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HomeMy WebLinkAboutItem 06.nNovember 16, 2015 Item No.________ APPROVAL OF COMMUNITY SOLAR GARDEN SUBSCRIPTION AGREEMENT Proposed Action Staff recommends adoption of the following motion: Move to approve the attached Community Solar Garden Subscription Agreement with Oak Leaf Solar XV LLC Overview Earlier this year the council reviewed a solar garden subscription proposal being sponsored by the Metropolitan Council. The Metropolitan Council is installing solar panels at their Empire Wastewater Treatment Plant, and is allowing surrounding cities the opportunity to receive the benefit of a portion of the solar energy provided by these panels. The attached subscription agreement is with a private provider named Oak Leaf Solar. The private company actually owns and operates the solar garden and will invoice the city for 5% (roughly 424,960 kWh in year 1 of the agreement) at a rate of $.089 per kWh. This is below the rate credited back to the city by Xcel Energy (currently $.09914/kWh, but will fluctuate with market prices). The estimated net present value of the savings over the 25 year contract is $302,994. Over the last twelve months the city has been billed for 6,275,824 kWh of electricity by both Dakota Electric and Xcel Energy. This agreement will essentially “freeze” or hedge our electricity rate for roughly 6.8% of the city’s electricity over the next 25 years. Primary Issues to Consider • Does the 25 year agreement provide enough of a benefit to the City of Lakeville? Supporting Information • Community Solar Garden Subscription Agreement • Financing Model Projections Justin Miller City Administrator Financial Impact: $302,694 savings over 25 years_Budgeted: Y/N __N__ Source: All Funds Related Documents (CIP, ERP, etc.): ________________________________________ Community Values: Good Value for Public Services Error! Unknown document property name. COMMUNITY SOLAR GARDEN SUBSCRIPTION AGREEMENT This Community Solar Garden Subscription Agreement (“Agreement”) is made and entered into by and between Oak Leaf Solar XV LLC ("Operator"), or its successors and assigns and the City of Lakeville, Minnesota, ("Subscriber"), a _________________________, jointly referred to as the “Parties.” Recitals WHEREAS, Operator intends to construct, install, own, operate, and maintain a solar photovoltaic System at the Premises described on Exhibit C; WHEREAS, the Parties intend that, pursuant to the Tariff and the Power Purchase Agreement (“PPA”), the System will qualify as a Community Solar Garden and will generate Bill Credits to be applied to Subscriber’s monthly invoices from Northern States Power for retail electric service for Subscriber Meters; WHEREAS, Subscriber is willing to purchase, or pay to be allocated, Subscriber’s Allocated Percentage as described in Exhibit C of the Delivered Energy to be generated by the System commencing on the Commercial Operation Date and continuing through the Term, and Operator is willing to sell, or cause to be allocated, Subscriber’s Allocated Percentage of the Delivered Energy to be generated by the System to Subscriber commencing on the Commercial Operation Date and continuing through the Term, as provided under the terms of this Agreement; WHEREAS, this Agreement is for Community Solar Garden SRC042538 located in Dakota County next to the Metropolitan Council’s Empire Wastewater Treatment Plant, located at 2540 West 19th Street, Farmington, Minnesota. NOW THEREFORE, in consideration of the foregoing recitals, mutual promises set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: 1. DEFINITIONS. Capitalized terms are defined as follows: “Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling, controlled by or under common control with such specified Person. “Agreement” or “Contract” means the Community Solar Garden Subscription Agreement which consists of this agreement and all exhibits. “Applicable Law” means, with respect to any Person, any constitutional provision, law, statute, rule, regulation, ordinance, treaty, order, decree, judgment, decision, certificate, holding, injunction, registration, permit, authorization, guideline, Governmental Approval, consent or 2 requirement of the federal government or the state of Minnesota, enforceable at law or in equity, including the interpretation and administration thereof by such authority. “Bankruptcy Event” means with respect to a Party, that either: (i) such Party has (A) applied for or consented to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property; (B) admitted in writing its inability, or be generally unable, to pay its debts as such debts become due; (C) made a general assignment for the benefit of its creditors; (D) commenced a voluntary case under any bankruptcy law; (E) filed a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding up, or composition or readjustment of debts; (F) failed to controvert in a timely and appropriate manner, or acquiesced in writing to, any petition filed against such Party in an involuntary case under any bankruptcy law; or (G) taken any corporate or other action for the purpose of effecting any of the foregoing; or (ii) a proceeding or case has been commenced without the application or consent of such Party in any court of competent jurisdiction seeking (A) its liquidation, reorganization, dissolution or winding-up or the composition or readjustment of debts or, (B) the appointment of a trustee, receiver, custodian, liquidator or the like of such Party under any bankruptcy law, and such proceeding or case has continued undefended, or any order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect for a period of 60 days. “Bill Credit” means the monetary value of the electricity generated by the Solar System commensurate with Subscriber’s Allocated Percentage, as calculated pursuant to the PPA and the Tariff, and credited to Subscriber by Northern States Power Company (“NSP”) on its monthly invoice for electric service for the Subscriber Meters in accordance with the PPA. “Bill Credit Rate” If Operator transfers the solar RECs to NSP under the PPA, the Bill Credit Rates will be the Enhanced Bill Credit in the PPA. If the Operator does not transfer the Solar RECs to NSP, the Bill Credit Rate will be the Standard Bill Credit in the PPA. “Billing Cycle” means the monthly billing cycle established by NSP. “Business Day” means any day other than Saturday, Sunday, or a legal holiday. “Community Solar Garden” means a community solar garden that qualifies for the Solar*Rewards Community Program as set forth in Minnesota Statutes section 216B.1641, related PUC orders and the Tariff. “Construction Commencement” means the date on which the Operator issues a notice to proceed under the applicable construction contract for the System. “Date of Commercial Operation” means the first day of the first full calendar month upon which commercial operation is achieved following completion of all Interconnection Agreement requirements and processes, as defined by the PPA executed by the Operator and NSP. “Delivered Energy” means the amount of alternating current (AC) energy generated by the System as inverted to AC and delivered to NSP at the Production Meter (as defined in the PPA). 