HomeMy WebLinkAbout299-23 RESOLUTION113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Resolution: 299-23
File Number: 2023-1458
ENTEGRITY ENERGY PARTNERS (SOLAR SERVICES AGREEMENT):
A RESOLUTION TO APPROVE A 25 YEAR SOLAR SERVICES AGREEMENT WITH ENTEGRITY ENERGY
PARTNERS, LLC THAT IS ANTICIPATED TO OFFSET 6,538,454 KWH OF THE CITY'S ANNUAL
ELECTRICITY CONSUMPTION FROM SOUTHWESTERN ELECTRIC POWER COMPANY AND PRODUCE
AN ESTIMATED $7 MILLION IN SAVINGS OVER THE LIFE OF THE CONTRACT
WHEREAS, the City adopted the Energy Action Plan in January of 2018 that was created to build a policy, program,
and project framework that would initiate actions leading to an increasingly sustainable natural resource and energy
efficient community; and
WHEREAS, a major goal of the action plan is to achieve 100% local government clean energy by the year 2030; and
WHEREAS, in 2019, the City entered into a solar services agreement to build 5MW solar arrays with battery storage
at each of the two City wastewater treatment plants; and
WHEREAS, in 2022, the City entered into an Energy Savings Performance Contract with Johnson Controls Inc. that
audited facilities energy use and identified energy efficiency improvements; and
WHEREAS, Act 278 passed by the 94th General Assembly in 2023 has overhauled the net metering policy in
Arkansas and the project must meet the September 30, 2024 deadline for interconnection approval from SWEPCO; and
WHEREAS, the City issued a request for proposals for a new solar array development on July 9, 2023, and the City's
selection committee selected Entegrity Energy Partners for the project; and
WHEREAS, Fayetteville Environmental Director Peter Nierengarten has fully disclosed his indirect financial interest
in this contract because his wife is Vice President for Sustainability of Entegrity Energy Partners and Director
Niergengarten's immediate supervisor, Chief of Staff Susan Norton, approves of this contract and will ensure that it
will not adversely affect his regular employment duties.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas, being aware of the indirect financial interest of
Director Nierengarten in this contract, hereby determines that it is in the best interests of Fayetteville to enter into this
contract and authorizes Mayor Jordan to sign the 25 year Solar Services Agreement with Entegrity Energy Partners,
LLC that is anticipated to offset 6,538,454 kWh of the City's annual electricity consumption from Southwestern
Page 1
Resolution: 299-23
File Number. 2023-1458
Electric Power Company and produce an estimated $7 million in savings over the life of the contract.
PASSED and APPROVED on December 19, 2023
Page 2
Attest:
�'' • •obi Y
Kara Paxton, City Cl rk Treasurer r ; FAYET i
��• :,�
CITY OF
FAYETTEVILLE
ARKANSAS
MEETING OF DECEMBER 19, 2023
TO: Mayor Jordan and City Council
THRU: Chris Brown, Public Works Director
Paul Becker, Chief Financial Officer
Susan Norton, Chief of Staff
FROM: Chris McNamara, Sustainability Project Manager
DATE:
CITY COUNCIL MEMO
SUBJECT: Solar Services Agreement with Entegrity Energy Partners
RECOMMENDATION:
2023-1458
Staff recommends approval of the Solar Services Agreement with Entegrity Energy Partners. The contract
initiates construction of a 3.77 MW solar array that will offset 6,538,454 kWh of the City's annual electricity
consumption from Southwestern Electric Power Company and produce $7million in savings over the 25yr
contract.
BACKGROUND:
The City of Fayetteville adopted the Energy Action Plan in January of 2018. This plan was created to build
a policy, program, and project framework that would initiate actions leading to an increasingly sustainable
natural resource and energy efficient community. A major goal of the action plan is to achieve 100% local
government clean energy by 2030.
In 2019 the City entered into a solar services agreement to build 51MW solar arrays with battery storage at
each of the two City wastewater treatment plants. The combined 10MW wastewater treatment plant solar
energy projects brought the City governments' clean energy consumption up from 16% to over 72% and is
projected to save over $6 million dollars during the 20-year life of the project.
In 2022 the City entered into an Energy Savings Performance Contract with Johnson Controls Inc. that
audited facilities energy use and identified energy efficiency improvements. These facility improvement
projects began in Fall 2022 and will result in a 27% reduction in energy consumption.
Act 278 passed by the 94th General Assembly in 2023 has overhauled the net metering policy in
Arkansas. To take advantage of the current net metering with 1:1 rate structure and the grandfathering
term, any renewable energy projects that are under development will have to meet the utility
interconnection agreement deadline of Sept 30, 2024.
The City issued an RFP for solar array development on 7/9/2023 received three responses, interviewed
two candidates and selected Entegrity Energy Partners on 9/28/2023. Since selection Entegrity has been
reviewing the City's SWEPCO bills and account rate structures to design an appropriately sized solar
Mailing address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
array that will produce the highest savings for the City.
DISCUSSION:
The proposed Solar Services Agreement between the City of Fayetteville and Entegrity Energy Partners
will establish a 25yr contract to purchase all energy produced from the solar array at an initial price of
$0.057/kWh that escalates 1 % annually. A 1 % annual escalation is under the average 2.5% annual cost
increase for electricity purchased from SWEPCO. This 1 % annual escalation will produce a balanced
savings profile across the contract term. The contract can be extended two times for an additional 10
years.
Entegrity will provide periodic bill and rate review during the contract to continue to optimize the highest
savings across the City's 250+ SWEPCO accounts. Electricity produced from the solar array will offset
SWEPCO accounts in descending order starting with those accounts that produce highest savings first
and proceed to next highest savings until all solar production is utilized.
Approval of this agreement is time sensitive as the project must meet the Sept 30, 2024 deadline for
interconnection approval from SWEPCO. Swift approval by City Council will ensure that project continues
to have plenty of time for development to meet the deadline. However, the City has negotiated in the
contract that at any time prior to the submission of the interconnection application, the City may terminate
this agreement, provided that City pay provider for any direct costs incurred as of the date of termination
in connection with the development of the project. This safety measure ensures that if the deadline is not
met the City can exit the agreement and cancel the project.
Solar array size is currently 3.77MW but can be changed until the design is submitted to SWEPCO. If
City staff and Entegrity identify additional opportunities for savings that adjust array size then a change
order will be submitted to the Mayor for approval.
The City has the option to purchase the array and take over ownership on either of the seventh (7th),
fourteenth (14th), or twenty-first (21 st) anniversary of the Commercial Operation Date.
BUDGET/STAFF IMPACT:
Project does not have a cost for development. The City agrees to pay a $/kWh for all solar energy
produced. These solar energy credits will be applied to City accounts with SWEPCO to offset billed
consumption. Solar credits will be applied to accounts producing the most savings and proceed until all
credits are used.
Before commercial operation date, Entegrity will provide a list of accounts to offset. City staff will
determine which funds will pay for solar energy costs based on offset accounts.
ATTACHMENTS: SRF (#3), Solar Services Agreement Signed (#4), Solar Services Agreement —Signed -
UPDATED (#5)
Mailing address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
== City of Fayetteville, Arkansas
y 113 West Mountain Street
Fayetteville, AR 72701
(479)575-8323
- Legislation Text
File #: 2023-1458
Solar Services Agreement with Entegrity Energy Partners
A RESOLUTION TO APPROVE A 25 YEAR SOLAR SERVICES AGREEMENT WITH
ENTEGRITY ENERGY PARTNERS, LLC THAT IS ANTICIPATED TO OFFSET 6,538,454 KWH
OF THE CITY'S ANNUAL ELECTRICITY CONSUMPTION FROM SOUTHWESTERN ELECTRIC
POWER COMPANY AND PRODUCE AN ESTIMATED $7 MILLION IN SAVINGS OVER THE
LIFE OF THE CONTRACT
WHEREAS, the City adopted the Energy Action Plan in January of 2018 that was created to build a
policy, program, and project framework that would initiate actions leading to an increasingly sustainable
natural resource and energy efficient community; and
WHEREAS, a major goal of the action plan is to achieve 100% local government clean energy by the
year 2030; and
WHEREAS, in 2019, the City entered into a solar services agreement to build 5MW solar arrays with
battery storage at each of the two City wastewater treatment plants; and
WHEREAS, in 2022, the City entered into an Energy Savings Performance Contract with Johnson
Controls Inc. that audited facilities energy use and identified energy efficiency improvements; and
WHEREAS, Act 278 passed by the 94th General Assembly in 2023 has overhauled the net metering
policy in Arkansas and the project must meet the September 30, 2024 deadline for interconnection
approval from SWEPCO; and
WHEREAS, the City issued a request for proposals for a new solar array development on July 9, 2023,
and the City's selection committee selected Entegrity Energy Partners for the project; and
WHEREAS, Fayetteville Environmental Director Peter Nierengarten has fully disclosed his indirect
financial interest in this contract because his wife is Vice President for Sustainability of Entegrity
Energy Partners and Director Niergengarten's immediate supervisor, Chief of Staff Susan Norton,
approves of this contract and will ensure that it will not adversely affect his regular employment duties.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas, being aware of the indirect
financial interest of Director Nierengarten in this contract, hereby determines that it is in the best
Page 1
Resolution: 299-23
File Number. 2023-1458
interests of Fayetteville to enter into this contract and authorizes Mayor Jordan to sign the 25 year Solar
Services Agreement with Entegrity Energy Partners, LLC that is anticipated to offset 6,538,454 kWh of
the City's annual electricity consumption from Southwestern Electric Power Company and produce an
estimated $7 million in savings over the life of the contract.
Page 2
Chris McNamara
Submitted By
City of Fayetteville Staff Review Form
2023-1458
Item ID
12/19/2023
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
12/1/2023 SUSTAINABILITY/RESILIENCE (631)
Submitted Date Division / Department
Action Recommendation:
Staff recommends approval of the Solar Services Agreement with Entegrity Energy Partners. The contract initiates
construction of a 3.77 MW solar array that will offset 6,538,454 kWh of the City's annual electricity consumption
from Southwestern Electric Power Company and produce $7million in savings over the 25yr contract.
Budget Impact:
xxxx. xxx. xxxx-5 310.10
Multiple
Account Number Fund
N/A N/A
Project Number
Budgeted Item? Yes
Does item have a direct cost? No
Is a Budget Adjustment attached? No
Purchase Order Number:
Change Order Number:
Original Contract Number:
Comments:
Total Amended Budget
Expenses (Actual+Encum)
Available Budget
Item Cost
Budget Adjustment
Remaining Budget
Project Title
$ 1,706,942.00
$ 1,184,830.59
522,111,41
e. 522,111.41
Previous Ordinance or Resolution #
Approval Date:
V20221130
SOLAR SERVICES AGREEMENT
between
Entegrity Energy Partners, LLC
as Provider
and
City of Fayetteville
as Buyer
INDEX
Section
1 DEFINITIONS
2 TERM
3 PLANNING, INSTALLATION AND OPERATION OF PROJECT
4 SALE OF ELECTRIC ENERGY
5 PAYMENT AND BILLING; LIMITS ON BUYER OBLIGATIONS; EVENT
OF NON -APPROPRIATION
6 SUPPLEMENTAL POWER, NET METERING, AND RECS
7 PERMITS AND OWNERSHIP OF PROJECT
8 PURCHASE OPTION
9 SHUTDOWNS
10 TAXES
II [RESERVED]
12 COOPERATION, SOLAR ACCESS, FUTURE IMPROVEMENTS
13 PRESS RELEASES AND CONFIDENTIALITY
14 REPRESENTATIONS AND WARRANTIES
15 FORCE MAJEURF,
16 PROVIDER DEFAULT AND BUYER REMEDIES
17 BUYER DEFAULT AND PROVIDER REMEDIES
18 COLLATERAL ASSIGNMENT, FINANCING PROVISIONS
19 CHANGE IN LAW
20 LIMITATIONS ON DAMAGES, LIABILITY, AND REMEDIES;
DISCLAIMER
21 DISPUTE RESOLUTION
22 NOTICES
23 MISCELLANEOUS
EXHIBIT A -
USABLE ELECTRICITY PURCHASE RATES
EXHIBIT B -
DESCRIPTION OF SITE
EXHIBIT C —
DESCRIPTION OF PROJECT
EXHIBIT D -
PURCHASE OPTION PURCHASE PRICE SCHEDULE
FA
SOLAR SERVICES AGREEMENT
THIS SOLAR SERVICES AGREEMENT ("Agreement') is made and entered into on as
of (the "Effective Date"), by and between Entegrity Energy Partners, LLC
("Provider"), and City of Fayetteville (`Buyer").
J+7TNESSETH.
WHEREAS, Provider controls (whether by lease, ownership, option or otherwise) that
certain real property located in the State of Arkansas, as more particularly described in Exhibit B
attached hereto (the "Site"), and Buyer and Provider desire for the development, design,
construction, operation and maintenance by Provider of one or more solar powered electric
generating project on the Site to be owned by Provider and for Buyer to purchase from Provider, at
a fixed rate, the electric energy produced by the Project;
WHEREAS, Provider desires to sell to Buyer the electric energy produced by such facilities
at a fixed rate and Buyer desires to purchase from Provider the electric energy produced by such
facilities; and
WHEREAS, Provider and Buyer now desire to enter into this Agreement to memorialize
their agreements regarding such solar alternative energy facilities and electric energy.
NOW, THEREFORE, in consideration of the premises and covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, Provider and Buyer hereby agree as follows:
1. Definitions. The following capitalized terms shall have the meanings set forth
below as used in this Agreement:
(a) The tern "Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with, such Person. For
purposes of this definition, "control' of a Person means the power, directly or indirectly, to direct
or cause the direction of the management and policies of such Person whether by contract or
otherwise.
(b) The tern "Agreement" means this Solar Services Agreement, including all exhibits
attached hereto, as the same may be amended from time to time in accordance with the provisions -
hereof.
(c) The tern "Applicable Law" means any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction,
registration, license, franchise, permit, authorization, or guideline issued by a Governmental
Authority that is applicable to a Party to this Agreement or the transaction described herein.
Applicable Law also includes an approval, consent or requirement of any Governmental Authority
having jurisdiction over such Party or its property, enforceable at law or in equity.
91
(d) The term "Billing" means the revenue grade meter(s) of Provider located at
the Site to measure the output of the Project at the Point of Delivery as identified in Exhibit C.
(e) The term "Business Day" means a day other than Saturday, Sunday, or other day on
which commercial banks in Little Rock, Arkansas are authorized or required by law to be closed.
(f) The term `Buyer" has the meaning assigned to it in the introductory paragraph
hereof.
(g) The term "Change in Law" means that after the date of this Agreement, an
Applicable Law is amended, modified, nullified, suspended, repealed; found unconstitutional or
unlawful, or changed or affected in any material respect by any Applicable Law. Change in Law
does not include changes in federal or state income tax laws. Change in Law does include material
changes in the interpretation of an Applicable Law.
(h) The term "Commercial Operation Date" means the date, which shall be specified by
Provider to Buyer pursuant to Section 3, when the Project is physically complete and has
successfully completed all performance tests and satisfies the interconnection requirements of the
Electric Utility.
(i) The term "Confidential Information" means information of a confidential or
proprietary nature. Provider shall notify Buyer in writing of any information that Provider contends
may provide an advantage to competitors if disclosed. Such information shall include, but not be
limited to, any documentation, records, listing, notes, data, computer disks, files or records,
memoranda, designs, financial models, accounts, reference materials, trade -secrets, prices, strategic
partners, marketing plans, strategic or other plans, financial analyses, customer names or lists,
project opportunities and the like, provided however that Confidential Information does not include
information which (i) was in the possession of the receiving Party before receipt from the disclosing
Party; (ii) is or becomes publicly available other than as a result of unauthorized disclosure by the
receiving Party; (iii) is received by the receiving Party from a third party not known by the receiving
Party with the exercise of reasonable diligence to be under an obligation of confidentiality
respecting the information; or (iv) is independently developed by the receiving Party without
reference to information provided by the disclosing Party. Notwithstanding the term defined above,
the Parties acknowledge that the Buyer is or may become subject to the disclosure requirements of
the Arkansas Freedom of Information Act ("FOIA"). The parties acknowledge and agree that
Provider believes that Exhibits A, C, and D may contain confidential information, trade secrets,
and/or competitive information exempt from disclosure obligations under "FOIA". Buyer agrees
to promptly notify Provider of any receipt of a request for information under FOIA or any other
similar disclosure law, related to the Project or this Agreement.
0) The term "Dispute" means a controversy or claim arising out of or relating to this
Agreement.
(k) The term "Electric Utility" means Southwestern Electric Power Company and its
successors and assigns.
(1) The term "Environmental Attributes" means Renewable Energy Certificates, carbon
trading credits, emissions reductions credits, emissions allowances, green tags, Green-e
certifications, or other entitlements, certificates, products, or valuations attributed to the Project and
its displacement of conventional energy generation, or any other entitlement pursuant to any federal,
state, or local program applicable to renewable energy sources, whether legislative or regulatory in
origin, as amended from time to time, and excluding, for the avoidance of doubt, any Tax Attributes.
(m) The term "Event of Non -Appropriation" shall have the meaning set forth in Section
5(g) hereof.
(n) The term "Fair Market Value" means the price 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 the Project and advances in solar technology, provided that installed equipment
shall be valued on an installed basis and costs of removal from a current location shall not be a
deduction from the valuation.
(o) The term "Financing Party' means a Project Lessee or Lender or tax equity investor
admitted as a direct or indirect member of Provider.
(p) The term "Fiscal Year" shall mean the fiscal year of Buyer, which Buyer represents
and warrants is January 1 to December 31.
(q) The term "Force Majeure Event" means any act or event that prevents the affected
Party from performing its obligations in accordance with this Agreement, if such act or event is
beyond the reasonable control, and not the result of the fault or negligence, of the affected Party
and such Party had been unable to overcome such act or event with the exercise of due diligence
(including the expenditure of reasonable sums). Subject to the foregoing, Force Majeure Event
may include but are not limited to the following acts or events: (i) extraordinary wind storms, hail,
tornados, hurricanes, floods, lightning strikes, and earthquakes; (ii) explosions or fires arising from
lightning strikes or other causes unrelated to the acts or omissions of the Party seeking to be excused
from performance and unrelated to any defect in materials or equipment of Provider; (iii) acts of
war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, pandemic,
official actions of any Governmental Authority, terrorist acts, or rebellion; and (iv) spikes or labor
disputes. Force Majeure Events shall not include equipment failures or acts or omissions of agents,
suppliers or subcontractors, except to the extent such acts or omissions arise from a Force Majeure
Event. Neither changes in prices for Usable Electricity nor changes in available solar energy
resulting from cloud cover or other natural events constitute Force Majeure Events.
(r) The terns "Governmental Authority" means any international, national, federal,
provincial, state, municipal, county, regional or local government, administrative, judicial or
regulatory entity operating under any Applicable Laws and includes any department, commission,
bureau, board, administrative agency or regulatory body of any government with authority over the
parties to this Agreement or this transaction.
5
(a) The term "Initial Period" has the meaning provided in Section 2.
(t) The term "hrstaller" means the Provider or any person or entity designated by
Provider to install a Project on a Site.
(u) The term "Land Registry" means the office where real estate records for a Site are
customarily filed.
(v) The term "Lender" means persons providing construction or permanent financing to
Provider in connection with installation of the Project.
(w) The term "Liens" has the meaning provided in Section 7(c).
(x) The term "Losses" means any and all losses, liabilities, claims, demands, suits,
causes of action, judgments, awards, damages, cleanup and remedial obligations, interest, fines,
fees, penalties, costs, and expenses (including all attorney's fees and other costs and expenses
incurred in defending any such claims or matters).
(y) The term "Operations Period" has the meaning provided in Section 2
(z) The term "Operations Year" means a twelve (12) month period beginning at 12:00
am on an anniversary of the Commercial Operation Date and ending at 11:59 pm on the day
immediately preceding the next anniversary of the Commercial Operation Date, provided that the
first Operations Year shall begin on the Commercial Operation Date.
(aa) The term "Party" means either Buyer or Provider, as the context shall indicate, and
"Parties" means both Buyer and Provider.
(bb) The term "Point of Delivery" has the meaning set forth in Section 4(a).
(cc) The term "Project" means an integrated system for the generation of Usable
Electricity from solar energy consisting of the photovoltaic panels and associated equipment to be
installed on each of the Sites in accordance with this Agreement, and includes equipment and
cabling required to connect to the Point of Delivery.
(dd) The term "Project Lessee" means, if applicable, any Person to whom Provider
transferred or leased a Project.
(cc) The term "Provider" has the meaning assigned to it in the introductory paragraph
hereof, and all permitted successors and assigns.
(ft) The term "Relocation Event" means the relocation of a Project, starting at the
shutdown of the Project pursuant to such relocation, and ending at the commercial operation of the
Project when such relocated Project is reinstalled at a new location, as determined by the Provider
in its reasonable discretion.
M
(gg) The term "Renewable Energy Certificate" or "REC" means a certificate, credit,
allowance, green tag, or other trausferable'indicia, howsoever entitled, created by an applicable
program or certification authority indicating generation of a particular quantity of energy, or
product associated with the generation of a megawatt -hour (MWh) from a renewable energy source
by a renewable energy project.
(hli) The term "Site" means the real property upon which the Project is developed.
(ii) The term "Solar Services" means the services Provider provides to Buyer hereunder.
6j) The term "Tax Attributes" means the investment tax credits (including any grants or
payments in lieu thereof) and any tax deductions or other benefits under the Internal Revenue Code
or applicable federal, state, or local law available as a result of the ownership and operation of a
Project or the output generated by a Project (including, without limitation, tax credits (including
any grants or payments in lieu thereof) and accelerated and/or bonus depreciation.)
(kk) The term "Term" shall have the meaning provided in Section 2 hereof.
(11) The tern "Usable Electricity" means alternating current electrical energy meeting
the specifications described in Exhibit C, as measured by the Billing Meter at the Point of Delivery.
2. Term.
(a) Term. This Agreement shall consist of an Initial Period and an Operations Period.
As used herein, "Term" shall mean all of the Initial Period and the Operations Period, unless the
Provider or Buyer terminates the Agreement prior to the end of the Initial Period pursuant to the
terms of this Agreement.
(b) Initial Period. The Initial Period will begin on the Effective Date and will terminate
on the earlier of (i) the Commercial Operation Date or (ii) the date the Agreement is terminated
pursuant to the provisions of Section 3.
(c) Operations Period. If applicable, the Operations Period will commence on the
Commercial Operation Date and will terminate at 11:59 p.m. on the 25"' anniversary of the
Commercial Operation Date unless earlier terminated in accordance with this Agreement; provided,
however the Operations Period will automatically renew for two (2) additional five (5) consecutive
year periods immediately following the Operations Period unless Buyer or Provider shall provide
written notice to the other Party of its intention not to extend the Agreement at least one hundred
eighty (180) days prior to the end of the Operations Period or any applicable automatic five (5) year
extension period, as the case may be.
3. Planning, Installation and Operation of Project.
(a) Site Assessment and Planning. During the Initial Period, Provider shall have the
right, at its own expense, to identify and assess the suitability of each Site for the Project to be
located on such Site and shall act diligently in conducting such assessment. The assessment shall
include the right to inspect the physical condition of the Site; to apply for any building permits or
other governmental authorizations necessary for the construction of the Project; to arrange
interconnections with the Electric Utility; to make any applications to the appropriate Public Service
Commission or other agencies for receipt of payments for the Project; to apply to any other
governmental agencies or other persons for grants or other determinations necessary for the
construction of or receipt of revenues from the Project; to execute a binding lease or close on an
option or purchase of the Site, as applicable; or to make any other investigation or determination
necessary for the financing, construction, operation or maintenance of the Project.
(b) Termination of Agreement during the hnitial Period. At any time during the Initial
Period, Provider shall have the right to cease development of the Project on a Site and unilaterally
terminate this Agreement, for any reason, including but not limited to material increases in
Provider's costs to provide the Solar Services. If Provider gives Buyer notice of such determination,
this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Parties shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii) the confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement. At any time prior
to the submission of the interconnection application and the payment associated therewith to the
Electrical Utility, Buyer may terminate this Agreement, provided that Buyer pay Provider for any
direct costs incurred as of the date of termination in connection with the development of the Project.
If Buyer gives Provider notice of such determination and makes the associated payment set forth
above, this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Buyer shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii) the confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement.
If material increases in Provider's costs to provide the Solar Services are the reason for Provider's
termination of this Agreement during the Initial Period, Provider shall propose an Amendment to
this Agreement for Buyer's consideration prior to exercising its right to terminate during the Initial
Period. Such Amendment shall set forth (i) the reasons Provider's costs to provide the Solar
Services have materially increased during the Initial Period, (ii) the extent Provider's costs to
provide the Solar Services have materially increased during the Initial Period, and (iii) Provider's
proposed adjustment to the Usable Electricity Purchase Rate schedule in Exhibit A to reflect such
material changes in Provider's costs. Such Amendment shall be delivered by written notice pursuant
to Section 22.
If Provider proposes an Amendment pursuant to this Section, Provider and Buyer may negotiate an
adjustment in the Usable Electricity Purchase Rate to reflect any material increases in Provider's
costs to provide the Solar Services, and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty (30) days after Provider has delivered a proposed Amendment
to Buyer in accordance with this Section, either Party may terminate the Agreement. If either Party
gives notice of such determination, this Agreement shall terminate effective as of the delivery of
such notice without any further liability of the Parties to each other, provided that (i) the Parties
shall not be released from any payment or other obligations arising under this Agreement prior to
0
the delivery of the notice; and (ii) the confidentiality provisions of Section 13, and the dispute
resolution provisions of Section 21 hereof shall continue to apply notwithstanding the termination
of this Agreement.
(c) Commencement of Construction, Modification of Design. Provided that either party
does not terminate this Agreement pursuant to this Section 3, Provider will use commercially
reasonable efforts to commence installing the Project on the applicable Site within one hundred
eighty (180) days of the Provider obtaining necessary approvals of the Project from the Electric
Utility and any Governmental Authority.
(i) As of the Effective Date, Provider anticipates that each Project shall consist
of the components and shall have the designs attributed to such Project in Exhibit C attached
hereto.
(ii) Notwithstanding subsection (i) above, Provider has the right to modify the
design of each Project, including the selection of the components in the Project, in its
reasonable discretion.
(d) Contractors. Provider shall use licensed contractors to perform the work of
installing, operating, and maintaining the Project. Provider shall be responsible for the conduct of
Installers and Provider's subcontractors, and Buyer shall have no contractual relationship with
Installers or Provider's subcontractors in connection with the work on the Project.
(e) Status Reports. Provider shall give Buyer regular updates, on a reasonable schedule
requested by Buyer, on the progress of installation of the Project and shall notify Buyer of when
Provider will commence testing of a Project. Buyer shall have the right to have its representatives
present during the construction and testing process, but subject to reasonable written rules and
procedures as may be established by Provider and Installer. After Provider has determined, in its
reasonable judgment, that a Project meets the requirements of the Electric Utility and the Arkansas
Public Service Commission, has been installed in accordance with all Applicable Laws, has
successfally completed all performance tests, and is capable of producing Usable Electricity on a
continuous basis, Provider shall notify Buyer that.mstallation of the Project is complete and shall
specify the Commercial Operation Date for such Project, which may be immediately upon delivery
of such notice to Buyer. All Usable Electricity produced by a Project prior to the Commercial
Operation Date shall be delivered to Buyer at the Point of Delivery after appropriate safety testing
and Buyer shall pay for all such Usable Electricity at the rate applicable to the first Operations Year.
(f) Standard of Operation. Provider shall design, obtain permits, install, operate, and
maintain a Project so as to keep it in good condition and repair, in compliance with all Applicable
Laws and in accordance with the generally accepted practices of the electric industry, in general,
and the solar generation industry, in particular. Such work shall be at Provider's sole expense.
Except for emergency situations or unplanned outages, Provider shall cause the work to be
performed at times so as to minimize disruption of the Project during peak sunlight times, to the
extent reasonably possible.
9
(g) System Shut Down. Provider may shut down the Project at any time in order to
perfonn required emergency repairs to the Project. At other times, Provider shall give Buyer
advance notice of the shutdown as may be reasonable under the circumstances. Provider shall have
no obligation to reimburse Buyer for costs of purchasing Usable Electricity that would have been
produced by the Project but for such shutdown. Provider shall not schedule shutdowns during peak
periods of electric generation and periods when peak energy and demand prices are charged by the
Electric Utility, except as may be required in accordance with prudent electric industry safety
practices in the event of equipment malfunction.
4. Sale of Electric Enerey.
(a) Sale of Usable Electricity. Throughout the Operations Period, subject to the terms
and conditions of this Agreement, Provider shall sell to Buyer and Buyer shall buy from Provider
all Usable Electricity produced by the Project, whether or not Buyer is able to use all such Usable
Electricity. The Point of Delivery of the Usable Electricity shall be as indicated in Exhibit C. Titre
to and risk of loss with respect to the Usable Electricity shall transfer from Provider to Buyer at the
Point of Delivery.
(b) Delivery of Usable Electricity. The Usable Electricity from the Project shall be
delivered from Provider to Buyer at the Point of Delivery per the specifications set forth in Exhibit
C and otherwise in compliance with all requirements of the Electric Utility.
(c) Limits on Obligation to Deliver. Provider does not warrant or guarantee the amount
of electric energy to be produced by the limits on Project for any hourly, daily, monthly, annual or
other period. Provider is not a utility or public service company and does not assume any obligations
of a utility or public service company to supply Buyer's electric requirements, other than the
obligations under this Agreement. At the time of this Agreement, Provider is not subject to rate
review by governmental authorities.
