Eagle Point Solar-1 Lease and Power Purchase AgreementMasterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
bgtri
IAA- Amedca CO
1
2007
SUBJECT: Approve a Lease with Eagle Point Energy - 1, LLC to Provide Solar
Panels at the Operations & Maintenance Facility
DATE: September 29, 2011
Economic Development Director Dave Heiar is recommending rescinding the previous
License and Power Purchase Agreement with Eagle Point Energy -1, LLC and adopting
a Lease /Purchase of the solar equipment for the roof of the Municipal Services Center
on Kerper Court.
Since the License and Power Purchase Agreement was approved by the City Council,
Interstate Power & Light, a subsidiary of Alliant Energy that is the electrical provider for
most of Dubuque, contends the Power Purchase Agreement structure of this project is
in conflict with their interpretation of Iowa Code Sections 476.1 and 476.25. These
sections refer to the definition of a public utility and the creation of service territories.
Alliant believes since the Power Purchase Agreement with Eagle Point Energy is based
on kWh production of the panels, this then makes Eagle Point Energy a utility and
violates Alliant's service territory.
This claim by Alliant necessitates the restructuring of the project so that the City owns
the electricity production of the panels. If the City leases the panels from Eagle Point
Energy, the City would benefit from the electricity produced by City equipment, thereby
eliminating Alliant's concerns that the City is buying power from another provider.
The previous agreement showed an annual savings of $3,500, but upon revisiting these
assumptions this benefit may have been overstated. To make this new arrangement
financially beneficial to the City, Eagle Point Solar has agreed to pay $3,000 a year for
the first 10 years and to shorten the agreement from 25 years to 22 years. At the end of
the 22 year lease, the panels would become wholly owned by the City of Dubuque. It is
estimated these panels have a 40 year productive life.
An analysis was conducted to determine the net present value this project has for the
City. To conduct the analysis, it was assumed that energy prices would follow the 10
year average increases of the CPI:Energy category (5.7% as opposed to the previously
used 3% factor) and using a discount rate equal to the 30 year average of the CPI:AII
Categories (4.9 %, also known as the inflation rate). Over the 22 year lease, the project
has a positive net present value to the City of $60,454.27. Over the 40 year expected
life of the panels, the project has a positive net present value to the City of $518,217.02.
This assumes that the panels will produce power at the factory warranted level when in
fact, it is believed they will actually produce more electricity than stated in the warranty.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
2
Masterpiece on the Mississippi
TO: Michael Van Milligen, City Manager
FROM: David J. Heiar, Economic Development Director
Dubuque
Itzetti
AFAmedcaCtv
11111r
2007
SUBJECT: Approve a Lease with Eagle Point Energy — 1, LLC to provide Solar
Panels at the Operations & Maintenance Facility
DATE: August 31, 2011
INTRODUCTION
This memorandum presents for City Council a resolution rescinding the previous
License and Power Purchase Agreement and approving a Lease with Eagle Point
Energy — 1, LLC to install and operate solar panels on the Operations & Maintenance
Facility on Kerper Court for the City's use.
BACKGROUND
A top priority of the City Council is to make the community more sustainable. City Staff
has been working with Eagle Point Energy —1, LLC for several months to determine the
viability of utilizing solar energy at the Operations & Maintenance Facility, located at 925
Kerper Court.
Eagle Point Solar is proposing to install 850 solar panels on the Northwest portion of the
City's Operation & Maintenance Facility located at 925 Kerper Court. The panels will
provide 260,000 kW AC power to the building to offset electricity usage from Alliant
Energy's power grid. Eagle Point Solar started business in 2009 and has executed 5
installations of solar panels in the region. Eagle Point Solar has informed staff that this
will be the largest installation in the State of Iowa to date.
City Staff along with Eagle Point Energy — 1, LLC analyzed two years of electrical bills
for the building. The building is charged two rates; a peak rate (M -F 7am — 9pm) and
off -peak rate (all other times). The peak rates per month vary from $.0918 - $.1958,
with a yearly average of $.1385. The off -peak rates vary from $.0270 - $.0602 with an
average of $.0384.
The building consumed 321,918 peak kWh and 503,382 off -peak kWh. The panels are
estimated to produce 185,714 peak kWh and 74,286 off -peak kWh. A rough calculation
erroneously determined that purchasing the power generated from the panels at $.11
per kWh for both peak and off -peak kWh will reduce the annual electrical bill for the
building by $3,500.
The License and Power Purchase Agreement (PPA) between the City and Eagle Point
Energy — 1, LLC, previously approved by the City Council on August 1, allowed Eagle
Point Energy — 1, LLC to utilize the portion of the roof needed for the solar panels and
required Eagle Point to sell the produced power to the City at $.11 per kWh. The
electrical rate was estimated to increase 3% per year for the entire 25 year term of the
agreement.
The federal government issues Solar Renewable Energy Credits to solar panel
installations. Solar Renewable Energy Certificates represent the environmental savings
impact of emission free solar energy production. Certain states have Renewable Energy
Portfolio standards ( "RPS ") whereby there are mandated power goals that need to be
reached by a certain date. Companies or individuals can purchase these credits to
increase their renewable energy portfolio. The credits earned by this project will be sold
and the City will receive a third of the proceeds.
The benefits from installing the panels for the building's electrical use were identified as
follows:
• An electrical cost savings of approximately $3500 per year
• One third of the proceeds from the sale of Solar Renewable Energy Credits
• 32 percent of the building's electrical usage will be provided from solar energy
• 319,556 pounds of CO2 will be reduced annually utilizing solar energy
The electricity produced by the solar panels flows through a net meter with Alliant
Energy. Normally, the building will be using more electricity than the panels produce at
any given time. However, there are certain times that the panels will produce more
electricity than the building uses (ex. a sunny Sunday afternoon) and the meter will run
backwards. The kWh put back into Alliant Energy's grid are then credited on a monthly
basis and can be used later at a time when the building is using more electricity than the
panels are producing. Should any kWh credits remain after the month ends, they are
rolled to the next month and can be used then.
The solar panels are estimated to produce one -third of the building's total electric
demand. It should be noted that should electrical efficiencies in the building be made
that reduce the current electrical usage by two- thirds (a reduction of 544,698 kWh), the
building will be selling power back to Alliant Energy. Currently, the price that Alliant
pays for power from power providers (which the City would become assuming the two -
thirds reduction can be achieved) would eliminate the cost savings of the solar panels.
Alliant Energy's rate structure may change in the future and could eliminate this concern
but cannot be assumed that this will happen at this time.
DISCUSSION
Since the License and PPA was approved by the City Council, Interstate Power & Light,
a subsidiary of Alliant Energy that is the electrical provider for most of Dubuque,
contends the PPA structure of this project is in conflict of their interpretation of Iowa
Code Sections 476.1 and 476.25. These sections refer to the definition of a public utility
and the creation of service territories. Alliant believes since the PPA with Eagle Point
2
Energy is based on kWh production of the panels, this then makes Eagle Point Energy
a utility and violates Alliant's service territory.
This claim by Alliant necessitates the restructuring of the project so that the City owns
the electricity production of the panels. If the City leases the panels from Eagle Point
Energy the City would benefit from the electricity produced by City equipment, thereby
eliminating Alliant's concerns that the City is buying power from another provider.
The attached document is an equipment lease /purchase between Eagle Point Energy
and the City. The method of payment will be a fixed monthly lease with an annual
increase for the duration of the 22 year agreement. The first year's payments are
calculated by using the panel's estimated electricity producing potential. This
restructuring to make the lease payments rather than purchasing kWh produced by the
panels is what Alliant Energy requires for this ownership structure to meet their
satisfaction. A copy of the Lease has been sent to their attorneys for their review.
The monthly payments will follow the schedule attached. These amounts were
calculated by taking into consideration the warranted production of the panels, the
original price per kWh being proposed for the project, and the effect the panels have on
the building's Alliant Energy bill.
The previous agreement showed an annual savings of $3,500, but upon revisiting these
assumptions this benefit may have been overstated. To make this new arrangement
financially beneficial to the City, Eagle Point Solar has agreed to pay $3,000 a year for
the first 10 years and to shorten the agreement from 25 years to 22 years. At the end of
the 22 year lease, the panels would become wholly owned by the City of Dubuque. It is
estimated these panels have a 40 year productive life.
An analysis was conducted to determine the net present value (NPV) this project has for
the City. To conduct the analysis, it was assumed that energy prices would follow the
10 year average increases of the CPI:Energy category (5.7% as opposed to the
previously used 3% factor) and using a discount rate equal to the 30 year average of
the CPI:AII Categories (4.9 %, also known as the inflation rate). Over the 22 year lease,
the project has a positive NPV to the City of $60,454.27. Over the 40 year expected life
of the panels, the project has a positive NPV to the City of $518,217.02. This assumes
that the panels will produce power at the factory warranted level when in fact, it is
believed they will actually produce more electricity than stated in the warranty.
In the new agreement, the City has in its sole discretion the option to revert back to the
original agreement approved on August 1, 2011 should a Power Purchase structure be
allowed by Alliant Energy or determined by the Iowa Utility Board to be acceptable.
3
RECOMMENDATION
I recommend the City Council approve the attached resolution rescinding the previous
agreement and approving an Equipment Lease for Solar Panels with Eagle Point
Energy — 1, LLC.
ACTION STEP
The action step is to approve the attached resolution
F: \USERS\Econ Dev \Eagle Point Solar \PPA\20110927 Memo approve New Solar Lease3.docx
4
Solar Equipment Lease Payment Schedule
Year Monthly Rent
1 $ 2,049.02
2 $ 2,101.42
3 $ 2,155.00
4 $ 2,209.81
5 $ 2,265.87
6 $ 2,323.21
7 $ 2,381.85
8 $ 2,441.83
9 $ 2,503.18
10 $ 2,565.93
11 $ 2,880.10
12 $ 2,945.74
13 $ 3,012.87
14 $ 3,081.53
15 $ 3,151.76
16 $ 3,223.59
17 $ 3,297.06
18 $ 3,372.20
19 $ 3,449.05
20 $ 3,527.65
21 $ 3,608.05
22 $ 3,690.28
5
RESOLUTION NO. 340 -11
APPROVAL OF A LICENSE AND POWER PURCHASE AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND EAGLE POINT ENERGY —
1, LLC AN IOWA LIMITED LIABILITY COMPANY
Whereas, the City of Dubuque, Iowa (City) is the owner of the real
property legally described as follows:
Roof space above the land commonly known as the western
side of the roof located at 925 Kerper Court, Dubuque, Iowa,
legally described as Lot 2 of 2 of Kerper Industrial Park in
the City of Dubuque, Iowa; and
Whereas, Eagle Point Energy — 1, LLC. desires to license a part of the
property to install solar panels at the facility; and
Whereas, a License and Power Purchase Agreement between the City of
Dubuque and Eagle Point Energy — 1, LLC was approved by Resolution 251 -11
on August 1, 2011; and
Whereas, City and Eagle Point Energy — 1, LLC. have negotiated a new
Lease for Solar Photovoltaic Equipment which will replace the original License
and Power Purchase Agreement; and
Whereas, the City Council believes it is in the best interest of the City of
Dubuque to approve the Lease for Solar Photovoltaic Equipment.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. That Resolution 251 -11 approving the License and Power
Purchase Agreement is rescinded.
Section 2. The City of Dubuque approves the Lease of Solar
Photovoltaic Equipment with Eagle Point Energy — 1, LLC and the City Manager is
authorized to execute said lease on behalf of the City of Dubuque.
Passed, approved and adopted this 3rd day of October, 011.
Attest: Kevin S. Firnstahl, City Clerk
Roy D. Buol, Mayor
F: \USERS \Econ Dev \Eagle Point Solar \PPA\20111003_Resolution EPS Solar Panel Lease.docx
LICENSE AGREEMENT
REGARDING SOLAR PHOTOVOLTAIC EQUIPMENT
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
EAGLE POINT ENERGY - 1, LLC
This License Agreement regarding Solar Photovoltaic Equipment (the
"Agreement "), dated the 3rd day of October , 2011, is made and entered into
by and between the City of Dubuque, Iowa ( "Lessee "), and Eagle Point Energy - 1,
LLC, an Iowa limited liability company, located at 923 Peru Road, Dubuque, Iowa
52001 ( "Lessor ") (together referred to as the "Parties ").
This Agreement is entered into for the purpose of allowing Lessor to install,
operate, and maintain a solar panel array on property owned by Lessee and to
allow Lessee to lease said solar photovoltaic equipment and to own any and all
power generated by such solar photovoltaic equipment at a cost to Lessee that is
estimated to be less than the historical cost of power to Lessee from other sources.
This Agreement is intended to fully and completely supersede the Agreement
entered into and executed by and betweeri the Parties on August 1st, 2011, which
has been deemed null and void by the Parties.
SECTION 1. LICENSE. Lessee grants to Lessor, its successors and assigns
(including any Financing Party, as defined in Section 16 hereof), an irrevocable
license coterminous with the Term to use the property commonly known as the
western side of the roof of the building located on the real property located at 925
Kerper Court, Dubuque, Iowa, legally described as Lot 2 of 2 of Kerper Industrial
Park in the City of Dubuque, Iowa (the "Premises ") for the purpose of installing,
operating, and maintaining the solar photovoltaic equipment on the roof and
inverters and related equipment within the building, as more particularly described
on Schedule A hereto, pursuant to the terms hereof (the "System "), including
access to electrical panels and conduits to interconnect or disconnect the System
with the Premises' electrical system. The roof plan for the System is depicted on
Exhibit A attached hereto.
SECTION 2. RENT; TERM. Lessor shall pay Lessee a license fee for the license
to use the Premises of Ten Dollars ($10) per year (the "Base License Fee ") plus 1/3
of the Solar Renewable Energy Certificate (SREC) sales described in Section 9.5, if
any (the "Additional License Fee "). The Base License Fee for the Term shall be
paid in advance on or before . The Additional License Fee, if any, shall
be credited monthly on the invoices submitted pursuant to Section 9.2. The term of
this Agreement shall commence on and continue until the twenty -
second (22nd) anniversary of the Commercial Operation Date (as defined in Section
30.1) (the "Term "), unless terminated earlier pursuant to the terms hereof.
SECTION 3. TITLE. Lessee warrants that Lessee is the owner of the Premises
and has full authority to enter into this License.
SECTION 4. INSURANCE.