3 “Early Termination Date” means any date the Agreement terminates other than for expiration of the Term. “Effective Date” means the date on which the Agreement is signed by authorized representatives of both Parties in accordance with Section 2.1. “Environmental Attributes” means, without limitation, carbon trading credits, Renewable Energy Credits or certificates, emissions reduction credits, emissions allowances, green tags, tradable renewable credits, or Green-e® products. “Estimated Remaining Payments” means as of any date, the estimated remaining Payments to be made through the end of the Term, as reasonably determined and supported by Operator. “Expiration Date” means the date the Agreement terminates by reason of expiration of the Term. “Financing Party” or “Lender” means, as applicable (i) any Person (or its agent) from whom Operator (or an Affiliate of Operator) leases the System, or (ii) any Person (or its agent) who has made or will make a loan to or otherwise provide financing to Operator (or an Affiliate of Operator) with respect to the System. “Governmental Approval” means any approval, consent, franchise, permit, certificate, resolution, concession, license, or authorization issued by or on behalf of any applicable Governmental Authority. “Governmental Authority” means any federal, state, regional, county, town, city, watershed district, park authority, or municipal government, whether domestic or foreign, or any department, agency, bureau, or other administrative, regulatory or judicial body of any such government. “Installation Work” means the construction and installation of the System and the start-up, testing and acceptance (but not the operation and maintenance) thereof, all performed by or for Operator at the Premises. “Interconnection Agreement” means the Interconnection Agreement entered into or to be entered into between Operator and NSP as required by the PPA. “Land Lease Agreement” means the lease agreement between Operator and Subscriber, attached hereto as Exhibit E. “NSP” means Northern States Power Company, a Minnesota Corporation and any successor thereto and Xcel Energy In c., to the extent it has control over NSP’s business. “Person” means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, firm, or other entity, or a Governmental Authority. “PPA” means the standard Power Purchase Agreement for Solar*Rewards Community to be entered into by and between Operator and NSP whereby NSP agrees to purchase all of the 4 energy produced by the photovoltaic Solar System and to pay for such energy by providing Bill Credits to Subscriber (and other Subscribers). A copy of the PPA will be attached to this Agreement as Exhibit G. “Premises” means the premises described in Exhibit C. “PUC” means the Minnesota Public Utilities Commission “Solar Incentives” means any accelerated depreciation, installation or production-based incentives, investment tax credits and subsidies and all other solar or renewable energy subsidies and incentives. “Subscriber’s Allocated Percentage” means Subscriber’s allocated portion, stated as a percentage, of the Delivered Energy in a given month, as described in Exhibit C. “Subscriber Meters” means the meters associated with specific subscriber NSP accounts/premises listed in Exhibit I as updated from time to time by the Parties. “Stated Rate” means a rate per annum equal to one and one-half percent per month or as otherwise established by Minnesota Statute Section 471.425 Subd. 4(a). “System” or “Solar System” means the integrated assembly of photovoltaic panels, mounting assemblies, inverters, converters, metering, lighting fixtures, transformers, ballasts, disconnects, combiners, switches, wiring devices and wiring, more specifically described in Exhibit C. “System Operations” means Operator’s operation, maintenance and repair of the System performed in accordance with the requirements of this Agreement. “Tariff” means the Solar*Rewards Community Program tariff in NSP’s rate book. 2. TERM AND TERMINATION. 2.1 Effective Date. This agreement is effective upon signature by authorized representatives of both Parties to the agreement. 2.2 Term. The term of the Agreement begins on the Effective Date and continues for 25 years from the Commercial Operation Date (or such other time period as specified in writing by the Parties), unless terminated earlier under the provisions of this Agreement. Without limiting either Party’s termination rights elsewhere in this Agreement, this Agreement will terminate if (i) Subscriber has moved out of or relocated from the county in which the Solar System is located or a contiguous county or relocated from the NSP service territory, and has not, within 90 days after such move or relocation, assigned this Agreement in accordance with the provisions of Section 12.3, or (ii) the PPA is otherwise terminated. 2.3 Operator Termination Before Commercial Operation. If any of the following events or circumstances occur before Construction Commencement, the Operator may terminate the Agreement immediately upon written notice, in which case neither Party will have any liability to the other except for any liabilities that accrued before termination: 5 (a) After the performance of due diligence using industry standard methods and techniques, if there exist site conditions (including environmental conditions and ecological concerns such as presence of wildlife species) at the Premises or construction requirements that could not have been reasonably known or discovered through due diligence as of the date of this Agreement and that could reasonably be expected to materially increase the cost of Installation Work or would adversely affect the electricity production from the System as designed; (b) There has been a material adverse change in the (i) rights of Operator to construct the System on the Premises, or (ii) financial prospects or viability of the Solar System, whether due to market conditions, cost of equipment or any other reason; (c) After timely application to NSP and best efforts to secure interconnection services, Operator has not received evidence that interconnection services will be available with respect to energy generated by the System; (d) After the performance of due diligence using industry standard methods and techniques, Operator has determined and did not previously know that there are easements, other liens or encumbrances, or other facts, circumstances or developments that would materially impair or prevent, or have a material adverse effect on, the installation, operation, maintenance or removal of the System; or (e) Subscriber’s representation and warranty contained in Section 8.2(f) is no longer true and correct. 2.4 Subscriber Termination Prior to Installation. If any of the following events or circumstances occur before Construction Commencement, Subscriber may terminate the Agreement immediately upon written notice, in which case neither Party will have any liability to the other except for any liabilities that accrued before termination: (a) If NSP or another party with the authority to do so, disqualifies the Operator of the facility from treatment as Operator of the Community Solar Garden under Minnesota Statutes or Minnesota Public Utilities Commission order; or (b) If the legislature, PUC, NSP, or any other entity reduces the Bill Credit Rate, or basis for escalation of that rate as of March 1, 2015. 2.5 Force Majeure. Upon the occurrence of a force majeure event, the Agreement may be terminated consistent with the provisions of Section 10.3 of this Agreement. 2.6 Termination for Default. If either Party defaults on their responsibilities under this Agreement, the Agreement may be terminated under Section 11. 2.7 Termination upon Mutual Agreement. This Agreement may be terminated at any time, for any reason, by mutual agreement of the Parties in writing. 3. CONSTRUCTION, INSTALLATION AND TESTING OF SYSTEM. 3.1 System Acceptance Testing. 6 (a) Operator must test the System in accordance with such methods, acts, guidelines, standards and criteria reasonably accepted or followed by photovoltaic solar system integrators in the United States and as otherwise required by the PPA and the NSP Tariff. (b) Commercial Operation occurs when the “Date of Commercial Operation” occurs under the PPA. At least a week before the Date of Commercial Operation, Operator will send a written notice to Subscriber providing the Date of Commercial Operation and the provided date will be the Commercial Operation Date for the purposes of this Agreement. Operator has the sole responsibility to notify NSP of this date and get any necessary approvals from NSP. (c) A copy of the warranty for the solar panels is attached to this Agreement as Exhibit B. 4. SYSTEM OPERATIONS. 4.1 Operator as Owner and Operator. The System will be owned by Operator or Operator’s Financing Party and will be operated and maintained in accordance with the PPA and the NSP Tariff and, as necessary, maintained and repaired by Operator at its sole cost and expense. Installation of the System, upgrades and repairs will be under the direct supervision of an NABCEP-certified solar professional. Maintenance will be performed according to industry standards, including the recommendations of the manufacturers of solar panels and other operational components. 