Attachment C to Solar RFP (01597001xA9E76)PCOR1.pdf

POWER PURCHASE AGREEMENT

By and Between

[NAME OF SOLAR TENANT]

(“Seller”)

And

ST. JOHNS PUBLIC SCHOOLS,

COUNTIES OF CLINTON AND GRATIOT, STATE OF MICHIGAN

(“Purchaser”)

Dated January [__], 2020

POWER PURCHASE AGREEMENT

This Power Purchase Agreement (the “Agreement”) is made and entered into as of this __ day of January, 2020 (the “Effective Date”), by and between [NAME OF SOLAR TENANT], (“Seller”), a __________Limited Liability Company with a principal place of business at ______________________, and St. Johns Public Schools (“Purchaser”), a Michigan general powers school district operating under the Revised School Code and located at 501 West Sickels Street, St. Johns, Michigan 48879. Seller and Purchaser are hereinafter referred to individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Seller desires to construct, own and operate [DESCRIPTION OF SYSTEM AND APPROXIMATE WATTAGE] (each a “System” and collectively, the “Systems,” as further defined in Article I of this Agreement) upon three real property locations owned by the Purchaser and set forth in Exhibit B (each, a “Site” and collectively, the “Sites”);

WHEREAS, Seller has entered into a Lease Agreement with Purchaser, as of the same date of this Agreement, a true and correct copy of which is attached hereto as Exhibit D (the “Lease”); and

WHEREAS, Seller desires to sell and deliver to Purchaser, and Purchaser desires to purchase and receive from Seller, all electricity that may be generated by the Systems for the term of this Agreement and otherwise on terms and subject to the conditions provided herein.

NOW THEREFORE, in consideration of the mutual obligations and undertakings herein contained, and intending to be legally bound hereby, the Parties hereto agree as follows:

Article I. DEFINITIONS; 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 Article I; (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 Articles, Sections, Schedules, Annexes, Appendices or Exhibits hereof; (d) all references to a particular 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 particular 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.

Certain terms in this Agreement shall be defined as follows:

“Affiliate” of any named person or entity means any other person or entity that controls, is under the control of, or is under common control with, the named entity. The term “control” (including the terms “controls”, “under the control of and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management of the policies of a person or entity, whether through ownership interest, by contract or otherwise.

“Applicable Law” means, with respect to any Person, any Site, any System or this Agreement, any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, registration, license, franchise, permit, authorization, guideline, consent, determination or requirement of any Governmental Authority having jurisdiction over such Person or its property, any Site, any System or this Agreement enforceable at law or in equity, including the interpretation and administration thereof by such Governmental Authority. For the avoidance of doubt, Applicable Law shall be governed, construed and enforced in accordance with the laws of the State of Michigan, without regards to its conflict of laws rules.

“Bankruptcy Event” means with respect to a Person, that such Person (a) files a petition or otherwise commences, or authorizes the commencement of, a proceeding or cause under any bankruptcy, insolvency, receivership or similar law for the protection of creditors, or (b) has such a petition filed or proceeding commenced against it, which remains undismissed for ninety (90) days, or (c) files an answer or pleading admitting or failing to contest the material allegations of any such petition, or (d) makes a general assignment or general arrangement for the benefit of its creditors, or (e) takes any action for its winding up, liquidation or dissolution, or (f) is otherwise adjudged bankrupt or insolvent under any bankruptcy, insolvency, receivership or similar law for the protection of creditors, or (g) consents to any of the actions described in clauses (a) through (f) of this definition being taken against it.

“Business Day” means any day except a Saturday, Sunday, a Federal Reserve Bank holiday, or a holiday recognized by the State of Michigan. A Business Day shall open at 8:00 a.m. and close at 5:00 p.m. local time for the relevant party’s principal place of business. The relevant party, in each instance, shall be the party from whom the notice, payment or delivery is being sent.

