RFP 20_1868_Utility Scale Solar Schedule C - Example Project Development Lease.pdf

PR4310-2 (Rev. 03/30/2009)

EXAMPLE PROJECT DEVELOPMENT LEASE

MICHIGAN DEPARTMENT OF NATURAL RESOURCES

FOREST RESOURCES DIVISION

By authority of Part 5, Act 451 of 1994, as amended.

L-XXXXX

Unknown Solar

Company

This lease made and entered into this day of in the year ;

By and between the DIRECTOR OF THE DEPARTMENT OF NATURAL RESOURCES for the STATE OF MICHIGAN, hereafter called "Lessor", whose address is P. O. Box 30452, Lansing, Michigan 48909-7952 and , whose address is , hereafter called "Lessee".

Whereas, pursuant to Section 503(1) Part 5 of the Natural Resource and Environmental Protection Act, 1994 PA 451 (NREPA), as amended, MCL 324.503(1), the Lessor is required to: protect and conserve the natural resources of the state; provide and develop facilities for outdoor recreation; prevent the destruction of timber and other forest growth by fire or otherwise; promote the reforesting of forest lands belonging to the state;

prevent and guard against the pollution of lakes and streams within the state and enforce all laws provided for that purpose with all authority granted by law; and foster and encourage the protecting and propagation of game and fish.

Whereas, the purpose of this lease is to design and build utility-scale solar photovoltaic (PV) systems. The Lessor is allowed to lease lands for such purpose as authorized under Section 503(2) of the NREPA, MCL 324.503(2).

Whereas, the Lessor has determined that the purpose of this lease is necessary to implement the NREPA because the utilization of the state's surface for the stated purpose will protect and conserve the natural resources of the state by converting from non-renewable to renewable energy to implement environmental sustainability across state government, and the revenue derived from the lease will assist the Department of Natural Resources (“Department”) in its administration and protection of state land.

Now therefore, the Lessor for and in consideration of a cash bonus in hand paid, and of the covenants and agreements hereinafter contained on the part of the Lessee to be paid, kept and performed, has granted, demised, leased and let, and by these presents does grant, demise, lease and let without warranty, expressed or implied, unto the said Lessee all of those certain tracts of land situated in the State of Michigan, and more particularly described below for the sole and only purpose of exploring, constructing and maintaining solar photovoltaic (PV) systems, for the production and sale of utility-scale renewable energy, and with the reasonable right to ingress and egress, the right to construct buildings and structures, make excavations, stockpiles, impoundments, roads, powerlines and other improvements as may be necessary to produce, save and take care of such renewable energy products on or from the leased premises. The locations of all such activities and the use of all highways, surface conveyances, leases, licenses or easements of public record are subject to Lessor approval. No operations shall be conducted by the Lessee on any of the following described land situated in the State of Michigan without obtaining all separate written permissions required by the Lessor or any other local, State or federal governmental agencies:

******** COUNTY

********** Township T**N, R**W

Premises Description Sections

Lands locate in the * ½ Section ** and the ** ¼ of the ** ¼ Section *. * & *

1. TERM OF LEASE

A. This lease shall remain in force for a primary term of five (5) years from this date or until the Premises or portions thereof are included within a Lessor approved Surface Use Lease.

B. Lessor may, at its sole discretion, upon written application of Lessee, agree to an extension of the primary term of this lease.

2. ECONOMIC TERMS

Rentals

Lessee shall pay to Lessor rental as follows:

a. Rental shall be paid at the rate of $XX.00 per acre per year.

b. Rental for the first year shall be paid upon execution of the lease, and thereafter rental shall be paid annually in advance of the lease anniversary date. Lease rights shall terminate and the Lessee shall be required to file a release with the Lessor as hereinafter provided whenever any rentals coming due under the lease remain unpaid for a period of ten (10) days after the rental become due. Lessor may, at its sole discretion waive in writing termination of the lease for unpaid rental upon Lessee’s submission in writing of proper and satisfactory proof as a cause, along with payments due. Any payments by Lessee after the due date shall include interest at the rate of 1.5 percent per month or at the maximum legal rate, whichever is less, on the amount unpaid.

3. TITLE

Lessee acknowledges that (a) Lessor makes no warranty of title with respect to the Premises; (b) Lessee has had the opportunity to make its own assessment to such title; and (c) Lessee waives any claim against Lessor for inadequate or defective title to the Premises.