4.2 Metering. There will be two meters installed and maintained by NSP, which will measure the amount of electrical energy flowing to and from the Premises as further described in the PPA. The Production Meter (as defined in the PPA) will record the amount of Delivered Energy. Operator will make the raw meter data available to Subscriber upon Subscriber’s request. 4.3 Maintenance Plan. Operator will maintain the System in accordance with the long-term maintenance plan in Exhibit E. 5. DELIVERY OF ENERGY. 5.1 Purchase Requirement. Subscriber agrees to make payments calculated as Subscriber’s Allocated Percentage multiplied by Delivered Energy generated by the System beginning on the Commercial Operation Date and continuing for each applicable month of the Term. If there is a difference between the Bill Credit by NSP to the Subscriber on the Subscriber Meter bills, and the Delivered Energy, for any reason not the fault of the Subscriber, the Subscriber’s payments will be based on the number of kWhs credited by NSP on the Subscriber Meter bills. 5.2 Estimated Annual Delivered Energy. The total annual estimate of Delivered Energy for any given year is the “Estimated Annual Delivered Energy.” The Estimated Annual 7 Delivered Energy and the estimated amount of electricity to be allocated to Subscriber for each year of the Term starting on the Commercial Operation Date are identified in Exhibit D. The estimated amount of electricity allocated to Subscriber is Subscriber’s Allocated Percentage of the Estimated Annual Delivered Energy. 5.3 Environmental Attributes and Solar Incentives. (a) Subscriber’s purchase does not include Environmental Attributes or Solar Incentives; (b) Subscriber disclaims any right to Solar Incentives or Environmental Attributes based upon the installation of the System, and to avoid any conflicts with fair trade rules regarding claims of solar or renewable energy use and to help ensure that Environmental Attributes will be certified by Green-e® or a similar organization Subscriber will, at the request of Operator, execute documents or agreements reasonably necessary to fulfill the intent of this Section; (c) When reasonably possible, Subscriber and Operator will consult with each other about press releases or public communications to help ensure that the Operator’s rights to claim Environmental Attributes are not compromised while allowing both Parties to claim as much publicity as possible without compromising Operator’s rights; and (d) Without limiting the foregoing, Subscriber agrees that NSP will acquire from Operator under the PPA all energy generated by the Solar System and all Renewable Energy Credits (as defined in the PPA) associated with the Solar System. Operator and Subscriber agree not to make any statement contrary to NSP’s ownership. 5.4 Title to System. Throughout the Term, Operator or Operator’s Financing Party is the legal and beneficial owner of the System at all times, and the System will remain the personal property of Operator or Operator’s Financing Party. 5.5 Obligations of Parties. The Parties will work cooperatively and in good faith to meet all Community Solar Garden program requirements under Applicable Law, the PPA and the Tariff, including applicable interconnection and metering requirements. The Parties agree that beginning on the Commercial Operation Date (a) Operator will transmit all of the Delivered Energy into the NSP system for the benefit of Subscriber, and (b) Subscriber (or its designee) shall be entitled to any and all Bill Credits issued by NSP resulting from such transmission and corresponding with Subscriber’s Allocated Percentage. 6. PRICE AND PAYMENT. 6.1 Consideration. Subscriber shall pay to Operator a monthly payment (“Payment”) for Subscriber’s Allocated Percentage of Delivered Energy beginning on the Commercial Operation Date and continuing through the Term. The Subscriber will pay a price of $.089 per Kilowatt Hour (“kWh Rate”) for its Allocated Percentage of the Delivered Energy up to but limited to the amount of kWh’s for which the Subscriber receives Bill Credits. The kWh Rate shall not change if the value of the Environmental Attributes change for the Operator. 8 To the extent Subscriber is paid by NSP for RECs related to this Community Solar Garden, Subscriber shall pay to Operator a monthly Renewable Energy Credit (REC) payment for Subscriber’s Allocated Percentage of Delivered Energy (as defined in Exhibit C) beginning on the Commercial Operation Date and continuing through the Term of this Agreement. The REC payment shall be the actual amount per Kilowatt Hour credited by NSP to Subscriber’s bill for the REC (“REC rate”), multiplied by the actual amount of Kilowatt Hours for which Subscriber receives Bill Credits: REC rate x Kilowatt Hours = REC payment The Parties agree that the REC rate effective at the time of execution of this Agreement is $0.02 per Kilowatt Hour. 6.2 Invoices. Operator shall invoice Subscriber within 30 days of the last Business Day of each calendar month (each such date on which an invoice is issued by Operator to Subscriber, an “Invoice Date”) for the Payment in respect of Subscriber’s Allocated Percentage of Delivered Energy and REC payment during the immediately preceding calendar month. Subscriber’s first invoice under this Agreement shall be for the first full calendar month after the Commercial Operation Date. For the avoidance of doubt, Subscriber shall (i) neither receive nor be entitled to any Bill Credits associated with Delivered Energy prior to the Commercial Operation Date, and (ii) have no obligation to make or any liability for Payments for Delivered Energy or REC Payments prior to the Commercial Operation Date. If the first month of commercial operation is less than a full calendar month, the Operator will bill Subscriber for any Delivered Energy on the invoice for the first full calendar month of operation. 6.3 Time of Payment. Subscriber will pay all undisputed amounts due hereunder within 35 days of the Invoice Date. 6.4 Method of Payment. Subscriber will make all payments under the Agreement by electronic funds transfer in immediately available funds to the account designated by Operator from time to time. If Subscriber does not have electronic funds transfer capability, or does not desire to use electronic funds transfer, the Parties shall agree to an alternative method of payment. All payments that are not paid when due shall bear interest accruing from the date becoming past due until paid in full at a rate equal to the Stated Rate. Except for billing errors or as provided in Section 6.5 below, all payments made hereunder shall be non-refundable, be made free and clear of any tax, levy, assessment, duties or other charges and not subject to reduction, withholding, set-off, or adjustment of any kind. 6.5 Disputed Payments. If a bona fide dispute arises with respect to any invoice, Subscriber shall not be deemed in default under the Agreement and the Parties shall not suspend the performance of their respective obligations hereunder, including payment of undisputed amounts owed hereunder. If an amount disputed by Subscriber is subsequently deemed to have been due pursuant to the applicable invoice, interest shall accrue at the Stated Rate on such amount from the date becoming past due under such invoice until the date paid. 6.6 Billing Adjustments Following NSP Billing Adjustments. If, as a result of an NSP billing adjustment, the quantity of Delivered Energy is decreased (the “Electricity 9 Deficiency Quantity”) and NSP reduces the amount of Bill Credits or Renewable Energy Credits allocated to Subscriber for such period, Operator will reimburse Subscriber for the amount paid by Subscriber in consideration for the Electricity Deficiency Quantity. If as a result of such adjustment the quantity of Delivered Energy allocated to Subscriber is increased (the “Electricity Surplus Quantity”) and NSP increases the amount of Bill Credits allocated to Subscriber for such period, Subscriber will pay for the Electricity Surplus Quantity at the kWh Rate applicable during such period. 7. GENERAL COVENANTS. 