“Change in Law” means (a) the enactment, adoption, promulgation, modification or repeal after the Effective Date of any Applicable Law; (b) the imposition of any material conditions on the issuance or renewal of any applicable permit after the Effective Date of this Agreement (notwithstanding the general requirements contained in any applicable Permit at the time of application or issue to comply with future laws, ordinances, codes, rules, regulations or similar legislation), or (c) a change in any utility rate schedule or tariff approved by any Governmental Authority which in the case of any of (a), (b) or (c), establishes requirements affecting owning, supplying, constructing, installing, operating or maintaining the System, or other performance of the Seller’s obligations hereunder and which has a material adverse effect on the cost to Seller of performing such obligations; provided, that a change in federal, state, county or any other tax law after the Effective Date of this Agreement shall not be a Change in Law pursuant to this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Commercial Operation” means the satisfaction of the Conditions set forth in Section 7.04 with respect to a System.

“Commercial Operation Date” or “COD” means, on a per System basis, the date on which a System achieves Commercial Operation. For the avoidance of doubt, each of the six (6) Sites will have independent Commercial Operation Dates.

“Commercial Operation Year” means any consecutive twelve (12) month period during the Term of this Agreement, commencing with the first day of the calendar month following the Commercial Operation Date of the last System to achieve Commercial Operation or any of its anniversaries.

“Electric Metering Device(s)” means metering equipment, and data processing equipment used to measure, record, or transmit data to determine the Energy Output. Electric Metering Devices include the metering current transformers and the metering voltage transformers.

“Emergency” means any occurrence or combination of occurrences that compromises or, in the judgment of a reasonable person consistent with Good Industry Practice, may compromise the lawful and/or safe operation of a System or Purchaser’s Electrical System, as applicable, or threatens the health and safety of persons or damage to property.

“Energy” means electric energy (three-phase, 60-cycle alternating current, expressed in kilowatt-hours).

“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 (kWh). For the avoidance of doubt, the Energy Output does not include RECs, Other Credits or Tax Credits.

“Fair Market Value” means the price, as determined by the mutual agreement of the Parties, to be paid on the date of any purchase, that would be paid in an arm’s length, free market transaction, in cash, between an informed, willing seller and an informed, willing buyer (who is neither a lessee in possession nor a used equipment or scrap dealer), neither of whom is under compulsion to complete the transaction, taking into account, among other things, the age and performance of a System and advances in solar technology; provided that installed equipment shall be valued on an as-installed basis. Costs of removal from a current location shall not be a deduction from the valuation. If the Parties cannot agree on a Fair Market Value price, they shall mutually select a nationally recognized independent appraiser with experience and expertise in the solar photovoltaic industry to value a System . In the absence of fraud, bias, or manifest error, the valuation determined by the independent appraiser is the Fair Market Value and will be binding. The costs of the appraisal shall be borne by the Seller. If the Parties are unable to agree on the selection of an appraiser, each Party will select an appraiser of its choice and the two appraisers will mutually select an independent appraiser to act as the appraiser who determines Fair Market Value.

“Financing Part(ies)” means any and all Persons or successors or assignees thereof lending money or extending credit to Seller or an Affiliate of Seller, or investing equity ((including tax equity) in Seller or an Affiliate of Seller: (a) for the construction, term or permanent financing of a System; (b) for working capital or other ordinary business requirement of a System (including but not limited to the maintenance, repair, replacement or improvement of a System); (c) for any development financing, bridge financing, credit enhancement, credit support or interest rate protection in connection with a System; (d) for the Seller’s operation of a System; or (e) for the purchase of a System and related rights and obligations of Seller.

“Good Industry Practice” means the practices, methods and acts (including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electric generation industry, or the electric industry, as applicable, during the relevant time period, (a) with respect to Seller, in the operation and maintenance of generating equipment similar in size and technology to the System;

and (b) with respect to Purchaser, in the operation and maintenance of electric systems similar to Purchaser’s Electrical Systems, that, at a particular time, in the exercise of reasonable judgment in light of the facts known or that should have been known at the time a decision was made, would have been expected to accomplish the desired result in a manner consistent with law, regulation, reliability, safety, environmental protection, economy and expedition. For the avoidance of doubt, Good Industry Practice is not intended to be limited to the optimum practice, method and standards to the exclusion of all others, but rather is intended to include acceptable practices, methods and standards generally accepted in the industry.

“Governmental Authority” means any federal, state, local or municipal governmental body; any governmental, quasi-governmental, regulatory or administrative agency, commission (including, but not limited to, the Michigan Public Service Commission), body or other authority exercising or entitled to exercise any administrative, executive, judicial, legislative, policy, regulatory or taxing authority or power; or any court or governmental tribunal.