(d) Meter Testing. Provider shall install one or more Billing Meter(s) at the Site, as
Provider deems appropriate, to measure the output of the Project at the Point of Delivery. Provider
shall provide Buyer with reasonable access to the metered energy output data collected by Provider.
Provider shall install an Interval Data Recorder (IDR) with industry standard telemetry at each
Project. Provider shall conduct tests of the Billing Meter(s) at such times as it deems appropriate
in accordance with industry standards, but not less than once in any two-year period. Buyer shall
pay for any independent testing of the Billing Meter(s) in excess of such minimum testing schedule
that Buyer deems necessary, except if, after such testing, the Billing Meter is shown to be in error
in Provider's favor by more than two percent (2%), Provider shall pay for the cost of such test and
shall make corresponding adjustments to the records of the amount of electrical energy provided
by the Project delivered based on the period that is half -way in between the date of this testing and
the last testing date of the Billing Meter. If there is an error of less than or equal to two percent
(2%) no billing adjustments will be made. In the event there is an error of greater than two percent
(2%), Provider shall adjust the next invoice to be provided to Buyer under Section 5(b) hereof, to
either charge the Buyer additional amounts for energy produced over the stated Billing Meter
amount during the applicable period at the applicable rate or provide Buyer a credit against future
billing for energy produced under the stated Billing Meter- amount during the applicable period,
10
provided, however, that any deficiencies or credits not theretofore applied or satisfied at the
expiration or earlier termination of the Operations Period shall be settled in cash.
5. Payment and Billing; Limits on Buyer Obligations; Event of Non -
Appropriation
(a) Rates. Buyer shall pay Provider for Usable Electricity produced by each Project at
the rates set forth in Exhibit A attached hereto.
(b) Billing. Buyer shall pay for the Usable Electricity produced by each Project
quarterly in arrears, promptly after the end of each quarter from the start of operational production.
Provider shall provide Buyer with an invoice setting forth the quantity of Usable Electricity
produced by the Project in such quarter, the applicable rates for such, and the total amount due,
which shall be the product of the quantities and the applicable rates.
(c) Invoice Delivery. Invoices shall be in writing and shall be either (i) delivered by
hand; (ii) mailed by first-class, registered or certified mail, return receipt requested, postage
prepaid; (iii) delivered by a recognized overnight or personal delivery service;; or (iv) transmitted
by email if receipt of such transmission by email is specifically acknowledged by the recipient
(automatic responses not being sufficient for acknowledgement) and with a hard copy to follow,
addressed as follows:
City of Fayetteville
113 West Mountain Street
Fayetteville, AR, 72701
(d) Payment. Went. Buyer shall pay each invoice within thirty (30) days of receipt of the
invoice. Payments shall be made by electronic funds transfer to an account designated by Provider
or by Direct Deposit of funds into Provider's bank account or by check if electronic transfer or
direct deposit are not available. Provider shall designate the account in the invoice or in a written
notice delivered to Buyer.
(f) Disputed Invoices. If Buyer objects to all or a portion of an invoice, Buyer shall,
on or before the date payment of the invoice is due, (i) pay the undisputed portion of the invoice,
and (ii) provide an itemized statement of its objections setting forth in reasonable detail the basis
for its objections. If Buyer does not object prior to the date payment of any invoice is due, Buyer
shall be obligated to pay the full amount of such invoices but Buyer may subsequently object to
such invoice and, if such objection proves to be correct, receive a refund of the disputed amount;
provided, however, that Buyer may not object to any invoice more than twelve (12) months after
the date on which such invoice is rendered.
(g) Payment Limitations. If, during the term of this Agreement including any
extensions, Buyer is bound or deemed bound by the provisions of any State of Arkansas laws
concerning the sufficiency of Buyer appropriations and the legal ability of Buyer to enter into
binding contracts and agreements with annual obligations in excess of annual Buyer appropriations
("Appropriation Bound") the provisions of Sections 5(0-0) of the Agreement shall control. If
Buyer is Appropriation Bound, Provider and Buyer hereby expressly acknowledge and agree that
the obligation of Buyer to pay invoices for Usable Electricity in any Fiscal Year under this
Agreement or otherwise would be legally binding to the extent of amounts appropriated for and
legally available to Buyer for such purposes during such Fiscal Year. The parties hereto
acknowledge that all payments made by Buyer under this Agreement will constitute currently
budgeted expenditures. The parties hereto acknowledge that all payments made by Buyer under
this Agreement will not constitute a general obligation debt, an indebtedness, or a multiple -Fiscal
Year direct or indirect debt or other financial obligation of Buyer within the meaning of any
constitutional or statutory provision or limitation. Buyer represents to Provider, and the parties
hereto acknowledge that, Buyer is Appropriation Bound.
(h) Event of Non -Appropriation. If Buyer is Appropriation Bound, if by the first day of
any Fiscal Year Buyer has failed for any reason to obtain an appropriation of sufficient legally
available amounts to be used by Buyer to pay invoices for Usable Electricity that will be due
hereunder for and during the next ensuing Fiscal Year, then an Event of Non -Appropriation shall
be deemed to have occurred on the first calendar day thereafter (an "Event of Non -
Appropriation"). However, the parties hereto hereby agree that no Event of Non -Appropriation
shall be deemed to have occurred if the foregoing failure set forth in this subsection (g) is cured on
or before the thirty-first (31 ") day of such Fiscal Year in which such Event of Non -Appropriation
shall be deemed to have occurred by the enactment of an appropriation providing sufficient legally
available amounts to Buyer, or Buyer otherwise making sufficient money available, to pay invoices
for Usable Electricity that will be due hereunder for and during the next ensuing Fiscal Year.
(i) Present Expectation. If Buyer becomes Appropriation Bound, it is the present
expectation of Buyer that the applicable budgetary entity, within the limits of available funds and
revenues, will make an appropriation of a sufficient amount to fund Buyer's obligations hereunder
during each Fiscal Year of the Term; provided, however, this expectation of Buyer shall not be
binding upon any future applicable budgetary entity in any future Fiscal Year, except to the extent
of any previously appropriated funds. Buyer shall use reasonable good faith efforts to have funds
properly budgeted in the general operating expense section of the budget (and not a specific line
item), appropriated, allotted, or otherwise made available for this Agreement (including obtaining
legislative and other authorizations for use of such winds) and to satisfy such conditions in a timely
manner.
0) Notice of Event of Non -Appropriation. In the case of an Event of Non -
Appropriation, Buyer shall promptly give notice of such Event of Non -appropriation (the "NAE
Notice"). Notwithstanding the occurrence of any Event of Non -Appropriation or the delivery of the
NAE Notice, Buyer will not interrupt or impair the delivery of Usable Electricity or jeopardize
Provider's sale, transfer or other monetization of Environmental Attributes, RECs or Tax
Attributes. Following receipt by Provider of an NAE Notice, Provider, in its sole discretion, (i)
may terminate this Agreement, or (ii) may continue to operate the Project and deliver the Usable
Electricity to a third party or utility company without payment by Buyer therefore during the
applicable Fiscal Year (and each Fiscal Year thereafter until an appropriation is made). Under the
circumstances of (ii), other than with respect to the obligation to make payment for energy
delivered, all obligations of Buyer under this Agreement shall remain in full force and effect. Should
Buyer receive an appropriation for this Agreement during the continuation of the Event of Non-
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Appropriation, before termination under option (i) has been exercised, Buyer shall pay such monies
to Provider as to make Provider whole for any amounts due and owing under this Agreement to the
extent appropriated, and upon payment such Event of Non -Appropriation shall be nullified.
(k) Within thirty (30) days of Provider's receipt of the NAE Notice, Provider shall give
notice to Buyer of Provider's election among options (i) and (ii) under subsection (i) above. If
Provider does not provide notice to Buyer of Provider's election under this subsection 0) within
such period, Provider shall be deemed to have elected option (ii) under subsection (i) above,
provided that, if Provider elects or is deemed to have elected option (ii) it may subsequently change
its election at any time upon prior written notice to Purchaser.
6. Supplemental Power, Net Metering and RECs.
(a) Back-up and Supplemental Usable Electricity. Except as otherwise provided herein,
throughout the Term, Buyer shall be responsible for obtaining all of its requirements for electric
energy in excess of the amounts produced by the Project. Provider shall have no obligation to
obtain or pay for such supplemental or back-up Usable Electricity.
(b) Net Metering & Utility Credits. At any time that electric production from the Project
is greater than Buyer's requirements at such time, Buyer shalt nevertheless pay Provider for all the
Usable Electricity produced by the Project at the rates and in the manner provided in this
Agreement. Buyer shall be entitled to receive, to the extent permitted by Applicable Law, any
credits or payments due from the Electric Utility as a result of net metering from the Project, except
during an Event of Non -Appropriation. Upon Buyer's written request and not to exceed twice per
year, Provider or its duly authorized contractor shall provide reasonable assistance to Buyer in
reviewing the applicable bills, credits and payments received from the Electric Utility.
(c) Interconnection. Provider shall be responsible for arranging the interconnection of
the Project with Buyer's distribution system in a manner that includes bi-directional or "net
metering" if applicable. It is further understood that all cost associated with establishing the
interconnection between the Project and the electric utility pursuant to Net -Metering Rule 3.01 are
solely the responsibility of the Provider.
(d) Solar Program Incentives. Provider shall receive all payments and benefits available
under any incentive/benefits solar program. Buyer shall provide reasonable assistance to Provider
in preparing all applications and other documents necessary for Provider to receive such
payments/benefits, including designating Provider as the customer for purposes thereof or assigning
payments/benefits therefrom to Provider. If Buyer receives any payments under any such
incentive/benefits solar program or other programs in respect of the Project, it shall promptly pay
them over to Provider. Buyer's obligation to make any payments to Provider under this paragraph
(d) is limited to any payments actually received by Buyer.
(e) Ownership of Tax Attributes. Provider shall be the owner of any Tax Attributes that
may arise as a result of the operation of the Project and shall be entitled to transfer such Tax
Attributes to any person. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such Tax Attributes, and if Buyer is deemed to be the
13
owner of any such Tax Attributes, Buyer shall assign the same (or the proceeds thereof) to Provider.
If Buyer receives any payments in respect of such Tax Attributes, it shall promptly pay them over
to Provider.
(f) Environmental Attributes. Buyer shall be the owner of any Environmental
Attributes that may arise as a result of the operation of the Project and shall be entitled to transfer
such Envirommental Attributes to any person. _
(g) Capacity & Ancillary Services. Provider shall be entitled to receive any payments
for electric capacity or ancillary services that may become available as a result of the construction
or operation of the Project. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such payments, and if Buyer is deemed to be the owner
or provider of such capacity or services, then Buyer shall assign the same to Provider. If Buyer
receives any payments in respect of capacity or such services then Buyer shall promptly pay them
over to Provider.
(h) Provider Is Not A Utility. Neither Party shall assert that Provider is an electric utility
or public service company or similar entity that has a duty to provide service, is subject to rate
regulation, or is otherwise subject to regulation by any governmental authority as a result of
Provider's obligations or performance under this Agreement.
(i) Grid charges. Buyer shall be responsible for paying any grid charge authorized
pursuant to Ark. Code Ann. §23-18-607 or any other Applicable Law.
7. Permits and Ownership of Project.
(a) Permits. Provider shall pay for and obtain all approvals from governmental entities
necessary for the construction and operation of the Project, including land use permits, building
permits, demolition and waste disposal permits and approval.
(b) System Ownership. Except as provided in Section 8, Provider or Financing Party
shall be the legal and beneficial owner of the Project at all times. Buyer disclaims any right, title
and interest in and to the Project. The Project is personal property and shall not attach to or be
deemed a part of, or fixture to, the Site. The Project shall at all times retain the legal status of
personal property as defined under Article 9 of the Uniform Commercial Code as in effect in the
state of the Site. Buyer and/or Provider shall make any necessary filings to disclaim the Project as
a fixture of the Site in the appropriate Land Registry to place all interested parties on notice of the
ownership of the Project by Provider.
(c) Liens. To the extent permitted by Applicable Law, each Party 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 of any
nature, including claims by Governmental Authorities for taxes (collectively referred to as "Liens"
and each, individually, a "Lien") on or with respect to the interests of the other in the Project.
8. Purchase Option
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(a) Purchase Option. Buyer shall have the right to purchase the Project and Provider's
rights in the Site from Provider upon the terms set forth in this Section 8(a) (the "Purchase
Option") on either of the seventh (7°1), fourteenth (10% or twenty-first (21") anniversary of the
Commercial Operation Date ("Purchase Option Period(s)") by providing to Provider written
notice of Buyer's election to purchase the Project and Provider's rights in the Site (the "Purchase
Option Notice") no later than the date which is twelve (12) months prior to the respective Purchase
Option Period (the "Purchase Option Notice Deadline"). If the Purchase Option is elected by
Buyer timely sending to Provider the Purchase Option Notice prior to the Purchase Option Notice
Deadline, the closing shall occur (i) within the three (3) month period immediately following the
respective Purchase Option Period or a time and date mutually agreeable to Buyer and Provider
(the "Purchase Option Closing Date"). The purchase price to be paid to Provider by Buyer for
the Project and Provider's rights in the Site on the Purchase Option Closing Date shall be the greater
of (i) Fair Market Value of the Project and Provider's rights in the Site and (ii) the purchase price
for the Project and Provider's rights in the Site on the respective Purchase Option Period as set forth
on Exhibit D hereto (the "Purchase Option Purchase Price"). Within one hundred twenty (120)
days of Provider's receipt of the Purchase Option Notice, Provider shall give Buyer an appraisal of
the Fair Market Value of the Project and Provider's rights in the Site as of the date of the sale. Buyer
may, but is not obligated to, accept such appraisal. If Buyer does not accept such appraisal within
fifteen (15) days of receiving the appraisal from Provider, the Parties shall meet to discuss the
appraisal. If the parties are unable to reach agreement within twenty (20) days of the Buyer's receipt
of the appraisal from Provider, the Parties will be deemed to enter into a dispute for purposes of
Section 21 and shall follow the procedures in Section 21 for resolution of the dispute.
Notwithstanding the foregoing, in the event that Provider enters into a tax equity investment
financing transaction in connection with funding the installation of the Project, the process of
determining the Fair Market Value of the Project and Provider's rights in the Site in this Agreement
shall be undertaken by a mutually acceptable nationally recognized independent appraiser with
experience and expertise in the solar photovoltaic industry acting reasonably and in good faith to
determine the Fair Market Value of the Project and Provider's rights in the Site and shall be
undertaken consistently with the terms of such transaction so that the process for determining Fair
Market Value under this Agreement shall be the same as provided in the agreements for such tax
equity investment financing transaction. Buyer shall be responsible for all appraisal fees.
(b) Transfer of Ownership. Upon Buyer's notice that it elects to exercise the option set
forth in Section 8(a) above, Provider shall prepare and deliver to Buyer a set of records on the
operation and maintenance history of the Project, including a summary of known defects. Upon
payment of the Purchase Option Purchase Price, Provider shall deliver, or cause to be delivered, to
Buyer a bill of sale conveying the Project to Buyer and an assignment or lease/easement or special
warranty deed, as applicable, with respect to Provider's rights in the Site. Such bill of sale,
assignment of lease/easement, and/or special warranty deed shall not contain any warranties other
than a warranty against any defects in title arising through Provider. Provider shall use all
reasonable efforts to transfer any remaining manufacturer's warranties on the Project, or portions
thereof, to Buyer.
(c) Operation & Maintenance After Sale. Prior to the effective date of Buyer's purchase
of the Project and Provider's rights in the Site under Section 8(a), Buyer and Provider shall discuss
15
entering into an operation and maintenance agreement under which Provider shall perform all or a
portion of the operation and maintenance requirements of the Project following Buyer's purchase
of the Project and Provider's rights in the Site. However, neither Party shall be tinder an obligation
to enter into such an agreement.
(d) No Survival of Purchase Option. The options for Buyer to purchase the Project and
Provider's rights in the Site under Section 8(a) shall not survive the termination of this Agreement.
9. Shutdowns.
(a) Provider Safety Shutdown. In addition to the right of Provider to shut down the
Project for maintenance as provided in Section 3(g), Provider may shutdown any or all Project if
Provider, in the exercise of reasonable judgment, believes Site conditions or activities of persons
on the Site may interfere with the safe operation of a Project. Provider shall give Buyer notice of a
shutdown immediately upon becoming aware of the potential for such conditions or activities.
Provider shall use commercially reasonable efforts to restore Site conditions so as to not interfere
with the safe operation of the Project and to reduce, to the greatest extent practicable, the duration
of the shutdown. hn the event of such a shutdown, unless the shutdown was caused by the act or
omission of Buyer or any party under Buyer's control, Buyer shall not be required to pay Provider
any amounts for Usable Electricity that Buyer would have purchased but for the shutdown.
(b) System Disruptions. In the event that any act or omission of Buyer, Buyer's
employees, Affiliates, or agents results in a disruption or outage in a Project's production, then, in
either case, Buyer shall reimburse Provider for all costs and expenses incurred by Provider to repair
the Project or restore suchProject's production to normal operating condition and Buyer will pay
Provider an amount equal to the sum of (A) payments that Buyer would have made to Provider
hereunder for Usable Electricity that would have been produced by the Project following such
outage or disruption; (B) revenues that Provider would have received with respect to the Project
under any incentives/benefits solar program and any other assistance program with respect to
electric energy that would have been produced following such outage or disruption; and (C)
revenues from Environmental Attributes that Provider would have received with respect to electric
energy that would have been produced by the Project following such outage or disruption.
Determination of the amount of electric energy that would have been produced following such
outage or disruption shall be based, during the first Operations Year, on the estimated levels of
production and, after the first Operations Year, based on actual operation of the Project in the same
period in the previous Operations Year, unless Provider and Buyer mutually agree to an alternative
methodology.
10. Taxes.
(a) Income Taxes. Provider shall be responsible income taxes associated with payments
from Buyer to Provider for Usable Electricity from the Project. Provider (and/or Financing Party),
as owner of the Project, shall be entitled to all Tax Attributes with respect to the Project.
(b) Sales Taxes. Buyer shall be responsible for all taxes, fees, and charges, including
sales, use, and gross receipts taxes, imposed or authorized by any Governmental Authority on the
16
sale of electric energy by Provider to Buyer. Buyer shall timely report, make filings for, and pay
any and all such taxes assessed directly against it and shall reimburse Provider for any and all such
taxes assessed against and paid by Provider.
(c) Personal Property Taxes. Provider shall be responsible for all personal property
taxes for personal property which comprises a part of the Project and which is owned by Provider.
(d) Real Property Taxes. Buyer shall not be responsible for real property taxes for any
real property which comprises a part of the Project and which is not owned by Buyer.
(e) Tax Contests. Each Party has the right to contest taxes in accordance with
Applicable Law and the terms of encumbrances against the Site. Each Party shall use all reasonable
efforts to cooperate with the other in any such contests of tax assessments or payments. In no event
shall either Party postpone during the pendency of an appeal of a tax assessment the payment of
taxes otherwise due except to the extent such postponement in payment is bonded or otherwise
secured in accordance with Applicable Law.
(f) Paymentof Delinquent Taxes. In the event either Party fails to pay any taxes that
may become a lien upon the other Party's property, such Party may pay such amounts and in such
event shall be entitled to recover such paid amount from the other Party, together with interest
thereon at the rate of one percent (1%) per month, compounded monthly, but not to exceed the
maximum amount of seventeen percent (17%) per annum.
(g) Reimbursement Deadline. Any reimbursement of taxes owing pursuant to this
Section 10 shall be paid within twenty (20) days of receiving an invoice therefor from the Party
who paid the taxes.
11. Reserved.
12. Cooperation
The Parties acknowledge that the performance of each Parry's obligations under this
Agreement will frequently require the assistance and cooperation of the other Party. Each Party
therefore agrees, in addition to those provisions in this Agreement specifically providing for
assistance from one Party to the other, that it will at all times during the Term cooperate with the
other Party and provide all reasonable assistance to the other Party to help the other Party perform
its obligations hereunder.
During the Term, Buyer shall deliver to Provider: (i) its annual audited financial statements
within 180 days after the end of each Fiscal Year, (ii) its annual budget for the succeeding Fiscal
Year promptly following approval thereof, (iii) proof of appropriation of funds for payments due
hereunder with its annual budget, and (iv) such other financial statements and information relating
to the ability of Buyer to satisfy its obligations under this Agreement as may be reasonably
requested by Provider from time to time.
17
13. Press Releases and Confidentiality.
(a) Press Releases. The Parties acknowledge that they each desire to publicize
information about this Agreement and the Project. The Parties therefore agree that each may make
independent press releases about entering into this Agreement, the size and location of the Project,
production values of the Project, the estimated savings ( including, but not limited to, financial and
environmental attributes) as a result of the Project, the costs incurred by the City related to the
Project, material aspects including, but not limited to, component descriptions and locations, and
the identity of the other Party, with the prior written consent of the other Party, which consent will
not be unreasonably withheld. However, the terms of this Agreement and information about the
Project other than that described above constitutes Confidential Information, as defined below, and
is subject to the remaining provisions of this Section 13. Both Parties have exclusive control over
the content or their respective websites. Any press release will be reviewed by both Parties within
3 business days. If no changes have been requested after 3 business days for review either Party
may issue the press release. Both Parties will review and agree to all media announcement and
marketing publications before release. Nothing herein shall prevent Buyer from complying with
its obligations under the Freedom of Information Act.
(b) Limits on Disclosure of Confidential Information. Subject to the exceptions set forth
below in Section 13(c), each Party agrees that, (i) without the consent of the other Party, it shall not
disclose any Confidential Information received from the other Party to any other person and (ii) it
shall use any Confidential Information received from the other Party only for the purpose of
fulfilling its obligations under this Agreement. Notwithstanding the foregoing, the Parties may,
and shall, disclose any information required to be disclosed under rules, regulations and contracts
implementing any incentivesibenefits applicable to the Project which Provider elects to participate
in or Tax Attributes required to be disclosed by any Governmental Authority under Applicable Law
or pursuant to a validly issued subpoena or required filing. Notwithstanding the foregoing provision,
the Parties acknowledge that the Buyer is subject to the disclosure requirements of the Arkansas
Freedom of Information Act and the confidentiality of the Family Educational Rights and Privacy
Act.
(c) Permissible Disclosures. Buyer may publicly publish this Agreement and its exhibits
and schedules in the event Buyer determines, in its sole discretion, that disclosure is required by
any agreement to which Buyer is a party, or by applicable law or the rules of any public or private .
regulatory body. Provider may provide this Agreement, and any correspondence, notices and other
information related to this Agreement to any person who has provided or who is interested in
providing construction or permanent financing, or any refinancing thereof, to Provider in
connection with the Project. In addition, if a receiving Party is required by Applicable Law, validly
issued subpoena, required filing, or the rules of any stock exchange or regulatory body, to disclose
any Confidential Information provided by the disclosing Party, the receiving Party shall notify the
disclosing Party prior to making any disclosure and shall use its reasonable efforts to cooperate with
the disclosing Party, but at the expense of the disclosing Party.
(d) Buyer acknowledges that Provider is an independent contractor and the Buyer has
no ownership or control over Provider, a private entity. Provider has not agreed to act as a custodian
of public records for the Buyer subject to the provisions of the Arkansas Freedom of Information
Act, Ark. Code Ann. §25-19-101, et seq. Buyer further acknowledges and agrees that certain
documents and information provided to Buyer pursuant to the terms and conditions of this
Agreement may place Provider and Buyer at a competitive disadvantage if the information is
disclosed by Buyer. In the event Buyer receives a request for disclosure pursuant to subpoena or
other means, Buyer shall promptly provide notice of such request to Provider, and shall notify
Provider of any records Buyer deems it is required under law to disclose, in order to give Provider
the opportunity to seek an Attorney General Opinion or court order to prevent the disclosure.
(e) Provider shall provide the Buyer with access to a Project monitoring application
which will allow the Buyer to access the Project information for purposes of Buyer displaying and
communicating the Project information to the public. The system monitoring application shall be
updated at least daily.
14. Representations and Warranties.
(a) Mutual Representations. Each Party hereby represents and warrants to the other, as
of the Effective Date, that:
(i) Organization. It is duly organized, validly existing and in good standing
under the laws of its state of incorporation or formation, as applicable, and of the state in
which the Sites are located, respectively, and has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(ii) No Conflict. The execution and delivery of this Agreement and the
performance of and compliance with the provisions of this Agreement will not conflict with
or constitute a breach of or a default under (1) its organizational documents; (2) any
agreement or other obligation by which it is bound; and/or (3) any law or regulation.
(iii) Enforceability. (1) Except as contemplated under Section 3(a), all actions
required to be taken by or on the part of such Party necessary to make this Agreement
effective have been duly and validly taken; (2) this Agreement has been duly and validly
authorized, executed and delivered on behalf of such Party; and (3) this Agreement
constitutes a legal, valid and binding obligation of such Party, enforceable in accordance
with its terms, subject to laws of bankruptcy, insolvency, reorganization, moratorium or
other similar laws.
(iv) No Material Litigation. There are no court orders, actions, suits or
proceedings at law or in equity by or before any governmental authority, arbitral tribunal or
other body, or threatened against or affecting it or brought or asserted by it in any court or
before any arbitrator of any kind or before or by any governmental authority that could
reasonably be expected to have a material adverse effect on it or its ability to perform its
obligations under this Agreement, or the validity or enforceability of this Agreement.
(b) Buyer Representations. In addition to the representations and warranties in Section
14(a), Buyer hereby represents and warrants to Provider, as of the Effective Date, that:
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(i) Authorization. The execution and delivery of this Agreement by Buyer and
the performance of its obligations hereunder have been duly authorized by all necessary
official action. This Agreement is a legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms.
(ii) Financial Information. The financial information Buyer has provided to
Provider presents fairly in all material respects the financial condition and results of
operations of Buyer.
(c) Provider Representations. In addition to the representations and warranties in
Section 14(a), Provider hereby represents and warrants to Buyer that:
(i) Before commencing performance of this Agreement Provider shall have
become licensed or otherwise permitted to do business in the State of Arkansas and shall
have provided proof and documentation of all required insurance and bonds pursuant to this
Agreement.
(ii) Provider shall make available, upon reasonable request, documents relating
to its performance under this Agreement, including contracts and subcontracts it shall enter
into;
(iii) Provider shall use contractors and subcontractors who are qualified, licensed
and bonded in this State to perform the work so subcontracted pursuant to the terms hereof,
(iv) Provider has all requisite authority to the use of proprietary property, both
tangible and intangible, contemplated by this Agreement;
(v) The execution and delivery of this Agreement by Provider and the
performance of its obligations hereunder have been duly authorized by all necessary official
action. This Agreement is a legal, valid and binding obligation of Provider enforceable
against Provider in accordance with its terms; and
(vi) If requested by Buyer, the financial information Provider has provided to
Buyer presents fairly in all material respects the financial condition and results of operations
of Provider.
15. Force Majeure.
(a) Excuse for Force Majeure Event. Except as provided in Section 15(b) or otherwise
specifically provided in this Agreement, neither Party shall be considered in breach of this
Agreement or liable for any delay or failure to comply with this Agreement if and to the extent that
such delay or failure is caused by the occurrence of a Force Majeure Event; provided that the Party
claiming relief as a result of the Force Majeure Event shall promptly (i) notify the other Party in
writing of the existence and details of the Force Majeure Event; (ii) exercise all reasonable efforts
to minimize delay caused by such Force Majeure Event; (iii) notify the other Party in writing of the
17
cessation of such Force Majeure Event; and (iv) resume performance of its obligations hereunder
as soon as practicable thereafter.
(b) No ,Excuse for Payment for Prior Services. Obligations to make payments for
services already provided shall not be excused by a Force Majeure Event.
(c) Restoration. In the event of a casualty event, to the extent that such casualty event is
attributable to the occurrence of a Force Majeure Event that destroys all or a substantial portion of
a Site, Provider shall elect, within ninety (90) days of such event, whether it will restore the Site,
which restoration will be at the sole expense of Provider. If Provider does not elect to restore the
Site, then this Agreement will terminate. If Provider does elect to restore the Site, Provider shall
provide notice of such election to Buyer, and thereafter following receipt of all necessary permits
and approvals shall diligently restore the Site at its sole expense. In the event of termination of this
Agreement pursuant to this Section 15(c), (i) the Parties shall not be released from any payment or
other obligations arising under this Agreement prior to the casualty event; and (ii) the
confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21 hereof
shall continue to apply notwithstanding the termination of this Agreement. Notwithstanding
anything to the contrary in this Agreement, Provider shall restore the Site if a Force Majeure Event
occurs during the first seven (7) years of the Operation Period.
(d) Termination for Force Majeure Event. Notwithstanding anything to the contrary in
this Agreement, if nonperformance that is the result of a Force Majeure Event continues beyond a
continuous period of two hundred and seventy (270) days, then either Party shall have the right to
terminate this Agreement upon thirty (30) days' notice to the other; provided, however, that
Provider's restoration of the Site under Section 15(c) shall not be subject to the foregoing
termination provision if during such 270-day period Provider has began restoration of the Site and
is proceeding diligently, using commercially reasonable efforts, to complete such restoration
without unreasonable delay. In the event of such a termination of this Agreement with respect to
the Project, the Parties shall not be released from any payment or other obligation arising under this
Agreement which accrued prior to the shutdown of the Project or Site, and the confidentiality and
dispute resolution provisions of this Agreement shall survive the termination of this Agreement.
16. Provider Default and Buyer Remedies.
(a) Provider Events of Default. Provider shall be in default of this Agreement if any of
the following ("Provider Events of Default") shall occur:
(i) Misrepresentation. Any representation or warranty by Provider under
Section 14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Buyer
identifying the defect.