7.1 Operator Covenants. Operator covenants and agrees to the following: (a) Notice of Damage or Emergency. Operator will within 3 business days notify Subscriber if it becomes aware of any significant damage to or loss of the use of the System or that could reasonably be expected to adversely affect the System. (b) System Condition. Operator shall make commercially reasonable efforts to ensure that the System is capable of operating at a commercially reasonable continuous rate. (c) Governmental Approvals. While providing the Installation Work and System Operations, Operator shall obtain and maintain and secure all Governmental Approvals required to be obtained and maintained and secured by Operator and to enable Operator to perform such obligations. (d) Interconnection Fees. Operator is responsible for all costs, fees, charges and obligations required to connect the System to the NSP distribution system, including fees associated with system upgrades, production, and operation and maintenance carrying charges, as provided in the Interconnection Agreement (“Interconnection Obligations”). In no event shall Subscriber be responsible for any Interconnection Obligations. (e) Compliance with PPA, Tariff and Interconnection Agreement. Operator shall cause the System to be designed, installed and operated in compliance with the PPA, the Tariff and the Interconnection Agreement. (f) The PPA requires that Operator (as opposed to NSP) is responsible for answering all questions from Subscriber regarding its participation in the Solar System. Operator is solely responsible for resolving disputes with NSP or Subscriber regarding the accuracy of Subscriber’s Allocated Percentage and the Delivered Energy allocated to Subscriber in connection therewith. Notwithstanding the foregoing, Subscriber acknowledges that NSP is responsible for resolving disputes with Subscriber regarding the applicable rate used to determine the Bill Credit. (g) The representations Operator made in its proposal in response to the RFP issued by Subscriber, including representations as to Operator’s financial ability to operate and maintain the System are true and correct as of the date of this Agreement. (h) The Operator is duly organized and validly existing and in good standing in the jurisdiction of its organization, and authorized to do business in the State of Minnesota. 10 7.2 Subscriber’s Covenants. Subscriber covenants and agrees as follows: (a) Consents and Approvals. Subscriber will ensure that any authorizations required of Subscriber under this Agreement are provided in a timely manner. To the extent that only Subscriber is authorized to request, obtain or issue any necessary approvals, permits, rebates or other financial incentives, Subscriber will cooperate with Operator to obtain such approvals, permits, rebates or other financial incentives. (b) Subscriber Agency and Consent Form. On the Effective Date, Subscriber will execute and deliver to Operator a Subscriber Agency Agreement and Consent Form in the form attached hereto as Exhibit A. Subscriber acknowledges that such agreement is required of Subscriber pursuant to the PPA. 8. REPRESENTATIONS & WARRANTIES. 8.1 Representations and Warranties Relating to Agreement Validity. In addition to any other representations and warranties contained in the Agreement, each Party represents and warrants to the other as of the date of this Agreement and on the Effective Date that: (a) it is duly organized and validly existing and in good standing in the jurisdiction of its organization; (b) it has the full right and authority to enter into, execute, deliver, and perform its obligations under the Agreement; (c) it has taken all requisite corporate or other action to approve the execution, delivery, and performance of the Agreement; (d) the Agreement constitutes its legal, valid and binding obligation enforceable against such Party in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter in effect relating to creditors’ rights generally; (e) there is no litigation, action, proceeding or investigation pending or, to the best of its knowledge, threatened before any court or other Governmental Authority by, against, affecting or involving any of its business or assets that could reasonably be expected to adversely affect its ability to carry out the transactions contemplated herein; and (f) its execution and performance of the Agreement and the transactions contemplated hereby do not constitute a breach of any term or provision of, or a default under, (i) any contract or agreement to which it or any of its Affiliates is a party or by which it or any of its Affiliates or its or their property is bound, (ii) its organizational documents, or (iii) any Applicable Laws. 8.2 Specific Representations and Warranties of Subscriber. Subscriber represents and warrants to Operator as of the date of this Agreement and on the Effective Date that: 11 (a) Subscriber is the sole party in interest agreeing to purchase Subscriber’s Allocated Percentage and is acquiring Subscriber’s Allocated Percentage for its own account, and not with a view to the resale or other distribution thereof, in whole or in part, and agrees that it will not transfer, sell or otherwise dispose of Subscriber’s Allocated Percentage in any manner in violation of applicable securities laws; (b) Subscriber is not relying on (i) Operator, or (ii) other subscribers, or any of the employees, members of boards of directors (or equivalent body) or officers, of those parties, or this Agreement with respect to tax and other economic considerations involved in the Agreement (c) Subscriber’s Allocated Percentage, combined with any other distributed resources serving the Subscriber Meters, represents no more than 120 percent of Subscriber’s average annual consumption at the Subscriber Meters over the last twenty-four (24) months; (d) Subscriber is a retail electric service customer of NSP and the Subscriber Meters are within the same county or contiguous county as the Solar System; and (e) Subscriber is not exempt from the Solar Energy Standard under Minnesota Statutes § 216B.1691, subd. 2(f)d. (f) Subscriber is an organization described in section 501(c)(25) of the Internal Revenue Code, a political subdivision with total assets in excess of $5,000,000. 8.3 Exclusion of Warranties. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 3.1, 4.1, 7.1, THIS SECTION 8, AND THE LAND LEASE AGREEMENT, THE INSTALLATION WORK, SYSTEM OPERATIONS AND PERFORMANCE PROVIDED BY OPERATOR TO SUBSCRIBER UNDER THIS AGREEMENT SHALL BE “AS-IS WHERE- IS.” NO OTHER WARRANTY TO SUBSCRIBER OR ANY OTHER PERSON, WHETHER EXPRESS, IMPLIED OR STATUTORY, IS MADE AS TO THE INSTALLATION, DESIGN, DESCRIPTION, QUALITY, MERCHANTABILITY, COMPLETENESS, USEFUL LIFE, FUTURE ECONOMIC VIABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE SYSTEM OR ANY OTHER SERVICE PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH ARE EXPRESSLY DISCLAIMED BY OPERATOR. 9. TAXES AND GOVERNMENTAL FEES. Operator is responsible for all income, gross receipts, ad valorem, personal property or real property or other similar taxes and any and all franchise fees or similar fees assessed against it due to its ownership of the System. Operator is not obligated for any taxes payable by or assessed against Subscriber based on or related to Subscriber’s overall income or revenues. 10. FORCE MAJEURE. 10.1 Definition. “Force Majeure Event” means any act or event that prevents the affected Party from performing its obligations in accordance with the Agreement, if such act or event is beyond the reasonable control, and not the result of the fault or negligence, of the affected Party and such Party had been unable to overcome such act or event with the exercise of due diligence (including the expenditure of reasonable sums). Subject to the foregoing 12 conditions, “Force Majeure Event” shall include the following acts or events: (i) natural phenomena, such as storms, hurricanes, floods, lightning, volcanic eruptions and earthquakes; (ii) explosions or fires arising from lightning or other causes unrelated to the acts or omissions of the Party seeking to be excused from performance; (iii) acts of war or public disorders, civil disturbances, riots, insurrection, sabotage, epidemic, terrorist acts, or rebellion; (iv) strikes or labor disputes (except strikes or labor disputes caused solely by employees of Operator or as a result of such Party’s failure to comply with a collective bargaining agreement); (v) action or inaction by a Governmental Authority (unless Subscriber is a Governmental Authority and Subscriber is the Party whose performance is affected by such action nor inaction); and (vi) any event of force majeure under the PPA. A Force Majeure Event shall not be based on the economic hardship of either Party. 