4.1. Lessee shall maintain policies of fire and extended coverage insurance on
the Premises, but not including the System. Lessee shall also maintain its
membership in the Iowa Communities Insurance Pool or equivalent commercial
general liability insurance (including contractual liability coverage) with limits of not
less than $2,000,000 general aggregate, $1,000,000 per occurrence. All policies
shall name Lessor and Lessor's Financing Party as additional insureds or loss
payees, as applicable.
4.2. Lessor shall provide and maintain at all times during the Term insurance as
required by the attached Schedule Bl as such schedule may from time to time be
amended.
4.3. Lessor shall provide and maintain or cause to be maintained at all times
during the process of constructing and operating the System (and, from time to time
at the request of Lessee, furnish Lessee with proof of insurance in the form of a
certificate of insurance for each insurance policy):
All risk insurance, written on a Completed Value Form in an amount equal to
one hundred percent (100 %) of the replacement value of the System when
construction is completed.
4.4. Each party having knowledge shall notify the other party and the Lessor's
Financing Party in the case of damage exceeding $5,000.00 in amount to, or
destruction of, the System, the Premises or any portion thereof resulting from fire or
other casualty. Net proceeds of any insurance (the "Net Proceeds ") with respect to
the System shall be paid directly to Lessor or Lessor's Financing Party, as its
interests may appear, and Lessor, if approved by the Lessor's Financing Party, shall
forthwith repair, reconstruct and restore the System to substantially the same or an
improved condition or value as they existed prior to the event causing such damage
and, to the extent necessary to accomplish such repair, reconstruction and
restoration, Lessor will apply the Net Proceeds of any insurance relating to such
damage incurred by Lessee to the payment or reimbursement of the costs thereof.
SECTION 5. REPAIRS.
5.1. Lessor shall at all times during the term of this License, at Lessor's own costs
and expense, keep the System in good working order, condition and repair, and in a
safe, clean and neat condition, in each case in accordance with those methods,
practices, and guidelines that are commonly used and accepted in the photovoltaic
solar system industry ( "Good Industry Practice ").
2
5.2 Lessor shall be responsible for repairing any damage to the Premises directly
caused by the installation, maintenance, or repair of the System. Lessor further
agrees to be responsible for costs arising from resealing the seams in the rubber
membrane on the roof of the Premises.
5.3 Lessee shall keep the Premises in such condition as may be required by law
and by the terms of the insurance policies furnished pursuant to this Agreement.
Lessee may at any time conduct an inspection of the Premises to determine
Lessor's compliance with this Section.
5.4. Lessee shall have the right to request Lessor upon written notice to Lessor
and Lessor's Financing Party to repair any part of the System which Lessee
reasonably determines does not materially comply with the requirements of this
Section, and Lessor shall repair, as the notice may request, any such part of the
System within ten days, or such longer period as may reasonably be required so
long as such repair is being diligently pursued, after receipt of such notice.
5.3. Lessee shall have no obligation to Lessor for any maintenance expense of
any kind related to the System.
SECTION 6. COMPLIANCE WITH LAW. During the term of this License, Lessor
shall comply in all material respects with all local, state and federal laws applicable
to Lessor's use of the Premises and the System.
SECTION 7. ALTERATIONS. Lessor shall not, without Lessee's prior written
consent make any alteration, addition, or modification to any improvement on the
Premises, other than as contemplated in the Agreement with respect to the System.
SECTION 8. USE OF PREMISES. Lessor shall not knowingly use or allow the
Premises or the System to be used or occupied for any unlawful purpose. Lessor
shall not suffer any act to be done or any condition to exist on the Premises or
permit any article to be brought thereon, in each case in connection with its
installation, operation or maintenance of the System, which is dangerous, unless
safeguarded as required by law, or which, in law, constitute a nuisance, public or
private, or which may make void or voidable any insurance in force with respect
thereto.
SECTION 9. USE OF ELECTRICITY.
9.1. Use of Electricity: Lessee shall have the full right to use and consume all
electricity produced by the System. Any environmental attributes of the electricity,
including any SRECs, shall inure to the benefit of Lessor and Lessor's Financing
Party, subject to Section 9.5.
9.2. License Price: Subject to Section 13, the monthly payments from Lessee to
Lessor will be as follows:
3
Year Monthly Rent
1 $ 2,049.02
2 $ 2,101.42
3 $ 2,155.00
4 $ 2,209.81
5 $ 2,265.87
6 $ 2,323.21
7 $ 2,381.85
8 $ 2,441.83
9 $ 2,503.18
10 $ 2,565.93
11 $ 2,880.10
12 $ 2,945.74
13 $ 3,012.87
14 $ 3,081.53
15 $ 3,151.76
16 $ 3,223.59
17 $ 3,297.06
18 $ 3,372.20
19 $ 3,449.05
20 $ 3,527.65
21 $ 3,608.05
22 $ 3,690.28
1) Billing System: Lessor will bill Lessee monthly in the amount equal to
the monthly payment . The first billing will occur within 10 days after the first
month of the System providing electricity to Lessee. Lessee will then have
20 days to pay such billing.
2) Lessee Service: Lessor shall provide all of the following:
a) Lessor will produce and send bills to Lessee within fifteen (15)
business days of the end of the billing cycle at the following address:
Public Works Department
925 Kerper Court
Dubuque, IA 52001
b) Lessor will make available, via the Internet, performance
information of the System and the software, at no cost to the Lessee,
necessary to retrieve and track the System performance.
3) Lessee will make payment for the amount of the bill to Lessor within
20 business days from the invoice billing date.
4
9.3. Rebates and Other Incentives: Any grant, rebate, or incentive payment from
the United States Department of the Treasury, or other party paid as a result of the
design, construction and operation of the System shall inure to the benefit of Lessor
or Lessor's Financing Party. Lessee will cooperate in good faith as necessary to
enable Lessor to obtain all available incentives and rebates, including assignment to
Lessor or Lessor's Financing Party of any incentive received by Lessee from the US
Treasury or other party as consistent with this Agreement.
9.4. Meters: Lessor shall provide a revenue -grade Data Acquisition System or
Interval Data Recording ( "IDR ") meter complete with industry standard telemetry for
communication with ethernet, cellular or other common output capability for the
purposes of metering /monitoring /data collection of solar production. Lessee shall
have access to data from these meters. Lessor shall measure the actual amount of
electricity supplied to Lessee by the System at the Electrical Interconnection Point
using the revenue -grade IDR meter. Meters shall be installed at Lessor's expense.
Lessor shall test the meter annually and at any reasonable time upon request of
Lessor at Lessor's expense. Lessee shall reimburse Lessor for the cost of any test
requested by Lessee, unless such testing demonstrates that the meter was
operating outside of its allowable calibration. Lessee may also conduct occasional
power production inquiry, validation and verification, or reconciliation procedures.
During such Lessee conducted procedures, Lessor shall provide Lessee with the
data and information related to the determination of power production, including any
interval meter data representing generation output. Lessee will use its reasonable
efforts to provide or arrange for Utility- metered data that can support the power
production process, either directly through a data file transmission or through some
arrangement with Utility.
9.5. Potential Revenue from Renewable Portfolio Standards and /or Solar
Renewable Energy Certificates (collectively "SRECs "): Lessor shall retain title and
is authorized to market, sell or transfer SRECs (including the ownership of the
renewable attributes of System) to any third -party purchaser or purchasers selected
by Lessor in Lessor's sole and absolute discretion; provided that the City of
Dubuque will be granted 1/3`d of any net SREC revenues as an Additional License
Fee, which amount shall be credited as a partial reduction of its monthly lease
payment and 1/3rd of the remaining net SREC revenues shall be for the benefit of
Lessor's Financing Party pursuant to the terms of the financing agreement with
Lessor. Lessor shall provide Lessee evidence in a form satisfactory to Lessee of the
terms of all sales or transfers of SRECs not more than ten (10) days after such
sales or transfers.
SECTION 10. TERMINATION.
10.1. By Lessee: Subject to Section 12, Lessee shall have the right to terminate
this Agreement after seven (7) years from the Commercial Operation Date (defined
5
in Section 30.1) at any time on ninety (90) days written notice to Lessor and
Lessor's Financing Party.
10.2. Termination Fee: In the event that Lessee terminates this Agreement for any
reason, other than as a result of an uncured Event of Default by the Lessor as set
forth in Section 14 of this Agreement, Lessee shall pay Lessor a Termination Fee.
The Termination Fee shall be the Net Present Value (at a 5% annual discount rate)
of all remaining monthly payments due for all remaining years under the Term of
this Agreement in accordance with Section 9.2. Upon payment of the Termination
Fee, all right, title, warranties and interest in the System shall be deemed
transferred to Lessee without further action by either party.
1) Transfer of Warranty Rights: Upon the termination of this Agreement
by Lessee as contemplated by this Section, Lessee shall have all of the
authority to exercise any and all powers relating to any and all warranties
related to the System that were held by Lessor immediately prior to the
termination.
10.3. By Lessor: Lessor shall be allowed to terminate this Agreement with the
written consent of Lessor's Financing Party at any time for any reason upon ninety
(90) days written notice to Lessee. Upon such Termination by Lessor, Lessee shall
have no further rights or obligations under this Agreement.
SECTION 11. EXPIRATION OF AGREEMENT. At the completion of the 22 year
term of this Agreement, as provided for in Section 2, all right, title and interest in the
System shall be transferred to Lessee without further action by either party.
SECTION 12. TEMPORARY SHUTDOWN OF SYSTEM.
12.1. "Temporary Shutdown of the System" means a complete shutdown of
electricity usage at the written direction of Lessee to Lessor and Lessor's Financing
Party for longer than 24 hours.
12.2. If an act, omission or event occurs during the Term, other than from actions
by Lessor or circumstances described in Section 13, which significantly reduces or
eliminates the use of electricity from the System or requires the Temporary
Shutdown of the System, Lessee and Lessor may, by mutual consent and with the
written approval of Lessor's Financing Party, do either of the following as a means
of avoiding default by Lessee under this Agreement:
1) Lessee may pay Lessor the same monthly lease payment as called for
in Section 9 for any month in which there is a Temporary Shutdown of the
System.
2) Lessee and Lessor may negotiate an alternative payment
methodology that is mutually acceptable and agreed upon by both parties
6
and with the written approval of Lessor's Financing Party. If no alternative
payment methodology can be agreed upon with good faith efforts within a
reasonable time following the Temporary Shutdown of the System, the
method described in Section 12.2(1) must be utilized.
Under either alternative, Lessee will make a good faith effort to give as much notice
as possible to Lessor and to Lessor's Financing Party prior to any Temporary
Shutdown of the System.
SECTION 13. FORCE MAJEURE. Neither party hereto shall be liable for any
failure of performance due to causes beyond its reasonable control, the occurrence
of which could not have been prevented by the exercise of due diligence, such as
acts of God, acts of the other party, acts of civil or military authority, fires, floods,
epidemics, windstorms, explosions, natural disasters, sabotage, wars, riots,
changes in laws, regulations, tariffs mandated or approved by federal, state or
governmental or regulatory entities, or court injunction or order provided that written
notice of such delay (including the anticipated duration of the delay) shall be given
by the affected party to the other party as soon as possible after the event or
occurrence (but in no event more than 10 days thereafter). The ability of either party
to obtain a better price shall not constitute an event of force majeure hereunder.
SECTION 14. EVENT OF DEFAULT.
14.1. By Lessee: The following shall be an Event of Default by Lessee:
1) Lessee's failure to pay undisputed invoices for a continuous period of
twenty (20) or more days.
2) The alteration, renovation, damage, destruction or closure of the
Premises or the System which is a result of any event other than Force
Majeure (as defined in Section 13) and results in undue or unreasonable
repair, maintenance or operational costs or expense to Lessor with regard to
the System.
3) For terms other than those listed in (1) and (2) above, failure by
Lessee to perform or comply with any material term of this Agreement within
thirty (30) days of written notice by Lessor, unless Lessor and Lessor's
Financing Party agree in writing to a longer period to cure the default.
14.2 Remedies of Lessor: If an Event of Default by Lessee has occurred and is
continuing, in addition to any and all remedies at law or in equity, Lessor shall have
the right to terminate this Agreement and Lessee shall pay the Termination Fee as
described in Section 10.
14.3. By Lessor: The following shall be considered an Event of Default by Lessor:
7
1) Lessor's failure to pay undisputed invoices or credits for a continuous
period of thirty (30) or more days after notice thereof to Lessor and Lessor's
Financing Party.
2) Lessor's failure to repair or maintain the System in accordance with
Good Industry Practice, following written notice to Lessor and Lessor's
Financing Party;
3) Lessor's failure to exercise its rights and powers under the System's
manufacturer's warranty within thirty (30) days following the failure of the
System, for any consecutive twelve (12) month period, to meet such
manufacturer's guaranteed and warranted standards of performance for the
System. Such warranted and guaranteed standards for the System are
attached hereto as Exhibit D.
4) For terms other than those listed in (1) through (3) above, failure by
Lessor to perform or comply with any material term of this Agreement within
thirty (30) days of written notice by Lessee to Lessor and Lessor's Financing
Party, unless Lessee agrees in writing to a longer period to cure the default.
14.4 Remedies of Lessee: If an Event of Default by Lessor has occurred and is
continuing, in addition to any and all other remedies at law or in equity, Lessee shall
have the right at its option, on written notice to Lessor and Lessor's Financing Party,
to terminate this Agreement. Lessee shall thereafter have the right to enter and take
possession of the Premises with proper notice and process of law and to remove
the System from the Premises without incurring any liability to Lessor or to any
persons occupying or using the Premises for any damage caused or sustained by
reason of such entry on the Premises or the removal of persons or property from
the Premises.
SECTION 15. ASSIGNMENT. Except as set forth in Section 16, this Agreement
shall not be assignable by either party in whole or in part without the written consent
of the other party.
SECTION 16. FINANCING. Lessor may without the consent of Lessee pledge its
interest in this Agreement as security for loans or financing provided by any person
to Lessor, including pursuant to an equipment lease (any such person includes
Lessor's Financing Party). If Lessor's Financing Party requests additional terms and
conditions to those already provided in this Agreement, Lessee agrees to consider
any such requests in good faith, but may refuse such requests in its sole and
absolute discretion and may withhold consent or approval of such additional terms
and conditions. If Lessor's Financing Party requires an Estoppel Certificate, Lessee
shall provide such certificate to Lessor within thirty (30) days of request
demonstrating Lessor's interest in the Premises for operation of the System and
Lessor's right to access thereof, and such other matters as may reasonably be
requested. Lessee acknowledges that as of the date hereof Lessor's Financing
8
Party is Dubuque Bank and Trust Co. and Lessee agrees to execute and deliver to
such Financing Party the consent in the form of Exhibit B attached hereto.
