the reasonable control of and without the fault or negligence of, the Party relying
thereon as justification for such delay, nonperformance, or noncompliance, which includes,
without limitation, an act of God or the elements, site conditions, extreme or severe weather
conditions, explosion, fire, epidemic, landslide, mudslide, sabotage, terrorism, lightning,
emihquake, flood, volcanic eruption or similar cataclysmic event, an act of public enemy, war,
blockade, civil insurrection, riot, civil disturbance, or strike or other labor difficulty caused or
suffered by a Party or any third party beyond the reasonable control of such Party. However,
financial cost alone or as the principal factor shall not constitute grounds for a claim of Force
Majeure, nor does the regular exercise of regulatory discretion by a Governmental Authority or
the Utility.
Exhibit A - 2
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
"Governmental Authorities" means any national, state, regional, municipal or local
government, any political subdivision thereof, or any governmental, quasi-governmental,
regulatory, judicial or administrative agency, authority, commission, board or similar entity having
jurisdiction over the System or its operations, the Premises or otherwise over any Patiy.
"Host" has the meaning set forth in the Preamble.
"Independent Appraiser" has the meaning set forth in Section 7.2.
"Interest Rate" means an annual rate equal to the lesser of (a) twelve (12) percent and (b)
the highest interest rate permitted by applicable law.
"kWh" means kilowatt-hours.
"Letter of Credit" means one or more irrevocable, transferable standby letters of credit
issued by either a U.S. commercial bank or a foreign bank with a U.S. branch, with such bank
having a credit rating of at least "A-" from S&P or "A3" from Moody's, in a form acceptable to
Seller.
"Net Metering Credits" means the credits applied to Purchaser's bill by the Utility in
respect of Energy produced by the System and allocated to Purchaser under this Agreement.
"Net Metering Rules" means the rules established pursuant to Ohio law and regulation as
well as applicable utility rules.
"Notice to Proceed Date" means the date on which physical work of a significant nature
relating to the installation of the System on the Premises commences.
"Patty" and "Parties" have the meanings set forth in the Preamble.
"Performance Assurance" means collateral in an amount as reasonably determined by
Seller and in a form (e.g., cash, Letter(s) of Credit, guaranty, or other security or credit assurance)
reasonably acceptable to Seller.
"Person" means any individual, corporation (including, without limitation, any non-stock
or non-profit corporation), limited liability company, partnership, joint venture, association, joint-
stock company, trust, unincorporated organization, or governmental body.
"Point of Delivery" means, at any given Site, the physical points at which electrical
interconnection are made between the System and the Purchaser's Electrical Systems.
"PP A Damages" has the meaning set fo1ih in Section 13 .4.
"Premises" means the leased real property under the Site Lease, located at:
Mercy Health Arena 470 W. Western, Muskegon, MI 49440
"Price Determination" has the meaning set forth in Section 7.2.
Exhibit A - 3
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
"Prudent Operating Practice" means the practices, methods, and standards of professional
care, skill, and diligence engaged in or approved by a significant portion of the electric power
industry for solar energy facilities of similar size, type, and design as the System that, in the
exercise of reasonable judgment, in light of the facts known at the time, would have been expected
to accomplish results consistent with applicable law, reliability, safety, environmental protection,
applicable codes, and standards of economy and expedition.
"Purchase Option" has the meaning set forth in Section 7 .1.
"Purchase Price" has the meaning set forth in Section 7.2.
"Purchase Option Dates" has the meaning set fo1ih in Section 7 .1.
"Purchaser" has the meaning set f01ih in the Preamble.
"Purchaser Event of Default" has the meaning set f01ih in Section 13.3.
"Purchaser Indemnified Parties" has the meaning set f01ih in Section 17.1.
"Seller" has the meaning set forth in the Preamble.
"Seller Event of Default" has the meaning set f01ih in Section 13 .1.
"Seller Indemnified Pmiies" has the meaning set forth in Section 17.2.
"Site Lease" has the meaning set forth in the Recitals.
"System" means the solar energy generating system described in Exhibit B.
"Transfer Date" has the meaning set forth in Section 7.3.
"Utility" means Consumers Energy.
Exhibit A - 4
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT B
DESCRIPTION OF THE SYSTEM
Description of Site:
The real property located at City of Muskegon.
Description of System:
Equipment Name
Manufacturer/ Model# Specifications Description
And Location
Modules:1,152/Hanwha
Q Cells 390W
Trinity Health Arena
470 W. Western 449.28kW DC • Ballasted Roof mount system
Inverters: 4/ SE lO0kW
Muskegon, Ml 49440
Racking: Aerocompact
Exhibit B - 1
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT C
ESTIMATE SYSTEM PRODUCTION
*Note: these values are estimates only and actual production may vary. Seller does not guarantee any
level of actual production.