“Hazardous Substance” means any chemical, waste or other substance; (a) which now or hereafter becomes defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “pollution,” “pollutants,” “regulated substances,” “petroleum products,” or words of similar import under any laws pertaining to the environment, health, safety or welfare, (b) which is declared to be hazardous, toxic, or polluting by any Governmental Authority, (c) exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Authority, (d) the storage, use, handling, disposal or release of which is restricted or regulated by any Governmental Authority, or (e) for which remediation or cleanup is required by any Governmental Authority.

“Interconnection Agreement” means, with respect to a System, that certain Interconnection Agreement to be entered into between Seller or Purchaser, as applicable, and the applicable Utility.

“kW” shall mean a kilowatt DC of capacity.

“kWh” means kilo-watt hour.

“Material Contracts” means any written contract, agreement, license, sublease, lease, easement, sublease, mortgage, instrument, guarantee, commitment, undertaking or other similar arrangement, whether expressed or implied, which either; (i) creates a right to lease, use or occupy real estate which is necessary for the operation of a System according to Good Industry Practice; or (ii) provides rights or benefits for the Seller such that the consequences of a default under or termination of such an arrangement would reasonably be expected to have a material adverse effect upon Seller’s ability to operate a System according to Good Industry Practice.

“Meter” shall mean an instrument or instruments meeting applicable Utility electric industry standards used to measure and record the volume in kWh and other required delivery characteristics of the Energy Output delivered hereunder.

“MIRECS” means the Michigan Renewable Energy Certification System and any successor organization.

“MWh” means megawatt hour.

“Operating Records” means all agreements associated with a System, operating logs, blueprints for construction, operating manuals, permits and authorizations, all warranties on equipment, and all documents, whether printed or electronic format, that the Seller uses or maintains for the operation of a System.

“Other Credits” shall mean all rights, credits (including Tax Credits), benefits, reductions, depreciation, any other reductions or other transferable indicia (other than RECs, which are expressly excluded from this definition): (i) denoting carbon offset credits or indicating generation of a particular quantity of energy from a renewable energy source by a renewable energy facility, offsets and allowances and entitlements of any kind, known or unknown at the time of this Agreement, that are or become available to Seller from the environmental attributes of a System or the generation of the Energy Output, or otherwise from the development or installation of a System or the production, sale, purchase, consumption or use of the Energy Output, including, but not limited to carbon credits, allowances and emission reduction credits and offsets and (ii) related to the capacity of a System, whether arising under federal, state or local law, international treaty, trade association membership or the like, and the right to apply for any such credits.

“Person” shall mean an individual, partnership, corporation, company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority, limited liability company or any other entity of whatever nature.

“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.

“Purchaser’s Electrical System(s)” shall be all of that equipment on the Purchaser’s side of the applicable Point of Delivery.

“Rebate” shall mean any and all incentives under any demand-side management or energy efficiency programs offered by a utility company, a third-party provider or the State of Michigan or other incentive programs offered by the State of Michigan with respect to the System at any given Site.

“RECs” shall mean those renewable energy certificates: (i) associated with the Energy Output generated by a System and purchased by Purchaser under this Agreement; and (ii) registered by Purchaser in the MIRECS or its successor. One REC represents the renewable attributes associated with 1,000 kWh of Energy Output generated by a System.

“Reporting Rights” means the right of Seller to report to any federal, state or local agency, authority or other party, including under Section 1605(b) of the Energy Policy Act of 1992 and provisions of the Energy Policy Act of 2005, or under any present or future domestic, international or foreign emissions trading program, that Seller owns the RECs, the Rebates and Other Credits associated with the System or the Energy Output.

“Scheduled Outage” means a planned interruption/reduction of a System’s generation that both (i) has been coordinated in advance between the Parties, with a mutually agreed start date and duration, and

(ii) is required for inspection, or preventive or corrective maintenance.

“Site” or “Sites” means that portion of a real estate parcel on which a System will be constructed and located, including any interests reasonably necessary for the construction, operation and maintenance of such System. The Sites are more specifically described in Exhibit B to this Agreement. When the last System achieves Commercial Operation, the Parties shall mutually agree, in writing, on a revised Attachment 1 to Exhibit B to reflect the as-built configuration of each System located on the Sites.