10.2 Excused Performance. Except as otherwise specifically provided in the Agreement, neither Party shall be considered in breach of the Agreement or liable for any delay or failure to comply with the Agreement (other than the failure to pay amounts due hereunder), if and to the extent that such delay or failure is attributable to the occurrence of a Force Majeure Event; provided that the Party claiming relief under this Article 10 shall immediately (i) notify the other Party in writing of the existence of the Force Majeure Event, (ii) exercise all reasonable efforts necessary to minimize delay caused by such Force Majeure Event, (iii) notify the other Party in writing of the cessation or termination of said Force Majeure Event and (iv) resume performance of its obligations hereunder as soon as practicable thereafter; provided, however, that Subscriber shall not be excused from making any payments and paying any unpaid amounts due in respect of Subscriber’s Allocated Percentage of Delivered Energy prior to any performance interruption due to a Force Majeure Event. 10.3 Termination for Force Majeure. Either Party may terminate this Agreement upon 15 days written notice to the other Party if any Force Majeure Event affecting such other Party has been in existence for a period of 180 consecutive days or longer, unless such Force Majeure Event expires before the end of the 15 day notice period. 11. DEFAULT. 11.1 Operator Defaults and Subscriber Remedies. (a) Operator Defaults. The following events are defaults with respect to Operator (each, an “Operator Default”): (i) A Bankruptcy Event occurs with respect to Operator; (ii) Operator fails to pay Subscriber any undisputed amount owed under the Agreement within 30 days from receipt of notice from Subscriber of such past due amount; (iii) Operator breaches any material term of this Agreement or of the Land Lease Agreement and (A) if operator can cure the breach within 30 days after Subscriber’s written notice of such breach and Operator fails to so cure, or (B) Operator fails to commence and pursue a cure within such 30 day period if a longer cure period is needed; (iv) The PPA is terminated for any reason; or 13 (v) Operator fails to produce at least 85% of the electric production estimated for a calendar year, when the solar irradiance available to the site is at least 90% as predicted by System Advisor Model (SAM) or National Renewable Energy Laboratory (NREL) and Operator does not cure within the allotted cure period. In the event of a Section 11.1(a)(v) default, Operator may cure the default by compensating Subscriber for Lost Savings, as defined herein, within 90 days after Subscriber’s written notice of such breach. Lost Savings shall equal Guaranteed Production less the product of the Subscriber’s Allocated Percentage and the Delivered Energy multiplied by the difference in the kWh Rate and the Bill Credit Rate for that year. Guaranteed Production shall equal the product of Estimated Energy Allocated to Subscriber for that year as shown in Exhibit D and 85 percent. (Guaranteed Production – (Subscriber’s Allocated Percentage X Delivered Energy)) X (Bill Credit Rate – kWh Rate) (b) Subscriber’s Remedies. If an Operator Default described in Section 11.1(a) has occurred and is continuing, in addition to other remedies expressly provided herein, Subscriber may terminate the Agreement and exercise any other remedy it may have at law or equity or under the Agreement. In the event of such termination, Subscriber shall use reasonable efforts to mitigate its damages. 11.2 Subscriber Defaults and Operator’s Remedies. (a) Subscriber Default. The following events shall be defaults with respect to Subscriber (each, a “Subscriber Default”): (i) A Bankruptcy Event occurs with respect to Subscriber; (ii) Subscriber fails to pay Operator any undisputed amount due Operator under the Agreement within 30 days from receipt of notice from Operator of such past due amount; and (iii) Subscriber breaches any material term of this Agreement or the Land Lease Agreement and (A) if such breach can be cured within 30 days after Operator’s written notice of such breach and Subscriber fails to so cure, or (B) Subscriber fails to commence and pursue said cure within such 30 day period if a longer cure period is needed. (b) Operator’s Remedies. If a Subscriber Default described in Section 11.2(a) has occurred and is continuing, in addition to other remedies expressly provided herein, Operator may terminate this Agreement, sell Subscriber’s Allocated Percentage to one or more persons other than Subscriber, recover from Subscriber the actual, reasonable and verifiable damages related to lost Community Solar Garden subscription and REC revenues, recapture of the Federal investment tax credit and removal of the system, not to exceed the values shown in Exhibit J, and Operator may exercise any other remedy it may have at law or equity or under the Agreement. In the event of such termination, Operator shall use reasonable efforts to mitigate its damages. 14 12. ASSIGNMENT. 12.1 Assignment by Operator. Operator may not assign this Agreement or any interest therein, without the prior written consent of Subscriber, except as part of a Permitted Assignment as defined in Section 12.1(a). Operator shall provide Subscriber with such information concerning the proposed transferee (including any person or entity liable for the performance of the terms and conditions of this Agreement) as may be reasonably required to ascertain whether the conditions upon Subscriber’s approval to such proposed assignment have been met. (a) Permitted Assignment. Operator may, without the consent of Subscriber, (1) transfer, pledge or assign all or substantially all of its rights and obligations hereunder as security for any financing and/or sale-leaseback transaction or to an affiliated special purpose entity created for the financing or tax credit purposes related to System, (2) transfer or assign this Agreement to any person or entity succeeding to all or substantially all of the assets of Operator; provided, however, that any such assignee shall agree to be bound by the terms and conditions hereof, (3) assign this Agreement to one or more affiliates; provided, however, that any such assignee shall agree to be bound by the terms and conditions hereof or (4) assign its rights under this Agreement to a successor entity in a merger or acquisition transaction; provided, however, that any such assignee shall agree to be bound by the terms and conditions hereof. Subscriber agrees to provide acknowledgments, consents or certifications reasonably requested by any Lender in conjunction with any financing of the System. (b) In the event of a Permitted Assignment by Operator of its interest in this Agreement to a person who has assumed, in writing, all of Operator’s obligations under this Agreement, Operator, without the necessity of any further document signed or actions taken by any party, shall be released from any and all further obligations hereunder, and Subscriber agrees to look solely to such successor-in-interest of the Operator for performance of such obligations. Notwithstanding the foregoing, Operator must present to Subscriber audited financial statements showing that the assignee has equal or greater unencumbered financial resources than Operator prior to the Permitted Assignment. Any Financing Party is an intended third-party beneficiary of this Section 12.1. 