SECTION 17. DEBT LIABILITY DISCLAIMER / HOLD HARMLESS.
17.1 Lessee is not liable for any of Lessor's debts, liabilities, settlements, liens
arising through Lessor, or any other obligations of Lessor or its heirs, successors, or
assigns. Lessee shall not directly or indirectly cause, create, incur, assume or
suffer to exist any liens on or with respect to the System or any interest therein.
Lessee shall indemnify, defend and hold Lessor and Lessor's Financing Party
harmless against all costs and expenses (including reasonable attorneys' fees and
court costs) incurred in discharging and releasing such lien.
17.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, no other
warranty to Lessee or any other person, whether express, implied, or statutory, is
made as to the design, description, quality, merchantability, completeness, useful
life, future economic viability, or fitness for any particular purpose of the System or
any service provided hereunder or described herein, or as to any other matter, all of
which are expressly disclaimed by Lessor.
17.3 Neither Party shall be liable to the other Party or its Indemnified Persons for
any special, punitive, exemplary, indirect, or consequential damages, losses or
damages for lost revenue or lost profits, whether foreseeable or not, arising out of,
or in connection with the Agreement.
SECTION 18. COMPLIANCE WITH APPLICABLE LAWS, INCLUDING UTILITY
INTERCONNECTION STANDARDS. Lessor, at its own cost and expense, shall
comply in all material respects with all applicable laws and regulations relating to
the operation of the System and the generation of electricity, including obtaining and
maintaining all relevant approvals and permits. In particular, Lessor agrees
throughout the Term to comply in all material respects with any and all operational
standards and requirements imposed by the Utility Interconnection Agreement with
Utility, a copy of which has been provided to Lessor, and to comply with the
interconnection requirements. In all cases, Lessor's interconnection shall be
acceptable to Utility. Lessee will cooperate with Lessor and, if necessary, will
provide consents and execute with Utility such agreements as are necessary to
permit the interconnection of the System. This interconnection shall be done at no
cost or liability to Lessee and Lessor shall reimburse Lessee for all out -of- pocket
costs reasonably incurred in connection with any interconnection agreement.
SECTION 19. TAXES. Lessor shall pay all lawful taxes, assessments or charges
that at any time may be levied upon any interest in this Agreement including the
System. Lessor shall not be liable or responsible for the payment of any taxes,
assessments or charges in respect of the Premises, all of which shall be for the
account of and payable by Lessee.
9
SECTION 20. CONFIDENTIALITY OF INFORMATION.
20.1. Lessor's Confidentiality Requirement: To the extent allowed by law, any
financial, statistical, personal, technical or other data and information relating to
Lessee's operations which are designated confidential by Lessee and made
available to Lessor in order to carry out this Agreement shall be protected by Lessor
from unauthorized use and disclosure through the observance of the same or more
effective procedural requirements as are applicable to Lessor for its own information
of serious nature. Lessee shall identify all confidential data and information at the
time it is provided.
20.2. Public Records: To the extent allowed by law, any mechanical, technical or
other data and information relating to the System which are designated confidential
by Lessor and made available to Lessee in order to carry out this Agreement shall
be protected by Lessee from unauthorized use and disclosure through the
observance of the same procedural requirements as are applicable to Lessee for its
own information of serious nature. Lessor shall identify all such confidential data
and information at the time it is provided. In the event of a request for such
information under the Iowa Public Records Act, Lessee shall promptly notify Lessor
and Lessor shall be solely responsible for taking such action as it deems
appropriate to protect the confidentiality of such information.
20.3. Confidentiality does not apply to information which is known to a receiving
party from other sources, which is otherwise publicly available or that is required to
be disclosed to or by order of any regulatory or judicial authority.
SECTION 21. AUDIT. Lessor agrees that Lessee or its designated
representatives shall have the right upon reasonable written notice to review and to
copy any records and supporting documentation pertaining to the performance of
this Agreement. Lessor agrees to maintain such records for possible audit for a
minimum of three (3) years after each payment, unless a longer period of records
retention is stipulated or required by law. Lessor will, at a minimum, maintain one
complete set of records at a location in Iowa to facilitate such audit. Lessor agrees
to allow the auditor(s) access to such records during normal business hours and to
allow interviews of any employees who might reasonably have information related
to such records. Further, Lessor agrees to include a similar right of Lessee to audit
records and interview staff in any subcontract or assignment related to performance
on this Agreement.
SECTION 22. INDEMNIFICATION.
22.1. Indemnification of Lessor. To the extent allowed by law, Lessee will defend,
indemnify and hold harmless Lessor, its permitted successors and assigns
(including Lessor's Financing Party) and their respective directors, officers,
members, shareholders and employees (collectively, the "Lessor Indemnified
Parties ") from and against all liabilities, obligations, claims, damages, penalties,
10
causes of action, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) (collectively, "Claims ") imposed upon or incurred by
or asserted against any Lessor Indemnified Party by reason of (a) any accident,
injury to or death of persons or Toss of or damage to property occurring on or about
the Premises and resulting from any negligent act or omission of Lessee, or anyone
claiming by through or under Lessee, during the Term, or (b) any negligent failure
on the part of Lessee to perform or comply in any material respect with any of the
material terms of this Agreement. In case any action, suit or proceeding is brought
against any Lessor Indemnified Party by reason of such occurrence, Lessee will, at
Lessee's expense and discretion, either defend such action, suit or proceeding, or
cause the same to be defended by counsel approved by Lessor and Lessor's
Financing Party, which approval will not be unreasonably withheld. Lessee shall
not, however, be required to reimburse, indemnify or defend any Lessor Indemnified
Party, to the extent any such Claim is due to the negligence or willful misconduct of
any Lessor Indemnified Party.
22.2. Indemnification of Lessee. To the extent allowed by law, Lessor will defend,
indemnify and hold harmless Lessee, its permitted successors and assigns and
their respective directors, officers, members, shareholders and employees
(collectively, the "Lessee Indemnified Party ") from and against all Claims imposed
upon or incurred by or asserted against any Lessee Indemnified Party by reason of
(a) any accident, injury to or death of persons or loss of or damage to property
occurring on or about the Premises during the term of this Agreement and resulting
from any negligent act or omission of Lessor or anyone claiming by, through or
under Lessor during the Term, or (b) any negligent failure on the part of Lessor to
perform or comply in any material respect with any of the material terms of this
Agreement. In case any action, suit or proceeding is brought against any Lessee
Indemnified Party by reason of such occurrence, Lessor will, at Lessor's expense
and discretion, either defend such action, suit or proceeding, or cause the same to
be defended by counsel approved by Lessee, which approval will not be
unreasonably withheld. Lessor shall not, however, be required to reimburse,
indemnify or defend any Lessee Indemnified Party to the extent any such Claim is
due to the negligence or willful misconduct of any Lessee Indemnified Party.
SECTION 23. SURVIVAL. The obligations and liabilities under this Agreement
shall survive and continue in full force and effect and shall not be terminated,
discharged or relicensed, in whole or in part, irrespective of the termination or
expiration of the term of this Agreement.
SECTION 24. GOVERNING LAW. This Agreement shall be governed and shall
be interpreted in accordance with the laws of the State of Iowa.
SECTION 25. OWNERSHIP.
25.1. Subject to the rights provided to Lessee pursuant to other terms hereof,
during the Term, the System and all alterations, additions or installations made
11
thereto by Lessor and all Lessor property used in connection with the installation,
operation and maintenance of the System is, and shall remain, the personal
property of Lessor or Lessor's Financing Party ( "Lessor Property "). In no event
shall any Lessor Property be deemed a fixture, nor shall Lessee, nor anyone
claiming by, through or under Lessee (including but not limited to any present or
future mortgagee of Lessee) have any rights in or to the Lessor Property at any time
except as otherwise provided herein. Except as provided in this Agreement, Lessee
acknowledges and agrees that Lessor may grant or cause to be granted to a
secured party a security interest in the Lessor Property. Lessee covenants that it
will place all parties having an interest in or lien upon the real property comprising
the Premises on notice of the ownership of the System and the legal status or
classification of the System as personal property of the Lessor or Lessor's
Financing Party. If there is any mortgage or fixture filing against the Premises that
could reasonably be construed as attaching to the System as a fixture of the
Premises, Lessee shall provide, at Lessor's or Lessor's Financing Party's request, a
disclaimer or release from such lien holder.
25.2. UCC Property Statement. Lessor shall have the right to file, and Lessee
hereby consents to such filing, a statement with the necessary state or local agency
including where the real estate records are located, indicating Lessor's sole
ownership of the System and indicating that no part of the System is to be
construed as a fixture or appurtenance to any property owned by Lessee.
SECTION 26. APPLICABLE LAWS AND REQUIREMENTS. All activities
conducted by Lessor pursuant to this Agreement shall be in compliance in all
material respects with all applicable zoning requirements and all applicable Federal,
State, and local laws, ordinances, rules and regulations, and all issued permits and
licenses (collectively "Applicable Laws and Requirements "), and shall be conducted
at Lessor's own cost and expense. Lessor shall provide Lessee upon request with a
copy of all permits, approvals and conditions issued by applicable Federal, State,
and local governmental entities. If required, Lessor shall immediately suspend any
use of the System to the extent required by any governmental authority upon notice
by such governmental authority having jurisdiction that any of Lessor's activities
under this Agreement constitutes a violation of any of the Applicable Laws and
Requirements until the violation, if any, is corrected and the applicable
governmental authority concurs that the violation is corrected. Lessor shall
immediately notify Lessee regarding any alleged violation. Failure of Lessor to
immediately suspend use of the System and /or to notify Lessee in accordance with
this provision after receiving a notice of any violation which may pose a risk to
public health or safety is considered an event of Default by Lessor. Lessee agrees
to assist Lessor in obtaining any and all municipal permits and zoning modifications
(if required) to permit construction and use of System on the applicable municipal
facility.
SECTION 27. NO INTERFERENCE WITH LESSEE USES /QUIET
ENJOYMENT. Lessor shall operate, maintain and repair the System in a manner
12
that will not unreasonably obstruct or interfere with Lessee's use of Lessee's facility
or the rights of any other occupants of Lessee's facility. In the event such
unreasonable interference occurs, Lessee shall notify Lessor and Lessor's
Financing Party in writing and Lessor agrees to promptly take all reasonable steps
necessary to eliminate such unreasonable interference.
SECTION 28. LESSEE INSPECTION OF SYSTEM. Lessee shall be permitted
non - emergency access to inspect the System upon seventy -two (72) hours prior
written notice to Lessor. Personnel of Lessor must accompany Lessee's personnel
during any non - emergency inspection of the System, unless Lessor agrees in
writing to waive its right to accompany Lessee personnel on all non - emergency
inspections. This requirement in no way prohibits Lessee from inspecting any and
all portions of Lessee's facility other than the System itself. In the event of
emergency, Lessee may inspect the System unaccompanied and must notify
Lessor within twenty -four (24) hours after such inspection. Lessee shall be liable to
Lessor for all fees and costs associated with any inspection of the System
requested or conducted by Lessee.
SECTION 29. LESSEE'S OBLIGATIONS. Subject to any specific limitations in
this Agreement, Lessee shall at all times during the Term use commercially
reasonable efforts to maintain the Premises other than the System, in good
condition and repair so as to be able to receive and utilize the electricity delivered to
Lessee from the System. Lessee will maintain in good working order and available
at all times, its connection and service contract(s) with the relevant utilities so that
Lessee can, upon any suspension or interruption of electricity from the System,
provide Lessee with the full requirements for electricity. Without limiting the
foregoing, Lessee shall take commercially reasonable actions as necessary to
prevent other buildings, structures or flora from overshadowing or otherwise
blocking access of sunlight to the System. All obligations of Lessee in this
Agreement regarding maintenance shall be subject to the right of Lessee during
periods of renovation of any part of the Premises to issue a shut down order to the
System, consistent with Section 12 of this Agreement.
SECTION 30. LESSOR'S OBLIGATIONS, INCLUDING MAINTENANCE AND
REPAIR.
30.1 Installation. Lessor shall install the System in accordance with Good Industry
Practice. Lessor estimates that the installation shall be complete, and the
Commercial Operation Date will occur, within six (6) weeks of the date of this
Agreement. The System shall be deemed to have achieved "Commercial
Operation" when the System has been approved for interconnection with the local
electric utility and the results of such testing demonstrate that the System is capable
of generating electrical energy for four (4) continuous hours in accordance with the
manufacturer's specifications, applicable permits and the Utility's interconnection
requirements. Lessor shall send Lessee and the Lessor's Financing Party written
notice of Commercial Operation promptly following its occurrence, certifying that the
13
requirements have been satisfied and identifying the date on which the System
achieved Commercial Operation, together with any supporting documentation
reasonably requested by Lessee. If Lessee does not dispute in good faith the
certification in writing within five (5) business days after receipt of such notice, the
date identified in the Lessor's notice as the date on which the system achieved
Commercial Operation shall be the date for the "Commercial Operation Date" for
purposes of this Agreement.
30.2 Operation and Maintenance. Lessor shall cause the System to be operated
and maintained at Lessor's sole expense, including the cost of capital repairs and
replacements of the System, in accordance with Good Industry Practice throughout
the Term. Lessor warrants that all of its operating and maintenance personnel will
be adequately qualified and trained throughout the Term. Preventative
maintenance, resulting in System outage, shall not be performed during on -peak
times according to Utility's applicable tariff. Lessor shall have the right to perform its
obligations hereunder through contracts with qualified third parties. Notwithstanding
the preceding sentence, Lessor shall retain ultimate responsibility to Lessee for
performance of such obligations.
SECTION 31. FURTHER ASSURANCES. Lessee and Lessor shall promptly
perform, execute and deliver or cause to be performed, executed and /or delivered
any and all acts and assurances, including the delivery of any documents, as either
party may reasonably require in order to carry out the intent and purpose of this
Agreement.