“System” or “Systems” means all equipment, facilities and materials, including photovoltaic arrays, DC/AC inverters, wiring, Meters, tools, and any other property now or hereafter installed, owned, operated, or controlled by Seller for the purpose of, or incidental or useful to, maintaining the use of the solar generation system and providing Energy Output to Purchaser at the Point of Delivery for the applicable site.

“Tariff” or “Utility Tariff” shall mean any tariffs required for connection for continuous feed electricity generated by the local franchise holding utility.

“Tax Credits” means any and all (i) investment tax credits, (ii) production tax credits and (iii) similar tax credits or grants under federal, state or local law relating to the construction, ownership or production of energy from a System.

“Term” means, collectively, the initial term set forth in Section 11.01 and any Additional Term, as applicable.

“Termination Value” shall mean the values set forth or described in Exhibit E to this Agreement.

“Utility” shall mean the electric utility in the area that supplies electric energy to Purchaser.

“Utility Rate” shall have the meaning set forth in Section 11.02.

Article II. SALE AND PURCHASE OF ENERGY OUTPUT; OWNERSHIP

Section 2.01 Energy Output. Beginning on the applicable Commercial Operation Date for a System and subject to the terms and conditions of this Agreement, Seller shall sell and Purchaser shall purchase all of the Energy Output produced by such System during the Term; provided, however, that the Purchaser shall not be required to purchase the Energy Output produced by a System in any given Commercial Operation Year that is in excess of the applicable Maximum Output identified in Table 1 of Exhibit B. Notwithstanding the foregoing, the Purchaser may for convenience accept excess Energy Output and pay the Seller at the applicable Utility’s buy back rate including any ancillary related costs or surcharges charged by the Utility.

Section 2.02 Price. Commencing on the Commercial Operation Date of a System, the price for the Energy Output produced and delivered by such System in the first year following the applicable Commercial Operation Date shall not exceed $[PRICE]/kWh, as identified in Exhibit A, and such amount shall increase [PERCENTAGE INCREASE] each year thereafter (each, the “Energy Rate”).

Section 2.03 Ownership of the Systems.

(a) Throughout the Term, Seller shall be the legal and beneficial owner of each System at all times, including all RECs and Other Credits, and each System shall remain the personal property of Seller and shall not attach to or be deemed a part of, or fixture to, the applicable Site.

Each of Seller and Purchaser agree that the Seller is the tax owner of each System and all tax filings and reports will be filed in a manner consistent with this Agreement.

(b) Each System shall at all times retain the legal status of personal property as defined under Article 9 of the Uniform Commercial Code. Purchaser covenants that it will use commercially reasonable efforts to place all parties having an interest in or claim of any nature on a Site on notice of the ownership of the applicable System and the legal status or classification of each of the Systems as personal property.

Article III. DELIVERY; CURTAILMENT; INSOLATION; METERING

Section 3.01 Delivery. For each System at the applicable Site, the 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.

Section 3.02 Purchaser’s Failure to Accept Delivery. On and after the applicable 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 or as provided in Section 2.01, such event shall constitute a Purchaser curtailment and be treated in accordance with Section 3.03 below.

Section 3.03 Curtailment

(a) Purchaser shall have the right to request curtailment of Energy Output upon sufficient prior written notice to Seller, and Seller shall curtail Energy Output pursuant to such request. For each of the Systems, the Parties agree Purchaser will be allotted six (6) four (4) hour curtailments per Commercial Operation Year for any reason (the “Curtailment Allotment”). The Parties agree that if the number or duration exceed the Curtailment Allotment during periods when Purchaser invokes such curtailment option (i) Purchaser shall pay to Seller liquidated damages for the Energy Output not sold that would have been due to Seller had such curtailment of Energy Output not occurred, which liquidated damages shall be calculated in the manner set forth below; and (ii) Seller shall have no obligation to remarket the Energy Output that is curtailed as a result of Purchaser invoking the Curtailment Allotment.

Subject to the provisions set forth in the Lease with respect to a relocation of a System, the remedy provided in this Section 3.03 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 Parties agree there will be no carry forward from one year to the next.