12.2 Assignment by Subscriber. (a) Subscriber will not assign this Agreement or any interest herein, without the prior written consent of Operator; provided however that Operator shall not unreasonably withhold, condition or delay its consent; and provided, further, that Operator’s consent shall not be required to the assignment by Subscriber to another governmental entity in the event the State of Minnesota reassigns responsibility to such other governmental entity for providing the services currently undertaken by Subscriber at the facilities associated with the Subscriber Meters. (b) Subscriber does not need Operator’s consent to change the Subscriber Meters for the same amount of subscription as long as all the Subscriber Meters are owned by the Subscriber and meet the requirements of the Community Solar Garden program. For such changes, 15 Subscriber will notify Operator in writing and Operator will inform NSP of the change as soon as practicable. (c) Subscriber’s request for Operator’s consent to any proposed change or assignment as contemplated in Section 12.2 (a) must be in writing and provided to Operator at least 30 days before the proposed effective date of such change or assignment, which request must include: (i) Subscriber's name and mailing address; (ii) the current Subscriber Meter(s); (iii) the assignee’s meters; (iv) the name of the individual or entity to whom Subscriber is requesting to assign this Agreement (if applicable) and the consideration (if any) proposed to be provided to Subscriber for such assignment; and (v) the proposed effective date of such proposed change or assignment. In the case of any assignment of this Agreement in whole or in part to another individual or entity, (i) such assignee's meters shall be located within NSP’s service territory and within the same county as the Solar System or a contiguous county, (ii) such assignee shall execute a new Minnesota Community Solar Program Subscription Agreement substantially in the same form as this Agreement, specifically including the representations and warranties in Section 8.2; and (iii) the value of any consideration to be provided to Subscriber for assignment of this Agreement may not exceed the aggregate amount of Bill Credits that have accrued to Subscriber, but have not yet been applied to Subscriber’s monthly invoice(s) from NSP. (d) Upon any assignment of this Agreement pursuant to this Section 12.2, Subscriber will surrender all right, title and interest in and to this Agreement. Any purported assignment in contravention of this Section 12.2 shall be of no force and effect and null and void ab initio. No assignment will extend the Term of this Agreement. 13. NOTICES. 13.1 Notice Addresses. Unless otherwise provided in the Agreement, all notices and communications concerning the Agreement shall be in writing and addressed to the other Party (or Financing Party, as the case may be) at the addresses below, or at such other address as may be designated in writing to the other Party from time to time. Subscriber: City of Lakeville 20195 Holyoke Avenue Lakeville, MN 55044-8339 Attn: ___________________ Email: __________________ Operator: Oak Leaf Solar XV LLC 2645 E. 2nd Avenue, Suite 206 Denver, CO 80206 Attn: Counsel Email: With a copy to Lender: 16 13.2 Notice. Unless otherwise provided herein, any notice provided for in the Agreement shall be hand delivered, sent by registered or certified U.S. Mail, postage prepaid, or by commercial overnight delivery service, or transmitted by email and shall be deemed delivered to the addressee or its office when received at the address for notice specified above when hand delivered, upon confirmation of sending when sent by email (if sent during normal business hours or the next Business Day if sent at any other time), on the Business Day after being sent when sent by overnight delivery service, or 5 Business Days after deposit in the mail when sent by U.S. mail. 13.3 Address for Invoices. All invoices under the Agreement shall be sent to the address provided by Subscriber. Invoices shall be sent by regular first class mail postage prepaid. 14. DATA PRACTICES AND DATA SHARING. 14.1 Data Practices. (a) Consistent with Minnesota Statutes, section 13.05, subdivision 6, if any data on individuals is made available to the Operator by the Subscriber under this Agreement, the Operator will administer and maintain any such data in accordance with Minnesota Statutes, Chapter 13 (the “Minnesota Government Data Practices Act”), and any other statutory provisions applicable to the data. If and to the extent that Minnesota Statutes, section 13.05, subdivision 11, is applicable to this Contract, then: i) all of the data created, collected, received, stored, used, maintained, or disseminated by the Operator in performing this Agreement are subject to the requirements of the Minnesota Government Data Practices Act; ii) the Operator must comply with those requirements as if it were a government entity; and iii) the remedies in Minnesota Statutes, section 13.08 apply to the Operator. (b) Consistent with Minnesota Statutes, section 13.055, if “private data on individuals,” “confidential data on individuals” or other “not public data” are provided to or made accessible to the Operator by the Subscriber, the Operator must: i) have safeguards to ensure private or confidential data on individuals or other not public data are only accessible or viewable by Operator employees and agents whose work assignments in connection with the performance of this Agreement reasonably require them to have access to the data; ii) immediately notify the Subscriber of any unauthorized access by Operator employees and agents, and unauthorized access by third parties; iii) fully cooperate with Subscriber investigations into any breach in the security of private or confidential data on individuals or other not public data that may have occurred in connection with the Operator’s access to or use of the data; and iv) fully cooperate with the Subscriber in fulfilling the notice and reporting requirements of Minnesota Statutes, section 13.055. The penalties in Minnesota Statutes, section 13.09 governing unauthorized acquisition of not public data apply to the Operator and Operator employees and agents. If the Operator is permitted to use a subcontractor to perform its duties under this Agreement, the Operator shall incorporate these data practices provisions into the subcontract. 17 If the Operator receives a request to release data referred to in this section, the Operator must immediately notify the Subscriber. The Subscriber will give the Operator instructions concerning the release of the data to the requesting party before the data is released. (c) Data Sharing. Operator may share data with NSP in accordance with the terms set forth in the attached Subscriber Agency Agreement and Consent Form. 15. INDEMNIFICATION, LIABILITY AND INSURANCE 15.01 Indemnification. Operator shall defend, indemnify, and hold harmless Subscriber, its present and former council members, officials, officers, agents, volunteers and employees from any liability, claims, causes of action, judgments, damages, losses, costs, or expenses, including reasonable attorney’s fees, resulting from any act or omission of Operator, a subcontractor, anyone directly or indirectly employed by them, and/or anyone for whose acts and/or omissions they may be liable in the performance of the services required by this Agreement, and against all loss by reason of the failure of Operator to perform any obligation under this Agreement. 15.02 Insurance. With respect to the services provided pursuant to this Agreement, Operator shall at all times during the term of this Agreement and beyond such term when so required have and keep in force the following insurance coverages: Limits 1. Commercial General Liability on an occurrence basis with contractual liability coverage: General Aggregate $2,000,000 Products—Completed Operations Aggregate 2,000,000 Personal and Advertising Injury 1,500,000 Each Occurrence— Combined Bodily Injury and Property Damage 1,500,000 2. Workers’ Compensation and Employer’s Liability: Workers’ Compensation Statutory 18 If Operator is based outside the state of Minnesota, coverage must comply with Minnesota law. Employer’s Liability. Bodily injury by: Accident—Each Accident 500,000 Disease—Policy Limit 500,000 Disease—Each Employee 500,000 An umbrella or excess policy over primary liability insurance coverages is an acceptable method to provide the required insurance limits. The above establishes minimum insurance requirements. It is the sole responsibility of Operator to determine the need for and to procure additional insurance which may be needed in connection with this Agreement. Upon written request, Operator shall promptly submit copies of insurance policies to Subscriber. Operator shall not commence work until it has obtained required insurance and filed with Subscriber a properly executed Certificate of Insurance establishing compliance. The certificate(s) must name Subscriber as the certificate holder and as an additional insured for the liability coverage(s) for all operations covered under the Agreement. Operator shall furnish to Subscriber updated certificates during the term of this Agreement as insurance policies expire. 