SECTION 32. SURRENDER. Lessor shall, on the last day of the Term or upon
any termination of this Agreement resulting in the payment of the Termination Fee
by Lessee, surrender and deliver up the Premises, with the System then located
thereon, into the possession and use of Lessee, without delay and in good order,
condition and repair, reasonable wear and tear excepted, free and clear of all
lettings and occupancies, free and clear of all liens and encumbrances other than
those existing on the date of this License and those, if any, created by Lessee,
without (except as otherwise provided herein) any payment or allowance whatever
by Lessee on account of or for any buildings and the System erected or maintained
on the Premises at the time of the surrender, or for the contents thereof or
appurtenances thereto. Lessor's trade fixtures, personal property and other
belongings of Lessor or of any sublessor or other occupant of space in the
Premises shall be and remain the property of Lessor, and Lessor shall have a
reasonable time after the expiration of the term of this License (not to exceed thirty
(30) days) to remove the same.
SECTION 33. SEVERABILITY. If one (1) or more of the provisions contained in
this Agreement for any reason is held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
14
SECTION 34. NOTICES, MEANS /RECEIPT. All notices or other
communications required or permitted hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, national overnight courier service (next business day delivery), or
by facsimile to
TO LESSEE:
TO LESSOR:
TO LESSOR'S
FINANCING PARTY:
City of Dubuque, Iowa
City Manager
City Hall
50 West 13th Street
Dubuque IA 52001
Fax 319 589 -4149
Eagle Point Energy — 1, LLC
923 Peru Road
Dubuque, IA 52001
Fax: 563 - 557 -3050
Dubuque Bank and Trust
1398 Central Avenue
Dubuque, IA 52001
Telecopy No: (563) 589 -2184
as may be updated in writing from time to time, and shall be deemed received upon
the earlier of (i) if mailed, three (3) business days after the posting by a U.S. Post
Office; (ii) if personally delivered, the date of delivery to the address of the person to
receive such notice; (iii) if sent by national overnight courier service (next business
day delivery), one (1) business day after delivery to such courier service; or (iv) if
given by facsimile, upon electronic evidence of receipt.
SECTION 35. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, and all the counterparts shall constitute but one and the same
agreement, notwithstanding that not all parties hereto are signatory to the same
counterpart.
SECTION 36. TIME IS OF THE ESSENCE. Time is of the essence of every
provision contained in this Agreement.
SECTION 37. NON - WAIVER. Unless otherwise expressly provided in this
Agreement, no waiver by Lessee or Lessor of any provision hereof shall be deemed
to have been made unless expressed in writing and signed by Lessee or Lessor as
the case may be. No delay or omission in the exercise of any right or remedy
accruing to Lessee or Lessor, as the case may be, upon any breach under this
Agreement shall impair such right or remedy or be construed as a waiver of any
15
such breach theretofore or thereafter occurring. The waiver by Lessee or Lessor of
any breach of any term, covenant or condition herein stated shall not be deemed to
be a waiver of any other term, covenant or condition.
SECTION 38. CAPTIONS. Section titles or captions contained in this Agreement
are inserted as a matter of convenience and for reference, and in no way define,
limit, extend or describe the scope of this Agreement.
SECTION 39. EXHIBITS. All Schedules attached shall be incorporated into this
Agreement by reference as if fully set out herein.
SECTION 40. FINAL AGREEMENT. This Agreement, together with all
schedules and exhibits attached hereto or mentioned herein, completely and
exclusively states the agreement of the parties regarding its subject matter and
supersedes all prior proposals, agreements, or other communications between the
parties, oral or written, regarding its subject matter. This Agreement may be
modified only by a writing signed by both the Lessee and the Lessor. If any
provision of this Agreement is found unenforceable or invalid, such unenforceability
or invalidity shall not render this Agreement unenforceable or invalid as a whole.
This Agreement may be executed in any number of separate counterparts and each
counterpart shall be considered an original and together shall comprise the same
Agreement. The captions or headings in this Agreement are strictly for convenience
and shall not be considered in interpreting this Agreement. This Agreement shall
become binding when accepted in writing by Lessee and Lessor.
SECTION 41. SERVICE CONTRACT. The Parties intend this Agreement to be a
"service contract" within the meaning of Section 7701(e)(3) of the Internal Revenue
Code of 1986. Lessee will not take the position on any tax return or in any other
filings suggesting that it is anything other than a purchase of electricity from the
System.
SECTION 42. NO PARTNERSHIP. No provision of this Agreement shall be
construed or represented as creating a partnership, trust, joint venture, fiduciary or
any similar relationship between or among the parties. No party is authorized to act
on behalf of any other party, and no party shall be considered the agent of another
party.
SECTION 43. NO THIRD PARTY BENEFICIARIES. Except as otherwise
expressly provided herein, this Agreement and all rights hereunder are intended for
the sole benefit of the parties hereto and shall not imply or create any rights on the
part of, or obligations to, any other person.
SECTION 44. IF DETERMINED THAT LESSOR IS NOT A PUBLIC UTILITY.
Upon the mutual written consent of the Parties, at any time during the Term of this
Agreement, that Lessor is not a "public utility" as defined in Iowa Code Section
476.1 and that Lessor would not be in violation of any law or regulation if Lessor
16
engaged in selling the power generated by the System to Lessee on the basis of the
amount of power actually generated by the System, Lessee may in its sole
discretion and upon not Tess than 30 days written notice to Lessor elect that this
Agreement shall be deemed null and void and the Agreement entered into and
executed by and between the Parties on August 1st, 2011, attached hereto as
Exhibit C, shall be reinstated as the binding agreement between the Parties.
[The next page is the signature page.]
17
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
CITY OF DUBUQUE, IOWA
(LESSEE)
By:
Roy D. Buol, Mayor
By:
Kevin S. Firnstahl
City Clerk
EAGLE POINT ENERGY — 1, LLC
(LESSOR)
By:
Barry S ear, Member /Manager
ac
SCHEDULE A — SYSTEM DESCRIPTION
The System consists of UL approved components and conforms to building
codes and the requirements of Utility.
The System consists of 806 SolarWorld SW 250 Monocrystaline solar panels
divided into 62 strings of 13 panels each. The system will be rated at 200 kW.
Each 31 13 panel string will be connected to a PV Powered PVP 100kW -480
inverter to convert the DC power produced by the Solar PV panels into usable
AC electric current. There will be two such inverters. The inverter power will
match the power already being provided by the Utility.
The PV panels will be mounted on Solar Dock ballasted racking, which will layout
on the Western side of the building roof, avoiding any and all roof mechanicals
that may be present. The Solar Dock will reside on weatherproof foam with the
aggregate rock material removed and either used for ballast (in bags), spread
elsewhere on the roof, or removed from the roof for a net zero weight gain on the
roof.
SCHEDULE B — INSURANCE SCHEDULE
See attached Insurance Requirements for Tenants and Lessees of City Property
or Vendors (Suppliers, Service Providers) to the City of Dubuque.
EXHIBIT B
FORM OF CONSENT
CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent "), dated as of
, 2011, is executed by CITY OF DUBUQUE, IOWA (the
"Undersigned "), and EAGLE POINT ENERGY — 1, LLC, an Iowa limited liability
company ( "Eagle Point "), for the benefit of DUBUQUE BANK AND TRUST ( "DB
& T ").
RECITALS
A. Eagle Point and DB & T are parties to that certain
[Equipment Lease Agreement] dated as of , 2011 (the "Equipment
Lease ") pursuant to which DB & T has leased to Eagle Point certain solar panels
and related equipment (the "System ").
B. The Undersigned and Eagle Point have entered into that
certain Agreement for Solar License and Power Generation dated as of
, 2011 (as amended, supplemented or modified from time to time in
accordance with its terms and the terms hereof, the "Contract "), pursuant to
which Eagle Point will install the System on premises owned by the Undersigned
and the Undersigned will lease the System from Eagle Point.
C. Pursuant to the Security Agreement dated as of
, 2011 (the "Security Agreement "), between Eagle Point and DB
& T, Eagle Point has assigned its interest under the Contract and in the System
to DB & T as security for Eagle Point's obligations under the Equipment Lease.
AGREEMENT
NOW THEREFORE, the Undersigned hereby agrees as follows:
1. The Undersigned consents to Eagle Point's transfer,
assignment and grant of a security interest in the Contract and the System to DB
& T pursuant to the terms of the Security Agreement, and agrees with DB & T as
follows:
(a) Upon the occurrence of a default by Eagle Point
under the Contract, DB & T shall be entitled (but not obligated) to exercise all
rights and to cure any defaults of Eagle Point under the Contract. Upon a
default under the Contract by Eagle Point and the receipt of notice from DB & T,
the Undersigned agrees to accept such exercise and cure by DB & T and to
render all performance due by it under the Contract and this Consent to DB & T.
The Undersigned agrees to make all payments to be made by it under the
Contract directly to DB & T upon receipt of DB & T's written instructions.
(b) The Undersigned will not, without the prior written
consent of DB & T (such consent not to be unreasonably withheld), (i) cancel or
terminate the Contract or suspend performance of its services thereunder except
as expressly provided in the Contract and in accordance with paragraph 1(c)
hereof, or consent to or accept any cancellation, termination or suspension
thereof by Eagle Point, (ii) sell, assign or otherwise dispose (by operation of law
or otherwise) of any part of its interest in the Contract, or (iii) amend or modify the
Contract in any material respect. The Undersigned agrees to deliver duplicates
or copies of all notices of default delivered under or pursuant to the Contract to
DB & T promptly upon receipt or delivery thereof.
(c) The Undersigned will not terminate the Contract on
account of any default or breach of Eagle Point thereunder without written notice
to DB & T and first providing to DB & T (i) thirty (30) days from the date notice of
default or breach is delivered to DB & T to cure such default if such default is the
failure to pay amounts to the Undersigned which are due and payable under the
Contract or (ii) a reasonable opportunity, but not fewer than thirty (30) days, to
cure such breach or default if the breach or default cannot be cured by the
payment of money to the Undersigned so long as DB & T or its designee shall
have commenced to cure the breach or default within such thirty (30) -day period
and thereafter diligently pursues such cure to completion and continues to
perform any monetary obligations under the Contract and all other obligations
under the Contract are performed by Eagle Point or DB & T. If possession of the
System is necessary to cure such breach or default, and DB & T or its
designee(s) or assignee(s) declare Eagle Point in default and commence
foreclosure proceedings, DB & T or its designee(s) or assignee(s) will be allowed
a reasonable period to complete such proceedings. If DB & T or its designee(s)
or assignee(s) are prohibited by any court order or bankruptcy or insolvency
proceedings from curing the default or from commencing or prosecuting
foreclosure proceedings, the foregoing time periods shall be extended by the
period of such prohibition. The Undersigned consents to the transfer of Eagle
Point's interest under the Contract to DB & T or a purchaser or grantee at a
foreclosure sale by judicial or nonjudicial foreclosure and sale or by a
conveyance by Eagle Point in lieu of foreclosure and agrees that upon such
foreclosure, sale or conveyance, the Undersigned shall recognize DB & T or
other purchaser or grantee as the applicable party under the Contract (provided
that DB & T or such purchaser or grantee assumes the obligations of Eagle
Point under the Contract).
(d) In the event that the Contract is rejected by a trustee
or debtor -in- possession in any bankruptcy or insolvency proceeding, or if the
Contract is terminated for any reason other than a default which could have been
but was not cured by DB & T as provided in paragraph 1(c) above, and if, within
forty -five (45) days after such rejection or termination, DB & T shall so request,
the Undersigned will execute and deliver to DB & T a new Contract, which
Contract shall be on the terms and conditions as the original Contract for the
remaining term of the Contract before giving effect to such termination.
(e) In the event DB & T or its designee(s) or assignee(s)
elects to perform Eagle Point's obligations under the Contract or to enter into a
new Contract as provided in subparagraph (c) or (d) respectively. above, DB & T,
its designee(s) and assignee(s), shall have no personal liability to the
Undersigned for the performance of such obligations, and the sole recourse of
the Undersigned in seeking the enforcement of such obligations shall be to such
parties' interest in the System.
(f) In the event DB & T or its designee(s) or assignee(s)
succeeds to Eagle Point's interest under the Contract or enters into a new
Contract, DB & T or its designee(s) or assignee(s) shall cure any defaults for
failure to pay amounts owed under the Contract, but shall not otherwise be
required to perform or be subject to any defenses or offsets by reason of any of
Eagle Point's other obligations under the Contract that were unperformed at such
time. DB & T shall have the right to assign all or a pro rata interest in the
Contract or a new Contract entered into pursuant to subparagraph (d) to a
person or entity to whom the System is transferred, provided such transferee
assumes the obligations of Eagle Point (or DB & T) under the Contract. Upon
such assignment, DB & T (including their agents and employees) shall be
released from any further liability thereunder to the extent of the interest
assigned.
2. The Undersigned hereby represents and warrants that:
(a) The execution, delivery and performance by the
Undersigned of the Contract and this Consent has been duly authorized by all
necessary corporate action, and does not and will not require any further
consents or approvals which have not been obtained, or violate any provision of
any law, regulation, order, judgment, injunction or similar matters or breach any
agreement presently in effect with respect to or binding on the Undersigned;
(b) This Consent and the Contract are legal, valid and
binding obligations of the Undersigned, enforceable against the Undersigned in
accordance with their respective terms;
(c) All government approvals necessary for the
execution, delivery and performance by the Undersigned of its obligations under
the Contract have been obtained and are in full force and effect;
(d) As of the date hereof, the Contract is in full force and
effect and has not been amended, supplemented or modified;
(e) Eagle Point has fulfilled all of its obligations under the
Contract, and there are no breaches or unsatisfied conditions presently existing
(or which would exist after the passage of time and /or giving of notice) that would
allow the Undersigned to terminate the Contract; and
(f) The Contract constitutes the only agreement between
the Undersigned and Eagle Point with respect to the matters and interests
described therein.
3. All Notices required or permitted hereunder shall be in
writing and shall be effective (a) upon receipt if hand delivered, (b) upon receipt if
sent by facsimile and (c) if otherwise delivered, upon the earlier of receipt or two
(2) business days after being sent registered or certified mail, return receipt
requested, with proper postage affixed thereto, or by private courier or delivery
service with charges prepaid, and addressed as specified below:
If to the Undersigned:
City of Dubuque, Iowa
City Manager
City Hall
50 West 13th Street
Dubuque IA 52001
Telecopy No: (319) 589 -4149
If toDB &T:
Dubuque Bank and Trust
Attn: j 1
1398 Central Avenue
Dubuque, IA 52001
Telecopy No: (563) 589 -2184
If to Eagle Point:
Eagle Point Energy — 1, LLC
923 Peru Road
Dubuque, IA 52001
4. This Consent shall be binding upon and inure to the benefit
of the Undersigned, Eagle Point, DB & T, and their respective successors,
transferees and assigns (including without limitation, any entity that refinances all
or any portion of the obligations under the Equipment Lease). The Undersigned
agrees to confirm such continuing obligation in writing upon the reasonable
request of Eagle Point, DB & T, or any of their respective successors,
transferees or assigns. No termination, amendment, variation or waiver of any
provisions of this Consent shall be effective unless in writing and signed by the
Undersigned, DB & T and Eagle Point. This Consent shall be governed by the
internal laws of the State of Iowa, without reference to principles of conflict of
laws.