(b) Liquidated damages pursuant to this Section 3.03 shall be calculated for each hour during which delivery does not occur according to the following formula:

Price x EEO + Rebate where the above items have the following meanings:

Price = The applicable Energy Rate plus the then current contract or market price (as applicable) of the RECs and Other Credits (if applicable) for the hour or hours when delivery is not occurring as set forth in this Section 3.03.

EEO = The estimated energy output that would have been achieved during the hour or hours to which the above formula is being applied, calculated by applying the sunlight data for each such hour available from the supervisory control and data acquisition system at the applicable System to the rated output for the photovoltaic modules; provided, however, that the rated output for the photovoltaic modules shall be the manufacturer’s stated nominal output.

Rebate = The amounts or current rate, if any, of Rebates for which the Seller was not eligible as a result of delivery not occurring as set forth in this Section 3.03.

The liquidated damages set forth in this Section 3.03 are a reasonable estimate of the damages the Seller will suffer in the event of nonperformance as set forth herein and are not intended as a penalty.

Section 3.04 Insolation. Purchaser understands that unobstructed access to sunlight (“Insolation”) is essential to Seller’s performance of its obligations and a material term of this Agreement. Purchaser shall not in any way cause and, where possible, shall not in any way permit any interference with any System’s Insolation. If Purchaser becomes aware of any activity or condition that could diminish the Insolation of a System, Purchaser shall notify Seller immediately and shall cooperate with Seller in preserving such System’s existing Insolation levels. The Parties agree that reducing Insolation would irreparably injure Seller that such injury may not be adequately compensated by an award of money damages, and that Seller is entitled to seek specific enforcement of this Section 3.04 against Purchaser.

For the avoidance of doubt, Purchasers responsibility for insolation is not a duty to perform maintenance but to not affirmatively cause or fail to report matters affecting Insolation.

Section 3.05 Electric Metering Devices.

(a) All Electric Metering Devices used to determine the Energy Output made available to Purchaser by Seller under this Agreement and to monitor and coordinate operation of a System shall be owned, installed, and maintained at no cost to Purchaser. Electric Metering Devices shall be located at the Point of Delivery. Seller shall provide Purchaser access to all Electric Metering Devices for all purposes necessary to perform under this Agreement and shall provide Purchaser the reasonable opportunity to be present at any time any Electric Metering Devices are to be inspected and tested or adjusted in accordance with the applicable Interconnection Agreement. Seller shall provide Purchaser with all authorizations necessary to have access to the Electric Metering Devices. Purchaser shall have the annual right to inspect, audit and or test Electric Metering Device accuracy.

(b) Monitoring. Seller shall install and maintain at least one Electric Metering Device on each System at the Point of Delivery which shall gather real time telemetry data and transmit such data on a periodic basis, not less than every fifteen minutes. Seller shall provide Purchaser with authorizations necessary to have access to the monitoring data.

(c) 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 Party 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 Party 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 Party 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 Party. If requested in writing, the installing Party shall provide copies of any inspection or testing reports to the requesting Party.

(d) Defective or Inaccurate Meters. If any Electric Metering Devices, or Back-Up Metering, are found to be defective or inaccurate, they shall be adjusted, repaired, replaced, and/or recalibrated as near as practicable to a condition of zero error by the Party owning such defective or inaccurate device and at that Party’s expense.

(e) Net Metering. Seller shall deliver all Energy Output generated by a System to Purchaser at the applicable Delivery Point. Purchaser shall be responsible for delivery of any Energy Output generated by a 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.

Section 3.06 Adjustment for Inaccurate Meters. If an Electric Metering Device, or Back-Up Metering, fails to register, or if the measurement made by an Electric Metering Device, or Back-Up Metering, is found upon testing to be inaccurate by two percent (2.0%) or more, an adjustment shall be made correcting all measurements by the inaccurate or defective Electric Metering Device, or Back-Up Metering, for both the amount of the inaccuracy and the period of the inaccuracy, in the following manner:

(a) In the event that the Electric Metering Device is found to be defective or inaccurate, the Parties shall use Back-up Metering, if installed, to determine the amount of such inaccuracy, provided, however, that Back-Up Metering has been tested and maintained in accordance with the provisions of this Article. If Back-Up Metering is installed on the low side of Seller’s step-up transformer, the Back-Up metering data shall be adjusted for losses, if applicable. In the event that Seller did not install Back-Up metering, or Back-Up Metering is also found to be inaccurate by two percent (2.0%) or more, the Parties shall estimate the amount of the necessary adjustment on the basis of deliveries of Energy Output from the System and to the Point of Delivery during periods of similar operating conditions when the Electric Metering Device was registering accurately. The adjustment shall be made for the period during which inaccurate measurements were made.