4. USE OF PREMISES

No operations shall be conducted by the Lessee on any of the following described land situated in the State of Michigan without obtaining all separate written permissions required by the Lessor or any other local, State or federal governmental agencies.

5. LESSOR’S OPERATIONS:

Lessee covenants that its use of the Premises shall, at no time, interfere with the public’s use of any state land that may be adjacent to the Premises, nor prevent Lessor, its agents, or the public from crossing the Premises to access the adjoining state land, nor prevent Lessor, or its agents, from managing forest cover including, but not limited to, timber harvesting and/or habitat manipulation on adjacent state land.

6. CONDITION OF PREMISES

Lessee stipulates, represents, and warrants that Lessee has examined the Premises, and that they are at the time of this lease in good order, repair, and in a safe, clean, and tenantable condition. Lessee represents that it is taking possession of the Premises in their “as is” condition. Lessee shall make an independent environmental assessment of the Premises and provide a copy of the environmental assessment to the Lessor’s Representative upon or by lease inception. Lessee agrees to maintain the Premises in good order, repair, and in a safe and clean condition throughout the life of the lease.

7. ASSIGNMENT

Lessee shall not assign, sublet, nor grant any license for the use of the Premises or any part thereof without Lessor’s prior written consent, which consent shall not be unreasonably denied. Lessee shall request Lessor’s prior written consent at least 45 days in advance of such an assignment. With Lessor’s prior written consent, an assignment shall be effective to transfer the following: (1) Lessee’s rights under the lease; (2) Lessee’s obligations under the lease only insofar as such obligations relate to use of the Premises after the effective date of assignment; and (3) any risk of loss associated with use of the Premises after the effective date of assignment. The request for Lessor’s consent shall include the assignee’s bond, and proof of insurance, as determined by Lessor. Any assignment, sublease, or license shall be absolutely null and void and shall, at Lessor’s option, terminate this lease.

8. LAWS, CODES AND PERMITS

All applicable laws and rules are made a part and condition of this lease. Violations of any of the applicable laws shall be considered a violation of the terms and conditions of this lease and Lessor, at its sole discretion, may invoke all or any combination thereof. No rules made after the approval of this lease shall operate to affect the term of the lease or rental rate, unless agreed to by both Lessor and Lessee.

9. INDEMNIFICATION

A. Unless resulting from the sole negligence or intentional conduct of the Lessor, the Lessee hereby releases, waives, discharges and covenants not to sue the State of Michigan, its departments, officers, employees and agents, from any and all liability to Lessee, its officers, employees and agents, for all losses, injury, death or damage, and any claims or demands thereto, on account of injury to person or property, or resulting in death of Lessee, its officers, employees or agents, in reference to the activities authorized by this lease.

B. Unless resulting from the sole negligence or intentional conduct of the Lessor, Lessee hereby covenants and agrees to indemnify and save harmless the State of Michigan, its departments, officers, employees and agents, from any and all claims and demands, for all loss, injury, death or damage, that any person or entity may have or make, in any manner, arising out of any occurrence related to (1) issuance of this lease; (2) the activities authorized by this lease; and (3) the use or occupancy of the premises which are the subject of this lease by the Lessee, its employees, contractors, or its authorized representatives.

10. INSURANCE

A. Lessee shall obtain and maintain all worker’s compensation insurance as required by state law in accordance with PA 317 1969 as amended, as well as liability insurance and policies of insurance against risks in amounts customarily obtained in similar operations and shall furnish Lessor proof of insurance prior to the commencement of any operations.

B. All insurance shall be maintained by Lessee at its own expense. The companies issuing such policies shall also be required to furnish the Lessor written notice thirty (30) days prior to cancellation, termination, or other change of any insurance.

11. ACCIDENTS OR PROPERTY DAMAGE

Lessee shall report, in writing, to the Lessor’s Representative, all accidents that result in personal injury or damage to the Premises or adjacent land. Lessee shall make complete reports in writing to Lessor’s Representative within 24 hours of any such incident. Incidents resulting in serious personal injury, death, or damage to the Premises or adjacent land are to be reported to Lessor’s Representative immediately by telephone or in person. A written report is to follow as described above. Lessee shall also provide to the

Lessor, all reports regarding damage to the Premises or adjacent land required under Part 615 of Public Act 451of 1994, as amended, MCL 324.61501 et seq. and Administrative Rules R324.101 et seq.