(ii) Abandonment During Installation. After commencement of installation of a
Project, Provider abandons installation of the Project for thirty (30) consecutive days and
fails to resume installation within thirty (30) days after receipt of notice from Buyer stating
21
that, in Buyer's reasonable determination, Provider has abandoned installation of the
Project.
(iii) Failure to Operate. After the Commercial Operation Date, Provider fails to
deliver Usable Electricity for a period of ninety (90) consecutive days, which failure is not
due to equipment failure, damage to the Project that can be remedied during such ninety
(90) day period through the exercise or ordinary diligence, act of governmental authority,
exercise of Provider's rights under this Agreement, or otherwise excused by the provisions
of Section 15(b) (relating to Force Majeure Events); and Provider fails to resume operation
within thirty (30) days after receipt of notice from Buyer stating that, in Buyer's reasonable
determination, Provider has ceased operation of the Project; provided, however, that the
cure period shall be extended by the number of calendar days during which Provider is
prevented by circumstances beyond its control from taking curative action if Provider had
begun curative action and was proceeding diligently, using commercially reasonable efforts,
to complete such curative action.
(iv) Obligation Failure. Provider fails to perform any obligation hereunder, such
failure is material, such failure is not excused by the provisions of Section 15(b) (relating to
Force Majeure Events), and such failure is not cured within: (A) ten (10) days if the failure
involves a failure to make payment when due; or (B) sixty (60) days if the failure involves
an obligation other than payment, after receipt of notice from Buyer identifying the failure.
(v) Prohibited Acts. Provider takes any material action forbidden by this
Agreement.
(vi) Insolvency. Provider (A) applies for or consents to the appointment, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or is generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner, any petition filed against Provider in an involuntary case
under bankruptcy law or seeking to dissolve Provider under other Applicable Law; or (G)
takes any action authorizing its dissolution. Prior to any event of Provider insolvency
occurring after the fifth anniversary of the Commercial Operation Date for a Project,
Provider shall offer to sell the Project at Fair Market Value to Buyer, unless prohibited by
law.
(b) Financing Party pportunity to Cure; Buyer Remedies. Upon an Event of Default
by Provider, provided that Buyer complies with its obligations under Section 18 and Financing
Party does not cure such Event of Default by Provider, Buyer may terminate this Agreement, seek
to recover damages for costs of replacement Usable Electricity for the Project, and pursue other
remedies available at law or equity.
17. Buyer Default and Provider Remedies.
22
(a) Buyer Events of Default. Buyer shall be in default of this Agreement if any of the
following ("Buyer Events of Default") shall occur:
(i) Misrepresentation. Any representation or warranty by Buyer under Section
14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Provider
identifying the defect.
(ii) . Obstruction. Buyer intentionally obstructs commencement of installation of
any Project or fails to take any actions necessary for the interconnection of any Project, or
fails to take Usable Electricity produced by any Project (except in the case of Excuse for
Force Majeure Event), and fails to correct such action within its own power to do so within
fifteen (15) days.
(iii) Payment Failure. Buyer fails to make any payment due under the terms of
this Agreement and fails to make such payment within thirty (30) days after the date when
due.
(iv) Obligation Failure. Buyer fails to perform any obligation hereunder, such
failure is material, such failure is not excused by the provisions of Section 15(b) (relating to
Force Majeure Events), and such failure is not cured within sixty (60) days if the failure
involves an obligation other than payment, after receipt of notice from Provider identifying
the failure.
(v) Insolvency. Buyer (A) applies for or consents to the appointment, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or be generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner, any petition filed against Buyer in an involuntary case
under bankruptcy law or seeking to dissolve Buyer under other Applicable Law; or (G) takes
any action authorizing its dissolution.
(b) Default Damages. Upon an Event of Default by Buyer, Provider may remove any
components of the Project located on a Site and/or pursue any and all other remedies available at
law or in equity.
18. Collateral Assignment; Financing Provisions.
(a) Financing Arrangements. To the extent permitted by law, Provider may pledge,
grant security interests, assign, or otherwise encumber its interests in the Site, Project and this
Agreement to any persons providing financing for the Project. Buyer acknowledges that Provider
23
will obtain construction financing for the Project from one or more third parties and that Provider
may either obtain term financing secured by the Project or sell or assign the Project to a Financing
Party or may arrange other financing accommodations from one or more financial institutions and
may from time to time refinance, or exercise purchase options under, such transactions. Buyer
acknowledges that in connection with such transactions Provider may secure Provider's obligations
by, among other collateral, an assignment of this Agreement, in whole or in part, and a first security
interest in the Project, including the Site. In order to facilitate such financing, and with respect to
any lender or lessor, as applicable, Buyer agrees as follows:
(i) Consent to Collateral Assignment. Buyer hereby consents to both of the sale
or lease of the Project to a Financing Party and the collateral assignment to the Financing
Party of the Provider's right, title and interest in and to this Agreement.
(ii) Rights of Financing Party. Notwithstanding any contrary term of this
Agreement:
(A) Step -In Rights. The Financing Party, as owner or lessee of the
Project, or as collateral assignee of this Agreement, shall be entitled to exercise, in
the place and stead of Provider, any and all rights and remedies of Provider under
this Agreement in accordance with the terms of this Agreement. The Financing
Party shall also be entitled to exercise all rights and remedies of owners or secured
parties, generally with respect to this Agreement and the Project;
(B) Opportunity to Cure Default. The Financing Party 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 Provider thereunder or cause to be cured
any default of Provider thereunder in the time and manner provided by the terms of
this Agreement. Nothing herein requires the Financing Party to true any default of
Provider under this Agreement or (unless the Financing Party has succeeded to
Provider's interests under this Agreement) to perform any act, duty or obligation of
Provider under this Agreement, but Buyer hereby gives it the option to do so;
(C) Exercise of Remedies. Upon the exercise of remedies, including any
sale of the Project by the Financing Party, whether by judicial proceeding or under
any power of sale contained therein, or any conveyance from Provider to the
Financing Party (or any assignee of the Financing Party as defined below) in lieu
thereof, the Financing Party shall give notice to Buyer of the transferee or assignee
of this Agreement. Any such exercise of remedies shall not constitute a default
under this Agreement;
(D) Cure of Bankruptcy Rejection. Upon any rejection or other
termination of this Agreement pursuant to any process undertaken with respect to
Provider under the United States Bankruptcy Code, at the request of Financing Party
made within ninety (90) days of such termination or rejection, Buyer shall enter into
a new agreement with Financing Party or its assignee(s) having the same terms and
conditions as this Agreement.
24
(iii) Right to Cure.
(A) Cure Period, If Financing Party provides Buyer with notice of its
interest and with a notice address, Buyer will not exercise any right to terminate or
suspend this Agreement unless it shall have given the Financing Party prior written
notice of its intent to terminate or suspend this Agreement, as required by this
Agreement, specifying the condition giving rise to such right, and the Financing
Party shall not have caused to be cured the condition giving rise to the right of
termination or suspension within the periods for cure provided for in this
Agreement.; provided that if such Provider default reasonably cannot be cured by
the Financing Party within such period and the Financing Party commences and
continuously pursues cure of such default within such period, such period for cure
will be extended for a reasonable period of time under the circumstances, such
period not to exceed an additional ninety (90) days. The Parties' respective
obligations will otherwise remain in effect during any cure period.
(B) Continuation of Agreement. If the Financing Party or its assignee
(including any purchaser or transferee), pursuant to an exercise of remedies by the
Financing Party, shall acquire title to or control of Provider's assets and shall, within
the time periods described in Section 18(a)(iii)(A) above, cure all defaults under this
Agreement existing as of the date of such change in title or control in the manner
required by this Agreement and which are capable of cure by a third person or entity,
then such Person shall no longer be in default under this Agreement, and this
Agreement shall continue in full force and effect.
(b) Financing Party a Third -Party Beneficiary. Buyer agrees and acknowledges that
Financing Party is a third -party beneficiary of the provisions of this Section 18.
(c) Entry to Consent to Assignment. Buyer agrees to execute any consents to
assignment, payment direction letters, or acknowledgements as may be reasonably requested by
Provider and/or Financing Party in connection with such financing of or sale of any or all of the
Project.
(d) Regardless of assignment, Provider, Provider's Affiliate, or a contractor thereof that
is an experienced manager in the renewable energy industry of at least 25 MW of renewable energy
assets will continue to operate and maintain the Project. For the avoidance of doubt, Entegrity
Energy Partners LLC and/or an Affiliate thereof shall qualify as an experienced manager hereunder.
19. Change in Law.
If there is any Change in Law subsequent to the Effective Date that results in a direct and
material change in Provider's costs to provide the Solar- Services or Buyer's ability to obtain, or a
material reduction in, any net metering credit or payment from the Electric Utility, Provider or
Buyer shall promptly submit to the other party a written notice setting forth (i) the citation of the
Change in Law, (ii) the manner in which such change materially increases Provider's costs to
25
provide the Solar Services or Buyer's ability to receive, or the material reduction in, the net
metering credit or payment, and (iii) Provider's or Buyer's proposed adjustment to the kWh rates to
reflect such material changes in Provider's costs or Buyer's ability to receive, or the material
reduction in, the net metering credit or payment. Provider and Buyer agree to negotiate in good
faith a commercially reasonable adjustment in the kWh rate to reflect the associated costs or values
impacted by the Change in Law, and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty (30) days after written notice in accordance with this Section,
such Dispute shall be resolved in accordance with Section 21 hereof.
20. Limitations on DamaEes, Liability, and Remedies; Disclaimer.
(a) EXCEPT AS EXPLICITLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY NOR ITS DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, MEMBERS,
AGENTS AND EMPLOYEES SUBCONTRACTORS OR SUPPLIERS SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION,
LOST REVENUES (OTHER THAN AMOUNTS PAYABLE UNDER THIS AGREEMENT),
LOST PROFITS, LOST BUSINESS OPPORTUNITY OR ANY BUSINESS INTERRUPTION),
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF ADVISED OF
SUCH. THE PARTIES AGREE THAT (1) IN THE EVENT THAT PROVIDER OR ITS
INVESTORS LOSE OR ARE REQUIRED TO RECAPTURE ANY TAX ATTRIBUTES OR
OTHER TAX BENEFITS AS A RESULT OF A BREACH OF THIS AGREEMENT BY BUYER,
SUCH RECAPTURED AMOUNT SHALL BE DEEMED TO BE DIRECT AND NOT
INDIRECT OR CONSEQUENTIAL DAMAGES, AND (II) IN THE EVENT THAT PROVIDER
IS RETAINING THE ENVIRONMENTAL ATTRIBUTES PRODUCED BY THE PROJECT,
AND A BREACH OF THIS AGREEMENT BY BUYER CAUSES PROVIDER TO LOSE THE
BENEFIT OF SALES OF SUCH ENVIRONMENTAL ATTRIBUTES TO THIRD PARTIES,
THE AMOUNT OF SUCH LOST SALES SHALL BE DIRECT AND NOT INDIRECT OR
CONSEQUENTIAL DAMAGES.
(b) PROVIDER'S AGGREGATE LIABILITY UNDER THIS AGREEMENT
ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OR NON-
PERFORMANCE OF THIS AGREEMENT CANNOT EXCEED THE TOTAL PAYMENTS
ACTUALLY MADE BY BUYER UNDER THIS AGREEMENT. THE PROVISIONS OF THIS
SECTION 20(B) WILL APPLY WHETHER SUCH LIABILITY OR CLAIM ARISES IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE.
(c) TO THE EXTENT THAT THIS AGREEMENT SETS FORTH SPECIFIC
REMEDIES FOR ANY CLAIM OR LIABILITY, SUCH REMEDIES ARE THE AFFECTED
PARTY'S SOLE AND EXCLUSIVE REMEDIES FOR SUCH CLAIM OR LIABILITY,
WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE.
(d) EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO WARRANTY WITH
RESPECT TO THE PROJECT OR THE PERFORMANCE OF PROVIDER'S OBLIGATIONS
HEREUNDER, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS, OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
26
PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE, APPLIES UNDER THIS AGREEMENT.
(e) NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO ALTER,
LIMIT, OR OTHERWISE COMPROMISE THAT TORT IMMUNITY AFFORDED THE CITY
OF FAYETTEVILLE UNDER THE CONSTITUTION AND STATUTES OF THE STATE OF
ARKANSAS.
21. Dispute Resolution.
(a) Negotiation Period. The Parties shall negotiate in good faith and attempt to resolve
any dispute, controversy or claim arising out of or relating to this Agreement (a "Dispute") within
thirty (30)-days after the date that a Party gives written notice of such Dispute to the other Party.
(b) Mediation. If, after such negotiation in accordance with Section 21(a), the Dispute
remains unresolved, either Party may request that a non -binding mediation take place. In such
mediation, representatives of the Parties with authority to resolve the dispute shall meet for at least
three (3) hours with a mediator whom they choose together. If the Parties are unable to agree on a
mediator, then either Party is hereby empowered to request the American Arbitration Association
to appoint a mediator. The mediator's fee and expenses shall be paid one-half by each Party.
(c) Forum. The parties agree that all claims, demands or actions for loss, expense,
damage, liability or other relief, either at law or in equity, arising out of or related to this Agreement
must be brought before a court in Washington County, Arkansas having jurisdiction over such
matter.
22. Notices.
Delivery of Notices. All notices or other communications which may be or are required to
be given by any party to any other party pursuant to this Agreement shall be in writing and shall be
either (i) delivered by hand; (ii) mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid; (iii) delivered by a recognized overnight or personal delivery service;
(iv) transmitted by facsimile (such transmission to be effective on the day of receipt if received
prior to 5:00 pm local time on a business day or in any other case as of the next business day
following the day of transmittal); or (v) transmitted by email if receipt of such transmission by
email is specifically acknowledged by the recipient (automatic responses not being sufficient for
acknowledgement), addressed as follows:
If to Buyer:
City of Fayetteville
113 West Mountain Street
Fayetteville, AR, 72701
If to Provider:
Entegrity Energy Partners, LLC
27
1403 East 6°i Street
Little Rock, AR 72202
Notices shall be effective when delivered (or in the case of email, when acknowledged by
the recipient) in accordance with the foregoing provisions, whether or not (except in the case of
email transmission) accepted by, or on behalf of, the Party to whom the notice is sent.
Each Party may designate by Notice in accordance with this section to the other Party a new
address to which any notice may thereafter be given.
23. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of
Arkansas, without regard to its choice of law provisions, and applicable federal law. Any legal
action or proceeding arising out of or relating to this Agreement must be conducted exclusively
within the State of Arkansas and in no other jurisdiction.
(b) Rules of Interpretation. Section headings are for convenience only and shall not
affect the interpretation of this Agreement. References to sections are, unless the context otherwise
requires, references to sections of this Agreement. The words "hereto", "hereof' and "hereunder"
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The
word "person" shall include individuals; partnerships; corporate bodies (including but not limited
to corporations, limited partnerships and limited liability companies); non-profit corporations or
associations; governmental bodies and agencies; and regulated utilities. The word "including" shall
be deemed to be followed by the words "without limitation". In the event of any conflict between
the text of this Agreement and the contents of an Exhibit hereto, the text of this Agreement shall
govern.
(c) Severability. If any non -material part of this Agreement is held to be unenforceable,
the rest of the Agreement will continue in effect. If a material provision is determined to be
unenforceable and the Party which would have been benefited by the provision does not waive its
unenforceability, then the Parties shall negotiate in good faith to amend the Agreement to restore
to the Party that was the beneficiary of such unenforceable provision the benefits of such provision.
(d) Amendment and Waiver. This Agreement may only be amended by a writing signed
by both Parties. Any waiver of any of the terms hereof shall be enforceable only to the extent it is
waived in a writing signed by the Party against whom the waiver is sought to be enforced. Any
waiver shall be effective only for the particular event for which it is issued and shall not constitute
a waiver of a subsequent occurrence of the waived event nor constitute a waiver of any other
provision hereof, at the same time or subsequently.
(e) Assignment. Neither Party may assign, sell, transfer or in any other way convey its
rights, duties or obligations under this Agreement, either in whole or in part, without the prior
written consent of the other Party which consent shall not be unreasonably withheld or delayed,
except that without consent of Buyer, Provider (i) may assign, in whole or in part, its rights and
obligations hereunder to an Affiliate of Provider and (ii) may sell or collaterally assign this
M
Agreement in whole or in part as collateral, in accordance with Section 18. For purposes of this
Section 23(e), assign, sell, transfer, or convey does not include any sale of all or substantially all of
the assets of Provider or any merger of Provider with another person, whether or not Provider is the
surviving entity from such merger, or any other change in control of Provider, provided any such
surviving entity assumes all obligations of Provider, as appropriate, under this Agreement. Buyer
agrees to execute any consents to assignment or acknowledgements as may be reasonably requested
by Provider in connection with an assignment of this Agreement.
(f) Provider Put Option. Buyer and Provider hereby expressly acknowledge and agree
that Provider shall have the option to put the purchase of one or more Projects located on a Site to
Buyer at the end of the Term for a purchase price which is equivalent to the Fair Market Value of
the Project at such time.
(g) THIS AGREEMENT IS NOT A LEASE — THIS AGREEMENT
CONSTITUTES A SERVICE CONTRACT. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS NOT A
LEASE AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS A LEASE. THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
NEITHER PARTY WILL TAKE ANY ACTION WHATSOEVER TO TREAT OR
CONSTRUE THIS AGREEMENT AS A LEASE. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS AN
AGREEMENT TO SELL ELECTRIC ENERGY GENERATED FROM AN
ALTERNATIVE ENERGY FACILITY AND THIS AGREEMENT SHALL BE DEEMED A
SERVICE CONTRACT PURSUANT TO 26 U.S.C. SECTION 7701(e)(3)(A). THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
EACH PARTY WILL TAKE ANY AND ALL ACTIONS NECESSARY TO INSURE THAT
THIS AGREEMENT IS TREATED AND CONSTRUED AS A SERVICE CONTRACT
SATISFYING THE REQUIREMENTS OF SERVICE CONTRACTS PURSUANT TO 26
U.S.C. SECTION 7701(e)(3)(A). THE PARTIES HERETO HEREBY FURTHER
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS INTENDED
TO FULLY COMPLY WITH ACT 464 OF THE 2019 REGULAR SESSION OF THE 92`u
GENERAL ASSEMBLY OF THE STATE OF ARKANSAS, EXPRESSLY INCLUDING,
BUT NOT LIMITED TO, A.C.A SECTION 23-18-603(7)(C).
(h) No Joint Venture. This Agreement does not create a joint venture, partnership or
other form of business association between the Parties.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Delivery of signature by fax, or scan delivered by email, receipt acknowledged, or
electronic signature are effective to bind a Party hereto.
(Signatures contained on following page)
29
(Signature Page to Solar Services Agreement)
EXECUTED AND EFFECTIVE as of the Effective Date.
BUYER:
CITY OF FAYETTEVILLE
By: _
Name:
Title:
PROVIDER:
ENTEGRITY ENERGY PARTNERS, LLC
Bv:
Name: Michael Parker
Title: President
30
EXHIBIT A
CONFIDENTIAL
USABLE ELECTRICITY PURCHASE RATE
Year
Solar Electric
Rate ($/kWh);
1
$0.0570
2
$0.0576
3
$0.0581
4
$0.0587
5
$0.0593
6
$0.0599
7
$0.0605
8
$0.0611
9
$0.0617
10
$0.0623
11
$0.0630
12
$0.0636
13
$0.0642
14
$0.0649
15
$0.0655
16
$0.0662
17
$0.0668
18
$0.0675
19
$0.0682
20
$0.0689
21
$0.0696
22
$0.0702
23
$0.0709
24
$0.0717
25
$0.0724
31
EXHIBIT B
DESCRIPTION OF SITE
General Description:
A portion of parcel in County, Arkansas. Final legal description to be
determined by survey.
32
Pi.aject Description:
Point of Delivery
Solar Modules:
Solar Racking System:
Inverters:
Billing Meter:
Facility Capacity (DC):
Facility Capacity (AC):
Estimated Year- I Production:
. EXHIBIT C
CONFIDENTIAL
DESCRIPTION OF PROJECT
33
EXHIBIT D
CONFIDENTIAL
PURCHASE OPTION PURCHASE PRICE SCHEDULE
Seventh (7o,) Anniversary of Commercial Operation Date: The greater of (i) Fair Market Value
of the Project and Provider's rights in the Site and (ii)
Fourteenth (14tii) Anniversary of Commercial Operation Date: The neater of (i) Fair Market
Value of the Project and Provider's rights in the Site and (ii)
Twenty -First (21st) Anniversary of Commercial Operation Date: The neater of (i) Fair Market
Value of the Project and Provider's rights in the Site and (ii)
34
SOLAR SERVICES AGREEMENT
between
Entegrity Energy Partners, LLC
as Provider
and
City of Fayetteville
as Buyer
INDEX
Section
1 DEFINITIONS
2 TERM
3 PLANNING, INSTALLATION AND OPERATION OF PROJECT
4 SALE OF ELECTRIC ENERGY
5 PAYMENT AND BILLING; LIMITS ON BUYER OBLIGATIONS; EVENT
OF NON -APPROPRIATION
6 SUPPLEMENTAL POWER, NET METERING, AND RECS
7 PERMITS AND OWNERSHIP OF PROJECT
8 PURCHASE OPTION
9 SHUTDOWNS
10 TAXES
II [RESERVED]
12 COOPERATION, SOLAR ACCESS, FUTURE IMPROVEMENTS
13 PRESS RELEASES AND CONFIDENTIALITY
14 REPRESENTATIONS AND WARRANTIES
15 FORCE MAJEURE
16 PROVIDER DEFAULT AND BUYER REMEDIES
17 BUYER DEFAULT AND PROVIDER REMEDIES
18 COLLATERAL ASSIGNMENT, FINANCING PROVISIONS
19 CHANGE IN LAW
20 LIMITATIONS ON DAMAGES, LIABILITY, AND REMEDIES;
DISCLAIMER
21 DISPUTE RESOLUTION
22 NOTICES
23 MISCELLANEOUS
EXHIBIT A — USABLE ELECTRICITY PURCHASE RATES
EXHIBIT B — DESCRIPTION OF SITE
EXHIBIT C — DESCRIPTION OF PROJECT
EXHIBIT D — PURCHASE OPTION PURCHASE PRICE SCHEDULE
2
SOLAR SERVICES AGREEMENT
THIS SOLAR SERVICES AGREEMENT ("Agreement") is made and entered into on as
Of December 19, 2023 (the "Effective Date"), by and between Entegrity Energy Partners, LLC
("Provider"), and City of Fayetteville ("Buyer").
WITNESSETH.-
WHEREAS, Provider controls (whether by lease, ownership, option or otherwise) that
certain real property located in the State of Arkansas, as more particularly described in Exhibit B
attached hereto (the "Site"), and Buyer and Provider desire for the development, design,
construction, operation and maintenance by Provider of one or more solar powered electric
generating project on the Site to be owned by Provider and for Buyer to purchase from Provider, at
a fixed rate, the electric energy produced by the Project;
WHEREAS, Provider desires to sell to Buyer the electric energy produced by such facilities
at a fixed rate and Buyer desires to purchase from Provider the electric energy produced by such
facilities; and
WHEREAS, Provider and Buyer now desire to enter into this Agreement to memorialize
their agreements regarding such solar alternative energy facilities and electric energy.
NOW, THEREFORE, in consideration of the premises and covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, Provider and Buyer hereby agree as follows:
1. Definitions. The following capitalized terms shall have the meanings set forth
below as used in this Agreement:
(a) The term "Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power, directly or indirectly, to direct
or cause the direction of the management and policies of such Person whether by contract or
otherwise.
(b) The term "Agreement' means this Solar Services Agreement, including all exhibits
attached hereto, as the same may be amended from time to time in accordance with the provisions
hereof.
(c) The term "Applicable Law" means any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction,
registration, license, franchise, permit, authorization, or guideline issued by a Governmental
Authority that is applicable to a Party to this Agreement or the transaction described herein.
Applicable Law also includes an approval, consent or requirement of any Governmental Authority
having jurisdiction over such Party or its property, enforceable at law or in equity.
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(d) The term `Billing Meter' means the revenue grade meter(s) of Provider located at
the Site to measure the output of the Project at the Point of Delivery as identified in Exhibit C.
(e) The term "Business Day' means a day other than Saturday, Sunday, or other day on
which commercial banks in Little Rock, Arkansas are authorized or required by law to be closed.
(f) The term `Buyer" has the meaning assigned to it in the introductory paragraph
hereof.
(g) The term "Change in Law" means that after the date of this Agreement, an
Applicable Law is amended, modified, nullified, suspended, repealed, found unconstitutional or
unlawful, or changed or affected in any material respect by any Applicable Law. Change in Law
does not include changes in federal or state income tax laws. Change in Law does include material
changes in the interpretation of an Applicable Law.
(h) The term "Commercial Operation Date" means the date, which shall be specified by
Provider to Buyer pursuant to Section 3, when the Project is physically complete and has
successfully completed all performance tests and satisfies the interconnection requirements of the
Electric Utility.
(i) The term "Confidential Information" means information of a confidential or
proprietary nature. Provider shall notify Buyer in writing of any information that Provider contends
may provide an advantage to competitors if disclosed. Such information shall include, but not be
limited to, any documentation, records, listing, notes, data, computer disks, files or records,
memoranda, designs, financial models, accounts, reference materials, trade -secrets, prices, strategic
partners, marketing plans, strategic or other plans, financial analyses, customer names or lists,
project opportunities and the like, provided however that Confidential Information does not include
information which (i) was in the possession of the receiving Party before receipt from the disclosing
Party; (ii) is or becomes publicly available other than as a result of unauthorized disclosure by the
receiving Party; (iii) is received by the receiving Party from a third party not known by the receiving
Party with the exercise of reasonable diligence to be under an obligation of confidentiality
respecting the information; or (iv) is independently developed by the receiving Party without
reference to information provided by the disclosing Party. Notwithstanding the term defined above,
the Parties acknowledge that the Buyer is or may become subject to the disclosure requirements of
the Arkansas Freedom of Information Act ("FOIA"). The parties acknowledge and agree that
Provider believes that Exhibits A, C, and D may contain confidential information, trade secrets,
and/or competitive information exempt from disclosure obligations under "FOIA". Buyer agrees
to promptly notify Provider of any receipt of a request for information under FOIA or any other
similar disclosure law, related to the Project or this Agreement.
0) The term "Dispute" means a controversy or claim arising out of or relating to this
Agreement.
(k) The term `Electric Utility" means Southwestern Electric Power Company and its
successors and assigns.
(1) The tern `Environmental Attributes" means Renewable Energy Certificates, carbon
trading credits, emissions reductions credits, emissions allowances, green tags, Green-e
certifications, or other entitlements, certificates, products, or valuations attributed to the Project and
its displacement of conventional energy generation, or any other entitlement pursuant to any federal,
state, or local program applicable to renewable energy sources, whether legislative or regulatory in
origin, as amended from time to time, and excluding, for the avoidance of doubt, any Tax Attributes.
(m) The term "Event of Non -Appropriation" shall have the meaning set forth in Section
5(g) hereof.
(n) The term "Fair Market Value" means the price 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 the Project and advances in solar technology, provided that installed equipment
shall be valued on an installed basis and costs of removal from a current location shall not be a
deduction from the valuation.
(o) The term "Financing Party" means a Project Lessee or Lender or tax equity investor
admitted as a direct or indirect member of Provider.
(p) The term "Fiscal Year" shall mean the fiscal year of Buyer, which Buyer represents
and warrants is January 1 to December 31.
(q) The term "Force Majeure Event" means any act or event that prevents the affected
Party from performing its obligations in accordance with this Agreement, if such act or event is
beyond the reasonable control, and not the result of the fault or negligence, of the affected Party
and such Party had been unable to overcome such act or event with the exercise of due diligence
(including the expenditure of reasonable sums). Subject to the foregoing, Force Majeure Event
may include but are not limited to the following acts or events: (i) extraordinary wind storms, hail,
tornados, hurricanes, floods, lightning strikes, and earthquakes; (ii) explosions or fires arising from
lightning strikes or other causes unrelated to the acts or omissions of the Party seeking to be excused
fiom performance and unrelated to any defect in materials or equipment of Provider; (iii) acts of
war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, pandemic,
official actions of any Governmental Authority, terrorist acts, or rebellion; and (iv) strikes or labor
disputes. Force Majeure Events shall not include equipment failures or acts or omissions of agents,
suppliers or subcontractors, except to the extent such acts or omissions arise from a Force Majeure
Event. Neither changes in prices for Usable Electricity nor changes in available solar energy
resulting from cloud cover or other natural events constitute Force Majeure Events.
(r) The term "Governmental Authority" means any international, national, federal,
provincial, state, municipal, county, regional or local government, administrative, judicial or
regulatory entity operating under any Applicable Laws and includes any department, comimission,
bureau, board, administrative agency or regulatory body of any government with authority over the
parties to this Agreement or this transaction.
(s) The term "Initial Period" has the meaning provided in Section 2.
(t) The term "Installer" means the Provider or any person or entity designated by
Provider to install a Project on a Site.
(u) The term "Land Registry' means the office where real estate records for a Site are
customarily filed.
(v) The term "Lender" means persons providing construction or permanent financing to
Provider in connection with installation of the Project.
(w) The term "Liens" has the meaning provided in Section 7(c).
(x) The term "Losses" means any and all losses, liabilities, claims, demands, suits,
causes of action, judgments, awards, damages, cleanup and remedial obligations, interest, fines,
fees, penalties, costs, and expenses (including all attorney's fees and other costs and expenses
incurred in defending any such claims or matters).