(b) In the event that the Parties cannot agree on the actual period during which the inaccurate measurements were made, the period during which the measurements are to be adjusted shall be the shorter of (i) the last one-half of the period from the last previous test of the Electric Metering Device to the test that found the Electric Metering Device to be defective or inaccurate, or (ii) the one hundred eighty (180) days immediately preceding the test that found the Electric Metering Device to be defective or inaccurate.

(c) To the extent that the adjustment period covers a period of deliveries for which payment has already been made by Purchaser, Purchaser shall use the corrected measurements as determined in accordance with this Article to re-compute the amount due for the period of the inaccuracy and shall subtract the previous payments by Purchaser for this period from such re-computed amount. If the difference is a positive number, the difference shall be paid by Purchaser to Seller; if the difference is a negative number, that difference shall be paid by Seller to Purchaser, or if the Parties agree, may take the form of an offset to payments due Seller by Purchaser. Payment of such difference by the owing Party shall be made not later than thirty

(30) days after the owing Party receives notice of the amount due, unless otherwise agreed by the Parties.

ARTICLE IV. SITE AND SYSTEM MAINTENANCE; SYSTEM RELIABILITY

Section 4.01 Site and System Maintenance and Repair. All maintenance shall be conducted in accordance with Good Industry Practices, and shall include all manufacturer’s recommended maintenance.

(a) Site Maintenance and Repair. Each Party’s obligations with respect to Site maintenance and repair shall be as set forth in the Lease.

(b) System Maintenance and Repair. Seller shall be responsible for System maintenance and repairs up to but not including the Purchaser’s side of the Point of Delivery. Seller shall properly maintain in full working order all of Seller’s electric supply or generation equipment.

Seller shall promptly notify Purchaser of any matters of which it is aware pertaining to any damage to or loss of use of a System or that could reasonably be expected to adversely affect a System. Seller shall repair any damage to the System arising out of any circumstance, other than the negligent acts or omissions or malfeasance of the Purchaser’s agents.

Section 4.02 System Reliability and Uptime. Beginning on the Commercial Operation Date of a System, the Energy Output delivered to Purchaser shall be not less than eighty-five percent (85%) of the aggregate System Expected Energy Production identified in Table 2 of Exhibit B (the "Guaranteed Delivered Energy"), 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) Purchaser exceeds the Curtailment Allotment, 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 Delivered Energy quantity 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 Delivered Energy quantity 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.

Article V. PURCHASER’S OPTION TO PURCHASE THE SYSTEM

Section 5.01 Option to Purchase During Term. Provided that no Purchaser Event of Default has occurred and is continuing, on the tenth (10th) anniversary of the Commercial Operation Date of the last System to achieve Commercial Operation, Purchaser shall have the option to purchase all, but not less than all of, the Systems from Seller at a price equal to the higher of (i) the Fair Market Value of all the Systems and (ii) the Termination Value of all of the Systems. Purchaser shall notify Seller in writing of its intent to exercise its purchase option under this Section 5.01 no later than ninety (90) days prior to the tenth (10th) anniversary of the Commercial Operation Date of the last System to achieve Commercial Operation.

Section 5.02 Option to Purchase at End of Term. Provided that Purchaser has fulfilled all obligations to Seller under this Agreement, at the expiration of the Term of this Agreement, Purchaser shall have the option to purchase all, but not less than all of, the Systems from Seller at a price equal to the Fair Market Value of all of the Systems. Purchaser shall notify Seller in writing of its intent to exercise its purchase option under this Section 5.02 no later than ninety (90) days prior to the end of the Term.

Section 5.03 Option to Purchase upon Site Sale or Abandonment. If, after the fifth (5th) anniversary of the Commercial Operation Date of the last System to achieve Commercial Operation, Purchaser abandons or sells a school facility to which a single System is interconnected, Purchaser shall, in such event, have the option to terminate this Agreement in part with respect to the affected System and purchase the affected System from Seller at a price equal to the higher of (i) the Fair Market Value of the affected System and (ii) the net present value of the future expected revenue from the sale of Energy, RECs and Other Credits generated by or associated with the affected System that would have been realized by Seller between the date of such termination and the end of the Term, plus any costs or expenses associated with such purchase.