15.03 Liability. Without Subscriber waiving any statutory immunities and specifically subject to the liability limits contained in Minn. Stat. Section 466.04, each Party agrees that it will be responsible for its own acts and omissions and the results thereof, to the extent authorized by the law, and shall not be responsible for the acts and omissions of another Party and the results thereof. Subscriber warrants that it has an insurance or self-insurance program with minimum coverage consistent with the liability limits in Minnesota Statutes Chapter 466. Operator agrees that the insurance, indemnification, and bonding requirement of Articles 7 and 8 in the Land Lease shall also apply to this Subscription Agreement. 16. COMPLIANCE 16.01 The Operator must comply with all applicable federal, state, and local laws, rules, and regulations, including any ruling of the Minnesota Public Utilities Commission (PUC). 16.02 Under the PUC Order in Docket Number E002/M-13-867, dated August 6, 2015, the Operator will, at the request of the Subscriber, provide documentation of continuing viability of the System, including but not limited to providing proof of sufficient financing; possession of required permits; certification of compliance with Federal Energy Regulatory Commission Form 19 556; or proof that the Operator has sufficient insurance to cover the ongoing installation, operation, or maintenance of the System. 17. DISCONTINUATION OF COMMUNITY SOLAR GARDEN PROGRAM. Notwithstanding anything herein to the contrary, this Agreement shall terminate immediately, without notice, if the Community Solar Garden program is discontinued, limited or materially adversely changed prior to Operator executing a PPA with NSP, so long as the Operator has used its best efforts to secure the PPA up to the point of program change. 18. MISCELLANEOUS. 18.1 Integration; Exhibits. This Agreement, together with the attached Exhibits, constitute the entire agreement and understanding between Operator and Subscriber with respect to the subject matter thereof and supersedes all prior agreements relating to the subject matter hereof. The Exhibits attached hereto are integral parts of the Agreement and are made a part of the Agreement by reference. 18.2 Amendments. This Agreement may only be amended, modified or supplemented by an instrument in writing executed by duly authorized representatives of Operator and Subscriber. To the extent any amendment changes Subscriber’s Allocated Percentage, such amendment shall include the representation by Subscriber set forth in Section 8.2(c). 18.3 Cumulative Remedies. Except as set forth to the contrary herein, any right or remedy of Operator or Subscriber shall be cumulative and without prejudice to any other right or remedy, whether contained herein or not. 18.4 Limited Effect of Waiver. The failure of Operator or Subscriber to enforce any of the provisions of the Agreement, or the waiver thereof, shall not be construed as a general waiver or relinquishment on its part of any such provision, in any other instance or of any other provision in any instance. 18.5 Survival. The obligations under Section 8.3 (Exclusion of Warranties), Section 9 (Taxes and Governmental Fees), Section 13 (Notices), Section 14 (Data Practices), Section 15 (Indemnification, Liability and Insurance), Section 17 (Miscellaneous), or pursuant to other provisions of this Agreement that, by their sense and context, are intended to survive termination of this Agreement, shall survive the expiration or termination of this Agreement for any reason. 18.6 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota without reference to any choice of law principles. The Parties agree that the courts of Minnesota and the federal Courts sitting therein shall have jurisdiction over any action or proceeding arising under the Agreement to the fullest extent permitted by Applicable Law. 18.7 Severability. If any term, covenant or condition in the Agreement shall, to any extent, be invalid or unenforceable in any respect under Applicable Law, the remainder of the Agreement shall not be affected thereby, and each term, covenant or condition of the Agreement shall be valid and enforceable to the fullest extent permitted by Applicable Law and, if 20 appropriate, such invalid or unenforceable provision shall be modified or replaced to give effect to the underlying intent of the Parties and to the intended economic benefits of the Parties. 18.8 Relation of the Parties. The relationship between Operator and Subscriber shall not be that of partners, agents, or joint ventures for one another, and nothing contained in the Agreement shall be deemed to constitute a partnership or agency agreement between them for any purposes, including federal income tax purposes. Operator and Subscriber, in performing any of their obligations hereunder, shall be independent contractors or independent parties and shall discharge their contractual obligations at their own risk. 18.9 Successors and Assigns. This Agreement and the rights and obligations under the Agreement are binding upon and shall inure to the benefit of Operator and Subscriber and their respective successors and permitted assigns. 18.10 Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one and the same instrument 18.11 Access. Subscriber has access to the Solar System in accordance with the terms of the Land Lease Agreement. Subscriber will have no ownership, possession right or control of the Solar System, and will have no rights or obligations with respect to the maintenance or operation of the Solar System. Operator will have no ownership, possession right, or control of the land other than the interest conveyed in the Land Lease Agreement. Except as provided in the land Land Lease Agreement, this Agreement does not convey to Subscriber any right, title or interest in or to any portion of any property (tangible or intangible, real or personal) underlying or comprising any portion of the Solar System. 18.12 No Reliance. Subscriber is not relying on any representation, warranty or promise with respect to the Solar*Rewards Community Solar Program or the Solar System made by or on behalf of NSP or Operator, except to the extent specifically stated in this Agreement. 18.13 Record Keeping. Operator will maintain books, records, documents and other evidence directly pertinent to performance of the work under this Agreement in accordance with generally accepted accounting and utility metering principles and practices, including all meter production records and adjustments thereto. Operator will also maintain the financial information and data used in preparation or support of the cost submission for any negotiated Agreement amendment and provide electronic, printed or copied documentation to the Subscriber as requested. These books, records, documents, and data must be retained for at least 6 years after the term of the Agreement, except in the event of litigation or settlement of claims arising from the performance of this Agreement, in which case the Operator agrees to maintain them until the Subscriber and any of its duly authorized representatives have disposed of the litigation or claims. 18.14 Audit. As required by Minnesota Statutes, section 16C.05, subdivision 5, the records, books, documents, and accounting procedures and practices of the Operator and of any subcontractor relating to work performed pursuant to this Agreement shall be subject to audit and examination by the Subscriber and the Legislative Auditor or State Auditor. The Operator and any subcontractor shall permit the Subscriber or its designee to inspect, copy, and audit its 21 accounts, records, and business documents at any time during regular business hours, as they may relate to the performance under this Agreement. Audits conducted by the Subscriber under this provision shall be in accordance with generally accepted auditing standards. Financial adjustments resulting from any audit by the Subscriber shall be paid in full within thirty (30) days of the Operator's receipt of audit. 