(y) The term "Operations Period" has the meaning provided in Section 2.
(z) The term "Operations Year' means a twelve (12) month period beginning at 12:00
am on an anniversary of the Commercial Operation Date and ending at 11:59 pm on the day
immediately preceding the next anniversary of the Commercial Operation Date, provided that the
first Operations Year shall begin on the Commercial Operation Date.
(aa) The term "Ta!:V" means either Buyer or Provider, as the context shall indicate, and
"Parties" means both Buyer and Provider.
(bb) The term "Point of Delivery" has the meaning set forth in Section 4(a).
(cc) The term "Project" means an integrated system for the generation of Usable
Electricity from solar energy consisting of the photovoltaic panels and associated equipment to be
installed on each of the Sites in accordance with this Agreement, and includes equipment and
cabling required to connect to the Point of Delivery.
(dd) The term "Project Lessee" means, if applicable, any Person to whom Provider
transferred or leased a Project.
(cc) The term "Provider" has the meaning assigned to it in the introductory paragraph
hereof, and all permitted successors and assigns.
(ff) The term "Relocation Event" means the relocation of a Project, starting at the
shutdown of the Project pursuant to such relocation, and ending at the commercial operation of the
Project when such relocated Project is reinstalled at a new location, as determined by the Provider
in its reasonable discretion.
(gg) The term "Renewable Energy Certificate" or "REC" means a certificate, credit,
allowance, green tag, or other transferable indicia, howsoever entitled, created by an applicable
program or certification authority indicating generation of a particular quantity of energy, or
product associated with the generation of a megawatt -hour (MWh) from a renewable energy source
by a renewable energy project.
(hh) The term "Site" means the real property upon which the Project is developed.
(ii) The term "Solar Services" means the services Provider provides to Buyer hereunder.
0j) The term "Tax Attributes" means the investment tax credits (including any grants or
payments in lieu thereof) and any tax deductions or other benefits under the Internal Revenue Code
or applicable federal, state, or local law available as a result of the ownership and operation of a
Project or the output generated by a Project (including, without limitation, tax credits (including
any grants or payments in lieu thereof) and accelerated and/or bonus depreciation.)
(kk) The term "Term" shall have the meaning provided in Section 2 hereof.
(11) The term "Usable Electricity" means alternating current electrical energy meeting
the specifications described in Exhibit C, as measured by the Billing Meter at the Point of Delivery.
2. Term.
(a) Term. This Agreement shall consist of an Initial Period and an Operations Period.
As used herein, "Term" shall mean all of the Initial Period and the Operations Period, unless the
Provider or Buyer terminates the Agreement prior to the end of the Initial Period pursuant to the
terms of this Agreement.
(b) Initial Period. The Initial Period will begin on the Effective Date and will terminate
on the earlier of (i) the Commercial Operation Date or (ii) the date the Agreement is terminated
pursuant to the provisions of Section 3.
(c) Operations Period. If applicable, the Operations Period will commence on the
Commercial Operation Date and will terminate at 11:59 p.m. on the 25a' anniversary of the
Commercial Operation Date unless earlier terminated in accordance with this Agreement; provided,
however the Operations Period will automatically renew for two (2) additional five (5) consecutive
year periods immediately following the Operations Period unless Buyer or Provider shall provide
written notice to the other Party of its intention not to extend the Agreement at least one hundred
eighty (180) days prior to the end of the Operations Period or any applicable automatic five (5) year
extension period, as the case may be.
3. Planning, Installation and Operation of Project.
(a) Site Assessment and Planning. During the Initial Period, Provider shall have the
right, at its own expense, to identify and assess the suitability of each Site for the Project to be
located on such Site and shall act diligently in conducting such assessment. The assessment shall
include the right to inspect the physical condition of the Site; to apply for any building permits or
other governmental authorizations necessary for the construction of the Project; to arrange
interconnections with the Electric Utility; to make any applications to the appropriate Public Service
Commission or other agencies for receipt of payments for the Project; to apply to any other
governmental agencies or other persons for grants or other determinations necessary for the
construction of or receipt of revenues from the Project; to execute a binding lease or close on an
option or purchase of the Site, as applicable; or to make any other investigation or determination
necessary for the financing, construction, operation or maintenance of the Project.
(b) Termination of Agreement during the Initial Period. At any time during the Initial
Period, Provider shall have the right to cease development of the Project on a Site and unilaterally
terminate this Agreement, for any reason, including but not limited to material increases in
Provider's costs to provide the Solar Services. If Provider gives Buyer notice of such determination,
this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Parties shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii) the confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement. At any time prior
to the submission of the interconnection application and the payment associated therewith to the
Electrical Utility, Buyer may terminate this Agreement, provided that Buyer pay Provider for any
direct costs incurred as of the date of termination in connection with the development of the Project.
If Buyer gives Provider notice of such determination and makes the associated payment set forth
above, this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Buyer shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii) the confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement.
If material increases in Provider's costs to provide the Solar Services are the reason for Provider's
termination of this Agreement during the Initial Period, Provider shall propose an Amendment to
this Agreement for Buyer's consideration prior to exercising its right to terminate during the Initial
Period. Such Amendment shall set forth (i) the reasons Provider's costs to provide the Solar
Services have materially increased during the Initial Period, (ii) the extent Provider's costs to
provide the Solar Services have materially increased during the Initial Period, and (iii) Provider's
proposed adjustment to the Usable Electricity Purchase Rate schedule in Exhibit A to reflect such
material changes in Provider's costs. Such Amendment shall be delivered by written notice pursuant
to Section 22.
If Provider proposes an Amendment pursuant to this Section, Provider and Buyer may negotiate an
adjustment in the Usable Electricity Purchase Rate to reflect any material increases in Provider's
costs to provide the Solar Services, and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty (30) days after Provider has delivered a proposed Amendment
to Buyer in accordance with this Section, either Party may terminate the Agreement. If either Party
gives notice of such determination, this Agreement shall terminate effective as of the delivery of
such notice without any further liability of the Parties to each other, provided that (i) the Parties
shall not be released from any payment or other obligations arising under this Agreement prior to
the delivery of the notice; and (ii) the confidentiality provisions of Section 13, and the dispute
resolution provisions of Section 21 hereof shall continue to apply notwithstanding the termination
of this Agreement.
(c) Commencement of Construction, Modification of Design. Provided that either party
does not terminate this Agreement pursuant to this Section 3, Provider will use commercially
reasonable efforts to commence installing the Project on the applicable Site within one hundred
eighty (180) days of the Provider obtaining necessary approvals of the Project from the Electric
Utility and any Governmental Authority.
(i) As of the Effective Date, Provider anticipates that each Project shall consist
of the components and shall have the designs attributed to such Project in Exhibit C attached
hereto.
(ii) Notwithstanding subsection (i) above, Provider has the right to modify the
design of each Project, including the selection of the components in the Project, in its
reasonable discretion.
(d) Contractors. Provider shall use licensed contractors to perform the work of
installing, operating, and maintaining the Project. Provider shall be responsible for the conduct of
Installers and Provider's subcontractors, and Buyer shall have no contractual relationship with
Installers or Provider's subcontractors in connection with the work on the Project.
(e) Status Reports. Provider shall give Buyer regular updates, on a reasonable schedule
requested by Buyer, on the progress of installation of the Project and shall notify Buyer of when
Provider will commence testing of a Project. Buyer shall have the right to have its representatives
present during the construction and testing process, but subject to reasonable written rules and
procedures as may be established by Provider and Installer. After Provider has determined, in its
reasonable judgment, that a Project meets the requirements of the Electric Utility and the Arkansas
Public Service Commission, has been installed in accordance with all Applicable Laws, has
successfully completed all performance tests, and is capable of producing Usable Electricity on a
continuous basis, Provider shall notify Buyer that installation of the Project is complete and shall
specify the Commercial Operation Date for such Project, which may be immediately upon delivery
of such notice to Buyer. All Usable Electricity produced by a Project prior to the Commercial
Operation Date shall be delivered to Buyer at the Point of Delivery after appropriate safety testing
and Buyer shall pay for all such Usable Electricity at the rate applicable to the first Operations Year.
(f) Standard of Operation. Provider shall design, obtain permits, install, operate, and
maintain a Project so as to keep it in good condition and repair, in compliance with all Applicable
Laws and in accordance with the generally accepted practices of the electric industry, in general,
and the solar generation industry, in particular. Such work shall be at Provider's sole expense.
Except for emergency situations or unplanned outages, Provider shall cause the work to be
performed at times so as to minimize disruption of the Project during peak sunlight times, to the
extent reasonably possible.
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(g) System Shut Down. Provider may shut down the Project at any time in order to
perform required emergency repairs to the Project. At other times, Provider shall give Buyer
advance notice of the shutdown as may be reasonable under the circumstances. Provider shall have
no obligation to reimburse Buyer for costs of purchasing Usable Electricity that would have been
produced by the Project but for such shutdown. Provider shall not schedule shutdowns during peak
periods of electric generation and periods when peak energy and demand prices are charged by the
Electric Utility, except as may be required in accordance with prudent electric industry safety
practices in the event of equipment malfunction.
4. Sale of Electric Energy.
(a) Sale of Usable Electricity. Throughout the Operations Period, subject to the terms
and conditions of this Agreement, Provider shall sell to Buyer and Buyer shall buy from Provider
all Usable Electricity produced by the Project. The Point of Delivery of the Usable Electricity shall
be as indicated in Exhibit C. Title to and risk of loss with respect to the Usable Electricity shall
transfer from Provider to Buyer at the Point of Delivery.
(b) Delivery of Usable Electricity. The Usable Electricity from the Project shall be
delivered from Provider to Buyer at the Point of Delivery per the specifications set forth in Exhibit
C and otherwise in compliance with all requirements of the Electric Utility.
(c) Limits on Obligation to Deliver. Provider does not warrant or guarantee the amount
of electric energy to be produced by the limits on Project for any hourly, daily, monthly, annual or
other period. Provider is not a utility or public service company and does not assume any obligations
of a utility or public service company to supply Buyer's electric requirements, other than the
obligations under this Agreement. At the time of this Agreement, Provider is not subject to rate
review by governmental authorities.
(d) Meter Testing. Provider shall install one or more Billing Meter(s) at the Site, as
Provider deems appropriate, to measure the output of the Project at the Point of Delivery. Provider
shall provide Buyer with reasonable access to the metered energy output data collected by Provider.
Provider shall install an Interval Data Recorder (IDR) with industry standard telemetry at each
Project. Provider shall conduct tests of the Billing Meter(s) at such times as it deems appropriate
in accordance with industry standards, but not less than once in any two-year period. Buyer shall
pay for any independent testing of the Billing Meter(s) in excess of such minimum testing schedule
that Buyer deems necessary, except if, after such testing, the Billing Meter is shown to be in error
in Provider's favor by more than two percent (2%), Provider shall pay for the cost of such test and
shall make corresponding adjustments to the records of the amount of electrical energy provided
by the Project delivered based on the period that is half -way in between the date of this testing and
the last testing date of the Billing Meter. If there is an error of less than or equal to two percent
(2%) no billing adjustments will be made. In the event there is an error of greater than two percent
(2%), Provider shall adjust the next invoice to be provided to Buyer under Section 5(b) hereof, to
either charge the Buyer additional amounts for energy produced over the stated Billing Meter
amount during the applicable period at the applicable rate or provide Buyer a credit against future
billing for energy produced under the stated Billing Meter amount during the applicable period,
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provided, however, that any deficiencies or credits not theretofore applied or satisfied at the
expiration or earlier termination of the Operations Period shall be settled in cash.
5. Payment and Billing; Limits on Buyer Obligations; Event of Non -
Appropriation
(a) Rates. Buyer shall pay Provider for Usable Electricity produced by each Project at
the rates set forth in Exhibit A attached hereto.
(b) Billing. Buyer shall pay for the Usable Electricity produced by each Project
quarterly in arrears, promptly after the end of each quarter from the start of operational production.
Provider shall provide Buyer with an invoice setting forth the quantity of Usable Electricity
produced by the Project in such quarter, the applicable rates for such, and the total amount due,
which shall be the product of the quantities and the applicable rates.
(c) Invoice Delivery. Invoices shall be in writing and shall be either (i) delivered by
hand; (ii) mailed by first-class, registered or certified mail, return receipt requested, postage
prepaid; (iii) delivered by a recognized overnight or personal delivery service;; or (iv) transmitted
by email if receipt of such transmission by email is specifically acknowledged by the recipient
(automatic responses not being sufficient for acknowledgement) and with a hard copy to follow,
addressed as follows:
City of Fayetteville
113 West Mountain Street
Fayetteville, AR, 72701
(d) Payment. Buyer shall pay each invoice within thirty (30) days of receipt of the
invoice. Payments shall be made by electronic funds transfer to an account designated by Provider
or by Direct Deposit of funds into Provider's bank account or by check if electronic transfer or
direct deposit are not available. Provider shall designate the account in the invoice or in a written
notice delivered to Buyer.
(f) Disputed Invoices. If Buyer objects to all or a portion of an invoice, Buyer shall,
on or before the date payment of the invoice is due, (i) pay the undisputed portion of the invoice,
and (ii) provide an itemized statement of its objections setting forth in reasonable detail the basis
for its objections. If Buyer does not object prior to the date payment of any invoice is due, Buyer
shall be obligated to pay the full amount of such invoices but Buyer may subsequently object to
such invoice and, if such objection proves to be correct, receive a refund of the disputed amount;
provided, however, that Buyer may not object to any invoice more than twelve (12) months after
the date on which such invoice is rendered.
(g) Payment Limitations. If, during the term of this Agreement including any
extensions, Buyer is bound or deemed bound by the provisions of any State of Arkansas laws
concerning the sufficiency of Buyer appropriations and the legal ability of Buyer to enter into
binding contracts and agreements with annual obligations in excess of annual Buyer appropriations
("Appropriation Bound") the provisions of Sections 5(f)-(j) of the Agreement shall control. If
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Buyer is Appropriation Bound, Provider and Buyer hereby expressly acknowledge and agree that
the obligation of Buyer to pay invoices for Usable Electricity in any Fiscal Year under this
Agreement or otherwise would be legally binding to the extent of amounts appropriated for and
legally available to Buyer for such purposes during such Fiscal Year. The parties hereto
acknowledge that all payments made by Buyer under this Agreement will constitute currently
budgeted expenditures. The parties hereto acknowledge that all payments made by Buyer under
this Agreement will not constitute a general obligation debt, an indebtedness, or a multiple -Fiscal
Year direct or indirect debt or other financial obligation of Buyer within the meaning of any
constitutional or statutory provision or limitation. Buyer represents to Provider, and the parties
hereto acknowledge that, Buyer is Appropriation Bound.
(h) Event of Non -Appropriation. If Buyer is Appropriation Bound, if by the first day of
any Fiscal Year Buyer has failed for any reason to obtain an appropriation of sufficient legally
available amounts to be used by Buyer to pay invoices for Usable Electricity that will be due
hereunder for and during the next ensuing Fiscal Year, then an Event of Non -Appropriation shall
be deemed to have occurred on the first calendar day thereafter (an "Event of Non -
Appropriation"). However, the parties hereto hereby agree that no Event of Non -Appropriation
shall be deemed to have occurred if the foregoing failure set forth in this subsection (g) is cured on
or before the thirty-first (3151) day of such Fiscal Year in which such Event of Non -Appropriation
shall be deemed to have occurred by the enactment of an appropriation providing sufficient legally
available amounts to Buyer, or Buyer otherwise making sufficient money available, to pay invoices
for Usable Electricity that will be due hereunder for and during the next ensuing Fiscal Year.
(i) Present Expectation. If Buyer becomes Appropriation Bound, it is the present
expectation of Buyer that the applicable budgetary entity, within the limits of available funds and
revenues, will make an appropriation of a sufficient amount to fund Buyer's obligations hereunder
during each Fiscal Year of the Term; provided, however, this expectation of Buyer shall not be
binding upon any future applicable budgetary entity in any future Fiscal Year, except to the extent
of any previously appropriated funds. Buyer shall use reasonable good faith efforts to have funds
properly budgeted in the general operating expense section of the budget (and not a specific line
item), appropriated, allotted, or otherwise made available for this Agreement (including obtaining
legislative and other authorizations for use of such funds) and to satisfy such conditions in a timely
manner.
0) Notice of Event of Non -Appropriation. In the case of an Event of Non -
Appropriation, Buyer shall promptly give notice of such Event of Non -appropriation (the "NAE
Notice"). Notwithstanding the occurrence of any Event of Non -Appropriation or the delivery of the
NAE Notice, Buyer will not interrupt or impair the delivery of Usable Electricity or jeopardize
Provider's sale, transfer or other monetization of Environmental Attributes, RECs or Tax
Attributes. Following receipt by Provider of an NAE Notice, Provider, in its sole discretion, (i)
may terminate this Agreement, or (ii) may continue to operate the Project and deliver the Usable
Electricity to a third party or utility company without payment by Buyer therefore during the
applicable Fiscal Year (and each Fiscal Year thereafter until an appropriation is made). Under the
circumstances of (ii), other than with respect to the obligation to make payment for energy
delivered, all obligations of Buyer under this Agreement shall remain in full force and effect. Should
Buyer receive an appropriation for this Agreement during the continuation of the Event of Non-
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Appropriation, before termination under option (i) has been exercised, Buyer shall pay such monies
to Provider as to make Provider whole for any amounts due and owing under this Agreement to the
extent appropriated, and upon payment such Event of Non -Appropriation shall be nullified.
(k) Within thirty (30) days of Provider's receipt of the NAE Notice, Provider shall give
notice to Buyer of Provider's election among options (i) and (ii) under subsection (i) above. If
Provider does not provide notice to Buyer of Provider's election under this subsection 0) within
such period, Provider shall be deemed to have elected option (ii) under subsection (i) above,
provided that, if Provider elects or is deemed to have elected option (ii) it may subsequently change
its election at any time upon prior written notice to Purchaser.
6. Supplemental Power, Net Metering and RE' Cs.
(a) Back-up and Supplemental Usable Electricity. Except as otherwise provided herein,
throughout the Term, Buyer shall be responsible for obtaining all of its requirements for electric
energy in excess of the amounts produced by the Project. Provider shall have no obligation to
obtain or pay for such supplemental or back-up Usable Electricity.
(b) Net Metering & Utility Credits. At any time that electric production from the Project
is greater than Buyer's requirements at such time, Buyer shall nevertheless pay Provider for all the
Usable Electricity produced by the Project at the rates and in the manner provided in this
Agreement. Buyer shall be entitled to receive, to the extent permitted by Applicable Law, any
credits or payments due from the Electric Utility as a result of net metering from the Project, except
during an Event of Non -Appropriation. Upon Buyer's written request and not to exceed twice per
year, Provider or its duly authorized contractor shall provide reasonable assistance to Buyer in
reviewing the applicable bills, credits and payments received from the Electric Utility.
(e) Interconnection. Provider shall be responsible for arranging the interconnection of
the Project with Buyer's distribution system in a manner that includes bi-directional or "net
metering" if applicable. It is further understood that all cost associated with establishing the
interconnection between the Project and the electric utility pursuant to Net -Metering Rule 3.01 are
solely the responsibility of the Provider.
(d) Solar Program Incentives. Provider shall receive all payments and benefits available
under any incentive/benefits solar program. Buyer shall provide reasonable assistance to Provider
in preparing all applications and other documents necessary for Provider to receive such
paymentsibenefits, including designating Provider as the customer for purposes thereof or assigning
payments benefits therefrom to Provider. If Buyer receives any payments under any such
incentive/benefits solar program or other programs in respect of the Project, it shall promptly pay
them over to Provider. Buyer's obligation to make any payments to Provider under this paragraph
(d) is limited to any payments actually received by Buyer.
(e) Ownership of Tax Attributes. Provider shall be the owner of any Tax Attributes that
may arise as a result of the operation of the Project and shall be entitled to transfer such Tax
Attributes to any person. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such Tax Attributes, and if Buyer is deemed to be the
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owner of any such Tax Attributes, Buyer shall assign the same (or the proceeds thereof) to Provider.
If Buyer receives any payments in respect of such Tax Attributes, it shall promptly pay them over
to Provider.
(f) Environmental Attributes. Buyer shall be the owner of any Environmental
Attributes that may arise as a result of the operation of the Project and shall be entitled to transfer
such Environmental Attributes to any person.
(g) Capacity & Ancillary Services. Provider shall be entitled to receive any payments
for electric capacity or ancillary services that may become available as a result of the construction
or operation of the Project. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such payments, and if Buyer is deemed to be the owner
or provider of such capacity or services, then Buyer shall assign the same to Provider. If Buyer
receives any payments in respect of capacity or such services then Buyer shall promptly pay them
over to Provider.
(h) Provider Is Not A Utility. Neither Party shall assert that Provider is an electric utility
or public service company or similar entity that has a duty to provide service, is subject to rate
regulation, or is otherwise subject to regulation by any governmental authority as a result of
Provider's obligations or performance under this Agreement.
(i) Grid charges. Buyer shall be responsible for paying any grid charge authorized
pursuant to Ark. Code Ann. §23-18-607 or any other Applicable Law.
7. Permits and Ownership of Proiect.
(a) Permits. Provider shall pay for and obtain all approvals from governmental entities
necessary for the construction and operation of the Project, including land use permits, building
permits, demolition and waste disposal permits and approval.
(b) System Ownership. Except as provided in Section 8, Provider or Financing Party
shall be the legal and beneficial owner of the Project at all times. Buyer disclaims any right, title
and interest in and to the Project. The Project is personal property and shall not attach to or be
deemed a part of, or fixture to, the Site. The Project shall at all times retain the legal status of
personal property as defined under Article 9 of the Uniform Commercial Code as in effect in the
state of the Site. Buyer and/or Provider shall make any necessary filings to disclaim the Project as
a fixture of the Site in the appropriate Land Registry to place all interested parties on notice of the
ownership of the Project by Provider.
(c) Liens. To the extent permitted by Applicable Law, each Party 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 of any
nature, including claims by Governmental Authorities for taxes (collectively referred to as "Liens"
and each, individually, a "Lien") on or with respect to the interests of the other in the Project.
8. Purchase Option
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(a) Purchase Option. Buyer shall have the right to purchase the Project and Provider's
rights in the Site from Provider upon the terms set forth in this Section 8(a) (the "Purchase
Option") on either of the seventh (7'h), fourteenth (14`h), or twenty-first (21") anniversary of the
Commercial Operation Date ("Purchase Option Period(s)") by providing to Provider written
notice of Buyer's election to purchase the Project and Provider's rights in the Site (the "Purchase
Option Notice") no later than the date which is twelve (12) months prior to the respective Purchase
Option Period (the "Purchase Option Notice Deadline"). If the Purchase Option is elected by
Buyer timely sending to Provider the Purchase Option Notice prior to the Purchase Option Notice
Deadline, the closing shall occur (i) within the three (3) month period immediately following the
respective Purchase Option Period or a time and date mutually agreeable to Buyer and Provider
(the "Purchase Option Closing Date"). The purchase price to be paid to Provider by Buyer for
the Project and Provider's rights in the Site on the Purchase Option Closing Date shall be the greater
of (i) Fair Market Value of the Project and Provider's rights in the Site and (ii) the purchase price
for the Project and Provider's rights in the Site on the respective Purchase Option Period as set forth
on Exhibit D hereto (the "Purchase Option Purchase Price"). Within one hundred twenty (120)
days of Provider's receipt of the Purchase Option Notice, Provider shall give Buyer an appraisal of
the Fair Market Value of the Project and Provider's rights in the Site as of the date of the sale. Buyer
may, but is not obligated to, accept such appraisal. If Buyer does not accept such appraisal within
fifteen (15) days of receiving the appraisal from Provider, the Parties shall meet to discuss the
appraisal. If the parties are unable to reach agreement within twenty (20) days of the Buyer's receipt
of the appraisal from Provider, the Parties will be deemed to enter into a dispute for purposes of
Section 21 and shall follow the procedures in Section 21 for resolution of the dispute.
Notwithstanding the foregoing, in the event that Provider enters into a tax equity investment
financing transaction in connection with funding the installation of the Project, the process of
determining the Fair Market Value of the Project and Provider's rights in the Site in this Agreement
shall be undertaken by a mutually acceptable nationally recognized independent appraiser with
experience and expertise in the solar photovoltaic industry acting reasonably and in good faith to
determine the Fair Market Value of the Project and Provider's rights in the Site and shall be
undertaken consistently with the terms of such transaction so that the process for determining Fair
Market Value under this Agreement shall be the same as provided in the agreements for such tax
equity investment financing transaction. Buyer shall be responsible for all appraisal fees.
(b) Transfer of Ownership. Upon Buyer's notice that it elects to exercise the option set
forth in Section 8(a) above, Provider shall prepare and deliver to Buyer a set of records on the
operation and maintenance history of the Project, including a summary of known defects. Upon
payment of the Purchase Option Purchase Price, Provider shall deliver, or cause to be delivered, to
Buyer a bill of sale conveying the Project to Buyer and an assignment or lease/easement or special
warranty deed, as applicable, with respect to Provider's rights in the Site. Such bill of sale,
assignment of lease/easement, and/or special warranty deed shall not contain any warranties other
than a warranty against any defects in title arising through Provider. Provider shall use all
reasonable efforts to transfer any remaining manufacturer's warranties on the Project, or portions
thereof, to Buyer.
(c) Operation & Maintenance After Sale. Prior to the effective date of Buyer's purchase
of the Project and Provider's rights in the Site under Section 8(a), Buyer and Provider shall discuss
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entering into an operation and maintenance agreement under which Provider shall perform all or a
portion of the operation and maintenance requirements of the Project following Buyer's purchase
of the Project and Provider's rights in the Site. However, neither Party shall be under an obligation
to enter into such an agreement.
(d) No Survival of Purchase Option. The options for Buyer to purchase the Project and
Provider's rights in the Site under Section 8(a) shall not survive the termination of this Agreement.
9. Shutdowns.
(a) Provider Safety Shutdown. In addition to the right of Provider to shut down the
Project for maintenance as provided in Section 3(g), Provider may shutdown any or all Project if
Provider, in the exercise of reasonable judgment, believes Site conditions or activities of persons
on the Site may interfere with the safe operation of a Project. Provider shall give Buyer notice of a
shutdown immediately upon becoming aware of the potential for such conditions or activities.
Provider shall use commercially reasonable efforts to restore Site conditions so as to not interfere
with the safe operation of the Project and to reduce, to the greatest extent practicable, the duration
of the shutdown, hi the event of such a shutdown, unless the shutdown was caused by the act or
omission of Buyer or any party under Buyer's control, Buyer shall not be required to pay Provider
any amounts for Usable Electricity that Buyer would have purchased but for the shutdown.
(b) System Disruptions. In the event that any act or omission of Buyer, Buyer's
employees, Affiliates, or agents results in a disruption or outage in a Project's production, then, in
either case, Buyer shall reimburse Provider for all costs and expenses incurred by Provider to repair
the Project or restore such Project's production to normal operating condition and Buyer will pay
Provider an amount equal to the sum of (A) payments that Buyer would have made to Provider
hereunder for Usable Electricity that would have been produced by the Project following such
outage or disruption; (B) revenues that Provider would have received with respect to the Project
under any incentives/benefits solar program and any other assistance program with respect to
electric energy that would have been produced following such outage or disruption; and (C)
revenues from Environmental Attributes that Provider would have received with respect to electric
energy that would have been produced by the Project following such outage or disruption.
Determination of the amount of electric energy that would have been produced following such
outage or disruption shall be based, during the first Operations Year, on the estimated levels of
production and, after the first Operations Year, based on actual operation of the Project in the same
period in the previous Operations Year, unless Provider and Buyer mutually agree to an alternative
methodology.
10. Taxes.
(a) Income Taxes. Provider shall be responsible income taxes associated with payments
from Buyer to Provider for Usable Electricity from the Project. Provider (and/or Financing Party),
as owner of the Project, shall be entitled to all Tax Attributes with respect to the Project.
(b) Sales Taxes. Buyer shall be responsible for all taxes, fees, and charges, including
sales, use, and gross receipts taxes, imposed or authorized by any Governmental Authority on the
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sale of electric energy by Provider to Buyer. Buyer shall timely report, make filings for, and pay
any and all such taxes assessed directly against it and shall reimburse Provider for any and all such
taxes assessed against and paid by Provider.
(e) Personal Property Taxes. Provider shall be responsible for all personal property
taxes for personal property which comprises a part of the Project and which is owned by Provider.
(d) Real Property Taxes. Buyer shall not be responsible for real property taxes for any
real property which comprises a part of the Project and which is not owned by Buyer.
(e) Tax Contests. Each Party has the right to contest taxes in accordance with
Applicable Law and the terms of encumbrances against the Site. Each Party shall use all reasonable
efforts to cooperate with the other in any such contests of tax assessments or payments. In no event
shall either Party postpone during the pendency of an appeal of a tax assessment the payment of
taxes otherwise due except to the extent such postponement in payment is bonded or otherwise
secured in accordance with Applicable Law.
(f) Payment of Delinquent Taxes. In the event either Party fails to pay any taxes that
may become a lien upon the other Party's property, such Party may pay such amounts and in such
event shall be entitled to recover such paid amount from the other Party, together with interest
thereon at the rate of one percent (1%) per month, compounded monthly, but not to exceed the
maximum amount of seventeen percent (17%) per annum.
(g) Reimbursement Deadline. Any reimbursement of taxes owing pursuant to this
Section 10 shall be paid within twenty (20) days of receiving an invoice therefor from the Party
who paid the taxes.