Section 5.04 Procedure. If Purchaser desires to exercise the option set forth in Section 5.01, Section

5.02 or Section 5.03, the Parties will promptly agree to a date for the closing of the purchase, not less than sixty (60) days after such confirmation and not more than one hundred and twenty (120) days after such confirmation at which closing, Seller and Purchaser, as the case may be, shall execute and/or deliver the following documents: (a) all documents necessary to cause title to the Systems to pass to Purchaser, free and clear of any liens immediately subsequent to the purchase; (b) assignment and assumption agreements, with all necessary consents thereto, causing the assignment of Seller’s rights to Purchaser and assumption by Purchaser of the obligations of Seller under all Material Contracts with respect to the Systems; (c) assignment of all warranties for the Systems to Purchaser, to the extent that such warranties are assignable; and (d) evidence of the satisfaction of any loans or other obligations of Seller to any lender that provided financing in connection with the Systems. The Systems shall be sold to Purchaser “as-is, where-is,” without further warranty.

Article VI. CONDITIONS PRECEDENT TO OBLIGATIONS

Section 6.01 Conditions Precedent. The respective rights and obligations of the Parties under this Agreement are expressly conditioned on the completion of the satisfaction in full (or written waiver) of all of the following conditions, which the Parties shall pursue diligently and in good faith:

(a) Seller shall have completed physical inspection of the Sites upon which the Systems will be constructed, including, if applicable, geotechnical work, and real estate due diligence to confirm the suitability of each Site for the applicable System;

(b) Seller shall have received approval of (a) this Agreement and (b) the applicable construction agreements (if any) for the Systems by Seller’s Financing Parties;

(c) Seller shall have received confirmation that the System will qualify for all applicable RECs and Other Credits;

(d) Seller shall have received all necessary tax exemptions from local, state, and federal taxing authorities, including confirmation from the applicable property tax collecting unit that the real estate on which the Site is located remains exempt from taxation under MCL 380.1141;

(e) Acknowledging that Purchaser is exempt from local zoning regulations, all necessary land use, building, and environmental permits and approvals from the Utility and Governmental Authorities required to construct, install and operate the Systems (“Permits and Approvals”) shall be received or issued;

(f) Through the Lease, Seller shall have control of the Sites upon which the Systems are to be located, providing Seller with all necessary real property rights to construct, install and operate the Systems on the Sites;

(g) Execution of all necessary agreements for interconnection of the Systems to the electric distribution systems; and

(h) Establishing financing arrangements on satisfactory terms.

Section 6.02 Early Termination Date. If all of the conditions precedent above are not satisfied for each System by a date that is six (6) months from the Effective Date (the “Early Termination Date”), the Parties will attempt in good faith to negotiate new dates for the satisfaction of the failed conditions. If the Parties are unable to negotiate new dates, then either Party may terminate this Agreement without penalty by providing the other Party with written notice.

Article VII. CONSTRUCTION AND COMMERCIAL OPERATION

Section 7.01 Construction.

(a) Seller shall install or cause to be installed the Systems in a good and workmanlike manner free from defects, which, upon the Commercial Operation Date, such Systems will have an aggregate approximate nameplate generating capacity rating as shown in Exhibit B.

(b) Promptly following the Effective Date, Seller shall commence pre-installation activities relating to the System, which shall include (a) thoroughly examining the Site to confirm its capability of hosting the System, (b) calling the MISS DIG notification system to inform utility and telecommunication providers of ground penetrations, and obtaining financing for the System on terms acceptable to the Seller in its sole discretion;

(c) Seller shall use commercially reasonable efforts to cause the installation of all of the

Systems to be completed and the Systems to achieve a Commercial Operation Date on or before [COMPLETION DATE] (the “Target COD”). In the event that one or more of 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 any affected 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 liquidated damages set forth in this Subsection 7.01(c) are a reasonable estimate of the damages the Seller will suffer in the event of nonperformance as set forth herein and are not intended as a penalty). The Parties may agree to amend this Agreement to revise the Target COD (the “Revised Target COD”). In the event that the Systems have 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.