5. This Consent may be executed in one or more duplicate
counterparts, and when executed and delivered by all the parties listed below,
shall constitute a single binding agreement.
6. All references in this Consent to any document, instrument
or agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) shall mean such document, instrument
or agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time.
IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent as of the date first set forth above.
Accepted and agreed to:
DUBUQUE BANK AND TRUST,
asDB &T
By:
Name:
Title:
EAGLE POINT ENERGY — 1, LLC,
as Eagle Point
By:
Barry Shear
President
CITY OF DUBUQUE, IOWA
By:
Roy D. Buol, Mayor
By:
Kevin S. Firnstahl,
City Clerk
Exhibit D
Warranted Production (in
Year Annual Kwh)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
250,802
249,047
247,303
245,572
243,853
242,146
240,451
238,768
237,097
235,437
233,789
232,152
230,527
228,914
227,311
225,720
224,140
222,571
221,013
219,466
217,930
216,404
214,889
213,385
211,891
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
Dubuque
kraal
AA- Ilaedcacfy
11111!
2007
SUBJECT: Approve a Power Purchase Agreement of Public Works Facility Roof to
Eagle Point Energy to provide Solar Energy to the Building
DATE: July 22, 2011
Economic Development Director Dave Heiar is recommending approval of a 25 -year
License and Power Purchase Agreement with Eagle Point Energy — 1, LLC to install
solar panels on the Public Works facility on Kerper Court and provide electricity to the
facility.
Eagle Point Solar is proposing to install 850 solar panels on the northwest portion of the
roof. The benefits to the City include:
• This furthers the City's Sustainability Initiative
• An electrical cost savings of approximately $3500 per year
• One third of the proceeds from the sale of Solar Renewable Energy Credits
• 32 percent of the building's electrical usage will be provided from solar energy
• 319,556 pounds of CO2 will be reduced annually utilizing solar energy
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM:jh
Attachment
cc: Barry Lindahl, City Attorney
Cindy Steinhauser, Assistant City Manager
David J. Heiar, Economic Development Director
Masterpiece on the Mississippi
TO: Michael Van Mil'igen, City Manager
FROM: David J. Heiar, Economic Development Director L./ 11\--
Dubuque
* Padaar
2007
SUBJECT: Approve a Power Purchase Agreement of Public Works Facility Roof
to Eagle Point Energy to provide Solar Energy to the Building
DATE: July 19, 2011
INTRODUCTION
This memorandum presents for City Council a resolution approving a License and
Power Purchase Agreement with Eagle Point Energy —1, LLC to install solar panels on
the Public Works Facility on Kerper Court and provide electricity to the facility.
BACKGROUND
A top priority of the City Council is to make the community more sustainable. City Staff
has been working with Eagle Point Energy —1, LLC for several months to determine the
viability of utilizing solar energy at the Operations & Maintenance Facility, located at 925
Kerper Court.
DISCUSSION
Eagle Point Solar is proposing to install 850 solar panels on the Northwest portion of the
City's Operation & Maintenance Facility located at 925 Kerper Court. The panels will
provide 260,000 kW AC power to the building to offset electricity usage from Alliant
Energy's power grid. Eagle Point Solar started business in 2009 and has executed 5
installations of solar panels in the region. Eagle Point Solar has informed staff that this
will be the largest installation in the State of Iowa to date.
City Staff with Eagle Point Energy —1, LLC analyzed two years of electrical bills for the
building. The building is charged two rates; a peak rate (M -F 7am — 9pm) and off -peak
rate (all other times). The peak rates per month vary from $.0918 - $.1958, with a
yearly average of $.1385. The off -peak rates vary from $.0270 - $.0602 with an
average of $.0384.
The building consumed 321,918 peak kWh and 503,382 off -peak kWh. The panels are
estimated to produce 185,714 peak kWh and 74,286 off -peak kWh. A rough calculation
determines that purchasing the power generated from the panels at $.11 per kWh for
both peak and off -peak kWh will reduce the annual electrical bill for the building by
$3,500.
The License and Power Purchase Agreement (PPA) between the City and Eagle Point
Energy —1, LLC allows Eagle Point Energy —1, LLC to utilize the portion of the roof
needed for the solar panels and requires Eagle Point to sell the produced power to the
City at $.11 per kWh. The electrical rate will increase by 3% per year for the entire 25
year term of the agreement.
The federal government issues Solar Renewable Energy Credits to solar panel
installations. Solar Renewable Energy Certificates represent the environmental savings
impact of emission free solar energy production. Certain states have Renewable Energy
Portfolio standards ( "RPS ") whereby there are mandated power goals that need to be
reached by a certain date. Companies or individuals can purchase these credits to
increase their renewable energy portfolio. The credits earned by this project will be sold
and the City will receive a third of the proceeds.
The benefits from installing the panels for the building's electrical use are as follows:
• An electrical cost savings of approximately $3500 per year
• One third of the proceeds from the sale of Solar Renewable Energy Credits
• 32 percent of the building's electrical usage will be provided from solar energy
• 319,556 pounds of CO2 will be reduced annually utilizing solar energy
The electricity produced by the solar panels flows through a net meter with Alliant
Energy. Normally, the building will be using more electricity than the panels produce at
any given time. However, there are certain times that the panels will produce more
electricity than the building uses (ex. a sunny Sunday afternoon) and the meter will run
backwards. The kWh put back into Alliant Energy's grid are then credited on a monthly
basis and can be used later at a time when the building is using more electricity than the
panels are producing. Should any kWh credits remain after the month ends, they are
rolled to the next month and can be used then.
The solar panels are estimated to produce one -third of the building's total electric
demand. It should be noted that should electrical efficiencies in the building be made
that reduce the current electrical usage by two- thirds (a reduction of 544,698 kWh), the
building will be selling power back to Alliant Energy. Currently, the price that Alliant
pays for power from power providers (which the City would become assuming the two-
thirds reduction can be achieved) would eliminate the cost savings of the solar panels.
Alliant Energy's rate structure may change in the future and could eliminate this concern
but cannot be assumed that this will happen at this time.
RECOMMENDATION
I recommend the City Council approve the attached resolution approve a License and
Power Purchase Agreement with Eagle Point Energy —1, LLC.
ACTION STEP
The action step is to approve the attached resolution
F: \USERS\Econ Dev \Eagle Point Solar\PPA\20110719 Memo approve PPA on City Garage.docx
1
CITY ODUBUQUE,
A
, . _ oincua.korna
NOTICE ic, hereby
given that-:the City
Council of Dubuque,
Iowa, will conduct a
public hearing at a
meeting to commence
at 6:30, p.m, on the 1st
day of August, 2011, in
the Historic Federal
BLllding, 350 West 6th
Street, to consider
disposing of Its interest
In the roof space above •
the land commonly
' known as the western
side of the roof located
at 925 Kerper Court,
Dubuque, Iowa, legally
described as.Lot 2 of 2
of . Kerper IndusariaF !
Park in the City of
Dubuque, Iowa, by
license to Eagle Point
Energy - 1, LLC. (Copy
' of supporting docu-
ments. are on file in the
City Clerk's Office and
may be viewed during
working h'ours).
Written comments
regarding said disposal'
may be submitted to
the City Clerk's Office
on or before time of
public hearing.
At said time and place .
of. public hearing, all
interested citizens and
parties will be given an
opportunity to be
heard for or against
the disposal of said
easements.
Any.visual or hearing ,
I impaired persons.need° •
ing special assistance
or persons with special
accessibility needs
should contact the City I
Clerk's Office at (563)
5894120 or TTY (563)
690 -6678 at least 48.1
hours prior to the �
meeting.
Dated this 22nd day of
July,2011 . •
Kevin 5. Firnstahl
Acting City Clerk '
1t 7/22
STATE OF IOWA {SS:
DUBUQUE COUNTY
CERTIFICATION OF PUBLICATION
I, Kathy Hefel - Goetzinger, a Billing Clerk for Woodward Communications, Inc.,
an Iowa corporation, publisher of the Telegraph Herald,a newspaper of general
circulation published in the City of Dubuque, County of Dubuque and State of
Iowa; hereby certify that the attached notice was published in said newspaper on
the following dates: July 22, 2011, and for which the charge is $17.11.
/ad
Subscribed to before me, a Notary Public in and for Dubuque County, Iowa,
this day of , 20 t I
k< Re,
Public in and for Dubuque County, Iowa.
JANET K. PAPE
Commieelon Number 182053
My Comm, Exp,
RESOLUTION NO. 251 -11
APPROVAL OF A LICENSE AND POWER PURCHASE AGREEMENT
BETWEEN THE CITY OF DUBUQUE, IOWA AND EAGLE POINT ENERGY —
1, LLC AN IOWA LIMITED LIABILITY COMPANY
Whereas, the City of Dubuque, Iowa (City) is the owner of the real
property legally described as follows:
Roof space above the land commonly known as the western
side of the roof located at 925 Kerper Court, Dubuque, Iowa,
legally described as Lot 2 of 2 of Kerper Industrial Park in
the City of Dubuque, Iowa; and
Whereas, Eagle Point Energy — 1, LLC. desires to license a part of the
property to install solar panels at the facility; and
Whereas, City and Eagle Point Energy — 1, LLC. have negotiated a
License and Power Purchase Agreement, which among other things, provides for
a term through September 1, 2026; and
Whereas, the City Council believes it is in the best interest of the City of
Dubuque to approve the License and Power Purchase Agreement.
NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF DUBUQUE, IOWA:
Section 1. The City of Dubuque approves the License and Power
Purchase Agreement with Eagle Point Energy — 1, LLC and the City Manager is
authorized to execute said lease on behalf of the City of Dubuque.
Attest'
Passed, approved and adopted this 1st day of August, 201
Ke ' S. Firnst
I, Acting City Clerk
,di,,,,,
oy D. Buol, Mayor
F: \USERS \Econ Dev\Eagle Point Solar \PPA\20110801_Resolution EPS Solar License approval.docx
AGREEMENT FOR
SOLAR LICENSE AND POWER PURCHASE
BETWEEN
THE CITY OF DUBUQUE, IOWA
AND
EAGLE POINT ENERGY -1, LLC
This Agreement for Solar License and Power Purchase (the "Agreement "),
dated the , day of 4-c.crl, s� , 2011, is made and entered into by and between
the City of Dubuque, Iowa ( "Owner "), and Eagle Point Energy - 1, LLC, an Iowa
limited liability company, located at 923 Peru Road, Dubuque, Iowa 52001
( "Licensee ").
This Agreement is entered into for the purpose of allowing Licensee to install
and operate a solar panel array on property owned by Owner and to allow Licensee
to sell power generated by such solar panel array to Owner at a cost to Owner that
is estimated to be less than the historical cost of power to Owner from other
sources. The parties agree that the approximate cost savings to Owner resulting
from this Agreement is estimated to be $3,500.00 annually. However, such amount
is merely an estimate and is not binding in full or in part in any way upon the
Licensee.
SECTION 1. LICENSE. Owner grants to Licensee, its successors and assigns
(including any Financing Party, as defined in Section 16 hereof), an irrevocable
license coterminous with the Term to use the property commonly known as the
western side of the roof of the building located on the real property located at 925
Kerper Court, Dubuque, Iowa, legally described as Lot 2 of 2 of Kerper Industrial
Park in the City of Dubuque, Iowa (the "Premises ") for the purpose of installing,
operating and maintaining solar panels on the roof and inverters and related
equipment within the building, as more particularly described on Schedule A hereto,
pursuant to the terms hereof (the "System "), including access to electrical panels
and conduits to interconnect or disconnect the System with the Premises' electrical
system. The roof plan for the System is depicted on Exhibit A attached hereto.
SECTION 2. RENT; TERM. Licensee shall pay Owner a license fee for the
license to use the Premises of Ten Dollars ($10) per year (the "Base License Fee ")
plus 1/3 of the Renewable Energy Certificate (REC) sales, if any (the "Additional
License Fee "). The Base License Fee for the Term shall be paid in advance on or
before . The Additional License Fee, if any, shall be credited monthly on
the invoices submitted pursuant to Section 9.2. The term of this Agreement shall
commence on and continue until the twenty -fifth anniversary of the
Commercial Operation Date (as defined in Section 30.1) (the "Term "), unless
terminated earlier pursuant to the terms hereof.
SECTION 3. TITLE. Owner warrants that Owner is the owner of the Premises and
has full authority to enter into this License.
SECTION 4. INSURANCE.
4.1. Owner shall maintain policies of fire and extended coverage insurance on the
Premises, but not including the System. Owner shall also maintain its membership
in the Iowa Communities Insurance Pool or equivalent commercial general liability
insurance (including contractual liability coverage) with limits of not less than
$2,000,000 general aggregate, $1,000,000 per occurrence. All policies shall name
Licensee and Licensee's Financing Party as additional insureds or loss payees, as
applicable.
4.2. Licensee shall provide and maintain at all times during the Term insurance
as required by the attached Schedule DS as such schedule may from time to time be
amended.
4.3. Licensee shall provide and maintain or cause to be maintained at all times
during the process of constructing and operating the System (and, from time to time
at the request of Owner, furnish Owner with proof of insurance in the form of a
certificate of insurance for each insurance policy):
All risk insurance, written on a Completed Value Form in an amount equal to
one hundred percent (100 %) of the replacement value of the System when
construction is completed.
4.4. Each party having knowledge shall notify the other party and the Licensee's
Financing Party in the case of damage exceeding $5,000.00 in amount to, or
destruction of, the System, the Premises or any portion thereof resulting from fire or
other casualty. Net proceeds of any insurance (the "Net Proceeds ") with respect to
the System shall be paid directly to Licensee or Licensee's Financing Party, as its
interests may appear, and Licensee, if approved by the Licensee's Financing Party,
shall forthwith repair, reconstruct and restore the System to substantially the same
or an improved condition or value as they existed prior to the event causing such
damage and, to the extent necessary to accomplish such repair, reconstruction and
restoration, Licensee will apply the Net Proceeds of any insurance relating to such
damage incurred by Owner to the payment or reimbursement of the costs thereof.