11. Reserved.
12. Cooperation
The Parties acknowledge that the performance of each Party's obligations under this
Agreement will frequently require the assistance and cooperation of the other Party. Each Party
therefore agrees, in addition to those provisions in this Agreement specifically providing for
assistance from one Party to the other, that it will at all times during the Term cooperate with the
other Party and provide all reasonable assistance to the other Party to help the other Party perform
its obligations hereunder.
During the Term, Buyer shall deliver to Provider: (i) its annual audited financial statements
within 180 days after the end of each Fiscal Year, (ii) its annual budget for the succeeding Fiscal
Year promptly following approval thereof, (iii) proof of appropriation of funds for payments due
hereunder with its annual budget, and (iv) such other financial statements and information relating
to the ability of Buyer to satisfy its obligations under this Agreement as may be reasonably
requested by Provider from time to time.
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13. Press Releases and Confidentiality.
(a) Press Releases. The Parties acknowledge that they each desire to publicize
information about this Agreement and the Project. The Parties therefore agree that each may make
independent press releases about entering into this Agreement, the size and location of the Project,
production values of the Project, the estimated savings ( including, but not limited to, financial and
environmental attributes) as a result of the Project, the costs incurred by the City related to the
Project, material aspects including, but not limited to, component descriptions and locations, and
the identity of the other Party, with the prior written consent of the other Party, which consent will
not be unreasonably withheld. However, the terms of this Agreement and information about the
Project other than that described above constitutes Confidential Information, as defined below, and
is subject to the remaining provisions of this Section 13. Both Parties have exclusive control over
the content or their respective websites. Any press release will be reviewed by both Parties within
3 business days. If no changes have been requested after 3 business days for review either Party
may issue the press release. Both Parties will review and agree to all media announcement and
marketing publications before release. Nothing herein shall prevent Buyer from complying with
its obligations under the Freedom of Information Act.
(b) Limits on Disclosure of Confidential Information. Subject to the exceptions set forth
below in Section 13(c), each Party agrees that, (i) without the consent of the other Party, it shall not
disclose any Confidential Information received from the other Party to any other person and (ii) it
shall use any Confidential Information received from the other Party only for the purpose of
fulfilling its obligations under this Agreement. Notwithstanding the foregoing, the Parties may,
and shall, disclose any information required to be disclosed under rules, regulations and contracts
implementing any incentives/benefits applicable to the Project which Provider elects to participate
in or Tax Attributes required to be disclosed by any Governmental Authority under Applicable Law
or pursuant to a validly issued subpoena or required filing. Notwithstanding the foregoing provision,
the Parties acknowledge that the Buyer is subject to the disclosure requirements of the Arkansas
Freedom of Information Act and the confidentiality of the Family Educational Rights and Privacy
Act.
(c) Permissible Disclosures. Buyer may publicly publish this Agreement and its exhibits
and schedules in the event Buyer determines, in its sole discretion, that disclosure is required by
any agreement to which Buyer is a party, or by applicable law or the rules of any public or private
regulatory body. Provider may provide this Agreement, and any correspondence, notices and other
information related to this Agreement to any person who has provided or who is interested in
providing construction or permanent financing, or any refinancing thereof, to Provider in
connection with the Project. In addition, if a receiving Party is required by Applicable Law, validly
issued subpoena, required filing, or the rules of any stock exchange or regulatory body, to disclose
any Confidential Information provided by the disclosing Party, the receiving Party shall notify the
disclosing Party prior to making any disclosure and shall use its reasonable efforts to cooperate with
the disclosing Party, but at the expense of the disclosing Party.
(d) Buyer acknowledges that Provider is an independent contractor and the Buyer has
no ownership or control over Provider, a private entity. Provider has not agreed to act as a custodian
of public records for the Buyer subject to the provisions of the Arkansas Freedom of Information
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Act, Ark. Code Ann. §25-19-101, et seq. Buyer further acknowledges and agrees that certain
documents and information provided to Buyer pursuant to the terms and conditions of this
Agreement may place Provider and Buyer at a competitive disadvantage if the information is
disclosed by Buyer. In the event Buyer receives a request for disclosure pursuant to subpoena or
other means, Buyer shall promptly provide notice of such request to Provider, and shall notify
Provider of any records Buyer deems it is required under law to disclose, in order to give Provider
the opportunity to seek an Attorney General Opinion or court order to prevent the disclosure.
(e) Provider shall provide the Buyer with access to a Project monitoring application
which will allow the Buyer to access the Project information for purposes of Buyer displaying and
communicating the Project information to the public. The system monitoring application shalt be
updated at least daily.
14. Representations and Warranties.
(a) Mutual Representations. Each Party hereby represents and warrants to the other, as
of the Effective Date, that:
(i) Organization. It is duly organized, validly existing and in good standing
under the laws of its state of incorporation or formation, as applicable, and of the state in
which the Sites are located, respectively, and has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(ii) No Conflict. The execution and delivery of this Agreement and the
performance of and compliance with the provisions of this Agreement will not conflict with
or constitute a breach of or a default under (1) its organizational documents; (2) any
agreement or other obligation by which it is bound; and/or (3) any law or regulation.
(iii) Enforceability. (1) Except as contemplated under Section 3(a), all actions
required to be taken by or on the part of such Party necessary to make this Agreement
effective have been duly and validly taken; (2) this Agreement has been duly and validly
authorized, executed and delivered on behalf of such Party; and (3) this Agreement
constitutes a legal, valid and binding obligation of such Party, enforceable in accordance
with its terms, subject to laws of bankruptcy, insolvency, reorganization, moratorium or
other similar laws.
(iv) No Material Litigation. There are no court orders, actions, suits or
proceedings at law or in equity by or before any governmental authority, arbitral tribunal or
other body, or threatened against or affecting it or brought or asserted by it in any court or
before any arbitrator of any kind or before or by any governmental authority that could
reasonably be expected to have a material adverse effect on it or its ability to perform its
obligations under this Agreement, or the validity or enforceability of this Agreement.
(b) Buyer Representations. In addition to the representations and warranties in Section
14(a), Buyer hereby represents and warrants to Provider, as of the Effective Date, that:
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(i) Authorization. The execution and delivery of this Agreement by Buyer and
the performance of its obligations hereunder have been duly authorized by all necessary
official action. This Agreement is a legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms.
(ii) Financial Information. The financial information Buyer has provided to
Provider presents fairly in all material respects the financial condition and results of
operations of Buyer.
(c) Provider Representations. In addition to the representations and warranties in
Section 14(a), Provider hereby represents and warrants to Buyer that:
(i) Before commencing performance of this Agreement Provider shall have
become licensed or otherwise permitted to do business in the State of Arkansas and shall
have provided proof and documentation of all required insurance and bonds pursuant to this
Agreement.
(ii) Provider shall make available, upon reasonable request, documents relating
to its performance under this Agreement, including contracts and subcontracts it shall enter
into;
(iii) Provider shall use contractors and subcontractors who are qualified, licensed
and bonded in this State to perform the work so subcontracted pursuant to the terms hereof;
(iv) Provider has all requisite authority to the use of proprietary property, both
tangible and intangible, contemplated by this Agreement;
(v) The execution and delivery of this Agreement by Provider and the
performance of its obligations hereunder have been duly authorized by all necessary official
action. This Agreement is a legal, valid and binding obligation of Provider enforceable
against Provider in accordance with its terms; and
(vi) If requested by Buyer, the financial information Provider has provided to
Buyer presents fairly in all material respects the financial condition and results of operations
of Provider.
15. Force Majeure.
(a) Excuse for Force Majeure Event. Except as provided in Section 15(b) or otherwise
specifically provided in this Agreement, neither Party shall be considered in breach of this
Agreement or liable for any delay or failure to comply with this Agreement if and to the extent that
such delay or failure is caused by the occurrence of a Force Majeure Event; provided that the Party
claiming relief as a result of the Force Majeure Event shall promptly (i) notify the other Party in
writing of the existence and details of the Force Majeure Event; (ii) exercise all reasonable efforts
to minimize delay caused by such Force Majeure Event; (iii) notify the other Party in writing of the
20
cessation of such Force Majeure Event; and (iv) resume performance of its obligations hereunder
as soon as practicable thereafter.
(b) No Excuse for Payment for Prior Services. Obligations to make payments for
services already provided shall not be excused by a Force Majeure Event.
(c) Restoration. In the event of a casualty event, to the extent that such casualty event is
attributable to the occurrence of a Force Majeure Event that destroys all or a substantial portion of
a Site, Provider shall elect, within ninety (90) days of such event, whether it will restore the Site,
which restoration will be at the sole expense of Provider. If Provider does not elect to restore the
Site, then this Agreement will terminate. If Provider does elect to restore the Site, Provider shall
provide notice of such election to Buyer, and thereafter following receipt of all necessary permits
and approvals shall diligently restore the Site at its sole expense. In the event of termination of this
Agreement pursuant to this Section 15(c), (i) the Parties shall not be released from any payment or
other obligations arising under this Agreement prior to the casualty event; and (ii) the
confidentiality provisions of Section 13, and the dispute resolution provisions of Section 21 hereof
shall continue to apply notwithstanding the termination of this Agreement. Notwithstanding
anything to the contrary in this Agreement, Provider shall restore the Site if a Force Majeure Event
occurs during the first seven (7) years of the Operation Period.
(d) Termination for Force Majeure Event. Notwithstanding anything to the contrary in
this Agreement, if nonperformance that is the result of a Force Majeure Event continues beyond a
continuous period of two hundred and seventy (270) days, then either Party shall have the right to
terminate this Agreement upon thirty (30) days' notice to the other; provided, however, that
Provider's restoration of the Site under Section 15(c) shall not be subject to the foregoing
termination provision if during such 270-day period Provider has begun restoration of the Site and
is proceeding diligently, using commercially reasonable efforts, to complete such restoration
without unreasonable delay. In the event of such a termination of this Agreement with respect to
the Project, the Parties shall not be released from any payment or other obligation arising under this
Agreement which accrued prior to the shutdown of the Project or Site, and the confidentiality and
dispute resolution provisions of this Agreement shall survive the termination of this Agreement.
16. Provider Default and Buyer Remedies.
(a) Provider Events of Default. Provider shall be in default of this Agreement if any of
the following ("Provider Events of Default") shall occur:
(i) Misrepresentation. Any representation or warranty by Provider under
Section 14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Buyer
identifying the defect.
(ii) Abandonment During Installation. After commencement of installation of a
Project, Provider abandons installation of the Project for thirty (30) consecutive days and
fails to resume installation within thirty (30) days after receipt of notice from Buyer stating
21
that, in Buyer's reasonable determination, Provider has abandoned installation of the
Project.
(iii) Failure to Operate. After the Commercial Operation Date, Provider fails to
deliver Usable Electricity for a period of ninety (90) consecutive days, which failure is not
due to equipment failure, damage to the Project that can be remedied during such ninety
(90) day period through the exercise or ordinary diligence, act of governmental authority,
exercise of Provider's rights under this Agreement, or otherwise excused by the provisions
of Section 15(b) (relating to Force Majeure Events); and Provider fails to resume operation
within thirty (30) days after receipt of notice from Buyer stating that, in Buyer's reasonable
determination, Provider has ceased operation of the Project; provided, however, that the
cure period shall be extended by the number of calendar days during which Provider is
prevented by circumstances beyond its control from taking curative action if Provider had
begun curative action and was proceeding diligently, using commercially reasonable efforts,
to complete such curative action.
(iv) Obligation Failure. Provider fails to perform any obligation hereunder, such
failure is material, such failure is not excused by the provisions of Section 15(b) (relating to
Force Majeure Events), and such failure is not cured within: (A) ten (10) days if the failure
involves a failure to make payment when due; or (B) sixty (60) days if the failure involves
an obligation other than payment, after receipt of notice from Buyer identifying the failure.
(v) Prohibited Acts. Provider takes any material action forbidden by this
Agreement.
(vi) Insolvency. Provider (A) applies for or consents to the appointment, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or is generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner, any petition filed against Provider in an involuntary case
under bankruptcy law or seeking to dissolve Provider under other Applicable Law; or (G)
takes any action authorizing its dissolution. Prior to any event of Provider insolvency
occurring after the fifth anniversary of the Commercial Operation Date for a Project,
Provider shall offer to sell the Project at Fair Market Value to Buyer, unless prohibited by
law.
(b) Financing Party pportunity to Cure; Buyer Remedies. Upon an Event of Default
by Provider, provided that Buyer complies with its obligations under Section 18 and Financing
Party does not cure such Event of Default by Provider, Buyer may terminate this Agreement, seek
to recover damages for costs of replacement Usable Electricity for the Project, and pursue other
remedies available at law or equity.
17. Buyer Default and Provider Remedies.
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(a) Buyer Events of Default. Buyer shall be in default of this Agreement if any of the
following ("Buyer Events of Default") shall occur:
(i) Misrepresentation. Any representation or warranty by Buyer under Section
14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Provider
identifying the defect.
(ii) Obstruction. Buyer intentionally obstructs commencement of installation of
any Project or fails to take any actions necessary for the interconnection of any Project, or
fails to take Usable Electricity produced by any Project (except in the case of Excuse for
Force Majeure Event), and fails to correct such action within its own power to do so within
fifteen (15) days.
(iii) Payment Failure. Buyer fails to make any payment due under the terms of
this Agreement and fails to make such payment within thirty (30) days after the date when
due.
(iv) Obligation Failure. Buyer fails to perform any obligation hereunder, such
failure is material, such failure is not excused by the provisions of Section 15(b) (relating to
Force Majeure Events), and such failure is not cured within sixty (60) days if the failure
involves an obligation other than payment, after receipt of notice from Provider identifying
the failure.
(v) Insolvency. Buyer (A) applies for or consents to the appointment, or the
taking of possession by, a receiver, custodian, trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or be generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner, any petition filed against Buyer in an involuntary case
under bankruptcy law or seeking to dissolve Buyer under other Applicable Law; or (G) takes
any action authorizing its dissolution.
(b) Default Damages. Upon an Event of Default by Buyer, Provider may remove any
components of the Project located on a Site and/or pursue any and all other remedies available at
law or in equity.
18. Collateral Assignment, Financing Provisions.
(a) Financing Arrangements. To the extent permitted by law, Provider may pledge,
grant security interests, assign, or otherwise encumber its interests in the Site, Project and this
Agreement to any persons providing financing for the Project. Buyer acknowledges that Provider
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will obtain construction financing for the Project from one or more third parties and that Provider
may either obtain term financing secured by the Project or sell or assign the Project to a Financing
Party or may arrange other financing accommodations from one or more financial institutions and
may from time to time refinance, or exercise purchase options under, such transactions. Buyer
acknowledges that in connection with such transactions Provider may secure Provider's obligations
by, among other collateral, an assignment of this Agreement, in whole or in part, and a first security
interest in the Project, including the Site. In order to facilitate such financing, and with respect to
any lender or lessor, as applicable, Buyer agrees as follows:
(i) Consent to Collateral Assignment. Buyer hereby consents to both of the sale
or lease of the Project to a Financing Party and the collateral assignment to the Financing
Party of the Provider's right, title and interest in and to this Agreement.
(ii) Rights of Financing Party. Notwithstanding any contrary term of this
Agreement:
(A) Step -In Rights. The Financing Party, as owner or lessee of the
Project, or as collateral assignee of this Agreement, shall be entitled to exercise, in
the place and stead of Provider, any and all rights and remedies of Provider under
this Agreement in accordance with the terms of this Agreement. The Financing
Party shall also be entitled to exercise all rights and remedies of owners or secured
parties, generally with respect to this Agreement and the Project;
(B) Opportunity to Cure Default. The Financing Party 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 Provider thereunder or cause to be cured
any default of Provider thereunder in the time and manner provided by the terms of
this Agreement. Nothing herein requires the Financing Party to cure any default of
Provider under this Agreement or (unless the Financing Party has succeeded to
Provider's interests under this Agreement) to perform any act, duty or obligation of
Provider under this Agreement, but Buyer hereby gives it the option to do so;
(C) Exercise of Remedies. Upon the exercise of remedies, including any
sale of the Project by the Financing Party, whether by judicial proceeding or under
any power of sale contained therein, or any conveyance from Provider to the
Financing Party (or any assignee of the Financing Party as defined below) in lieu
thereof, the Financing Party shall give notice to Buyer of the transferee or assignee
of this Agreement. Any such exercise of remedies shall not constitute a default
under this Agreement;
(D) Cure of Bankruptcy Rejection. Upon any rejection or other
termination of this Agreement pursuant to any process undertaken with respect to
Provider under the United States Bankruptcy Code, at the request of Financing Party
made within ninety (90) days of such termination or rejection, Buyer shall enter into
a new agreement with Financing Party or its assignee(s) having the same terms and
conditions as this Agreement.
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(iii) Right to Cure.
(A) Cure Period. If Financing Party provides Buyer with notice of its
interest and with a notice address, Buyer will not exercise any right to terminate or
suspend this Agreement unless it shall have given the Financing Party prior written
notice of its intent to terminate or suspend this Agreement, as required by this
Agreement, specifying the condition giving rise to such right, and the Financing
Party shall not have caused to be cured the condition giving rise to the right of
termination or suspension within the periods for cure provided for in this
Agreement.; provided that if such Provider default reasonably cannot be cured by
the Financing Party within such period and the Financing Party commences and
continuously pursues cure of such default within such period, such period for cure
will be extended for a reasonable period of time under the circumstances, such
period not to exceed an additional ninety (90) days. The Parties' respective
obligations will otherwise remain in effect during any cure period.
(B) Continuation of Agreement. If the Financing Party or its assignee
(including any purchaser or transferee), pursuant to an exercise of remedies by the
Financing Party, shall acquire title to or control of Provider's assets and shall, within
the time periods described in Section 18(a)(iii)(A) above, cure all defaults under this
Agreement existing as of the date of such change in title or control in the manner
required by this Agreement and which are capable of cure by a third person or entity,
then such Person shall no longer be in default under this Agreement, and this
Agreement shall continue in full force and effect.
(b) Financing Party a Third -Party Beneficiary. Buyer agrees and acknowledges that
Financing Party is a third -party beneficiary of the provisions of this Section 18.
(c) Entry to Consent to Assi mg Went. Buyer agrees to execute any consents to
assignment, payment direction letters, or acknowledgements as may be reasonably requested by
Provider and/or Financing Party in connection with such financing of or sale of any or all of the
Project.
(d) Regardless of assignment, Provider, Provider's Affiliate, or a contractor thereof that
is an experienced manager in the renewable energy industry of at least 25 MW of renewable energy
assets will continue to operate and maintain the Project. For the avoidance of doubt, Entegrity
Energy Partners LLC and/or an Affiliate thereof shall qualify as an experienced manager hereunder.
19. Chanae in Law.
If there is any Change in Law subsequent to the Effective Date that results in a direct and
material change in Provider's costs to provide the Solar Services or Buyer's ability to obtain, or a
material reduction in, any net metering credit or payment from the Electric Utility, Provider or
Buyer shall promptly submit to the other party a written notice setting forth (i) the citation of the
Change in Law, (ii) the manner in which such change materially increases Provider's costs to
25
provide the Solar Services or Buyer's ability to receive, or the material reduction in, the net
metering credit or payment, and (iii) Provider's or Buyer's proposed adjustment to the kWh rates to
reflect such material changes in Provider's costs or Buyer's ability to receive, or the material
reduction in, the net metering credit or payment. Provider and Buyer agree to negotiate in good
faith a commercially reasonable adjustment in the kWh rate to reflect the associated costs or values
impacted by the Change in Law, and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty (30) days after written notice in accordance with this Section,
such Dispute shall be resolved in accordance with Section 21 hereof.
20. Limitations on Damages, Liability, and Remedies; Disclaimer.
(a) EXCEPT AS EXPLICITLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY NOR ITS DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, MEMBERS,
AGENTS AND EMPLOYEES SUBCONTRACTORS OR SUPPLIERS SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION,
LOST REVENUES (OTHER THAN AMOUNTS PAYABLE UNDER THIS AGREEMENT),
LOST PROFITS, LOST BUSINESS OPPORTUNITY OR ANY BUSINESS INTERRUPTION),
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF ADVISED OF
SUCH. THE PARTIES AGREE THAT (1) IN THE EVENT THAT PROVIDER OR ITS
INVESTORS LOSE OR ARE REQUIRED TO RECAPTURE ANY TAX ATTRIBUTES OR
OTHER TAX BENEFITS AS A RESULT OF A BREACH OF THIS AGREEMENT BY BUYER,
SUCH RECAPTURED AMOUNT SHALL BE DEEMED TO BE DIRECT AND NOT
INDIRECT OR CONSEQUENTIAL DAMAGES, AND (II) IN THE EVENT THAT PROVIDER
IS RETAINING THE ENVIRONMENTAL ATTRIBUTES PRODUCED BY THE PROJECT,
AND A BREACH OF THIS AGREEMENT BY BUYER CAUSES PROVIDER TO LOSE THE
BENEFIT OF SALES OF SUCH ENVIRONMENTAL ATTRIBUTES TO THIRD PARTIES,
THE AMOUNT OF SUCH LOST SALES SHALL BE DIRECT AND NOT INDIRECT OR
CONSEQUENTIAL DAMAGES.
(b) PROVIDER'S AGGREGATE LIABILITY UNDER THIS AGREEMENT
ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OR NON-
PERFORMANCE OF THIS AGREEMENT CANNOT EXCEED THE TOTAL PAYMENTS
ACTUALLY MADE BY BUYER UNDER THIS AGREEMENT. THE PROVISIONS OF THIS
SECTION 20(B) WILL APPLY WHETHER SUCH LIABILITY OR CLAIM ARISES IN
CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY, OR OTHERWISE.
(c) TO THE EXTENT THAT THIS AGREEMENT SETS FORTH SPECIFIC
REMEDIES FOR ANY CLAIM OR LIABILITY, SUCH REMEDIES ARE THE AFFECTED
PARTY'S SOLE AND EXCLUSIVE REMEDIES FOR SUCH CLAIM OR LIABILITY,
WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE.
(d) EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO WARRANTY WITH
RESPECT TO THE PROJECT OR THE PERFORMANCE OF PROVIDER'S OBLIGATIONS
HEREUNDER, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS, OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
26
PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE, APPLIES UNDER THIS AGREEMENT.
(e) NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO ALTER,
LIMIT, OR OTHERWISE COMPROMISE THAT TORT IMMUNITY AFFORDED THE CITY
OF FAYETTEVILLE UNDER THE CONSTITUTION AND STATUTES OF THE STATE OF
ARKANSAS.
21. Dispute Resolution.
(a) Negotiation Period. The Parties shall negotiate in good faith and attempt to resolve
any dispute, controversy or claim arising out of or relating to this Agreement (a "Dispute") within
thirty (30) days after the date that a Party gives written notice of such Dispute to the other Party.
(b) Mediation. If, after such negotiation in accordance with Section 21(a), the Dispute
remains unresolved, either Party may request that a non -binding mediation take place. In such
mediation, representatives of the Parties with authority to resolve the dispute shall meet for at least
three (3) hours with a mediator whom they choose together. If the Parties are unable to agree on a
mediator, then either Party is hereby empowered to request the American Arbitration Association
to appoint a mediator. The mediator's fee and expenses shall be paid one-half by each Party.
(c) Forum. The parties agree that all claims, demands or actions for loss, expense,
damage, liability or other relief, either at law or in equity, arising out of or related to this Agreement
must be brought before a court in Washington County, Arkansas having jurisdiction over such
matter.
22. Notices.
Delivery of Notices. All notices or other communications which may be or are required to
be given by any party to any other party pursuant to this Agreement shall be in writing and shall be
either (i) delivered by hand; (ii) mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid; (iii) delivered by a recognized overnight or personal delivery service;
(iv) transmitted by facsimile (such transmission to be effective on the day of receipt if received
prior to 5:00 pm local time on a business day or in any other case as of the next business day
following the day of transmittal); or (v) transmitted by email if receipt of such transmission by
email is specifically acknowledged by the recipient (automatic responses not being sufficient for
acknowledgement), addressed as follows:
If to Buyer:
City of Fayetteville
113 West Mountain Street
Fayetteville, AR, 72701
If to Provider:
Entegrity Energy Partners, LLC
27
1403 East 6"' Street
Little Rock, AR 72202
Notices shall be effective when delivered (or in the case of email, when acknowledged by
the recipient) in accordance with the foregoing provisions, whether or not (except in the case of
email transmission) accepted by, or on behalf of, the Party to whom the notice is sent.
Each Party may designate by Notice in accordance with this section to the other Party a new
address to which any notice may thereafter be given.
23. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of
Arkansas, without regard to its choice of law provisions, and applicable federal law. Any legal
action or proceeding arising out of or relating to this Agreement must be conducted exclusively
within the State of Arkansas and in no other jurisdiction.
(b) Rules of Interpretation. Section headings are for convenience only and shall not
affect the interpretation of this Agreement. References to sections are, unless the context otherwise
requires, references to sections of this Agreement. The words "hereto", "hereof' and "hereunder"
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The
word "person" shall include individuals; partnerships; corporate bodies (including but not limited
to corporations, limited partnerships and limited liability companies); non-profit corporations or
associations; governmental bodies and agencies; and regulated utilities. The word "including" shall
be deemed to be followed by the words "without limitation". In the event of any conflict between
the text of this Agreement and the contents of an Exhibit hereto, the text of this Agreement shall
govern.
(c) Severability. If any non -material part of this Agreement is held to be unenforceable,
the rest of the Agreement will continue in effect. If a material provision is determined to be
unenforceable and the Party which would have been benefited by the provision does not waive its
unenforceability, then the Parties shall negotiate in good faith to amend the Agreement to restore
to the Party that was the beneficiary of such unenforceable provision the benefits of such provision.
(d) Amendment and Waiver. This Agreement may only be amended by a writing signed
by both Parties. Any waiver of any of the terms hereof shall be enforceable only to the extent it is
waived in a writing signed by the Party against whom the waiver is sought to be enforced. Any
waiver shall be effective only for the particular event for which it is issued and shall not constitute
a waiver of a subsequent occurrence of the waived event nor constitute a waiver of any other
provision hereof, at the same time or subsequently.
(e) Assignment. Neither Party may assign, sell, transfer or in any other way convey its
rights, duties or obligations under this Agreement, either in whole or in part, without the prior
written consent of the other Party which consent shall not be unreasonably withheld or delayed,
except that without consent of Buyer, Provider (i) may assign, in whole or in part, its rights and
obligations hereunder to an Affiliate of Provider and (ii) may sell or collaterally assign this
m
Agreement in whole or in part as collateral, in accordance with Section 18. For purposes of this
Section 23(e), assign, sell, transfer, or convey does not include any sale of all or substantially all of
the assets of Provider or any merger of Provider with another person, whether or not Provider is the
surviving entity from such merger, or any other change in control of Provider, provided any such
surviving entity assumes all obligations of Provider, as appropriate, under this Agreement. Buyer
agrees to execute any consents to assignment or acknowledgements as may be reasonably requested
by Provider in connection with an assignment of this Agreement.
(f) Provider Put Option. Buyer and Provider hereby expressly acknowledge and agree
that Provider shall have the option to put the purchase of one or more Projects located on a Site to
Buyer at the end of the Term for a purchase price which is equivalent to the Fair Market Value of
the Project at such time.
(g) THIS AGREEMENT IS NOT A LEASE — THIS AGREEMENT
CONSTITUTES A SERVICE CONTRACT. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS NOT A
LEASE AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS A LEASE. THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
NEITHER PARTY WILL TAKE ANY ACTION WHATSOEVER TO TREAT OR
CONSTRUE THIS AGREEMENT AS A LEASE. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS AN
AGREEMENT TO SELL ELECTRIC ENERGY GENERATED FROM AN
ALTERNATIVE ENERGY FACILITY AND THIS AGREEMENT SHALL BE DEEMED A
SERVICE CONTRACT PURSUANT TO 26 U.S.C. SECTION 7701(e)(3)(A). THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
EACH PARTY WILL TAKE ANY AND ALL ACTIONS NECESSARY TO INSURE THAT
THIS AGREEMENT IS TREATED AND CONSTRUED AS A SERVICE CONTRACT
SATISFYING THE REQUIREMENTS OF SERVICE CONTRACTS PURSUANT TO 26
U.S.C. SECTION 7701(e)(3)(A). THE PARTIES HERETO HEREBY FURTHER
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS INTENDED
TO FULLY COMPLY WITH ACT 464 OF THE 2019 REGULAR SESSION OF THE 92Nn
GENERAL ASSEMBLY OF THE STATE OF ARKANSAS, EXPRESSLY INCLUDING,
BUT NOT LIMITED TO, A.C.A SECTION 23-18-603(7)(C).
(h) No Joint Venture. This Agreement does not create a joint venture, partnership or
other form of business association between the Parties.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Delivery of signature by fax, or scan delivered by email, receipt acknowledged, or
electronic signature are effective to bind a Party hereto.
(Signatures contained on following page)
29
(Signature Page to Solar Services Agreement)
EXECUTED AND EFFECTIVE as of the Effective Date.
BUYER:
CITY OF FAYETTEVILLE
By
Na
Tit
PROVIDER:
ENTEGRITY ENERGY PARTNERS, LLC
Mchae( TarAk e
By: t— �^, ker).7eC 18. 1 D23 12 19 CST)
Name: Michael Parker
Title: President
30
EXHIBIT A
CONFIDENTIAL
USABLE ELECTRICITY PURCHASE RATE
Year
Solar Electric
Rate,($/kWh)
1
$0.0570
2
$0.0576
3
$0.0581
4
$0.0587
5
$0.0593
6
$0.0599
7
$0.0605
8
$0.0611
9
$0.0617
10
$0.0623
11
$0.0630
12
$0.0636
13
$0.0642
14
$0.0649
15
$0.0655
16
$0.0662
17
$0.0668
18
$0.0675
19
$0.0682
20
$0.0689
21
$0.0696
22
$0.0702
23
$0.0709
24
$0.0717
25
$0.0724
31
EXHIBIT B
DESCRIPTION OF SITE
General Description:
A portion of parcel ® in ® County, Arkansas. Final legal description to be
determined by survey.