(d) Seller and Purchaser hereby agree and acknowledge that Purchaser shall have no ownership interest in the Systems and no responsibility for its operation, maintenance, or repair (unless such repairs are made necessary from damages arising out of

Purchaser’s agents’ negligent acts or omissions or malfeasance). Neither Purchaser nor any party related thereto shall have the right or be deemed to operate the Systems for purposes of Section 7701(e)(4)(A)(i) of the Code.

Section 7.02 Interconnection. 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 each System to the applicable Point of Delivery for each System. Seller shall, at no cost to Purchaser, apply for and pay all application fees associated with the interconnection of each System to Purchaser’s Electrical System at the Site. Seller shall also be responsible to procure and pay for all equipment necessary to interconnect each System to Purchaser’s Electrical System. Purchaser shall be responsible to pay for other costs related to the interconnection of a System to the Purchaser’s Electrical System, including (a) any upgrades to Purchaser’s Electrical System or the Utility’s distribution system that are required for Seller to interconnect the System to Purchaser’s Electrical System and (b) the costs of any studies that may be required by the Utility with respect to such upgrades.

Section 7.03 Progress Reports. Commencing on the Effective Date, Seller shall, for each System, submit to Purchaser, on a monthly basis until such System’s Commercial Operation Date is achieved, written progress reports that inform Purchaser in reasonable detail of the current status of each construction milestone for each Site.

Section 7.04 Conditions to Commercial Operation. Seller will notify Purchaser in writing when each System has achieved Commercial Operation. This notification shall provide documented evidence of the satisfaction or occurrence of all of the conditions set forth in this Section 7.04 (“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 13.10. The Conditions are:

(a) The System is capable of delivering Energy Output to the Point of Delivery;

(b) Seller has provided a list of the System’s major equipment, showing the make, model, and nameplate capacity of such equipment, and has certified the nameplate capacity of the System;

(c) The System has demonstrated the reliability of its communications systems; and

(d) 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.

Section 7.05 Compliance.

(a) Seller’s Obligation. Seller is responsible for obtaining and constructing, operating, and maintaining the System in compliance with any and all applicable permits or authorizations needed from any Governmental Authority or Utility for construction, operations, maintenance, and decommissioning of the Systems with the exception of those permits and authorizations necessary for the Purchaser to interconnect the Systems to Purchaser’s Electrical System. Seller shall at all times comply with all applicable laws, ordinances, rules, and regulations applicable to it in the performance of this Agreement.

(b) Notification. Seller shall promptly notify Purchaser in writing of any actions, claims, suits, notices of violation, fines, penalties, orders, revocations, and other proceedings related to violations or alleged violations of environmental laws, including, but not limited, to permits issued thereunder, which are asserted against Seller or any of Seller’s personnel in connection with the Systems or their activities on, along, adjacent to or near the Sites by any Governmental Authority. Seller will keep Purchaser informed on a regular basis of the progress made and resolution of such events.

Section 7.06 RECs Certification and Registration. Seller will use commercially reasonable efforts to design and install the Systems so that it is eligible to qualify for any RECs or Other Credits and further have sole responsibility for registering or obtaining such credits. Purchaser shall cooperate with Seller, at Sellers’s expense, to qualify for such applicable credits.

Article VIII. RIGHTS AND OBLIGATIONS OF PURCHASER

Section 8.01 Purchaser Access. To the extent authorized by this Agreement and any applicable Lease, Seller shall provide Purchaser with reasonable access to the Sites 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.

Section 8.02 Site Lease. As of the Effective Date hereof, Purchaser and Seller have entered into an irrevocable Lease running with each of the Sites (the “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 inverters 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 or knowingly consent to any third-party interference with Seller’s rights under the Lease. 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 Parties.

Article IX. BILLING AND PAYMENT

Section 9.01 Billing Invoices. Seller shall be responsible for reading the Electric Metering Device at the end of each calendar month. The monthly billing period shall be the calendar month. No later than fifteen (15) Business Days after the end of each calendar month, Seller shall provide to Purchaser, by electronic methods, an invoice for the amount due Seller by Purchaser under this Agreement, during the previous calendar month billing period.