12. PERFORMANCE BOND

As a guarantee of faithful performance of the conditions of this lease, Lessee delivers herewith a cash or surety bond or letter of credit in the sum of $10,000.00. As soon as security for the performance of the terms of this lease or the settlement of claims incident thereto is no longer necessary, deposits in lieu of surety or cash bond will be subject to the conditions set forth in the sentence immediately following and returned to Lessee. Lessee agrees that all monies deposited under this lease may, upon failure on Lessee’s part to fulfill all and singular the requirements herein set forth or made a part hereof, be retained by the State of Michigan to be applied as far as may be to the satisfaction of Lessee’s obligations assumed hereunder, without prejudice whatever to any rights and remedies of the State of Michigan.

13. NONDISCRIMINATION

Lessee shall comply with the Elliott-Larsen Civil Rights Act, 1976 PA 453 as amended, MCL 37.2101 et seq.; MSA 3.548 (101) et seq.; the Persons with Disabilities Civil Rights Act, 1976 PA 220, as amended, MCL 37.1101; MSA 3.550 (101) et seq., and all other federal, state, and local fair employment practices and equal opportunity laws and covenants that it shall not discriminate against any employee or applicant for employment, to be employed in the performance of this lease, with respect to his or her hire, tenure, terms, conditions, or privileges of employment, or any matter directly or indirectly related to employment, because of his or her race, religion, color, national origin, age, sex, height, weight, marital status, or physical or mental disability that is unrelated to the individual's ability to perform the duties of a particular job or position. Lessee agrees to include in every contract entered into for the performance of this lease this covenant not to discriminate in employment. A breach of this covenant is a material breach of this lease.

14. UNFAIR LABOR PRACTICES

Lessee shall comply with the Employers Engaging in Unfair Labor Practices Act, 1980 PA 278, as amended, MCL 423.321 et seq.; MSA 17.458(21) et seq.

15. CANCELLATION

Lessor may cancel this lease provided Lessee is notified in writing at least 30 days prior to the effective date of cancellation and any one of the following occur:

a. Lessor determines that the Premises are no longer being used for the purposes identified in this lease.

b. Lessor determines that Lessee provided Lessor with information, in its application for this lease or at any time during the lease term, that was false or fraudulent.

c. Lessee fails to perform any of its obligations under this lease, and such failure is not cured within 30 calendar days after written notice of default to Lessee.

d. Lessee or any subcontractor, manufacturer, or supplier of Lessee appears in the register compiled by the Michigan Department of Consumer and Industry Services pursuant to 1980 PA 278, as amended, MCL 423.321 et seq.; MSA 17.458(21) et seq. (Employers Engaging in Unfair Labor Practices Act).

e. Lessee or any subcontractor, manufacturer, or supplier of Lessee is found guilty of discrimination, pursuant to 1976 PA 453, as amended, MCL 37.2101 et seq.; MSA 3.548(101) et seq. (Elliott-Larsen Civil Rights Act); or 1976 PA 220, as amended, MCL 37.1101 et seq.; MSA 3.550(101) et seq.

(Persons with Disabilities Civil Rights Act).

16. RESERVATION

Lessor reserves the right to grant rights-of-way and easements of any kind and nature over and across the Premises and to grant or exercise all other rights and privileges of every kind and nature not herein specifically granted so long as granting of such rights does not interfere with Lessee’s use of the Premises as described in Paragraph 4.

17. TAXES

A. Lessee shall pay all taxes and assessments, whether general, special or specific, including but not limited to personal property taxes, levied upon the leases premises, on any part thereof, or any property or improvements on the leased premises.

B. Upon the termination of this lease for any cause and with respect to any of the leased premises Lessee shall pay the taxes and assessments whether general, special or specific assessed or levied on all of the leased premises for the entire calendar year.

C. Lessee shall have the right consistent with statutes in such cases made and provided to contest the validity of any tax and assessment whether general, special or specific and may seek its cancellation, reduction, readjustment or equalization.

D. Lessee shall not permit the leased premises, any part thereof, or any improvements or personal property thereon, to be sold at any time for any taxes or assessments whether general, special or specific.