32
EXHIBIT C
CONFIDENTIAL
DESCRIPTION OF PROJECT
Project Description:
Point of Delivery
Solar Modules: ��-
Solar Racking System:
Inverters:
Billing Meter:
Facility Capacity (DC):
Facility Capacity (AC):
Estimated Year-1 Production:
33
EXHIBIT D
CONFIDENTIAL
PURCHASE OPTION PURCHASE PRICE SCHEDULE
Seventh (7111) Anniversary of Commercial Operation Date: The greater of (i) Fair Market Value
of the Project and Provider's rights in the Site and (ii) -;
Fourteenth (14m) Anniversary of Commercial Operation Date: The greater of (i) Fair Market
Value of the Project and Provider's rights in the Site and (ii) -;
Twenty -First (21st) Anniversary of Commercial Operation Date: The greater of (i) Fair Market
Value of the Project and Provider's rights in the Site and (ii) ®.
34
Assignment of Solar Services Agreement
City of Fayetteville Staff Review Form
2024-0411
Item ID ARCHIVED
N/A
City Council Meeting Date-Agenda Item Only
N/A for Non-Agenda Item
Chris McNamara 6/24/2024 SUSTAINABILITY/RESILIENCE (631)
Submitted By Submitted Date Division/ Department
Action Recommendation:
Staff recommends approval of ASSIGNMENT OF SOLAR SERVICES AGREEMENT with Entegrity Energy Partners LLC
and BluePath Solar Fayetteville LLC. This agreement transfers project ownership responsibilities and liabilities from
project developer, Entegrity Energy Partners, to financier, BluePath Solar Fayetteville LLC.
Budget Impact:
xxxx.xxx.xxxx-5310.10 Multiple
Account Number Fund
N/A N/A
Project Number Project Title
Budgeted Item? Yes Total Amended Budget $ 1,801,643.00
Expenses (Actual+Encum) $ 594,601.08
Available Budget S 1,207,041.92
Does item have a direct cost? No Item Cost $Is a Budget Adjustment attached? No Budget Adjustment $ -
Remaining Budget 1,2.07,041.92
V20221130
Purchase Order Number: Previous Ordinance or Resolution# Res. 299-23
Change Order Number: Approval Date: 06/26/2024
Original Contract Number:
Comments:
CITY OF
FAYETTEVILLE STAFF MEMO
ARKANSAS
TO: Lioneld Jordan, Mayor
THRU: Susan Norton, Chief of Staff
Paul Becker, Chief Financial Officer
Kit Williams, City Attorney
Chris Brown, Public Works Director
FROM: Chris McNamara, Sustainability Project Manager
DATE: 06/24/2024
SUBJECT: ASSIGNMENT OF SOLAR SERVICES AGREEMENT
RECOMMENDATION:
Staff recommends approval of ASSIGNMENT OF SOLAR SERVICES AGREEMENT with
Entegrity Energy Partners LLC and BluePath Solar Fayetteville LLC. This agreement transfers
project ownership responsibilities and liabilities from project developer, Entegrity Energy
Partners, to financier, BluePath Solar Fayetteville LLC.
BACKGROUND:
On December 28th, 2023 the City of Fayetteville entered into a Solar Services Agreement (SSA)
with Entegrity Energy Partners LLC for development of a 3.77MW ground mounted solar array.
This project is an essential step in reaching the City's goal of 100% local government clean
energy by 2030 that was established in the 2018 Energy Action Plan.
This 3.77MW solar project is estimated to save the City $7 million over the life of the 25yr
contract.
DISCUSSION:
Assignment of rights, title, benefit, privileges, interest, liabilities, and obligations established
under the SSA from project developer to project financier is normal industry procedure and an
essential step in project development. The City of Fayetteville requested the right to approve
assignment of ownership to third parties as part of the project approval process.
This assignment does not change any agreement established under the solar services
agreement. It only transfers ownership to the financing company, Blue Path Solar. To deny
assignment would effectively cancel the 3.77MW solar project.
BUDGET/STAFF IMPACT:
None
Attachments:
Sale & Assignment Agreement
Mailing Address:
113 W. Mountain Street www.fayetteville-ar.gov
Fayetteville, AR 72701
DocuSign Envelope ID:6A07CA8E-E31 B-4A44-A199-EB3302A6CF57
ESTOPPEL CERTIFICATE,ASSIGNMENT OF SOLAR SERVICES AGREEMENT,
CONSENT TO ASSIGNMENT,NOTICE,AND AMENDMENT TO
SOLAR SERVICES AGREEMENT
This Estoppel Certificate, Assignment of Solar Services Agreement, Consent to
Assignment, Notice, and Amendment to Solar Services Agreement (this "Agreement"), dated as
of June 26, 2024 (the "Effective Date"), is made by and among City of Fayetteville ("Buyer"),
Entegrity Energy Partners, LLC, an Arkansas limited liability company ("Assignor"), and
BluePath Solar Fayetteville LLC, an Arkansas limited liability company ("Assignee") (each, a
"Party,"and collectively,the"Parties").
WHEREAS,Assignor and Buyer are parties to that certain Solar Services Agreement
dated as of December 28, 2023 (the"SSA")attached hereto as Exhibit A;
WHEREAS,Assignor, in connection with the financing of the System under the SSA,
desires to fully assign and delegate to Assignee all of its rights, title, benefit, privileges, interest,
liabilities, and obligations in, to, and under the SSA, and Assignee desires to accept such
assignment and delegation and to assume all such rights, title, benefit, privileges, interest,
liabilities,and obligations, in accordance with the terms hereof;
WHEREAS,Assignee will finance the System in part,with proceeds of a loan by City
National Bank("Lender");and
WHEREAS, the Parties desire to acknowledge this Agreement and the transactions
contemplated hereby in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound,
do hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms shall have the
meanings given to them in the SSA.
2. Assignment. Effective as of the Effective Date, Assignor hereby assigns and
delegates to Assignee all of its rights,title, benefit, privileges, interest, liabilities, and obligations
in, to, and under the SSA arising on or after the Effective Date, free and clear of all liens,
encumbrances, and claims, subject to the terms set forth below.
3. Assumption. Effective as of the Effective Date, Assignee hereby accepts such
assignment from Assignor and assumes and agrees to observe and perform all of Assignor's duties,
liabilities,and obligations arising under the SSA on or after the Effective Date.
4. No Prior Duties, Liabilities, or Obligations. Buyer and Assignor acknowledge
and agree that as of the Effective Date, no duties, obligations, or liabilities have accrued or are
outstanding in connection with the SSA and the SSA shall be assumed by Assignee without any
prior duties,obligations,or liabilities.
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5. Acknowledgement and Acceptance. Effective as of the Effective Date,the Buyer:
(1)acknowledges Assignor's assignment of all of its rights, title, benefit, privileges, interest, and
obligations in,to, and under the SSA; (2)accepts Assignee's assumption of the duties, liabilities,
and obligations of Assignor arising on or after the Effective Date under the SSA;and(3)fully and
finally releases and discharges the Assignor from any and all of its duties, obligations, and
liabilities arising under the SSA on or after the Effective Date.
6. Further Actions Necessary. Each of the Parties hereto covenants and agrees, at
its own expense, to execute and deliver, at the request of another Party hereto, such further
instruments of transfer and assignment and to take such other actions as such other Party may
reasonably request to consummate more effectively the transactions contemplated by this
Agreement.
7. Representations and Warranties of Buyer. The Buyer represents and warrants
to the Assignor, the Assignee, and the Lender, as of the Effective Date:
(a) Organization;Power and Authority. Buyer is validly organized and existing
under the laws of the State of Arkansas, and has the power and authority to transact the
business it transacts and proposes to transact, to execute this Agreement and the SSA and
to perform its obligations hereunder and thereunder.
(b) Authorizations, Enforceability. This Agreement and the SSA have been
duly authorized, executed and delivered by Buyer and do not require any permits,
approvals, resolutions, filings with, or consents of any entity or person (including any
governmental authority)that have not previously been obtained or made. This Agreement
and the SSA each constitute a legal, valid, and binding obligation of Buyer enforceable
against Buyer in accordance with its terms, except as such enforceability may be limited
by(a)applicable bankruptcy,insolvency,reorganization,moratorium,or other similar laws
affecting the enforcement of creditors' rights generally and(b)general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at
law).
(c) No Default or Force Majeure Event. Buyer is not in breach of any of its
obligations under the SSA,and to Buyer's knowledge, Assignor is not in breach of any of
its obligations under the SSA and no event has occurred which with the passage of time or
giving of notice or both would constitute a default, result in a loss of rights or permit
termination,modification or acceleration under,or result in the creation of a lien,under the
SSA. To Buyer's knowledge, no Force Majeure Event exists under the SSA.
(d) No Adverse Proceedings. There is no litigation,action, suit, proceeding or
investigation pending or (to Buyer's knowledge) threatened against Buyer or Assignor
before or by any court, administrative agency, arbitrator or governmental authority, body
or agency that, if adversely determined, individually or in the aggregate, (a)could
materially adversely affect the performance by Buyer of its obligations under this
Agreement or the SSA or that could modify or otherwise adversely affect any required
approvals, filings, resolution or consents that have previouslybeen obtained or made,
PP � g �
(b)could have a material adverse effect on the condition(financial or otherwise), business
2
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or operations of Buyer,or(c)questions the validity, binding effect or enforceability of this
Agreement or the SSA,any action taken or to be taken pursuant hereto or thereto or any of
the transactions contemplated hereby or thereby.
(e) No Violations. The execution, delivery and performance by Buyer of this
Agreement, the SSA, and the consummation of the transactions contemplated hereby and
thereby, will not result in any violation of, breach of or default under any term of its
formation or governance documents, or of any contract or agreement to which it is a party
or by which it or its property is bound, or of any resolution, license, permit, franchise,
judgment, injunction, order, law, rule or regulation applicable to it, other than any such
violation, breach or default which could not reasonably be expected to have a material
adverse effect on the rights and benefits of Assignee or Buyer's ability to perform its
obligations, under, in respect of, or in connection with, this Agreement or the SSA.
(f) SSA; No Other Agreements. A true and complete copy of the SSA is
attached hereto as Exhibit E. Except as set forth herein, the SSA has not been amended or
modified. The SSA is the only agreement between Buyer and Assignor with respect to the
System and the only agreement entered into by Buyer in connection with the System.
Each of the foregoing representations and warranties will survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated by the SSA.
8. Representations and Warranties of Assignor. Assignor represents and warrants
to the Assignee and the Lender, as of the Effective Date:
(a) Organization;Power and Authority. Assignor is a limited liability company
organized and existing under the laws of the State of Arkansas and has the power and
authority to transact the business it transacts and proposes to transact, to execute this
Agreement and the SSA and to perform its obligations hereunder and thereunder.
(b) Authorizations, Enforceability. This Agreement and the SSA have been
duly authorized, executed and delivered by Assignor and do not require any permits,
approvals, resolutions, filings with, or consents of any entity or person (including any
governmental authority)that have not previously been obtained or made. This Agreement
and the SSA each constitute a legal, valid, and binding obligation of Assignor enforceable
against Assignor in accordance with its terms,except as such enforceability may be limited
by(a)applicable bankruptcy, insolvency,reorganization,moratorium,or other similar laws
affecting the enforcement of creditors' rights generally and(b)general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at
law).
(c) No Default or Force Majeure Event. Assignor is not in breach of any of its
obligations under the SSA, and to Assignor's knowledge, Buyer is not in breach of any of
its obligations under the SSA and no event has occurred which with the passage of time or
giving of notice or both would constitute a default, result in a loss of rights or permit
termination, modification or acceleration under,or result in the creation of a lien,under the
SSA. To Assignor's knowledge, no Force Majeure Event exists under the SSA.
3
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(d) No Adverse Proceedings. There is no litigation, action, suit, proceeding or
investigation pending or (to Assignor's knowledge) threatened against Assignor or Buyer
before or by any court, administrative agency, arbitrator or governmental authority, body
or agency that, if adversely determined, individually or in the aggregate, (a) could
materially adversely affect the performance by Assignor of its obligations under this
Agreement or the SSA or that could modify or otherwise adversely affect any required
approvals, filings, resolution or consents that have previously been obtained or made,
(b)could have a material adverse effect on the condition (financial or otherwise), business
or operations of Assignor, or (c)questions the validity, binding effect or enforceability of
this Agreement or the SSA, any action taken or to be taken pursuant hereto or thereto or
any of the transactions contemplated hereby or thereby.
(e) No Violations. The execution, delivery and performance by Assignor of
this Agreement, the SSA, and the consummation of the transactions contemplated hereby
and thereby, will not result in any violation of, breach of or default under any term of its
formation or governance documents, or of any contract or agreement to which it is a party
or by which it or its property is bound, or of any resolution, license, permit, franchise,
judgment, injunction, order, law, rule or regulation applicable to it, other than any such
violation, breach or default which could not reasonably be expected to have a material
adverse effect on the rights and benefits of Assignee or Assignor's ability to perform its
obligations, under, in respect of, or in connection with, this Agreement or the SSA.
(f) SSA; No Other Agreements; No Liens. A true and complete copy of the
SSA is attached hereto as Exhibit A. Except as set forth herein, the SSA has not been
amended or modified. The SSA is the only agreement between Buyer and Assignor with
respect to the System and the only agreement entered into by Assignor with Buyer or any
other person in connection with the System. To Assignor's knowledge, the Buyer intends
to honor the terms of the SSA. Assignor has good and marketable title to the SSA and is
assigning the SSA to Assignee free and clear of all liens, encumbrances, and claims.
Each of the foregoing representations and warranties will survive the execution and delivery of
this Agreement and the consummation of the transactions contemplated by the SSA.
9. Lender. Lender will have all the rights of a Financing Party under the SSA.
Without limiting any other rights of a Financing Party under the SSA, Buyer agrees that no
amendment or modification to the SSA will be effective as against Lender unless Lender has
agreed in writing to such amendment or modification. Buyer acknowledges and agrees that Lender
is a third-party beneficiary of this Agreement.
10. Governing Law. The validity, interpretation, and performance of this Agreement
and each of its provisions shall be governed by the applicable laws of the State of Arkansas,
without regard to the application of such state's laws relating to conflicts of laws. The Parties agree
that, in the event a Dispute is not otherwise resolved in accordance with Section 21(b) of the SSA,
all claims, demands or actions for loss, expense, damage, liability or other relief, either at law or
in equity, arising out of or related to this Agreement or the SSA must be brought before the court
having jurisdiction over such matter.
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11. Notices. From and after the Effective Date, all notices with respect to this
Agreement shall be given and delivered to:
Assignor: Entegrity Energy Partners,LLC
1403 East 6th Street
Little Rock, AR 72202
Attn: Michael Parker, President
Telephone: (479)659-7825
Email: Michael.ParkerANabholz.com
Assignee: BluePath Solar Fayetteville LLC
921 E.Fort Avenue, Suite 120-125
Baltimore,MD 21230
Attn: Legal
Telephone: (415) 549-0429
Email: legalRbluepathfinance.com
Buyer: City of Fayetteville
113 West Mountain Street
Fayetteville,AR 72701
Attn: Chris Brown, Public Works Director
Telephone: (479) 575-8207
Email: cbrown@fayetteville-ar.gov
12.Assignments and Binding Effect. This Agreement shall be irrevocable and shall
inure to the benefit of and shall be binding upon Assignor and Assignee and their respective
successors,transferees and permitted assigns.
13. Counterparts. The Parties agree that this Agreement may be executed in
counterparts and that,when taken together, such counterparts constitute but one agreement.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and
year first above written.
ASSIGNOR:
ENTEGRITY ENERGY PARTNERS, LLC
By: a___
Name: Michael Parker
Title: President
ASSIGNEE:
BLUEPATH SOLAR FAYETTEVILLE LLC
LAkiCtUlti
DocuSigned by:
By: 492ASSEEFE93405
Name: Michael J.J. Cox
Title: Chief Financial Officer
BUYER:
CITY OF AYETTEVILLE
y:
Name: Lione d Jor n
Title: Mayor
DocuSign Envelope ID:6A07CA8E-E31B-4A44-A199-EB3302A6CF57
EXHIBIT A
SSA
[See attached.]
DocuSign Envelope ID:6A07CA8E-E31B-4A44-A199-EB3302A6CF57
SOLAR SERVICES AGREEMENT
between
Entegrity Energy Partners,LLC
as Provider
and
City of Fayetteville
as Buyer
DocuSign Envelope ID:6A07CA8E-E31B-4A44-A199-EB3302A6CF57
INDEX
Section
1 DEFINITIONS
2 TERM
3 PLANNING,INSTALLATION AND OPERATION OF PROJECT
4 SALE OF ELECTRIC ENERGY
5 PAYMENT AND BILLING; LIMITS ON BUYER OBLIGATIONS; EVENT
OF NON-APPROPRIATION
6 SUPPLEMENTAL POWER,NET METERING,AND RECS
7 PERMITS AND OWNERSHIP OF PROJECT
8 PURCHASE OPTION
9 SHUTDOWNS
10 TAXES
11 [RESERVED]
12 COOPERATION, SOLAR ACCESS, FUTURE IMPROVEMENTS
13 PRESS RELEASES AND CONFIDENTIALITY
14 REPRESENTATIONS AND WARRANTIES
15 FORCE MAJEURE
16 PROVIDER DEFAULT AND BUYER REMEDIES
17 BUYER DEFAULT AND PROVIDER REMEDIES
18 COLLATERAL ASSIGNMENT,FINANCING PROVISIONS
19 CHANGE IN LAW
20 LIMITATIONS ON DAMAGES, LIABILITY, AND REMEDIES;
DISCLAIMER
21 DISPUTE RESOLUTION
22 NOTICES
23 MISCELLANEOUS
EXHIBIT A — USABLE ELECTRICITY PURCHASE RATES
EXHIBIT B — DESCRIPTION OF SITE
EXHIBIT C — DESCRIPTION OF PROJECT
EXHIBIT D — PURCHASE OPTION PURCHASE PRICE SCHEDULE
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SOLAR SERVICES AGREEMENT
THIS SOLAR SERVICES AGREEMENT("Agreement") is made and entered into on as
of December28, 2023 (the "Effective Date"), by and between Entegrity Energy Partners, LLC
("Provider"),and City of Fayetteville ("Buyer").
WITNESSETH:
WHEREAS, Provider controls (whether by lease, ownership, option or otherwise) that
certain real property located in the State of Arkansas, as more particularly described in Exhibit B
attached hereto (the "Site"), and Buyer and Provider desire for the development, design,
construction, operation and maintenance by Provider of one or more solar powered electric
generating project on the Site to be owned by Provider and for Buyer to purchase from Provider, at
a fixed rate,the electric energy produced by the Project;
WHEREAS,Provider desires to sell to Buyer the electric energy produced by such facilities
at a fixed rate and Buyer desires to purchase from Provider the electric energy produced by such
facilities;and
WHEREAS, Provider and Buyer now desire to enter into this Agreement to memorialize
their agreements regarding such solar alternative energy facilities and electric energy.
NOW, THEREFORE, in consideration of the premises and covenants set forth herein, and
other good and valuable consideration, the receipt and sufficiency of which are hereby expressly
acknowledged, Provider and Buyer hereby agree as follows:
1. Definitions. The following capitalized terms shall have the meanings set forth
below as used in this Agreement:
(a) The term "Affiliate" means, as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with, such Person. For
purposes of this definition,"control"of a Person means the power,directly or indirectly, to direct
or cause the direction of the management and policies of such Person whether by contract or
otherwise.
(b) The term"Agreement"means this Solar Services Agreement,including all exhibits
attached hereto, as the same may be amended from time to time in accordance with the provisions
hereof.
(c) The term"Applicable Law" means any constitutional provision, law, statute, rule,
regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction,
registration, license, franchise, permit, authorization, or guideline issued by a Governmental
Authority that is applicable to a Party to this Agreement or the transaction described herein.
Applicable Law also includes an approval, consent or requirement of any Governmental Authority
having jurisdiction over such Party or its property,enforceable at law or in equity.
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(d) The term"Billing Meter"means the revenue grade meter(s) of Provider located at
the Site to measure the output of the Project at the Point of Delivery as identified in Exhibit C.
(e) The term"Business Day"means a day other than Saturday,Sunday,or other day on
which commercial banks in Little Rock,Arkansas are authorized or required by law to be closed.
(f) The term "Buyer" has the meaning assigned to it in the introductory paragraph
hereof.
(g) The term "Change in Law" means that after the date of this Agreement, an
Applicable Law is amended, modified, nullified, suspended, repealed, found unconstitutional or
unlawful, or changed or affected in any material respect by any Applicable Law. Change in Law
does not include changes in federal or state income tax laws. Change in Law does include material
changes in the interpretation of an Applicable Law.
(h) The term"Commercial Operation Date"means the date,which shall be specified by
Provider to Buyer pursuant to Section 3, when the Project is physically complete and has
successfully completed all performance tests and satisfies the interconnection requirements of the
Electric Utility.
(i) The term "Confidential Information" means information of a confidential or
proprietary nature.Provider shall notify Buyer in writing of any information that Provider contends
may provide an advantage to competitors if disclosed. Such information shall include, but not be
limited to, any documentation, records, listing, notes, data, computer disks, files or records,
memoranda,designs,financial models,accounts,reference materials,trade-secrets,prices,strategic
partners, marketing plans, strategic or other plans, financial analyses, customer names or lists,
project opportunities and the like,provided however that Confidential Information does not include
information which(i)was in the possession of the receiving Party before receipt from the disclosing
Party; (ii) is or becomes publicly available other than as a result of unauthorized disclosure by the
receiving Party;(iii)is received by the receiving Party from a third party not known by the receiving
Party with the exercise of reasonable diligence to be under an obligation of confidentiality
respecting the information; or (iv) is independently developed by the receiving Party without
reference to information provided by the disclosing Party.Notwithstanding the term defined above,
the Parties acknowledge that the Buyer is or may become subject to the disclosure requirements of
the Arkansas Freedom of Information Act ("FOIA"). The parties acknowledge and agree that
Provider believes that Exhibits A, C, and D may contain confidential information, trade secrets,
and/or competitive information exempt from disclosure obligations under"FOIA". Buyer agrees
to promptly notify Provider of any receipt of a request for information under FOIA or any other
similar disclosure law,related to the Project or this Agreement.
(j) The term "Dispute" means a controversy or claim arising out of or relating to this
Agreement.
(k) The term "Electric Utility" means Southwestern Electric Power Company and its
successors and assigns.
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(1) The term"Environmental Attributes"means Renewable Energy Certificates,carbon
trading credits, emissions reductions credits, emissions allowances, green tags, Green-e
certifications,or other entitlements,certificates,products,or valuations attributed to the Project and
its displacement of conventional energy generation,or any other entitlement pursuant to any federal,
state,or local program applicable to renewable energy sources,whether legislative or regulatory in
origin,as amended from time to time,and excluding,for the avoidance of doubt,any Tax Attributes.
(m) The term"Event of Non-Appropriation"shall have the meaning set forth in Section
5(g)hereof.
(n) The term"Fair Market Value"means the price 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 the Project and advances in solar technology, provided that installed equipment
shall be valued on an installed basis and costs of removal from a current location shall not be a
deduction from the valuation.
(o) The term"Financing Party"means a Project Lessee or Lender or tax equity investor
admitted as a direct or indirect member of Provider.
(p) The term"Fiscal Year"shall mean the fiscal year of Buyer,which Buyer represents
and warrants is January 1 to December 31.
(q) The term"Force Majeure Event"means any act or event that prevents the affected
Party from performing its obligations in accordance with this Agreement, if such act or event is
beyond the reasonable control, and not the result of the fault or negligence, of the affected Party
and such Party had been unable to overcome such act or event with the exercise of due diligence
(including the expenditure of reasonable sums). Subject to the foregoing, Force Majeure Event
may include but are not limited to the following acts or events: (i)extraordinary wind storms,hail,
tornados,hurricanes,floods,lightning strikes,and earthquakes;(ii)explosions or fires arising from
lightning strikes or other causes unrelated to the acts or omissions of the Party seeking to be excused
from performance and unrelated to any defect in materials or equipment of Provider; (iii) acts of
war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, pandemic,
official actions of any Governmental Authority,terrorist acts, or rebellion;and(iv)strikes or labor
disputes. Force Majeure Events shall not include equipment failures or acts or omissions of agents,
suppliers or subcontractors,except to the extent such acts or omissions arise from a Force Majeure
Event. Neither changes in prices for Usable Electricity nor changes in available solar energy
resulting from cloud cover or other natural events constitute Force Majeure Events.
(r) The term "Governmental Authority" means any international, national, federal,
provincial, state, municipal, county, regional or local government, administrative, judicial or
regulatory entity operating under any Applicable Laws and includes any department, commission,
bureau,board,administrative agency or regulatory body of any government with authority over the
parties to this Agreement or this transaction.
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(s) The term"Initial Period"has the meaning provided in Section 2.
(t) The term "Installer" means the Provider or any person or entity designated by
Provider to install a Project on a Site.
(u) The term"Land Registry"means the office where real estate records for a Site are
customarily filed.
(v) The term"Lender"means persons providing construction or permanent financing to
Provider in connection with installation of the Project.
(w) The term"Liens"has the meaning provided in Section 7(c).
(x) The term "Losses" means any and all losses, liabilities, claims, demands, suits,
causes of action,judgments, awards, damages, cleanup and remedial obligations, interest, fines,
fees, penalties, costs, and expenses (including all attorney's fees and other costs and expenses
incurred in defending any such claims or matters).
(y) The term"Operations Period"has the meaning provided in Section 2.
(z) The term"Operations Year" means a twelve (12) month period beginning at 12:00
am on an anniversary of the Commercial Operation Date and ending at 11:59 pm on the day
immediately preceding the next anniversary of the Commercial Operation Date,provided that the
first Operations Year shall begin on the Commercial Operation Date.
(aa) The term"Party"means either Buyer or Provider,as the context shall indicate, and
"Parties"means both Buyer and Provider.
(bb) The term"Point of Delivery"has the meaning set forth in Section 4(a).
(cc) The term "Project" means an integrated system for the generation of Usable
Electricity from solar energy consisting of the photovoltaic panels and associated equipment to be
installed on each of the Sites in accordance with this Agreement, and includes equipment and
cabling required to connect to the Point of Delivery.
(dd) The term "Project Lessee" means, if applicable, any Person to whom Provider
transferred or leased a Project.
(ee) The term "Provider" has the meaning assigned to it in the introductory paragraph
hereof,and all permitted successors and assigns.
(ff) The term "Relocation Event" means the relocation of a Project, starting at the
shutdown of the Project pursuant to such relocation,and ending at the commercial operation of the
Project when such relocated Project is reinstalled at a new location,as determined by the Provider
in its reasonable discretion.
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(gg) The term "Renewable Energy Certificate" or "REC" means a certificate, credit,
allowance, green tag, or other transferable indicia, howsoever entitled, created by an applicable
program or certification authority indicating generation of a particular quantity of energy, or
product associated with the generation of a megawatt-hour(MWh)from a renewable energy source
by a renewable energy project.
(hh) The term"Site"means the real property upon which the Project is developed.
(ii) The term"Solar Services"means the services Provider provides to Buyer hereunder.
(jj) The term"Tax Attributes"means the investment tax credits(including any grants or
payments in lieu thereof)and any tax deductions or other benefits under the Internal Revenue Code
or applicable federal, state, or local law available as a result of the ownership and operation of a
Project or the output generated by a Project (including, without limitation, tax credits (including
any grants or payments in lieu thereof)and accelerated and/or bonus depreciation.)
(kk) The term"Term"shall have the meaning provided in Section 2 hereof.
(11) The term "Usable Electricity" means alternating current electrical energy meeting
the specifications described in Exhibit C,as measured by the Billing Meter at the Point of Delivery.
2. Term.
(a) Term. This Agreement shall consist of an Initial Period and an Operations Period.
As used herein, "Term" shall mean all of the Initial Period and the Operations Period, unless the
Provider or Buyer terminates the Agreement prior to the end of the Initial Period pursuant to the
terms of this Agreement.
(b) Initial Period.The Initial Period will begin on the Effective Date and will terminate
on the earlier of(i) the Commercial Operation Date or (ii) the date the Agreement is terminated
pursuant to the provisions of Section 3.
(c) Operations Period. If applicable, the Operations Period will commence on the
Commercial Operation Date and will terminate at 11:59 p.m. on the 25th anniversary of the
Commercial Operation Date unless earlier terminated in accordance with this Agreement;provided,
however the Operations Period will automatically renew for two(2)additional five(5)consecutive
year periods immediately following the Operations Period unless Buyer or Provider shall provide
written notice to the other Party of its intention not to extend the Agreement at least one hundred
eighty(180)days prior to the end of the Operations Period or any applicable automatic five(5)year
extension period,as the case may be.
3. Planning,Installation and Operation of Project.
(a) Site Assessment and Planning. During the Initial Period, Provider shall have the
right, at its own expense, to identify and assess the suitability of each Site for the Project to be
located on such Site and shall act diligently in conducting such assessment. The assessment shall
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include the right to inspect the physical condition of the Site; to apply for any building permits or
other governmental authorizations necessary for the construction of the Project; to arrange
interconnections with the Electric Utility;to make any applications to the appropriate Public Service
Commission or other agencies for receipt of payments for the Project; to apply to any other
governmental agencies or other persons for grants or other determinations necessary for the
construction of or receipt of revenues from the Project; to execute a binding lease or close on an
option or purchase of the Site, as applicable; or to make any other investigation or determination
necessary for the financing,construction, operation or maintenance of the Project.