2
SECTION 5. REPAIRS.
5.1. Licensee shall at all times during the term of this License, at Licensee's own
costs and expense, keep the System in good order, condition and repair, and in a
safe, clean and neat condition, in each case in accordance with those methods,
practices, guidelines that are commonly used and accepted by a significant portion
of the photovoltaic solar system industry ( "Good Industry Practice ").
5.2 Licensee shall be responsible for repairing any damage to the Premises
directly caused by the installation, maintenance, or repair of the System. Licensee
further agrees to be responsible for costs arising from resealing the seems in the
rubber membrane on the roof of the premises, which costs are estimated to be
between $10,000.00 and $15,000.00.
5.3 Owner shall keep the Premises in such condition as may be required by law
and by the terms of the insurance policies furnished pursuant to this Agreement.
Owner may at any time conduct an inspection of the Premises to determine
Licensee's compliance with this Section.
5.4. Owner shall have the right to request Licensee upon written notice to
Licensee and Licensee's Financing Party to repair any part of the System which
Owner reasonably determines does not materially comply with the requirements of
this Section, and Licensee shall repair, as the notice may request, any such part of
the System within ten days, or such longer period as may reasonably be required so
long as such repair is being diligently pursued, after receipt of such notice.
5.3. Owner shall have no obligation to Licensee for any maintenance expense of
any kind of the System.
SECTION 6. COMPLIANCE WITH LAW. During the term of this License, Licensee
shall comply in all material respects with all local, state and federal laws applicable
to Licensee's use of the Premises and the System.
SECTION 7. ALTERATIONS. Licensee shall not, without Owner's prior written
consent make any alteration, addition, or modification to any improvement on the
Premises, other than as contemplated in the Agreement with respect to the System.
SECTION 8. USE OF PREMISES. Licensee shall not knowingly use or allow the
Premises or the System to be used or occupied for any unlawful purpose. Licensee
shall not suffer any act to be done or any condition to exist on the Premises or
permit any article to be brought thereon, in each case in connection with its
installation, operation or maintenance of the System, which is dangerous, unless
safeguarded as required by law, or which, in law, constitute a nuisance, public or
private, or which may make void or voidable any insurance in force with respect
thereto.
3
SECTION 9. POWER PURCHASE.
9.1. Purchase of Electricity: Owner will purchase from Licensee all electricity
produced by the System. Such purchase shall be for the electricity only and shall
not include any environmental attributes of the electricity, including any RECs, all of
which shall inure to the benefit of Licensee and Licensee's Financing Party, subject
to Section 9.5.
9.2. Purchase Price: The annual price per kilowatt-hour ( "kWh ") will be as
calculated in accordance with Schedule B.
1) Billing System: Licensee will bill Owner monthly in the amount equal
to the monthly kWh production of the System (as determined by the Data
Acquisition System or Interval Data Recording meter) multiplied by the
applicable Base Price as described in Schedule B.
2) Owner Service: Licensee shall provide all of the following:
a) Licensee will produce and send bills to Owner within fifteen (15)
business days of the end of the billing cycle at the following address:
Public Works Department
925 Kerper Court
Dubuque, IA 52001
b) Licensee will make available, via the Internet, performance
information of the system and the software, at no cost to the Owner,
necessary to retrieve and track the system performance.
3) Owner will make payment for the amount of the bill to Licensee within
20 business days from the invoice billing date.
9.3. Rebates and Other Incentives: Any grant, rebate, incentive payment or
credit from Alliant Energy, or its successor, transferee, or assignee in interest
(hereinafter "Utility "), the United States Department of the Treasury, or other party
paid as a result of the design, construction and operation of the System shall inure
to the benefit of Licensee or Licensee's Financing Party. Owner will cooperate in
good faith as necessary to enable Licensee to obtain all available incentives and
rebates, including assignment to Licensee or Licensee's Financing Party of any
incentive received by Owner from Utility, US Treasury or other party as consistent
with this Agreement.
9.4. Meters: Licensee shall provide a revenue -grade Data Acquisition System or
Interval Data Recording ( "IDR ") meter complete with industry standard telemetry for
communication with ethernet, cellular or other common output capability for the
purposes of metering /monitoring /data collection of solar production. Owner shall
4
have access to data from these meters. Licensee shall measure the actual amount
of electricity supplied to Owner by the System at the Electrical Interconnection Point
using the revenue -grade IDR meter. Meters shall be installed at Licensee's
expense. Licensee shall test the meter annually and at any reasonable time upon
request of Licensee at Licensee's expense. Owner shall reimburse Licensee for the
cost of any test requested by Owner, unless such testing demonstrates that the
meter was operating outside of its allowable calibration. Owner may also conduct
occasional billing inquiry, validation and verification, or reconciliation procedures.
During such Owner conducted procedures, Licensee shall provide Owner with the
data and information used to generate billing determinants, including any interval
meter data representing generation output. Owner will use its reasonable efforts to
provide or arrange for Utility- metered data that can support the billing process,
either directly through a data file transmission or through some arrangement with
Utility.
9.5. Potential Revenue from Renewable Portfolio Standards and /or Renewable
Energy Credits (collectively "RECs "): Licensee shall retain title and is authorized to
market, sell or transfer RECs (including the ownership of the renewable attributes of
System) to any third -party purchaser or purchasers selected by Licensee in
Licensee's sole and absolute discretion; provided that the City of Dubuque will be
granted 1/3`' of any net REC revenues as an Additional License Fee, which amount
shaii be credited as a partial reduction of its electrical costs and 1/3`d of the
remaining net REC revenues shall be for the benefit of Licensee's Financing Party
pursuant to the terms of the financing agreement with Licensee. Licensee shall
provide Owner evidence in a form satisfactory to Owner of all sales or transfers of
RECs not more than days after such sales or transfers.
SECTION 10. TERMINATION.
10.1. By Owner. Subject to Section 12, Owner shall have the right to terminate
this Agreement after seven (7) years from the Commencement Date at any time on
ninety (90) days written notice to Licensee and Licensee's Financing Party.
10.2. Termination Fee: In the event that Owner terminates this Agreement for any
reason, other than pursuant to an uncured Event of Default by the Licensee as set
forth in Section 14 of this Agreement, Owner shall pay Licensee a Termination Fee
as listed in Schedule C. Upon payment of the Termination Fee, all right, title,
warrantees and interest in the System shall be deemed transferred to Owner
without further action by either party.
10.3. By Licensee. Licensee shall be allowed to terminate this Agreement with the
written consent of the Licensee's Financing Party at any time for any reason upon
ninety (90) days written notice to Owner. Upon such Termination by Licensee,
Owner shall have no further rights or obligations under this Agreement.
5
SECTION 11. EXPIRATION OF AGREEMENT. At the completion of the 25 year
term of this Agreement, as provided for in Section 2, all right, title and interest in the
System shall be transferred to Owner without further action by either party.
SECTION 12. TEMPORARY SHUTDOWN OF SYSTEM.
12.1. "Temporary Shutdown of the System" means a complete shutdown of
electricity usage at the written direction of Owner to Licensee and Licensee's
Financing Party for longer than 24 hours.
12.2. If an act, omission or event occurs during the Term, other than from actions
by Licensee or circumstances described in Section 13, which significantly reduces
or eliminates the use of electricity from the System or requires the Temporary
Shutdown of System, Owner and Licensee may, by mutual consent and with the
written approval of Licensee's Financing Party, do either of the following as a
means of avoiding default by Owner under this Agreement:
1) Owner may pay Licensee "in -lieu" fees during the duration of the
reduction or shutdown. These "in -lieu" fees shall be based on the actual
payments made by Owner on a daily basis during the same period in the
previous calendar year increased at the rate of 3 %, unless Owner and
Licensee with the written approval of Licensee's Financing Party mutually
agree to an alternative "in -lieu" fee methodology. For the first year of this
Agreement for which no previous year's usage data is available, "in lieu" fees
shall equal the estimated annual output (kWh) of the System, according to
Schedule B, pro rated for the period of the shutdown, multiplied by $.11.
2) Owner and Licensee may negotiate an alternative "in -lieu" fee
methodology that is mutually acceptable and agreed upon by both parties
and with the written approval of Licensee's Financing Party. If no alternative
"in -lieu" fee methodology can be agreed upon with good faith efforts within a
reasonable time following the Temporary Shutdown of the System, the
method described in Section 12.2(1) must be utilized.
Under either alternative, Owner will make a good faith effort to give as much notice
as possible to Licensee and to Licensee's Financing Party prior to System
shutdown.
SECTION 13. FORCE MAJEURE. Neither party hereto shall be liable for any
failure of performance due to causes beyond its reasonable control, the occurrence
of which could not have been prevented by the exercise of due diligence, such as
acts of God, acts of the other party, acts of civil or military authority, fires, floods,
epidemics, windstorms, explosions, natural disasters, sabotage, wars, riots,
changes in laws, regulations, tariffs mandated or approved by federal, state or
governmental or regulatory entities, or court injunction or order provided that written
notice of such delay (including the anticipated duration of the delay) shall be given
6
by the affected party to the other party as soon as possible after the event or
occurrence (but in no event more than 10 days thereafter). During the period of
such delay or failure to perform by Licensee, Owner, at its option, may purchase
electricity from other sources and reduce its schedules to Licensee by such'
quantities, without liability to Licensee. The ability of either party to obtain a better
price shall not constitute an event of Force Majeure hereunder.
SECTION 14. EVENT OF DEFAULT.
14.1. By Owner: The following shall be an Event of Default by Owner:
1) Owner's failure to pay undisputed invoices for a continuous period of
thirty (30) or more days.
2) The renovation, damage, destruction or closure of the Premises which
is a result of any event other than Force Majeure and results in the
Temporary Shutdown of the System for more than three (3) consecutive
months and Owner has not terminated this Agreement pursuant to Section
10.2 and paid the Termination Fee.
3) For terms other than those listed in (1) and (2) above, failure by
Owner to perform or comply with any material term of this Agreement within
thirty (30) days of written notice by Licensee, unless Licensee and Licensee's
Financing Party agree in writing to a longer period to cure the default.
14.2 Remedies of Licensee: If an Event of Default by Owner has occurred and is
continuing, in addition to any and all remedies at law or in equity, Licensee shall
have the right to terminate this Agreement and Owner shall pay the Termination
Fee as listed in Schedule C.
14.3. By Licensee: The following shall be considered an Event of Default by
Licensee:
1) Licensee's failure to pay undisputed invoices or credits for a
continuous period of thirty (30) or more days after notice thereof to Licensee
and Licensee's Financing Party.
2) Licensee's failure to maintain the System in accordance with Good
Industry Practice, other than solar intensity, following written notice to
Licensee and Licensee's Financing Party;
3) Reduced output of System electricity for a consecutive twelve (12)
month period below 50% of the annual projected output listed in Schedule B.
4) For terms other than those listed in (1) and (2) above, failure by
Licensee to perform or comply with any material term of this Agreement
7
within ninety (90) days of written notice by Owner to Licensee and Licensee's
Financing Party, unless Owner agrees in writing to a longer period to cure
the default.
14.4 Remedies of Owner: If an Event of Default by Licensee has occurred and is
continuing, in addition to any and all other remedies at law or in equity, Owner shall
have the right at its option, on written notice to Licensee and Licensee's Financing
Party, to terminate this Agreement. Owner shall thereafter have the right to enter
and take possession of the Premises with proper notice and process of law and to
remove the System from the Premises without incurring any liability to Licensee or
to any persons occupying or using the Premises for any damage caused or
sustained by reason of such entry on the Premises or the removal of persons or
property from the Premises.
SECTION 15. ASSIGNMENT. Except as set forth in Section 16, this Agreement
shall not be assignable by either party in whole or in part without the written consent
of the other party_
SECTION 16. FINANCING. Licensee may without the consent of Owner pledge
its interest in this Agreement as security for loans or financing provided by any
Person to Licensee, including pursuant to an equipment lease (any such person
inciudes Licensee's Financing Party). it Licensee's Financing Party requests
additional terms and conditions to those already provided in this Agreement, Owner
agrees to consider any such requests in good faith, but may refuse such requests in
its sole and absolute discretion and may withhold consent or approval of such
additional terms and conditions. If Licensee's Financing Party requires an Estoppel
Certificate, Owner shall provide such certificate to Licensee within thirty (30) days of
request demonstrating Licensee's interest in the Premises for operation of the
System and Licensee's right to access thereof, and such other matters as may
reasonably be requested. Owner acknowledges that as of the date hereof
Licensee's Financing Party is Dubuque Bank and Trust Co. and Owner agrees to
execute and deliver to such Financing Party the consent in the form of Exhibit B
attached hereto.
SECTION 17. DEBT LIABILITY DISCLAIMER / HOLD HARMLESS.
17.1 Owner is not liable for any of Licensee's debts, liabilities, settlements, liens
arising through Licensee, or any other obligations of Licensee or its heirs,
successors, or assigns. Owner shall not directly or indirectly cause, create, incur,
assume or suffer to exist any liens on or with respect to the System or any interest
therein. Owner shall indemnify, defend and hold Licensee and Licensee's
Financing Party harmless against all costs and expenses (including reasonable
attorneys' fees and court costs) incurred in discharging and releasing such lien.
17.2 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, no other
warranty to Owner or any other person, whether express, implied, or statutory, is
8
made as to the design, description, quality, merchantability, completeness, useful
life, future economic viability, or fitness for any particular purpose of the System or
any service provided hereunder or described herein, or as to any other matter, all of
which are expressly disclaimed by Licensee.
17.3 Neither Party shall be liable to the other Party or its Indemnified Persons for
any special, punitive, exemplary, indirect, or consequential damages, losses or
damages for lost revenue or lost profits, whether foreseeable or not, arising out of,
or in connection with the Agreement.
SECTION 18. COMPLIANCE WITH APPLICABLE LAWS, INCLUDING UTILITY
INTERCONNECTION STANDARDS. Licensee, at its own cost and expense, shall
comply in all material respects with all applicable laws and regulations relating to
the operation of the System and the generation and sale of electricity to Owner,
including obtaining and maintaining all relevant approvals and permits. In particular,
Licensee agrees throughout the Term to comply in all material respects with any
and all operational standards and requirements imposed by the Utility
Interconnection Agreement with Utility, a copy of which has been provided to
Licensee, and to comply with the interconnection requirements. In all cases,
Licensee's interconnection shall be acceptable to Utility. Owner will cooperate with
Licensee and, if necessary, will provide consents and execute with Utility such
agreements as are necessary to permit the interconnection of the System. This
interconnection shall be done at no cost or liability to Owner and Licensee shall
reimburse Owner for all out -of- pocket costs reasonably incurred in connection with
any interconnection agreement.