SYSTEM PERFORMANCE
Year Solar (kWh)
1 529,830
2 527,287
3 524,756
4 522,237
5 519,730
6 517,236
7 514,753
8 512,282
9 509,823
10 507,376
11 504,941
12 502,517
13 500,105
14 497,704
15 495,315
16 492,938
17 490,572
18 488,217
19 485,874
20 483,541
21 481,220
22 478,910
23 476,612
24 474,324
25 472,047
Exhibit C - 1
DocuSign Envelope ID: E8771C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT D
ENERGY PRICE
Commencing on the Commercial Operation Date of the System, the price for the Energy
Output produced and delivered by the System in the first year following the applicable
Commercial Operation Date shall not exceed $0.115/kWh and such amount shall remain
constant each subsequent year as follows:
Contract Year Energy Price ($/kWh)
1 0.115
2 0.115
3 0.115
4 0.115
5 0.115
6 0.115
7 0.115
8 0.115
9 0.115
10 0.115
11 0.115
12 0.115
13 0.115
14 0.115
15 0.115
16 0.115
17 0.115
18 0.115
19 0.115
20 0.115
21 0.115
22 0.115
23 0.115
24 0.115
25 0.115
Exhibit D - 1
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT E
INSURANCE REQUIREMENTS
(a) Seller shall, at its sole cost and expense obtain and maintain for the duration of this
Agreement, the following insurance policies:
(i) Workers' compensation insurance, with limits of liability at least equal to the
statutory requirements therefor;
(ii) Employer's liability insurance of not less than one million dollars ($1,000,000);
(iii) Commercial general liability insurance against liability for injury to or death of any
Person, contractual liability, or damage to property in connection with the construction, use,
operation or condition of the System of not less than $2,000,000 combined single limit per
occurrence. Purchaser shall be named as an additional insured under this liability insurance;,
provided however that Seller shall in no event be obligated to repair or replace Purchaser's
buildings or Premises;
(iv) Automobile liability insurance that complies with the requirements of the
Michigan No fault law with residual liability limit of at least $2,000,000 combined single limit for
bodily injury and properly damage. There shall be coverage for owned, hired, and non-owned
vehicles.
(v) "Completed value" Builder's risk insurance with a limit of at least 100% of the
total aggregate value for the System's construction.
(vi) Excess or umbrella liability insurance with a limit of at least $2,000,000.
(vii) Customary property insurance in the amount of the full replacement value of the
equipment constituting the System and any other improvements installed on the Site by Seller.
(viii) Seller may satisfy the insurance requirements contained in this Agreement though
any combination of primary and/or excess coverage; and
(ix) Seller may elect to self-insure any or all of the insurance requirements contained in
this Agreement, with the approval of Purchaser. In such event, Seller shall submit to Purchaser a
Certificate of Self-Insurance, including evidence of financial responsibility.
Seller shall name "the City of Muskegon", its employees, Board Members, and officers as
additional insureds on all liability coverage other than workers compensation. The coverage
granted to the Purchaser as an additional insured shall apply on a primary basis. The Purchaser's
coverage shall be excess. Deductibles and retentions shall be clearly stated on any certificate of
insurance and shall be the responsibility of the respective party. Unless otherwise provided herein,
all insurance coverage is to be on an occurrence basis rather than claims made basis.
Exhibit E - 1
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
Upon request of Purchaser, Seller shall furnish a current certificate or certificates of insurance for
the insurance then in place evidencing the existence of the required coverage and stating that
Purchaser will be notified in writing thirty (30) days prior to cancellation, material change or non-
renewal of such insurance.
Seller shall cause the insurance policies obtained by it to provide that the insurance company
waives all right of recovery by way of subrogation against Purchaser in connection with any
damage covered by any policy. To the extent permitted by law, neither Party shall be liable to the
other for any damage exceeding applicable policy limits that are caused by fire or any of the risks
insured against under the prope1iy insurance policy required by this Agreement or that would have
been covered by the property insurance policy required to be carried under this Agreement.
Seller hereby releases Purchaser, its trustees, officers, agents, representatives, officers, employees
and contractors, from any claims for damage to any person or to the Premises and other
improvements located on the Premises, to the fixtures, personal property, Seller's improvements,
and alterations of Seller in or on the Premises and the improvements located on the Premises that
are caused by or result from risks insured against under any insurance policies carried by Seller
under this Agreement, or that would have been covered by any insurance policy required to be
carried under this Agreement.
(b) Purchaser shall obtain and maintain the following insurance policies:
(i) Workers' compensation insurance, with limits of liability at least equal to the
statutory requirements therefor;
(ii) Employer's liability insurance of not less than one million dollars ($1,000,000);
(iii) Commercial general liability insurance or its equivalent against liability for injury
to or death of any Person or damage to property in connection with the use, operation or condition
of the Premises of not less than two million dollars ($2,000,000) combined single limit per
occurrence and annual aggregate. Seller shall be named as an additional insured under this liability
insurance; provided, however, that Purchaser shall in no event by obligated to repair or replace
Seller's equipment, buildings, or Premises;
(iv) Purchaser may satisfy the insurance requirements contained in this Agreement
though any combination of primary and/or excess coverage; and
(v) Purchaser may elect to self-insure any or all of the msurance requirements
contained in this Agreement.
Exhibit E - 1
DocuSign Envelope ID: E8771 C7C-F2E4-4912-9C48-4F5F6C7FA837
EXHIBIT F
PURCHASER TERMINATION PAYMENT
Termination
Year
Payment
Year 1 $1,596,805
Year 2 $1,448,476
Year 3 $1,287,769
Year4 $1,126,514
Year 5 $964,761
Year6 $480,361
Year 7 $464,631
Year 8 $445,029
Year 9 $424,846
Year 10 $404,057
Year 11 $382,655
Year 12 $360,569
Year 13 $341,945
Year 14 $329,216
Year 15 $311,473
Year 16 $293,178
Year 17 $269,608
Year 18 $244,487
Year 19 $218,677
Year 20 $192,071
Year 21 $164,593
Year22 $136,204
Year 23 $106,872
Year 24 $80,627
Year 25 $54,934
Exhibit F - 1