(b) Termination of Agreement during the Initial Period. At any time during the Initial
Period,Provider shall have the right to cease development of the Project on a Site and unilaterally
terminate this Agreement, for any reason, including but not limited to material increases in
Provider's costs to provide the Solar Services. If Provider gives Buyer notice of such determination,
this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Parties shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii) the confidentiality provisions of Section 13,and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement. At any time prior
to the submission of the interconnection application and the payment associated therewith to the
Electrical Utility, Buyer may terminate this Agreement, provided that Buyer pay Provider for any
direct costs incurred as of the date of termination in connection with the development of the Project.
If Buyer gives Provider notice of such determination and makes the associated payment set forth
above,this Agreement shall terminate effective as of the delivery of such notice without any further
liability of the Parties to each other, provided that (i) the Buyer shall not be released from any
payment or other obligations arising under this Agreement prior to the delivery of the notice; and
(ii)the confidentiality provisions of Section 13,and the dispute resolution provisions of Section 21
hereof shall continue to apply notwithstanding the termination of this Agreement.
If material increases in Provider's costs to provide the Solar Services are the reason for Provider's
termination of this Agreement during the Initial Period, Provider shall propose an Amendment to
this Agreement for Buyer's consideration prior to exercising its right to terminate during the Initial
Period. Such Amendment shall set forth (i) the reasons Provider's costs to provide the Solar
Services have materially increased during the Initial Period, (ii) the extent Provider's costs to
provide the Solar Services have materially increased during the Initial Period, and (iii) Provider's
proposed adjustment to the Usable Electricity Purchase Rate schedule in Exhibit A to reflect such
material changes in Provider's costs.Such Amendment shall be delivered by written notice pursuant
to Section 22.
If Provider proposes an Amendment pursuant to this Section,Provider and Buyer may negotiate an
adjustment in the Usable Electricity Purchase Rate to reflect any material increases in Provider's
costs to provide the Solar Services,and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty(30) days after Provider has delivered a proposed Amendment
to Buyer in accordance with this Section, either Party may terminate the Agreement. If either Party
gives notice of such determination, this Agreement shall terminate effective as of the delivery of
such notice without any further liability of the Parties to each other, provided that (i) the Parties
shall not be released from any payment or other obligations arising under this Agreement prior to
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the delivery of the notice; and (ii) the confidentiality provisions of Section 13, and the dispute
resolution provisions of Section 21 hereof shall continue to apply notwithstanding the termination
of this Agreement.
(c) Commencement of Construction,Modification of Design.Provided that either party
does not terminate this Agreement pursuant to this Section 3, Provider will use commercially
reasonable efforts to commence installing the Project on the applicable Site within one hundred
eighty (180) days of the Provider obtaining necessary approvals of the Project from the Electric
Utility and any Governmental Authority.
(i) As of the Effective Date,Provider anticipates that each Project shall consist
of the components and shall have the designs attributed to such Project in Exhibit C attached
hereto.
(ii) Notwithstanding subsection (i) above, Provider has the right to modify the
design of each Project, including the selection of the components in the Project, in its
reasonable discretion.
(d) Contractors. Provider shall use licensed contractors to perform the work of
installing, operating, and maintaining the Project. Provider shall be responsible for the conduct of
Installers and Provider's subcontractors, and Buyer shall have no contractual relationship with
Installers or Provider's subcontractors in connection with the work on the Project.
(e) Status Reports. Provider shall give Buyer regular updates,on a reasonable schedule
requested by Buyer, on the progress of installation of the Project and shall notify Buyer of when
Provider will commence testing of a Project. Buyer shall have the right to have its representatives
present during the construction and testing process, but subject to reasonable written rules and
procedures as may be established by Provider and Installer. After Provider has determined, in its
reasonable judgment,that a Project meets the requirements of the Electric Utility and the Arkansas
Public Service Commission, has been installed in accordance with all Applicable Laws, has
successfully completed all performance tests, and is capable of producing Usable Electricity on a
continuous basis, Provider shall notify Buyer that installation of the Project is complete and shall
specify the Commercial Operation Date for such Project,which may be immediately upon delivery
of such notice to Buyer. All Usable Electricity produced by a Project prior to the Commercial
Operation Date shall be delivered to Buyer at the Point of Delivery after appropriate safety testing
and Buyer shall pay for all such Usable Electricity at the rate applicable to the first Operations Year.
(I) Standard of Operation. Provider shall design, obtain permits, install, operate, and
maintain a Project so as to keep it in good condition and repair, in compliance with all Applicable
Laws and in accordance with the generally accepted practices of the electric industry, in general,
and the solar generation industry, in particular. Such work shall be at Provider's sole expense.
Except for emergency situations or unplanned outages, Provider shall cause the work to be
performed at times so as to minimize disruption of the Project during peak sunlight times, to the
extent reasonably possible.
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(g) System Shut Down. Provider may shut down the Project at any time in order to
perform required emergency repairs to the Project. At other times, Provider shall give Buyer
advance notice of the shutdown as may be reasonable under the circumstances. Provider shall have
no obligation to reimburse Buyer for costs of purchasing Usable Electricity that would have been
produced by the Project but for such shutdown.Provider shall not schedule shutdowns during peak
periods of electric generation and periods when peak energy and demand prices are charged by the
Electric Utility, except as may be required in accordance with prudent electric industry safety
practices in the event of equipment malfunction.
4. Sale of Electric Energy.
(a) Sale of Usable Electricity. Throughout the Operations Period, subject to the terms
and conditions of this Agreement, Provider shall sell to Buyer and Buyer shall buy from Provider
all Usable Electricity produced by the Project,whether or not Buyer is able to use all such Usable
Electricity. The Point of Delivery of the Usable Electricity shall be as indicated in Exhibit C. Title
to and risk of loss with respect to the Usable Electricity shall transfer from Provider to Buyer at the
Point of Delivery.
(b) Delivery of Usable Electricity. The Usable Electricity from the Project shall be
delivered from Provider to Buyer at the Point of Delivery per the specifications set forth in Exhibit
C and otherwise in compliance with all requirements of the Electric Utility.
(c) Limits on Obligation to Deliver. Provider does not warrant or guarantee the amount
of electric energy to be produced by the limits on Project for any hourly, daily,monthly,annual or
other period.Provider is not a utility or public service company and does not assume any obligations
of a utility or public service company to supply Buyer's electric requirements, other than the
obligations under this Agreement. At the time of this Agreement, Provider is not subject to rate
review by governmental authorities.
(d) Meter Testing. Provider shall install one or more Billing Meter(s) at the Site, as
Provider deems appropriate,to measure the output of the Project at the Point of Delivery. Provider
shall provide Buyer with reasonable access to the metered energy output data collected by Provider.
Provider shall install an Interval Data Recorder (IDR) with industry standard telemetry at each
Project. Provider shall conduct tests of the Billing Meter(s) at such times as it deems appropriate
in accordance with industry standards, but not less than once in any two-year period. Buyer shall
pay for any independent testing of the Billing Meter(s)in excess of such minimum testing schedule
that Buyer deems necessary, except if, after such testing, the Billing Meter is shown to be in error
in Provider's favor by more than two percent(2%),Provider shall pay for the cost of such test and
shall make corresponding adjustments to the records of the amount of electrical energy provided
by the Project delivered based on the period that is half-way in between the date of this testing and
the last testing date of the Billing Meter. If there is an error of less than or equal to two percent
(2%)no billing adjustments will be made. In the event there is an error of greater than two percent
(2%), Provider shall adjust the next invoice to be provided to Buyer under Section 5(b) hereof, to
either charge the Buyer additional amounts for energy produced over the stated Billing Meter
amount during the applicable period at the applicable rate or provide Buyer a credit against future
billing for energy produced under the stated Billing Meter amount during the applicable period,
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provided, however, that any deficiencies or credits not theretofore applied or satisfied at the
expiration or earlier termination of the Operations Period shall be settled in cash.
5. Payment and Billing; Limits on Buyer Obligations; Event of Non-
Appropriation
(a) Rates. Buyer shall pay Provider for Usable Electricity produced by each Project at
the rates set forth in Exhibit A attached hereto.
(b) Billing. Buyer shall pay for the Usable Electricity produced by each Project
quarterly in arrears,promptly after the end of each quarter from the start of operational production.
Provider shall provide Buyer with an invoice setting forth the quantity of Usable Electricity
produced by the Project in such quarter, the applicable rates for such, and the total amount due,
which shall be the product of the quantities and the applicable rates.
(c) Invoice Delivery. Invoices shall be in writing and shall be either (i) delivered by
hand; (ii) mailed by first-class, registered or certified mail, return receipt requested, postage
prepaid; (iii)delivered by a recognized overnight or personal delivery service;; or(iv)transmitted
by email if receipt of such transmission by email is specifically acknowledged by the recipient
(automatic responses not being sufficient for acknowledgement) and with a hard copy to follow,
addressed as follows:
City of Fayetteville
113 West Mountain Street
Fayetteville,AR,72701
(d) Payment. Buyer shall pay each invoice within thirty (30) days of receipt of the
invoice. Payments shall be made by electronic funds transfer to an account designated by Provider
or by Direct Deposit of funds into Provider's bank account or by check if electronic transfer or
direct deposit are not available. Provider shall designate the account in the invoice or in a written
notice delivered to Buyer.
(f) Disputed Invoices. If Buyer objects to all or a portion of an invoice, Buyer shall,
on or before the date payment of the invoice is due, (i) pay the undisputed portion of the invoice,
and (ii) provide an itemized statement of its objections setting forth in reasonable detail the basis
for its objections. If Buyer does not object prior to the date payment of any invoice is due, Buyer
shall be obligated to pay the full amount of such invoices but Buyer may subsequently object to
such invoice and, if such objection proves to be correct, receive a refund of the disputed amount;
provided,however, that Buyer may not object to any invoice more than twelve (12) months after
the date on which such invoice is rendered.
(g) Payment Limitations. If, during the term of this Agreement including any
extensions, Buyer is bound or deemed bound by the provisions of any State of Arkansas laws
concerning the sufficiency of Buyer appropriations and the legal ability of Buyer to enter into
binding contracts and agreements with annual obligations in excess of annual Buyer appropriations
("Appropriation Bound") the provisions of Sections 5(f)-(j) of the Agreement shall control. If
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Buyer is Appropriation Bound,Provider and Buyer hereby expressly acknowledge and agree that
the obligation of Buyer to pay invoices for Usable Electricity in any Fiscal Year under this
Agreement or otherwise would be legally binding to the extent of amounts appropriated for and
legally available to Buyer for such purposes during such Fiscal Year. The parties hereto
acknowledge that all payments made by Buyer under this Agreement will constitute currently
budgeted expenditures. The parties hereto acknowledge that all payments made by Buyer under
this Agreement will not constitute a general obligation debt, an indebtedness, or a multiple-Fiscal
Year direct or indirect debt or other financial obligation of Buyer within the meaning of any
constitutional or statutory provision or limitation. Buyer represents to Provider, and the parties
hereto acknowledge that,Buyer is Appropriation Bound.
(h) Event of Non-Appropriation. If Buyer is Appropriation Bound,if by the first day of
any Fiscal Year Buyer has failed for any reason to obtain an appropriation of sufficient legally
available amounts to be used by Buyer to pay invoices for Usable Electricity that will be due
hereunder for and during the next ensuing Fiscal Year, then an Event of Non-Appropriation shall
be deemed to have occurred on the first calendar day thereafter (an "Event of Non-
Appropriation"). However, the parties hereto hereby agree that no Event of Non-Appropriation
shall be deemed to have occurred if the foregoing failure set forth in this subsection(g)is cured on
or before the thirty-first(3151) day of such Fiscal Year in which such Event of Non-Appropriation
shall be deemed to have occurred by the enactment of an appropriation providing sufficient legally
available amounts to Buyer,or Buyer otherwise making sufficient money available,to pay invoices
for Usable Electricity that will be due hereunder for and during the next ensuing Fiscal Year.
(i) Present Expectation. If Buyer becomes Appropriation Bound, it is the present
expectation of Buyer that the applicable budgetary entity, within the limits of available funds and
revenues,will make an appropriation of a sufficient amount to fund Buyer's obligations hereunder
during each Fiscal Year of the Term; provided, however, this expectation of Buyer shall not be
binding upon any future applicable budgetary entity in any future Fiscal Year, except to the extent
of any previously appropriated funds. Buyer shall use reasonable good faith efforts to have funds
properly budgeted in the general operating expense section of the budget(and not a specific line
item), appropriated, allotted,or otherwise made available for this Agreement(including obtaining
legislative and other authorizations for use of such funds)and to satisfy such conditions in a timely
manner.
(j) Notice of Event of Non-Appropriation. In the case of an Event of Non-
Appropriation, Buyer shall promptly give notice of such Event of Non-appropriation (the "NAE
Notice").Notwithstanding the occurrence of any Event of Non-Appropriation or the delivery of the
NAE Notice, Buyer will not interrupt or impair the delivery of Usable Electricity or jeopardize
Provider's sale, transfer or other monetization of Environmental Attributes, RECs or Tax
Attributes. Following receipt by Provider of an NAE Notice, Provider, in its sole discretion, (i)
may terminate this Agreement, or(ii) may continue to operate the Project and deliver the Usable
Electricity to a third party or utility company without payment by Buyer therefore during the
applicable Fiscal Year(and each Fiscal Year thereafter until an appropriation is made). Under the
circumstances of (ii), other than with respect to the obligation to make payment for energy
delivered,all obligations of Buyer under this Agreement shall remain in full force and effect.Should
Buyer receive an appropriation for this Agreement during the continuation of the Event of Non-
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Appropriation,before termination under option(i)has been exercised,Buyer shall pay such monies
to Provider as to make Provider whole for any amounts due and owing under this Agreement to the
extent appropriated,and upon payment such Event of Non-Appropriation shall be nullified.
(k) Within thirty(30)days of Provider's receipt of the NAE Notice,Provider shall give
notice to Buyer of Provider's election among options (i) and (ii) under subsection (i) above. If
Provider does not provide notice to Buyer of Provider's election under this subsection (j) within
such period, Provider shall be deemed to have elected option (ii) under subsection (i) above,
provided that,if Provider elects or is deemed to have elected option(ii)it may subsequently change
its election at any time upon prior written notice to Purchaser.
6. Supplemental Power,Net Metering and RECs.
(a) Back-up and Supplemental Usable Electricity. Except as otherwise provided herein,
throughout the Term, Buyer shall be responsible for obtaining all of its requirements for electric
energy in excess of the amounts produced by the Project. Provider shall have no obligation to
obtain or pay for such supplemental or back-up Usable Electricity.
(b) Net Metering&Utility Credits.At any time that electric production from the Project
is greater than Buyer's requirements at such time,Buyer shall nevertheless pay Provider for all the
Usable Electricity produced by the Project at the rates and in the manner provided in this
Agreement. Buyer shall be entitled to receive, to the extent permitted by Applicable Law, any
credits or payments due from the Electric Utility as a result of net metering from the Project,except
during an Event of Non-Appropriation. Upon Buyer's written request and not to exceed twice per
year, Provider or its duly authorized contractor shall provide reasonable assistance to Buyer in
reviewing the applicable bills,credits and payments received from the Electric Utility.
(c) Interconnection. Provider shall be responsible for arranging the interconnection of
the Project with Buyer's distribution system in a manner that includes bi-directional or "net
metering" if applicable. It is further understood that all cost associated with establishing the
interconnection between the Project and the electric utility pursuant to Net-Metering Rule 3.01 are
solely the responsibility of the Provider.
(d) Solar Program Incentives.Provider shall receive all payments and benefits available
under any incentive/benefits solar program. Buyer shall provide reasonable assistance to Provider
in preparing all applications and other documents necessary for Provider to receive such
payments/benefits,including designating Provider as the customer for purposes thereof or assigning
payments/benefits therefrom to Provider. If Buyer receives any payments under any such
incentive/benefits solar program or other programs in respect of the Project, it shall promptly pay
them over to Provider. Buyer's obligation to make any payments to Provider under this paragraph
(d)is limited to any payments actually received by Buyer.
(e) Ownership of Tax Attributes.Provider shall be the owner of any Tax Attributes that
may arise as a result of the operation of the Project and shall be entitled to transfer such Tax
Attributes to any person. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such Tax Attributes,and if Buyer is deemed to be the
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owner of any such Tax Attributes,Buyer shall assign the same(or the proceeds thereof)to Provider.
If Buyer receives any payments in respect of such Tax Attributes, it shall promptly pay them over
to Provider.
(f) Environmental Attributes. Buyer shall be the owner of any Environmental
Attributes that may arise as a result of the operation of the Project and shall be entitled to transfer
such Environmental Attributes to any person.
(g) Capacity& Ancillary Services. Provider shall be entitled to receive any payments
for electric capacity or ancillary services that may become available as a result of the construction
or operation of the Project. Buyer shall provide reasonable assistance to Provider in preparing all
documents necessary for Provider to receive such payments,and if Buyer is deemed to be the owner
or provider of such capacity or services, then Buyer shall assign the same to Provider. If Buyer
receives any payments in respect of capacity or such services then Buyer shall promptly pay them
over to Provider.
(h) Provider Is Not A Utility.Neither Party shall assert that Provider is an electric utility
or public service company or similar entity that has a duty to provide service, is subject to rate
regulation, or is otherwise subject to regulation by any governmental authority as a result of
Provider's obligations or performance under this Agreement.
(i) Grid charges. Buyer shall be responsible for paying any grid charge authorized
pursuant to Ark. Code Ann. §23-18-607 or any other Applicable Law.
7. Permits and Ownership of Project.
(a) Permits. Provider shall pay for and obtain all approvals from governmental entities
necessary for the construction and operation of the Project, including land use permits, building
permits,demolition and waste disposal permits and approval.
(b) System Ownership. Except as provided in Section 8, Provider or Financing Party
shall be the legal and beneficial owner of the Project at all times. Buyer disclaims any right, title
and interest in and to the Project. The Project is personal property and shall not attach to or be
deemed a part of, or fixture to, the Site. The Project shall at all times retain the legal status of
personal property as defined under Article 9 of the Uniform Commercial Code as in effect in the
state of the Site. Buyer and/or Provider shall make any necessary filings to disclaim the Project as
a fixture of the Site in the appropriate Land Registry to place all interested parties on notice of the
ownership of the Project by Provider.
(c) Liens. To the extent permitted by Applicable Law, each Party 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 of any
nature,including claims by Governmental Authorities for taxes(collectively referred to as"Liens"
and each,individually,a"Lien")on or with respect to the interests of the other in the Project.
8. Purchase Option
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(a) Purchase Option. Buyer shall have the right to purchase the Project and Provider's
rights in the Site from Provider upon the terms set forth in this Section 8(a) (the "Purchase
Option") on either of the seventh (7`h), fourteenth (14th), or twenty-first (2151) anniversary of the
Commercial Operation Date ("Purchase Option Period(s)") by providing to Provider written
notice of Buyer's election to purchase the Project and Provider's rights in the Site(the "Purchase
Option Notice")no later than the date which is twelve(12)months prior to the respective Purchase
Option Period (the "Purchase Option Notice Deadline"). If the Purchase Option is elected by
Buyer timely sending to Provider the Purchase Option Notice prior to the Purchase Option Notice
Deadline, the closing shall occur(i) within the three (3) month period immediately following the
respective Purchase Option Period or a time and date mutually agreeable to Buyer and Provider
(the "Purchase Option Closing Date"). The purchase price to be paid to Provider by Buyer for
the Project and Provider's rights in the Site on the Purchase Option Closing Date shall be the greater
of(i)Fair Market Value of the Project and Provider's rights in the Site and (ii)the purchase price
for the Project and Provider's rights in the Site on the respective Purchase Option Period as set forth
on Exhibit D hereto(the"Purchase Option Purchase Price"). Within one hundred twenty (120)
days of Provider's receipt of the Purchase Option Notice,Provider shall give Buyer an appraisal of
the Fair Market Value of the Project and Provider's rights in the Site as of the date of the sale.Buyer
may,but is not obligated to, accept such appraisal. If Buyer does not accept such appraisal within
fifteen (15) days of receiving the appraisal from Provider, the Parties shall meet to discuss the
appraisal. If the parties are unable to reach agreement within twenty(20)days of the Buyer's receipt
of the appraisal from Provider, the Parties will be deemed to enter into a dispute for purposes of
Section 21 and shall follow the procedures in Section 21 for resolution of the dispute.
Notwithstanding the foregoing, in the event that Provider enters into a tax equity investment
financing transaction in connection with funding the installation of the Project, the process of
determining the Fair Market Value of the Project and Provider's rights in the Site in this Agreement
shall be undertaken by a mutually acceptable nationally recognized independent appraiser with
experience and expertise in the solar photovoltaic industry acting reasonably and in good faith to
determine the Fair Market Value of the Project and Provider's rights in the Site and shall be
undertaken consistently with the terms of such transaction so that the process for determining Fair
Market Value under this Agreement shall be the same as provided in the agreements for such tax
equity investment financing transaction.Buyer shall be responsible for all appraisal fees.
(b) Transfer of Ownership. Upon Buyer's notice that it elects to exercise the option set
forth in Section 8(a) above, Provider shall prepare and deliver to Buyer a set of records on the
operation and maintenance history of the Project, including a summary of known defects. Upon
payment of the Purchase Option Purchase Price,Provider shall deliver,or cause to be delivered,to
Buyer a bill of sale conveying the Project to Buyer and an assignment or lease/easement or special
warranty deed, as applicable, with respect to Provider's rights in the Site. Such bill of sale,
assignment of lease/easement, and/or special warranty deed shall not contain any warranties other
than a warranty against any defects in title arising through Provider. Provider shall use all
reasonable efforts to transfer any remaining manufacturer's warranties on the Project, or portions
thereof,to Buyer.
(c) Operation&Maintenance After Sale.Prior to the effective date of Buyer's purchase
of the Project and Provider's rights in the Site under Section 8(a),Buyer and Provider shall discuss
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entering into an operation and maintenance agreement under which Provider shall perform all or a
portion of the operation and maintenance requirements of the Project following Buyer's purchase
of the Project and Provider's rights in the Site. However,neither Party shall be under an obligation
to enter into such an agreement.
(d) No Survival of Purchase Option.The options for Buyer to purchase the Project and
Provider's rights in the Site under Section 8(a)shall not survive the termination of this Agreement.
9. Shutdowns.
(a) Provider Safety Shutdown. In addition to the right of Provider to shut down the
Project for maintenance as provided in Section 3(g), Provider may shutdown any or all Project if
Provider, in the exercise of reasonable judgment, believes Site conditions or activities of persons
on the Site may interfere with the safe operation of a Project. Provider shall give Buyer notice of a
shutdown immediately upon becoming aware of the potential for such conditions or activities.
Provider shall use commercially reasonable efforts to restore Site conditions so as to not interfere
with the safe operation of the Project and to reduce,to the greatest extent practicable, the duration
of the shutdown. In the event of such a shutdown, unless the shutdown was caused by the act or
omission of Buyer or any party under Buyer's control,Buyer shall not be required to pay Provider
any amounts for Usable Electricity that Buyer would have purchased but for the shutdown.
(b) System Disruptions. In the event that any act or omission of Buyer, Buyer's
employees,Affiliates, or agents results in a disruption or outage in a Project's production,then, in
either case,Buyer shall reimburse Provider for all costs and expenses incurred by Provider to repair
the Project or restore such Project's production to normal operating condition and Buyer will pay
Provider an amount equal to the sum of(A) payments that Buyer would have made to Provider
hereunder for Usable Electricity that would have been produced by the Project following such
outage or disruption; (B) revenues that Provider would have received with respect to the Project
under any incentives/benefits solar program and any other assistance program with respect to
electric energy that would have been produced following such outage or disruption; and (C)
revenues from Environmental Attributes that Provider would have received with respect to electric
energy that would have been produced by the Project following such outage or disruption.
Determination of the amount of electric energy that would have been produced following such
outage or disruption shall be based, during the first Operations Year, on the estimated levels of
production and,after the first Operations Year,based on actual operation of the Project in the same
period in the previous Operations Year,unless Provider and Buyer mutually agree to an alternative
methodology.
10. Taxes.
(a) Income Taxes.Provider shall be responsible income taxes associated with payments
from Buyer to Provider for Usable Electricity from the Project. Provider(and/or Financing Party),
as owner of the Project, shall be entitled to all Tax Attributes with respect to the Project.
(b) Sales Taxes. Buyer shall be responsible for all taxes, fees, and charges, including
sales,use, and gross receipts taxes,imposed or authorized by any Governmental Authority on the
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sale of electric energy by Provider to Buyer. Buyer shall timely report, make filings for, and pay
any and all such taxes assessed directly against it and shall reimburse Provider for any and all such
taxes assessed against and paid by Provider.
(c) Personal Property Taxes. Provider shall be responsible for all personal property
taxes for personal property which comprises a part of the Project and which is owned by Provider.
(d) Real Property Taxes. Buyer shall not be responsible for real property taxes for any
real property which comprises a part of the Project and which is not owned by Buyer.
(e) Tax Contests. Each Party has the right to contest taxes in accordance with
Applicable Law and the terms of encumbrances against the Site. Each Party shall use all reasonable
efforts to cooperate with the other in any such contests of tax assessments or payments. In no event
shall either Party postpone during the pendency of an appeal of a tax assessment the payment of
taxes otherwise due except to the extent such postponement in payment is bonded or otherwise
secured in accordance with Applicable Law.
(f) Payment of Delinquent Taxes. In the event either Party fails to pay any taxes that
may become a lien upon the other Party's property, such Party may pay such amounts and in such
event shall be entitled to recover such paid amount from the other Party, together with interest
thereon at the rate of one percent (1%) per month, compounded monthly, but not to exceed the
maximum amount of seventeen percent(17%)per annum.
(g) Reimbursement Deadline. Any reimbursement of taxes owing pursuant to this
Section 10 shall be paid within twenty (20) days of receiving an invoice therefor from the Party
who paid the taxes.
11. Reserved.
12. Cooperation
The Parties acknowledge that the performance of each Party's obligations under this
Agreement will frequently require the assistance and cooperation of the other Party. Each Party
therefore agrees, in addition to those provisions in this Agreement specifically providing for
assistance from one Party to the other, that it will at all times during the Term cooperate with the
other Party and provide all reasonable assistance to the other Party to help the other Party perform
its obligations hereunder.
During the Term,Buyer shall deliver to Provider: (i)its annual audited financial statements
within 180 days after the end of each Fiscal Year, (ii) its annual budget for the succeeding Fiscal
Year promptly following approval thereof, (iii) proof of appropriation of funds for payments due
hereunder with its annual budget,and(iv) such other financial statements and information relating
to the ability of Buyer to satisfy its obligations under this Agreement as may be reasonably
requested by Provider from time to time.
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13. Press Releases and Confidentiality.
(a) Press Releases. The Parties acknowledge that they each desire to publicize
information about this Agreement and the Project. The Parties therefore agree that each may make
independent press releases about entering into this Agreement,the size and location of the Project,
production values of the Project,the estimated savings(including,but not limited to,financial and
environmental attributes) as a result of the Project, the costs incurred by the City related to the
Project, material aspects including, but not limited to, component descriptions and locations, and
the identity of the other Party,with the prior written consent of the other Party,which consent will
not be unreasonably withheld. However, the terms of this Agreement and information about the
Project other than that described above constitutes Confidential Information,as defined below, and
is subject to the remaining provisions of this Section 13. Both Parties have exclusive control over
the content or their respective websites. Any press release will be reviewed by both Parties within
3 business days. If no changes have been requested after 3 business days for review either Party
may issue the press release. Both Parties will review and agree to all media announcement and
marketing publications before release. Nothing herein shall prevent Buyer from complying with
its obligations under the Freedom of Information Act.
(b) Limits on Disclosure of Confidential Information. Subject to the exceptions set forth
below in Section 13(c),each Party agrees that,(i)without the consent of the other Party,it shall not
disclose any Confidential Information received from the other Party to any other person and(ii) it
shall use any Confidential Information received from the other Party only for the purpose of
fulfilling its obligations under this Agreement. Notwithstanding the foregoing, the Parties may,
and shall, disclose any information required to be disclosed under rules, regulations and contracts
implementing any incentives/benefits applicable to the Project which Provider elects to participate
in or Tax Attributes required to be disclosed by any Governmental Authority under Applicable Law
or pursuant to a validly issued subpoena or required filing.Notwithstanding the foregoing provision,
the Parties acknowledge that the Buyer is subject to the disclosure requirements of the Arkansas
Freedom of Information Act and the confidentiality of the Family Educational Rights and Privacy
Act.
(c) Permissible Disclosures.Buyer may publicly publish this Agreement and its exhibits
and schedules in the event Buyer determines, in its sole discretion, that disclosure is required by
any agreement to which Buyer is a party, or by applicable law or the rules of any public or private
regulatory body. Provider may provide this Agreement,and any correspondence,notices and other
information related to this Agreement to any person who has provided or who is interested in
providing construction or permanent financing, or any refinancing thereof, to Provider in
connection with the Project. In addition,if a receiving Party is required by Applicable Law,validly
issued subpoena,required filing,or the rules of any stock exchange or regulatory body,to disclose
any Confidential Information provided by the disclosing Party,the receiving Party shall notify the
disclosing Party prior to making any disclosure and shall use its reasonable efforts to cooperate with
the disclosing Party,but at the expense of the disclosing Party.