SECTION 19. TAXES. Licensee shall pay all lawful taxes, assessments or
charges that at any time may be levied upon any interest in this Agreement
including the System. Licensee shall not be liable or responsible for the payment of
any taxes, assessments or charges in respect of the Premises, all of which shall be
for the account of and payable by Owner.
SECTION 20. CONFIDENTIALITY OF INFORMATION.
20.1. Licensee's Confidentiality Requirement: To the extent allowed by law, any
financial, statistical, personal, technical or other data and information relating to
Owner's operations which are designated confidential by Owner and made available
to Licensee in order to carry out this Agreement shall be protected by Licensee from
unauthorized use and disclosure through the observance of the same or more
effective procedural requirements as are applicable to Licensee for its own
information of serious nature. Owner shall identify all confidential data and
information at the time it is provided.
20.2. Public Records: To the extent allowed by law, any mechanical, technical or
other data and information relating to the System which are designated confidential
by Licensee and made available to Owner in order to carry out this Agreement shall
9
be protected by Owner from unauthorized use and disclosure through the
observance of the same procedural requirements as are applicable to Owner for its
own information of serious nature. Licensee shall identify all such confidential data
and information at the time it is provided. In the event of a request for such
information under the Iowa Public Records Act, Owner shall promptly notify
Licensee and Licensee shall be solely responsible for taking such action as it
deems appropriate to protect the confidentiality of such information.
20.3. Confidentiality does not apply to information which is known to a receiving
party from other sources, which is otherwise publicly available or that is required to
be disclosed to any regulatory or judicial authority.
SECTION 21. AUDIT. Licensee agrees that Owner or its designated
representatives shall have the right upon reasonable written notice to review and to
copy any records and supporting documentation pertaining to the performance of
this Agreement. Licensee agrees to maintain such records for possible audit for a
minimum of three (3) years after each payment, unless a longer period of records
retention is stipulated or required by law. Licensee will, at a minimum, maintain one
complete set of records at a location in Iowa to facilitate such audit. Licensee
agrees to allow the auditor(s) access to such records during normal business hours
and to allow interviews of any employees who might reasonably have information
related to such records. Further, Licensee agrees to include a similar right of Owner
to audit records and interview staff in any subcontract or assignment related to
performance on this Agreement.
SECTION 22. INDEMNIFICATION.
22.1. Indemnification of Licensee. To the extent allowed by law, Owner will
defend, indemnify and hold harmless Licensee, its permitted successors and
assigns (including Licensee's Financing Party) and their respective directors,
officers, members, shareholders and employees (collectively, the "Licensee
Indemnified Parties ") from and against all liabilities, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) (collectively, "Claims ") imposed upon or
incurred by or asserted against any Licensee Indemnified Party by reason of (a) any
accident, injury to or death of persons or loss of or damage to property occurring on
or about the Premises and resulting from any negligent act or omission of Owner, or
anyone claiming by through or under Owner, during the Term, or (b) any negligent
failure on the part of Owner to perform or comply in any material respect with any of
the material terms of this Agreement. In case any action, suit or proceeding is
brought against any Licensee Indemnified Party by reason of such occurrence,
Owner will, at Owner's expense and discretion, either defend such action, suit or
proceeding, or cause the same to be defended by counsel approved by Licensee
and Licensee's Financing Party, which approval will not be unreasonably withheld.
Owner shall not, however, be required to reimburse, indemnify or defend any
10
Licensee Indemnified Party, to the extent any such Claim is due to the negligence
or willful misconduct of any Licensee Indemnified Party.
22.2. Indemnification of Owner. To the extent allowed by law, Licensee will
defend, indemnify and hold harmless Owner, its permitted successors and assigns
and their respective directors, officers, members, shareholders and employees
(collectively, the "Owner Indemnified Party ") from and against all Claims imposed
upon or incurred by or asserted against any Owner Indemnified Party by reason of
(a) any accident, injury to or death of persons or loss of or damage to property
occurring on or about the Premises during the term of this Agreement and resulting
from any negligent act or omission of Licensee or anyone claiming by, through or
under Licensee during the Term, or (b) any negligent failure on the part of Licensee
to perform or comply in any material respect with any of the material terms of this
Agreement. In case any action, suit or proceeding is brought against any Owner
Indemnified Party by reason of such occurrence, Licensee will, at Licensee's
expense and discretion, either defend such action, suit or proceeding, or cause the
same to be defended by counsel approved by Owner, which approval will not be
unreasonably withheld. Licensee shall not, however, be required to reimburse,
indemnify or defend any Owner Indemnified Party to the extent any such Claim is
due to the negligence or willful misconduct of any Owner Indemnified Party.
SECTION 23. SURVIVAL. The obligations and liabilities under this Agreement
shall survive and continue in full force and effect and shall not be terminated,
discharged or relicensed, in whole or in part, irrespective of the termination or
expiration of the term of this Agreement.
SECTION 24. GOVERNING LAW. This Agreement shall be governed and shall
be interpreted in accordance with the laws of the State of Iowa.
SECTION 25. OWNERSHIP.
25.1. Subject to the rights provided to Owner pursuant to other terms hereof,
during the Term, the System and all alterations, additions or installations made
thereto by Licensee and all Licensee property used in connection with the
installation, operation and maintenance of the System is, and shall remain, the
personal property of Licensee or Licensee's Financing Party ( "Licensee Property ").
In no event shall any Licensee Property be deemed a fixture, nor shall Owner, nor
anyone claiming by, through or under Owner (including but not limited to any
present or future mortgagee of Owner) have any rights in or to the Licensee
Property at any time except as otherwise provided herein. Except as provided in
this Agreement, Owner acknowledges and agrees that Licensee may grant or cause
to be granted to a secured party a security interest in the Licensee Property. Owner
covenants that it will place all parties having an interest in or lien upon the real
property comprising the Premises on notice of the ownership of the System and the
legal status or classification of the System as personal property of the Licensee or
Licensee's Financing Party. If there is any mortgage or fixture filing against the
11
Premises that could reasonably be construed as attaching to the System as a
fixture of the Premises, Owner shall provide, at Licensee's or Licensee's Financing
Party's request, a disclaimer or release from such lien holder.
25.2. UCC Property Statement. Licensee shall have the right to file, and Owner
hereby consents to such filing, a statement with the necessary state or local agency
including where the real estate records are located, indicating Licensee's sole
ownership of the System and indicating that no part of the System is to be
construed as a fixture or appurtenance to any property owned by Owner.
SECTION 26. APPLICABLE LAWS AND REQUIREMENTS. All activities
conducted by Licensee pursuant to this Agreement shall be in compliance in all
material respects with all applicable zoning requirements and all applicable Federal,
State, and local laws, ordinances, rules and regulations, and all issued permits and
licenses (collectively "Applicable Laws and Requirements "), and shall be conducted
at Licensee's own cost and expense. Licensee shall provide Owner upon request
with a copy of all permits, approvals and conditions issued by applicable Federal,
State, and local governmental entities. If required, Licensee shall immediately
suspend any use of the System to the extent required by any governmental
authority upon notice by such governmental authority having jurisdiction that any of
Licensee's activities under this Agreement constitutes a violation of any of the
Applicable Laws and Requirements until the violation, if any, is corrected and the
applicable governmental authority concurs that the violation is corrected. Licensee
shall immediately notify Owner regarding any alleged violation. Failure of Licensee
to immediately suspend use of the System and /or to notify Owner in accordance
with this provision after receiving a notice of any violation which may pose a risk to
public health or safety is considered an event of Default by Licensee. Owner agrees
to assist Licensee in obtaining any and all municipal permits and zoning
modifications (if required) to permit construction and use of System on the
applicable municipal facility.
SECTION 27. NO INTERFERENCE WITH OWNER USES /QUIET ENJOYMENT.
Licensee shall operate, maintain and repair the System in a manner that will not
unreasonably obstruct or interfere with Owner's use of Owner's facility or the rights
of any other occupants of Owner's facility. In the event such unreasonable
interference occurs, Owner shall notify Licensee and Licensee's Financing Party in
writing and Licensee agrees to promptly take all reasonable steps necessary to
eliminate such unreasonable interference.
SECTION 28. OWNER INSPECTION OF SYSTEM. Owner shall be permitted
non - emergency access to inspect the System upon seventy -two (72) hours prior
written notice to Licensee. Personnel of Licensee must accompany Owner's
personnel during any non - emergency inspection of the System, unless Licensee
agrees in writing to waive its right to accompany Owner personnel on all non -
emergency inspections. This requirement in no way prohibits Owner from inspecting
any and all portions of Owner's facility other than the System itself. In the event of
12
emergency, Owner may inspect the System unaccompanied and must notify
Licensee within twenty -four (24) hours after such inspection. Owner shall be liable
to Licensee for all fees and costs associated with any inspection of the System
requested or conducted by Owner.
SECTION 29. OWNER'S OBLIGATIONS. Subject to any specific limitations in
this Agreement, Owner shall at all times during the Term use commercially
reasonable efforts to maintain the Premises other than the System, in good
condition and repair so as to be able to receive and utilize the electricity delivered to
Owner from the System. Owner will maintain in good working order and available at
all times, its connection and service contract(s) with the relevant utilities so that
Owner can, upon any suspension or interruption of electricity from the System,
provide Owner with the full requirements for electricity. Without limiting the
foregoing, Owner shall take commercially reasonable actions as necessary to
prevent other buildings, structures or flora from overshadowing or otherwise
blocking access of sunlight to the System. All obligations of Owner in this
Agreement regarding maintenance shall be subject to the right of Owner during
periods of renovation of any part of the Premises to issue a shut down order to the
System, consistent with Section 12 of this Agreement.
SECTION 30. LICENSEE'S OBLIGATIONS, INCLUDING MAINTENANCE AND
REPAIR.
30.1 Installation. Licensee shall install the System in accordance with Good
Industry Practice. Licensee estimates that the installation shall be complete, and
the Commercial Operation Date will occur, within six (6) weeks of the date of this
Agreement. The System shall be deemed to have achieved "Commercial
Operation" when the System has been approved for interconnection with the local
electric utility and the results of such testing demonstrate that the System is capable
of generating electrical energy for four (4) continuous hours in accordance with the
manufacturer's specifications, applicable permits and the Utility's interconnection
requirements. Licensee shall send Owner and the Licensee's Financing Party
written notice of Commercial Operation promptly following its occurrence, certifying
that the requirements have been satisfied and identifying the date on which the
System achieved Commercial Operation, together with any supporting
documentation reasonably requested by Owner. If Owner does not dispute in good
faith the certification in writing within five (5) business days after receipt of such
notice, the date identified in the Licensee's notice as the date on which the system
achieved Commercial Operation shall be the date for the "Commercial Operation
Date" for purposes of this Agreement.
30.2 Operation and Maintenance. Licensee shall cause the System to be
operated and maintained at Licensee's sole expense, including the cost of capital
repairs and replacements of the System, in accordance with Good Industry Practice
throughout the Term. Licensee warrants that all of its operating and maintenance
personnel will be adequately qualified and trained throughout the Term.
13
Preventative maintenance, resulting in System outage, shall not be performed
during on -peak times according to Utility's applicable tariff. Licensee shall have the
right to perform its obligations hereunder through contracts with qualified third
parties. Notwithstanding the preceding sentence, Licensee shall retain ultimate
responsibility to Owner for performance of such obligations.
SECTION 31. FURTHER ASSURANCES. Owner and Licensee shall promptly
perform, execute and deliver or cause to be performed, executed and /or delivered
any and all acts and assurances, including the delivery of any documents, as either
party may reasonably require in order to carry out the intent and purpose of this
Agreement.
SECTION 32. SURRENDER. Licensee shall, on the last day of the Term or upon
any termination of this Agreement resulting in the payment of the Termination Fee
by Owner, surrender and deliver up the Premises, with the System then located
thereon, into the possession and use of Owner, without delay and in good order,
condition and repair, reasonable wear and tear excepted, free and clear of all
lettings and occupancies, free and clear of all liens and encumbrances other than
those existing on the date of this License and those, if any, created by Owner,
without (except as otherwise provided herein) any payment or allowance whatever
by Owner on account of or for any buildings and the System erected or maintained
on the Premises at the time of the surrender, or for the contents thereof or
appurtenances thereto. Licensee's trade fixtures, personal property and other
belongings of Licensee or of any sublicensee or other occupant of space in the
Premises shall be and remain the property of Licensee, and Licensee shall have a
reasonable time after the expiration of the term of this License (not to exceed thirty
(30) days) to remove the same.
SECTION 33. SEVERABILITY. If one (1) or more of the provisions contained in
this Agreement for any reason is held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as if such invalid, illegal, or
unenforceable provision had never been contained herein.
SECTION 34. NOTICES, MEANS /RECEIPT. All notices or other
communications required or permitted hereunder shall be in writing and shall be
personally delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, national overnight courier service (next business day delivery), or
by facsimile to
TO OWNER:
City of Dubuque, Iowa
City Manager
City Hall
50 West 13th Street
Dubuque IA 52001
Fax 319 589 -4149
14
TO LICENSEE:
TO LICENSEE'S
FINANCING PARTY:
Eagle Point Energy — 1, LLC
923 Peru Road
Dubuque, IA 52001
Fax: 563- 557 -3050
Dubuque Bank and Trust
1398 Central Avenue
Dubuque, IA 52001
Telecopy No: (563) 589 -2184
as may be updated in writing from time to time, and shall be deemed received upon
the earlier of (i) if mailed, three (3) business days after the posting by a U.S. Post
Office; (ii) if personally delivered, the date of delivery to the address of the person to
receive such notice; (iii) if sent by national overnight courier service (next business
day delivery), one (1) business day after delivery to such courier service; or (iv) if
given by facsimile, upon electronic evidence of receipt.
SECTION 35. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, and all the counterparts shall constitute but one and the same
agreement, notwithstanding that not all parties hereto are signatory to the same
counterpart.
SECTION 36. TIME IS OF THE ESSENCE. Time is of the essence of every
provision contained in this Agreement.