E. Lessee’s failure to notify the taxing authority of this lease or its failure to pay its pro rata share of real property taxes by the first due date shall be a breach of the lease. Lessee shall, upon request, provide Lessor with paid receipts for any real property taxes.

NOTICE AND APPROVALS

18. NOTICES

Any notices to Lessor or to Lessee required by this lease shall be complete if submitted in writing and transmitted by personal delivery (with signed delivery receipt), or certified or registered mail return receipt requested. Unless either party notifies the other in writing of a different mailing address, notices to Lessor and Lessee shall be transmitted to the addresses listed below:

To Lessor:

State of Michigan Department of Natural Resources Forest Resources Division P.O. Box 30452 Lansing, Michigan 48909-7952

To Lessee:

NAME

COMPANY

ADDRESS

CITY, STATE ZIP

19. NOTICE EFFECTIVE TIME/DATE

Notices shall be deemed effective as of 12:00 Noon Eastern Standard Time on the third business day following the date of mailing, if sent by mail. Business day is defined as any day other than a Saturday, Sunday, legal holiday, or day preceding a legal holiday. A receipt from a U.S. Postal Service, or comparable agency performing such function, shall be conclusive evidence of the date of mailing.

20. INTERPRETATION

This lease shall be interpreted in accordance with the laws of the State of Michigan.

21. NO UNNAMED PARTNERS

Lessee covenants that there are no unnamed partners having authority over the operation or management of the Premises and further represents that Lessee is the only entity responsible for carrying out Lessee’s responsibilities.

22. LESSEE’S INDEPENDENT STATUS

Lessee covenants that its officers, employees, or agents, are not employees of the State of Michigan.

Lessor and Lessee agree that the Lessee shall have a leasehold interest only on the Premises and that Lessee will have no title lien or any reversionary interest in the Premises or in any property belonging to Lessor surrounding or adjacent to the Premises.

23. CONTRACTS

Lessee may execute contracts or agreements as the operator of the business authorized under the terms of this lease. The contracts or agreements must not obligate Lessor or conflict with the terms of the lease.

Lessee shall indemnify, defend, and exculpate Lessor from any liability that may accrue or be asserted against the Department or the State of Michigan under such contracts or agreements.

24. REQUIRED APPROVALS

This lease shall not be binding or effective on either party until executed (and witnessed and notarized as necessary) by Lessor and Lessee.

25. SEVERABLITY

Should any provision of this lease or any addenda thereto be found to be illegal or otherwise unenforceable by a court of law, such provision shall be severed from the remainder of the lease, and such action shall not affect the enforceability of the remaining provisions of the lease.

26. NON-ENFORCEMENT

The decision of Lessor not to enforce, in any one or more instances, the performance of any term of this lease may not be construed as a waiver or relinquishment of Lessor’s right to the future performance of the term. Lessee’s obligations to comply with all terms of the lease remain in full force and effect.

27. ENTIRE AGREEMENT AND EXHIBITS

This lease, with the Exhibits listed below, constitutes the entire agreement between Lessor and Lessee with regard to this transaction, and may be amended only in writing and executed in the same manner as this lease was originally executed.

Exhibit A – Map of Premises

The said Lessor, by its ACTING CHIEF of Forest Resources Division, has signed and affixed the seal of the State of

Michigan by virtue of action taken by Lessor on ___________________, 20_____, and Lessee has signed and affixed its seal the day and year written below.

ACKNOWLEDGEMENT BY LESSOR

Printed Name, Title: Jeff Stampfly, Acting Chief Agency Name: Forest Resources Division

Department of Natural Resources State of Michigan

Signature: _________________________________________

The foregoing instrument was acknowledged before me this _ day of , 20____, by Jeff Stampfly, Acting Chief, Forest Resources Division.

Prepared by: Matt Fry ____________________________________, Forest Resources Division Karen Maidlow, Notary Public Department of Natural Resources State of Michigan, Ingham County P.O. Box 30452 Acting in Ingham County, Lansing, Michigan Lansing, Michigan 48909-7952 My Commission Expires: July 1, 2025

ACKNOWLEDGEMENT BY LESSEE

Printed Name, Title:

Agency Name:

Signature: _________________________________________

The foregoing instrument was acknowledged before me this ________ day of _______________, 20____, by

__________________________________ Notary Public

State of Michigan, ________________________ County

Acting in ________________________________ County

My Commission Expires: _________________________