(d) Buyer acknowledges that Provider is an independent contractor and the Buyer has
no ownership or control over Provider,a private entity. Provider has not agreed to act as a custodian
of public records for the Buyer subject to the provisions of the Arkansas Freedom of Information
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Act, Ark. Code Ann. §25-19-101, et seq. Buyer further acknowledges and agrees that certain
documents and information provided to Buyer pursuant to the terms and conditions of this
Agreement may place Provider and Buyer at a competitive disadvantage if the information is
disclosed by Buyer. In the event Buyer receives a request for disclosure pursuant to subpoena or
other means, Buyer shall promptly provide notice of such request to Provider, and shall notify
Provider of any records Buyer deems it is required under law to disclose, in order to give Provider
the opportunity to seek an Attorney General Opinion or court order to prevent the disclosure.
(e) Provider shall provide the Buyer with access to a Project monitoring application
which will allow the Buyer to access the Project information for purposes of Buyer displaying and
communicating the Project information to the public. The system monitoring application shall be
updated at least daily.
14. Representations and Warranties.
(a) Mutual Representations. Each Party hereby represents and warrants to the other,as
of the Effective Date,that:
(i) Organization. It is duly organized, validly existing and in good standing
under the laws of its state of incorporation or formation, as applicable, and of the state in
which the Sites are located, respectively, and has the power and authority to enter into this
Agreement and to perform its obligations hereunder.
(ii) No Conflict. The execution and delivery of this Agreement and the
performance of and compliance with the provisions of this Agreement will not conflict with
or constitute a breach of or a default under (1) its organizational documents; (2) any
agreement or other obligation by which it is bound; and/or(3)any law or regulation.
(iii) Enforceability. (1) Except as contemplated under Section 3(a), all actions
required to be taken by or on the part of such Party necessary to make this Agreement
effective have been duly and validly taken; (2) this Agreement has been duly and validly
authorized, executed and delivered on behalf of such Party; and (3) this Agreement
constitutes a legal, valid and binding obligation of such Party, enforceable in accordance
with its terms, subject to laws of bankruptcy, insolvency, reorganization, moratorium or
other similar laws.
(iv) No Material Litigation. There are no court orders,. actions, suits or
proceedings at law or in equity by or before any governmental authority,arbitral tribunal or
other body, or threatened against or affecting it or brought or asserted by it in any court or
before any arbitrator of any kind or before or by any governmental authority that could
reasonably be expected to have a material adverse effect on it or its ability to perform its
obligations under this Agreement,or the validity or enforceability of this Agreement.
(b) Buyer Representations. In addition to the representations and warranties in Section
14(a), Buyer hereby represents and warrants to Provider, as of the Effective Date,that:
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(i) Authorization. The execution and delivery of this Agreement by Buyer and
the performance of its obligations hereunder have been duly authorized by all necessary
official action. This Agreement is a legal,valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms.
(ii) Financial Information. The financial information Buyer has provided to
Provider presents fairly in all material respects the financial condition and results of
operations of Buyer.
(c) Provider Representations. In addition to the representations and warranties in
Section 14(a),Provider hereby represents and warrants to Buyer that:
(i) Before commencing performance of this Agreement Provider shall have
become licensed or otherwise permitted to do business in the State of Arkansas and shall
have provided proof and documentation of all required insurance and bonds pursuant to this
Agreement.
(ii) Provider shall make available,upon reasonable request, documents relating
to its performance under this Agreement, including contracts and subcontracts it shall enter
into;
(iii) Provider shall use contractors and subcontractors who are qualified,licensed
and bonded in this State to perform the work so subcontracted pursuant to the terms hereof;
(iv) Provider has all requisite authority to the use of proprietary property, both
tangible and intangible,contemplated by this Agreement;
(v) The execution and delivery of this Agreement by Provider and the
performance of its obligations hereunder have been duly authorized by all necessary official
action. This Agreement is a legal, valid and binding obligation of Provider enforceable
against Provider in accordance with its terms; and
(vi) If requested by Buyer, the financial information Provider has provided to
Buyer presents fairly in all material respects the financial condition and results of operations
of Provider.
15. Force Maieure.
(a) Excuse for Force Majeure Event. Except as provided in Section 15(b) or otherwise
specifically provided in this Agreement, neither Party shall be considered in breach of this
Agreement or liable for any delay or failure to comply with this Agreement if and to the extent that
such delay or failure is caused by the occurrence of a Force Majeure Event;provided that the Party
claiming relief as a result of the Force Majeure Event shall promptly (i) notify the other Party in
writing of the existence and details of the Force Majeure Event; (ii)exercise all reasonable efforts
to minimize delay caused by such Force Majeure Event;(iii)notify the other Party in writing of the
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cessation of such Force Majeure Event; and (iv) resume performance of its obligations hereunder
as soon as practicable thereafter.
(b) No Excuse for Payment for Prior Services. Obligations to make payments for
services already provided shall not be excused by a Force Majeure Event.
(c) Restoration.In the event of a casualty event,to the extent that such casualty event is
attributable to the occurrence of a Force Majeure Event that destroys all or a substantial portion of
a Site, Provider shall elect, within ninety(90) days of such event, whether it will restore the Site,
which restoration will be at the sole expense of Provider. If Provider does not elect to restore the
Site, then this Agreement will terminate. If Provider does elect to restore the Site, Provider shall
provide notice of such election to Buyer, and thereafter following receipt of all necessary permits
and approvals shall diligently restore the Site at its sole expense. In the event of termination of this
Agreement pursuant to this Section 15(c), (i)the Parties shall not be released from any payment or
other obligations arising under this Agreement prior to the casualty event; and (ii) the
confidentiality provisions of Section 13,and the dispute resolution provisions of Section 21 hereof
shall continue to apply notwithstanding the termination of this Agreement. Notwithstanding
anything to the contrary in this Agreement,Provider shall restore the Site if a Force Majeure Event
occurs during the first seven(7)years of the Operation Period.
(d) Termination for Force Majeure Event. Notwithstanding anything to the contrary in
this Agreement, if nonperformance that is the result of a Force Majeure Event continues beyond a
continuous period of two hundred and seventy(270)days, then either Party shall have the right to
terminate this Agreement upon thirty (30) days' notice to the other; provided, however, that
Provider's restoration of the Site under Section 15(c) shall not be subject to the foregoing
termination provision if during such 270-day period Provider has begun restoration of the Site and
is proceeding diligently, using commercially reasonable efforts, to complete such restoration
without unreasonable delay. In the event of such a termination of this Agreement with respect to
the Project,the Parties shall not be released from any payment or other obligation arising under this
Agreement which accrued prior to the shutdown of the Project or Site,and the confidentiality and
dispute resolution provisions of this Agreement shall survive the termination of this Agreement.
16. Provider Default and Buyer Remedies.
(a) Provider Events of Default. Provider shall be in default of this Agreement if any of
the following("Provider Events of Default")shall occur:
(i) Misrepresentation. Any representation or warranty by Provider under
Section 14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Buyer
identifying the defect.
(ii) Abandonment During Installation. After commencement of installation of a
Project, Provider abandons installation of the Project for thirty (30) consecutive days and
fails to resume installation within thirty(30) days after receipt of notice from Buyer stating
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that, in Buyer's reasonable determination, Provider has abandoned installation of the
Project.
(iii) Failure to Operate. After the Commercial Operation Date, Provider fails to
deliver Usable Electricity for a period of ninety (90)consecutive days,which failure is not
due to equipment failure, damage to the Project that can be remedied during such ninety
(90) day period through the exercise or ordinary diligence, act of governmental authority,
exercise of Provider's rights under this Agreement, or otherwise excused by the provisions
of Section 15(b) (relating to Force Majeure Events); and Provider fails to resume operation
within thirty(30)days after receipt of notice from Buyer stating that,in Buyer's reasonable
determination, Provider has ceased operation of the Project; provided, however, that the
cure period shall be extended by the number of calendar days during which Provider is
prevented by circumstances beyond its control from taking curative action if Provider had
begun curative action and was proceeding diligently,using commercially reasonable efforts,
to complete such curative action.
(iv) Obligation Failure. Provider fails to perform any obligation hereunder, such
failure is material,such failure is not excused by the provisions of Section 15(b)(relating to
Force Majeure Events), and such failure is not cured within: (A)ten (10)days if the failure
involves a failure to make payment when due; or(B)sixty(60)days if the failure involves
an obligation other than payment,after receipt of notice from Buyer identifying the failure.
(v) Prohibited Acts. Provider takes any material action forbidden by this
Agreement.
(vi) Insolvency. Provider(A) applies for or consents to the appointment, or the
taking of possession by,a receiver, custodian, trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or is generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E) files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner,any petition filed against Provider in an involuntary case
under bankruptcy law or seeking to dissolve Provider under other Applicable Law; or(G)
takes any action authorizing its dissolution. Prior to any event of Provider insolvency
occurring after the fifth anniversary of the Commercial Operation Date for a Project,
Provider shall offer to sell the Project at Fair Market Value to Buyer,unless prohibited by
law.
(b) Financing Party Opportunity to Cure; Buyer Remedies. Upon an Event of Default
by Provider, provided that Buyer complies with its obligations under Section 18 and Financing
Party does not cure such Event of Default by Provider,Buyer may terminate this Agreement, seek
to recover damages for costs of replacement Usable Electricity for the Project, and pursue other
remedies available at law or equity.
17. Buyer Default and Provider Remedies.
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(a) Buyer Events of Default. Buyer shall be in default of this Agreement if any of the
following("Buyer Events of Default")shall occur:
(i) Misrepresentation. Any representation or warranty by Buyer under Section
14 hereof, is incorrect or incomplete in any material way, or omits to include any
information necessary to make such representation or warranty not materially misleading,
and such defect is not cured within fifteen (15) days after receipt of notice from Provider
identifying the defect.
(ii) Obstruction. Buyer intentionally obstructs commencement of installation of
any Project or fails to take any actions necessary for the interconnection of any Project,or
fails to take Usable Electricity produced by any Project (except in the case of Excuse for
Force Majeure Event),and fails to correct such action within its own power to do so within
fifteen(15)days.
(iii) Payment Failure. Buyer fails to make any payment due under the terms of
this Agreement and fails to make such payment within thirty(30)days after the date when
due.
(iv) Obligation Failure. Buyer fails to perform any obligation hereunder, such
failure is material,such failure is not excused by the provisions of Section 15(b)(relating to
Force Majeure Events), and such failure is not cured within sixty (60) days if the failure
involves an obligation other than payment,after receipt of notice from Provider identifying
the failure.
(v) Insolvency. Buyer (A) applies for or consents to the appointment, or the
taking of possession by,a receiver,custodian,trustee or liquidator of itself or a substantial
portion of its property; (B) admits in writing its inability, or be generally unable, to pay its
debts as such debts become due; (C) makes a general assignment for the benefit of its
creditors; (D) commences a voluntary case under any bankruptcy law; (E)files a petition
seeking to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, winding up, or composition or readjustment of debts; (F) acquiesces in, or
fails to contest in a timely manner, any petition filed against Buyer in an involuntary case
under bankruptcy law or seeking to dissolve Buyer under other Applicable Law;or(G)takes
any action authorizing its dissolution.
(b) Default Damages. Upon an Event of Default by Buyer, Provider may remove any
components of the Project located on a Site and/or pursue any and all other remedies available at
law or in equity.
18. Collateral Assignment,Financing Provisions.
(a) Financing Arrangements. To the extent permitted by law, Provider may pledge,
grant security interests, assign, or otherwise encumber its interests in the Site, Project and this
Agreement to any persons providing financing for the Project. Buyer acknowledges that Provider
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will obtain construction financing for the Project from one or more third parties and that Provider
may either obtain term financing secured by the Project or sell or assign the Project to a Financing
Party or may arrange other financing accommodations from one or more financial institutions and
may from time to time refinance, or exercise purchase options under, such transactions. Buyer
acknowledges that in connection with such transactions Provider may secure Provider's obligations
by,among other collateral,an assignment of this Agreement,in whole or in part,and a first security
interest in the Project, including the Site. In order to facilitate such financing, and with respect to
any lender or lessor,as applicable,Buyer agrees as follows:
(i) Consent to Collateral Assignment. Buyer hereby consents to both of the sale
or lease of the Project to a Financing Party and the collateral assignment to the Financing
Party of the Provider's right,title and interest in and to this Agreement.
(ii) Rights of Financing Party. Notwithstanding any contrary term of this
Agreement:
(A) Step-In Rights. The Financing Party, as owner or lessee of the
Project, or as collateral assignee of this Agreement, shall be entitled to exercise, in
the place and stead of Provider, any and all rights and remedies of Provider under
this Agreement in accordance with the terms of this Agreement. The Financing
Party shall also be entitled to exercise all rights and remedies of owners or secured
parties,generally with respect to this Agreement and the Project;
(B) Opportunity to Cure Default. The Financing Party 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 Provider thereunder or cause to be cured
any default of Provider thereunder in the time and manner provided by the terms of
this Agreement. Nothing herein requires the Financing Party to cure any default of
Provider under this Agreement or (unless the Financing Party has succeeded to
Provider's interests under this Agreement)to perform any act,duty or obligation of
Provider under this Agreement,but Buyer hereby gives it the option to do so;
(C) Exercise of Remedies. Upon the exercise of remedies,including any
sale of the Project by the Financing Party, whether by judicial proceeding or under
any power of sale contained therein, or any conveyance from Provider to the
Financing Party (or any assignee of the Financing Party as defined below) in lieu
thereof,the Financing Party shall give notice to Buyer of the transferee or assignee
of this Agreement. Any such exercise of remedies shall not constitute a default
under this Agreement;
(D) Cure of Bankruptcy Rejection. Upon any rejection or other
termination of this Agreement pursuant to any process undertaken with respect to
Provider under the United States Bankruptcy Code,at the request of Financing Party
made within ninety(90)days of such termination or rejection,Buyer shall enter into
a new agreement with Financing Party or its assignee(s) having the same terms and
conditions as this Agreement.
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(iii) Right to Cure.
(A) Cure Period. If Financing Party provides Buyer with notice of its
interest and with a notice address,Buyer will not exercise any right to terminate or
suspend this Agreement unless it shall have given the Financing Party prior written
notice of its intent to terminate or suspend this Agreement, as required by this
Agreement, specifying the condition giving rise to such right, and the Financing
Party shall not have caused to be cured the condition giving rise to the right of
termination or suspension within the periods for cure provided for in this
Agreement.; provided that if such Provider default reasonably cannot be cured by
the Financing Party within such period and the Financing Party commences and
continuously pursues cure of such default within such period, such period for cure
will be extended for a reasonable period of time under the circumstances, such
period not to exceed an additional ninety (90) days. The Parties' respective
obligations will otherwise remain in effect during any cure period.
(B) Continuation of Agreement. If the Financing Party or its assignee
(including any purchaser or transferee), pursuant to an exercise of remedies by the
Financing Party,shall acquire title to or control of Provider's assets and shall,within
the time periods described in Section 18(a)(iii)(A)above,cure all defaults under this
Agreement existing as of the date of such change in title or control in the manner
required by this Agreement and which are capable of cure by a third person or entity,
then such Person shall no longer be in default under this Agreement, and this
Agreement shall continue in full force and effect.
(b) Financing Party a Third-Party Beneficiary. Buyer agrees and acknowledges that
Financing Party is a third-party beneficiary of the provisions of this Section 18.
(c) Entry to Consent to Assignment. Buyer agrees to execute any consents to
assignment, payment direction letters, or acknowledgements as may be reasonably requested by
Provider and/or Financing Party in connection with such financing of or sale of any or all of the
Project.
(d) Regardless of assignment,Provider,Provider's Affiliate,or a contractor thereof that
is an experienced manager in the renewable energy industry of at least 25 MW of renewable energy
assets will continue to operate and maintain the Project. For the avoidance of doubt, Entegrity
Energy Partners LLC and/or an Affiliate thereof shall qualify as an experienced manager hereunder.
19. Chanee in Law.
If there is any Change in Law subsequent to the Effective Date that results in a direct and
material change in Provider's costs to provide the Solar Services or Buyer's ability to obtain, or a
material reduction in, any net metering credit or payment from the Electric Utility, Provider or
Buyer shall promptly submit to the other party a written notice setting forth (i) the citation of the
Change in Law, (ii) the manner in which such change materially increases Provider's costs to
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provide the Solar Services or Buyer's ability to receive, or the material reduction in, the net
metering credit or payment,and(iii)Provider's or Buyer's proposed adjustment to the kWh rates to
reflect such material changes in Provider's costs or Buyer's ability to receive, or the material
reduction in, the net metering credit or payment. Provider and Buyer agree to negotiate in good
faith a commercially reasonable adjustment in the kWh rate to reflect the associated costs or values
impacted by the Change in Law, and in the event Buyer and Provider are unable to agree upon a
reasonable adjustment within thirty(30) days after written notice in accordance with this Section,
such Dispute shall be resolved in accordance with Section 21 hereof.
20. Limitations on Damages,Liability,and Remedies;Disclaimer.
(a) EXCEPT AS EXPLICITLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY NOR ITS DIRECTORS, OFFICERS, SHAREHOLDERS, PARTNERS, MEMBERS,
AGENTS AND EMPLOYEES SUBCONTRACTORS OR SUPPLIERS SHALL BE LIABLE TO
THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, EXEMPLARY, INDIRECT,
INCIDENTAL,OR CONSEQUENTIAL DAMAGES (INCLUDING,WITHOUT LIMITATION,
LOST REVENUES (OTHER THAN AMOUNTS PAYABLE UNDER THIS AGREEMENT),
LOST PROFITS, LOST BUSINESS OPPORTUNITY OR ANY BUSINESS INTERRUPTION),
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT EVEN IF ADVISED OF
SUCH. THE PARTIES AGREE THAT (1) IN THE EVENT THAT PROVIDER OR ITS
INVESTORS LOSE OR ARE REQUIRED TO RECAPTURE ANY TAX ATTRIBUTES OR
OTHER TAX BENEFITS AS A RESULT OF A BREACH OF THIS AGREEMENT BY BUYER,
SUCH RECAPTURED AMOUNT SHALL BE DEEMED TO BE DIRECT AND NOT
INDIRECT OR CONSEQUENTIAL DAMAGES,AND(II)IN THE EVENT THAT PROVIDER
IS RETAINING THE ENVIRONMENTAL ATTRIBUTES PRODUCED BY THE PROJECT,
AND A BREACH OF THIS AGREEMENT BY BUYER CAUSES PROVIDER TO LOSE THE
BENEFIT OF SALES OF SUCH ENVIRONMENTAL ATTRIBUTES TO THIRD PARTIES,
THE AMOUNT OF SUCH LOST SALES SHALL BE DIRECT AND NOT INDIRECT OR
CONSEQUENTIAL DAMAGES.
(b) PROVIDER'S AGGREGATE LIABILITY UNDER THIS AGREEMENT
ARISING OUT OF OR IN CONNECTION WITH THE PERFORMANCE OR NON-
PERFORMANCE OF THIS AGREEMENT CANNOT EXCEED THE TOTAL PAYMENTS
ACTUALLY MADE BY BUYER UNDER THIS AGREEMENT. THE PROVISIONS OF THIS
SECTION 20(B) WILL APPLY WHETHER SUCH LIABILITY OR CLAIM ARISES IN
CONTRACT,TORT(INCLUDING NEGLIGENCE), STRICT LIABILITY,OR OTHERWISE.
(c) TO THE EXTENT THAT THIS AGREEMENT SETS FORTH SPECIFIC
REMEDIES FOR ANY CLAIM OR LIABILITY, SUCH REMEDIES ARE THE AFFECTED
PARTY'S SOLE AND EXCLUSIVE REMEDIES FOR SUCH CLAIM OR LIABILITY,
WHETHER ARISING IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY OR OTHERWISE.
(d) EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO WARRANTY WITH
RESPECT TO THE PROJECT OR THE PERFORMANCE OF PROVIDER'S OBLIGATIONS
HEREUNDER, WHETHER STATUTORY, WRITTEN, ORAL, EXPRESS, OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
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PARTICULAR PURPOSE, OR WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE,APPLIES UNDER THIS AGREEMENT.
(e) NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO ALTER,
LIMIT, OR OTHERWISE COMPROMISE THAT TORT IMMUNITY AFFORDED THE CITY
OF FAYETTEVILLE UNDER THE CONSTITUTION AND STATUTES OF THE STATE OF
ARKANSAS.
21. Dispute Resolution.
(a) Negotiation Period. The Parties shall negotiate in good faith and attempt to resolve
any dispute,controversy or claim arising out of or relating to this Agreement(a"Dispute")within
thirty(30)days after the date that a Party gives written notice of such Dispute to the other Party.
(b) Mediation. If, after such negotiation in accordance with Section 21(a), the Dispute
remains unresolved, either Party may request that a non-binding mediation take place. In such
mediation,representatives of the Parties with authority to resolve the dispute shall meet for at least
three(3)hours with a mediator whom they choose together. If the Parties are unable to agree on a
mediator, then either Party is hereby empowered to request the American Arbitration Association
to appoint a mediator. The mediator's fee and expenses shall be paid one-half by each Party.
(c) Forum. The parties agree that all claims, demands or actions for loss, expense,
damage,liability or other relief,either at law or in equity,arising out of or related to this Agreement
must be brought before a court in Washington County, Arkansas having jurisdiction over such
matter.
22. Notices.
Delivery of Notices. All notices or other communications which may be or are required to
be given by any party to any other party pursuant to this Agreement shall be in writing and shall be
either (i)delivered by hand; (ii) mailed by first-class, registered or certified mail, return receipt
requested,postage prepaid; (iii) delivered by a recognized overnight or personal delivery service;
(iv)transmitted by facsimile (such transmission to be effective on the day of receipt if received
prior to 5:00 pm local time on a business day or in any other case as of the next business day
following the day of transmittal); or (v) transmitted by email if receipt of such transmission by
email is specifically acknowledged by the recipient (automatic responses not being sufficient for
acknowledgement),addressed as follows:
If to Buyer:
City of Fayetteville
113 West Mountain Street
Fayetteville,AR,72701
If to Provider:
Entegrity Energy Partners,LLC
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1403 East 6t Street
Little Rock,AR 72202
Notices shall be effective when delivered(or in the case of email,when acknowledged by
the recipient) in accordance with the foregoing provisions, whether or not (except in the case of
email transmission) accepted by, or on behalf of,the Party to whom the notice is sent.
Each Party may designate by Notice in accordance with this section to the other Party a new
address to which any notice may thereafter be given.
23. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the laws of the State of
Arkansas, without regard to its choice of law provisions, and applicable federal law. Any legal
action or proceeding arising out of or relating to this Agreement must be conducted exclusively
within the State of Arkansas and in no other jurisdiction.
(b) Rules of Interpretation. Section headings are for convenience only and shall not
affect the interpretation of this Agreement. References to sections are,unless the context otherwise
requires, references to sections of this Agreement. The words "hereto","hereof"and"hereunder"
shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The
word"person" shall include individuals; partnerships; corporate bodies (including but not limited
to corporations, limited partnerships and limited liability companies); non-profit corporations or
associations;governmental bodies and agencies;and regulated utilities. The word"including"shall
be deemed to be followed by the words "without limitation". In the event of any conflict between
the text of this Agreement and the contents of an Exhibit hereto, the text of this Agreement shall
govern.
(c) Severability. If any non-material part of this Agreement is held to be unenforceable,
the rest of the Agreement will continue in effect. If a material provision is determined to be
unenforceable and the Party which would have been benefited by the provision does not waive its
unenforceability, then the Parties shall negotiate in good faith to amend the Agreement to restore
to the Party that was the beneficiary of such unenforceable provision the benefits of such provision.
(d) Amendment and Waiver. This Agreement may only be amended by a writing signed
by both Parties. Any waiver of any of the terms hereof shall be enforceable only to the extent it is
waived in a writing signed by the Party against whom the waiver is sought to be enforced. Any
waiver shall be effective only for the particular event for which it is issued and shall not constitute
a waiver of a subsequent occurrence of the waived event nor constitute a waiver of any other
provision hereof, at the same time or subsequently.
(e) Assignment. Neither Party may assign, sell,transfer or in any other way convey its
rights, duties or obligations under this Agreement, either in whole or in part, without the prior
written consent of the other Party which consent shall not be unreasonably withheld or delayed,
except that without consent of Buyer, Provider (i)may assign, in whole or in part, its rights and
obligations hereunder to an Affiliate of Provider and (ii) may sell or collaterally assign this
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Agreement in whole or in part as collateral, in accordance with Section 18. For purposes of this
Section 23(e),assign,sell,transfer,or convey does not include any sale of all or substantially all of
the assets of Provider or any merger of Provider with another person,whether or not Provider is the
surviving entity from such merger, or any other change in control of Provider,provided any such
surviving entity assumes all obligations of Provider, as appropriate,under this Agreement. Buyer
agrees to execute any consents to assignment or acknowledgements as may be reasonably requested
by Provider in connection with an assignment of this Agreement.
(f) Provider Put Option. Buyer and Provider hereby expressly acknowledge and agree
that Provider shall have the option to put the purchase of one or more Projects located on a Site to
Buyer at the end of the Term for a purchase price which is equivalent to the Fair Market Value of
the Project at such time.
(g) THIS AGREEMENT IS NOT A LEASE — THIS AGREEMENT
CONSTITUTES A SERVICE CONTRACT. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS NOT A
LEASE AND THIS AGREEMENT SHALL NOT BE CONSTRUED AS A LEASE. THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
NEITHER PARTY WILL TAKE ANY ACTION WHATSOEVER TO TREAT OR
CONSTRUE THIS AGREEMENT AS A LEASE. THE PARTIES HERETO HEREBY
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS AN
AGREEMENT TO SELL ELECTRIC ENERGY GENERATED FROM AN
ALTERNATIVE ENERGY FACILITY AND THIS AGREEMENT SHALL BE DEEMED A
SERVICE CONTRACT PURSUANT TO 26 U.S.C. SECTION 7701(e)(3)(A). THE
PARTIES HERETO HEREBY EXPRESSLY ACKNOWLEDGE AND AGREE AND
FURTHER COVENANT, WARRANT, AND REPRESENT TO EACH OTHER THAT
EACH PARTY WILL TAKE ANY AND ALL ACTIONS NECESSARY TO INSURE THAT
THIS AGREEMENT IS TREATED AND CONSTRUED AS A SERVICE CONTRACT
SATISFYING THE REQUIREMENTS OF SERVICE CONTRACTS PURSUANT TO 26
U.S.C. SECTION 7701(e)(3)(A). THE PARTIES HERETO HEREBY FURTHER
EXPRESSLY ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT IS INTENDED
TO FULLY COMPLY WITH ACT 464 OF THE 2019 REGULAR SESSION OF THE 92ND
GENERAL ASSEMBLY OF THE STATE OF ARKANSAS, EXPRESSLY INCLUDING,
BUT NOT LIMITED TO,A.C.A SECTION 23-18-603(7)(C).
(h) No Joint Venture. This Agreement does not create a joint venture, partnership or
other form of business association between the Parties.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument. Delivery of signature by fax, or scan delivered by email, receipt acknowledged, or
electronic signature are effective to bind a Party hereto.
(Signatures contained on following page)
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(Signature Page to Solar Services Agreement)
EXECUTED AND EFFECTIVE as of the Effective Date.
BUYER:
CITY OF FAYETTEVILLE
By:
Nai c: IQl1Bl a
Title:MA
PROVIDER:
ENTEGRITY ENERGY PARTNERS,LLC
Mickaet?ai-ker
By: wkk.r►.w..ro«1I.Ian MOW)
Name: Michael Parker
Title: President
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EXHIBIT A
CONFIDENTIAL
USABLE ELECTRICITY PURCHASE RATE
Year Solar Electric
Rate($/kWh)
1 $0.0570
2 $0.0576
3 $0.0581
4 $0.0587
5 $0.0593
6 $0.0599
7 $0.0605
8 $0.0611
9 $0.0617
10 $0.0623
11 $0.0630
12 $0.0636
13 $0.0642
14 $0.0649
15 $0.0655
16 $0.0662
17 $0.0668
18 $0.0675
19 $0.0682
20 $0.0689
21 $0.0696
22 $0.0702
23 $0.0709
24 $0.0717
25 $0.0724
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EXHIBIT B
DESCRIPTION OF SITE
General Description:
A portion of parcel#200-02456-000 in Logan County,Arkansas. Final legal description to be
determined by survey.
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EXHIBIT C
CONFIDENTIAL
DESCRIPTION OF PROJECT
Project Description:
Point of Delivery Located at the Billing Meter
Solar Modules: FS-6450A-P or similar
Solar Racking System: OMCO Single Axis Tracker Racking or similar
Inverters: SMA Sunny Highpower PEAK3 125-US or similar
Billing Meter: Elkor WattsOn-Mark II MT-RG-05 or similar
Facility Capacity(DC): Approximately 3.77 MW
Facility Capacity(AC): Approximately 2.88 MW
Estimated Year-1 Production: Approximately 6,538,454 kWh
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EXHIBIT D
CONFIDENTIAL
PURCHASE OPTION PURCHASE PRICE SCHEDULE
Seventh(7th)Anniversary of Commercial Operation Date: The greater of(i)Fair Market Value
of the Project and Provider's rights in the Site and(ii)$4,650,000.00;
Fourteenth (14th) Anniversary of Commercial Operation Date: The greater of(i) Fair Market
Value of the Project and Provider's rights in the Site and(ii)$3,250,000.00;
Twenty-First(21st)Anniversary of Commercial Operation Date:The greater of(i)Fair Market
Value of the Project and Provider's rights in the Site and(ii)$1,750,000.00.
34