SECTION 37. NON - WAIVER. Unless otherwise expressly provided in this
Agreement, no waiver by Owner or Licensee of any provision hereof shall be
deemed to have been made unless expressed in writing and signed by Owner or
Licensee as the case may be. No delay or omission in the exercise of any right or
remedy accruing to Owner or Licensee, as the case may be, upon any breach
under this Agreement shall impair such right or remedy or be construed as a waiver
of any such breach theretofore or thereafter occurring. The waiver by Owner or
Licensee of any breach of any term, covenant or condition herein stated shall not be
deemed to be a waiver of any other term, covenant or condition.
SECTION 38. CAPTIONS. Section titles or captions contained in this Agreement
are inserted as a matter of convenience and for reference, and in no way define,
limit, extend or describe the scope of this Agreement.
SECTION 39. EXHIBITS. All Schedules attached shall be incorporated into this
Agreement by reference as if fully set out herein.
SECTION 40. FINAL AGREEMENT. This Agreement, together with all
schedules and exhibits attached hereto or mentioned herein, completely and
15
exclusively states the agreement of the parties regarding its subject matter and
supersedes all prior proposals, agreements, or other communications between the
parties, oral or written, regarding its subject matter. This Agreement may be
modified only by a writing signed by both the Owner and the Licensee. If any
provision of this Agreement is found unenforceable or invalid, such unenforceability
or invalidity shall not render this Agreement unenforceable or invalid as a whole. In
such event, such provision shall be changed and interpreted so as to best
accomplish the objectives of such unenforceable or invalid provision within the limits
of applicable law. This Agreement may be executed in any number of separate
counterparts and each counterpart shall be considered an original and together
shall comprise the same Agreement. The captions or headings in this Agreement
are strictly for convenience and shall not be considered in interpreting this
Agreement. This Agreement shall become binding when accepted in writing by
Owner and Licensee.
SECTION 41. SERVICE CONTRACT. The Parties intend this Agreement to be a
"service contract" within the meaning of Section 7701(e)(3) of the Internal Revenue
Code of 1986. Owner will not take the position on any tax return or in any other
filings suggesting that it is anything other than a purchase of electricity from the
System.
SECTION 42. NO PARTNERSHIP. No provision of this Agreement shall be
construed or represented as creating a partnership, trust, joint venture, fiduciary or
any similar relationship between or among the parties. No party is authorized to act
on behalf of any other party, and no party shall be considered the agent of another
party.
SECTION 43. NO THIRD PARTY BENEFICIARIES. Except as otherwise
expressly provided herein, this Agreement and all rights hereunder are intended for
the sole benefit of the parties hereto and shall not imply or create any rights on the
part of, or obligations to, any other person.
[The next page is the signature page.]
16
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
CITY OF DUBUQUE, IOWA
(LESSEE)
By:
Roy D. "uol, Mayor
By:
Kev' S. Firnstahl
City Clerk
EAGLE POINT ENERGY —1, LLC
(LESSOR)
By:
Barry S ear, Member /Manager
sr
SCHEDULE A — SYSTEM DESCRIPTION
(TBD BASED ON FINAL SPECIFICATIONS)
The System consists of UL approved components and conforms to building
codes and the requirements of Utility.
The System will consist of 806 SolarWorld SW 250 Monocrystaline solar panels
divided into 62 strings of 13 panels each. The system will be rated at 200 kW.
Each 31 13 panel string will be connected to a PV Powered PVP 100KW -480
inverter to convert the DC power produced by the Solar PV panels into usable
AC electric current. There will be two such inverters. The Inverter power will
match the power already being provided by the Utility.
The PV panels will be mounted on Solar Dock ballasted racking which will layout
on the Western side of the building roof avoiding any and all roof mechanicals
that may be present. The Solar Dock will reside on weatherproof foam with the
aggregate rock material removed and either used for ballast (in bags), spread
elsewhere on the roof or removed from the roof for a net zero weight gain on the
roof.
SCHEDULE B
SCHEDULE B - Owner shall pay a monthly amount billed based upon the
System's previous month electrical production at the initial (2011) rate of $0.11
per kWh. At each annual anniversary of the Commencement Date the rate will
increase by 3% of the previous year's rate.
The Schedule B Table below indicates the appropriate rate per kWh for each
year of the original Term of this Agreement.
Year
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Year 12
Year 13
Year 14
Year 15
Year 16
Year 17
Year 18
Year 19
Year 20
Year 21
Year 22
Year 23
Year 24
Year 25
SCHEDULE B TABLE
Estimated
Annual
Rate / kWh Output (kWh)
$0.11000 260,000
$0.11330 258,700
$0.11670
$0.12020
$0.12381
$0.12752
$0.13135
$0.13529
$0.13934
$0.14353
$0.14783
$0.15227
$0.15683
$0.16154
$0.16638
$0.17138
$0.17652
$0.18181
$0.18727
$0.19289
$0.19867
$0.20463
$0.21077
$0.21709
$0.22361
257,407
256,119
254,839
253,565
252,297
251,035
249,780
248,531
247,289
246,052
244,822
243,598
242,380
241,168
239,962
238,762
237,568
236,381
235,199
234,023
232,853
231,688
230,530 4
SCHEDULE C — TERMINATION VALUES
The Termination Fee shall be the Net Present Value (at a 5% annual discount
rate) of all remaining payments due under the remaining Term of this Agreement,
including all scheduled 3% annual rate increases, based upon the energy
production of the System for the 12 months immediately preceding the
Termination and reduced 0.7% per year for the remaining term of this
Agreement.
SCHEDULE D — INSURANCE SCHEDULE
See attached Insurance Requirements for Tenants and Lessees of City Property
or Vendors (Suppliers, Service Providers) to the City of Dubuque.
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CONSENT AND AGREEMENT
This CONSENT AND AGREEMENT (this "Consent "), dated as of
2011, is executed by CITY OF DUBUQUE, IOWA (the
"Ui4'dersigned "), and EAGLE POINT ENERGY — 1, LLC, an Iowa limited liability
company ( "Licensee "), for the benefit of DUBUQUE BANK AND TRUST
( "Lessor ").
RECITALS
A. Licensee and Lessor are parties to that certain [Equipment Lease
Agreement] dated as of it 2011 (the "Equipment Lease ") pursuant to
which Lessor has leased to icensee certain solar panels and related equipment
(the "System ").
B. The Undersigned and Licensee have entered into that certain
Agreement for Solar License and Power Purchase dated as of -s1 2011
(as amended, supplemented or modified from time to time in acco ance with its
terms and the terms hereof, the "Contract "), pursuant to which Licensee will
install the System on premises owned by the Undersigned and Undersigned will
purchase the power produced by the System.
C. Pursuant to the Security Agreement dated as of 11. L / s'14 ,
2011 (the "Security Agreement "), between Licensee and Lessor,4icensee has
assigned its interest under the Contract and in the System to Lessor as security
for Licensee's obligations under the Equipment Lease.
AGREEMENT
NOW THEREFORE, the Undersigned hereby agrees as follows:
1. The Undersigned consents to the Licensee's transfer, assignment
and grant of a security interest in the Contract and the System to Lessor
pursuant to the terms of the Security Agreement, and agrees with Lessor as
follows:
(a) Upon the occurrence of a default by Licensee under the Contract,
Lessor shall be entitled (but not obligated) to exercise all rights and to cure any
defaults of Licensee under the Contract. Upon a default under the Contract by
licensee and the receipt of notice from Lessor, the Undersigned agrees to accept
such exercise and cure by Lessor and to render all performance due by it under
the Contract and this Consent to Lessor. The Undersigned agrees to make all
payments to be made by it under the Contract directly to Lessor upon receipt of
Lessor's written instructions.
(b) The Undersigned will not, without the prior written consent of
Lessor (such consent not to be unreasonably withheld), (i) cancel or terminate
8 -2
the Contract or suspend performance of its services thereunder except as
expressly provided in the Contract and in accordance with paragraph 1(c) hereof,
or consent to or accept any cancellation, termination or suspension thereof by
Licensee, (ii) sell, assign or otherwise dispose (by operation of law or otherwise)
of any part of its interest in the Contract, or (iii) amend or modify the Contract in
any material respect. The Undersigned agrees to deliver duplicates or copies of
all notices of default delivered under or pursuant to the Contract to Lessor
promptly upon receipt or delivery thereof.
(c) The Undersigned will not terminate the Contract on account of any
default or breach of Licensee thereunder without written notice to Lessor and first
providing to Lessor (i) thirty (30) days from the date notice of default or breach is
delivered to Lessor to cure such default if such default is the failure to pay
amounts to the Undersigned which are due and payable under the Contract or (ii)
a reasonable opportunity, but not fewer than ninety (90) days, to cure such
breach or default if the breach or default cannot be cured by the payment of
money to the Undersigned so long as Lessor or its designee shall have
commenced to cure the breach or default within such ninety (90) -day period and
thereafter diligently pursues such cure to completion and continues to perform
any monetary obligations under the Contract and all other obligations under the
Contract are performed by Licensee or Lessor. If possession of the System is
necessary to cure such breach or default, and Lessor or its designee(s) or
assignee(s) declare Licensee in default and commence foreclosure proceedings,
Lessor or its designee(s) or assignee(s) will be allowed a reasonable period to
complete such proceedings. If Lessor or its designee(s) or assignee(s) are
prohibited by any court order or bankruptcy or insolvency proceedings from
curing the default or from commencing or prosecuting foreclosure proceedings,
the foregoing time periods shall be extended by the period of such prohibition.
The Undersigned consents to the transfer of Licensee's interest under the
Contract to Lessor or a purchaser or grantee at a foreclosure sale by judicial or
nonjudicial foreclosure and sale or by a conveyance by Licensee in lieu of
foreclosure and agrees that upon such foreclosure, sale or conveyance, the
Undersigned shall recognize Lessor or other purchaser or grantee as the
applicable party under the Contract (provided that Lessor or such purchaser or
grantee assumes the obligations of Licensee under the Contract).
(d) In the event that the Contract is rejected by a trustee or debtor -in-
possession in any bankruptcy or insolvency proceeding, or if the Contract is
terminated for any reason other than a default which could have been but was
not cured by Lessor as provided in paragraph 1(c) above, and if, within forty -five
(45) days after such rejection or termination, Lessor shall so request, the
Undersigned will execute and deliver to Lessor a new Contract, which Contract
shall be on the terms and conditions as the original Contract for the remaining
term of the Contract before giving effect to such termination.
B -3
(e) In the event Lessor or its designee(s) or assignee(s) elects to
perform Licensee's obligations under the Contract or to enter into a new Contract
as provided in subparagraph (c) or (d) respectively above, Lessor, its designee(s)
and assignee(s), shall have no personal liability to the Undersigned for the
performance of such obligations, and the sole recourse of the Undersigned in
seeking the enforcement of such obligations shall be to such parties' interest in
the System.
(f) In the event Lessor or its designee(s) or assignee(s) succeeds to
Licensee's interest under the Contract or enters into a new Contract, Lessor or its
designee(s) or assignee(s) shall cure any defaults for failure to pay amounts
owed under the Contract, but shall not otherwise be required to perform or be
subject to any defenses or offsets by reason of any of Licensee's other
obligations under the Contract that were unperformed at such time. Lessor shall
have the right to assign all or a pro rata interest in the Contract or a new Contract
entered into pursuant to subparagraph (d) to a person or entity to whom the
System is transferred, provided such transferee assumes the obligations of
Licensee (or Lessor) under the Contract. Upon such assignment, Lessor
(including their agents and employees) shall be released from any further liability
thereunder to the extent of the interest assigned.
2. The Undersigned hereby represents and warrants that:
(a) The execution, delivery and performance by the Undersigned of the
Contract and this Consent has been duly authorized by all necessary corporate
action, and does not and will not require any further consents or approvals which
have not been obtained, or violate any provision of any law, regulation, order,
judgment, injunction or similar matters or breach any agreement presently in
effect with respect to or binding on the Undersigned;
(b) This Consent and the Contract are legal, valid and binding
obligations of the Undersigned, enforceable against the Undersigned in
accordance with their respective terms;
(c) All government approvals necessary for the execution, delivery and
performance by the Undersigned of its obligations under the Contract have been
obtained and are in full force and effect;
(d) As of the date hereof, the Contract is in full force and effect and has
not been amended, supplemented or modified;
(e) Licensee has fulfilled all of its obligations under the Contract, and
there are no breaches or unsatisfied conditions presently existing (or which
would exist after the passage of time and /or giving of notice) that would allow the
Undersigned to terminate the Contract; and
B-4
(f) The Contract constitutes the only agreement between the
Undersigned and Licensee with respect to the matters and interests described
therein.
3. All Notices required or permitted hereunder shall be in writing and
shall be effective (a) upon receipt if hand delivered, (b) upon receipt if sent by
facsimile and (c) if otherwise delivered, upon the earlier of receipt or two (2)
business days after being sent registered or certified mail, return receipt
requested, with proper postage affixed thereto, or by private courier or delivery
service with charges prepaid, and addressed as specified below:
If to the Undersigned:
City of Dubuque, Iowa
City Manager
City Hall
50 West 13th Street
Dubuque IA 52001
Telecopy No: (319) 589 -4149
If to Lessor:
Dubuque Bank and Trust
Attn:( 1
1398 Central Avenue
Dubuque, IA 52001
Telecopy No: (563) 589 -2184
If to Licensee:
Eagle Point Energy— 1, LLC
923 Peru Road
Dubuque, IA 52001
4. This Consent shall be binding upon and inure to the benefit of the
Undersigned, the Licensee, the Lessor and their respective successors,
transferees and assigns (including without limitation, any entity that refinances all
or any portion of the obligations under the Equipment Lease). The Undersigned
agrees to confirm such continuing obligation in writing upon the reasonable
request of Licensee, Lessor or any of their respective successors, transferees or
assigns. No termination, amendment, variation or waiver of any provisions of this
Consent shall be effective unless in writing and signed by the Undersigned,
Lessor and Licensee. This Consent shall be governed by the internal laws of the
State of Iowa, without reference to principles of conflict of laws.
B -5
5. This Consent may be executed in one or more duplicate
counterparts, and when executed and delivered by all the parties listed below,
shall constitute a single binding agreement:
6. All references in this Consent to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments thereto,
(b) shall include all documents, instruments or agreements issued or executed in
replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time.
IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent as of the date first set forth above.
CITY OF DUBU!+UE, IOWA
By:
By:
Accepted and agreed to:
DUBUQUE BANK AND TRUST,
as Lessor
Roy D.
uol, Mayor
Title: i-itaa_J,c 0t.' .
EAGLE POINT ENERGY — 1, LLC,
as Licensee
By:
Barry Shear
Member /Manager
B-6
K in S. Fir tahl,
Acting City Clerk