18.15 Dispute Resolution. Operator must submit in writing to the City Administrator of Subscriber any dispute regarding the meaning and intent of this Agreement or arising from performance of this Agreement r within 60 days after the dispute arises. The City Administrator or his/her designee must respond to the Operator in writing with a decision within 60 calendar days following receipt of the Operator’s dispute. Submission of a dispute to Dispute Resolution is a condition precedent to the Operator initiating any litigation relating to this Agreement. Pending final decision of a dispute, the Parties will proceed diligently with the performance of the Agreement. Failure by the Operator comply precisely with the time deadlines under this paragraph as to any claim shall operate as a release of that claim and a presumption of prejudice to the Subscriber. 19. LENDER PROVISIONS 19.1 Notice of Lender. Operator shall notify Subscriber of the identity of any Lender within thirty (30) days of such party becoming a Lender. 19.2 Lender Collateral Assignment. In the event that Operator identifies a Lender pursuant to Section 19.1, then Subscriber hereby: (a) Acknowledges and consents to the sale, assignment or conveyance or pledge or the collateral assignment by Operator to the Lender, of Operator’s right, title and interest in, to and under this Agreement, as consented to under Section 12.1 of this Agreement; (b) Acknowledges that any Lender as such collateral assignee shall be entitled to exercise any and all rights of lenders generally with respect to Operator’s interests in this Agreement; (c) Acknowledges that it has been advised that Operator has granted a security interest in the System to the Lender and that the Lender has relied upon the characterization of the System as personal property, as agreed in this Agreement, in accepting such security interest as collateral for its financing of the System; and (d) Acknowledges that any Lender shall be an intended third-party beneficiary of this Section 19.2. 19.3 Lender Cure Rights Upon System Owner Default. Upon any Event of Default by Operator, a copy of any notice delivered under Article 11 shall be delivered concurrently by Subscriber to any Lender at the addresses provided in writing by Operator to Subscriber. Following receipt by any Lender of any notice that Operator is in default in its obligations under this Agreement, such Lender shall have the right but not the obligation to cure any such default, and Subscriber agrees to accept any cure tendered by the Lenders on behalf of Operator in 22 accordance with the following: (a) a Lender shall have the same period after receipt of a notice of default to remedy an Event of Default by Operator, or cause the same to be remedied, as is given to Operator after Operator’s receipt of a notice of default hereunder; provided, however, that any such cure periods shall be extended for the time reasonably required by the Lender to complete such cure, including the time required for the Lender to obtain possession of the System (including possession by a receiver), institute foreclosure proceedings or otherwise perfect its right to effect such cure, but in no event longer than 180 days; and (b) the Lender shall not be required to cure those Events of Default that are not reasonably susceptible of being cured or performed by Lender. The Lender shall have the absolute right to substitute itself or an Affiliate for Operator and perform the duties of Operator hereunder for purposes of curing such Event of Default. Subscriber expressly consents to such substitution, and authorizes the Lender, its affiliates (or either of their employees, agents, representatives or contractors) to enter upon the Premises to complete such performance with all of the rights and privileges of Operator, but subject to the terms and conditions of this Agreement and the Lease, . 19.4 Upon any rejection or other termination of this Agreement pursuant to any process undertaken with respect to Operator under the United States Bankruptcy Code, at the request of the Lender made within ninety (90) days of such termination or rejection, Subscriber shall enter into a new agreement with the Lender or its assignee having the same terms and conditions as this Agreement and the Land Lease. 19.5 Except as otherwise set forth in this Article 19, the Parties’ respective obligations will remain in effect during any cure period. 19.6 If the Lender (including any purchaser or transferee), pursuant to an exercise of remedies by the Lender, shall acquire title to or control of Operator’s assets and shall, within the time periods described in Section 19.3 above, cure all defaults under this Agreement existing as of the date of such change in title or control in the manner required by this Agreement and which are capable of cure by a third person or entity, then such person or entity shall no longer be in default under this Agreement and this Agreement shall continue in full force and effect. 19.7 The Lender rights in this Agreement shall also apply to the Land Lease Agreement. The remainder of this page is intentionally blank. 23 IN WITNESS WHEREOF, the Parties have caused this Contract to be executed by their duly authorized officers on the dates below: CITY OF LAKEVILLE Dated: _________________________ By: __________________________________ Matt Little, Mayor Dated: _________________________ By: __________________________________ Charlene Friedges, City Clerk OAK LEAF SOLAR XV LLC Dated: _________________________ By: __________________________________ Michael McCabe President 24 Exhibit A [Insert form of Subscriber Agency Agreement and Consent Form as required by PPA] Solar*Rewards Community Subscriber Agency Agreement and Consent Form The undersigned (“Subscriber”) has a Subscription to the following Community Solar Garden: Community Solar Garden Name: Community Solar Garden Address: Community Solar Garden Operator: Community Solar Garden contact information for Subscriber questions and complaints: Address (if different from above); Telephone number: Email address: Web Site URL: Subscriber Name: Subscriber Service Address where receiving electrical service from Northern States Power Company: Subscriber’s Account Number with Northern States Power Company: 25 By signing this Solar*Rewards Community Subscriber Agency Agreement and Consent Form, the Subscriber agrees to all of the following: 1. Assignment of Renewable Energy Credits (“RECs”), Energy and Capacity to Northern States Power Company, a Minnesota corporation. The Subscriber agrees that the Community Solar Garden Operator has authority to assign all energy produced and capacity associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and the Subscriber agrees that all energy produced, and capacity associated with the Subscriber’s share of the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. The Subscriber also agrees that the Community Solar Garden Operator has authority to assign all RECs associated with the photovoltaic energy system at the Community Solar Garden to Northern States Power Company, and that if the Community Solar Garden or a person or entity on its behalf has assigned the RECs to Northern States Power Company, then all RECs associated with the Subscriber’s share of the photovoltaic energy system at the Community Solar Garden shall belong to Northern States Power Company. 2. Tax Implications. The Community Solar Garden Operator has provided the Subscriber with a statement that Northern States Power Company makes no representations concerning the taxable consequences to the Subscriber with respect to its Bill Credits to the Subscriber or other tax issues relating to participation in the Community Solar Garden. 3. Northern States Power Company hereby discloses to the Subscriber that it recognizes that not all production risk factors, such as grid-failure events or atypically cloudy weather, are within the Community Solar Garden Operator’s control. 4. Information Sharing. Participating in the Solar*Rewards Community Program will require sharing Subscriber’s Account Information (name, account number, service address, telephone number, email address, web site URL, information on Subscriber participation in other distributed generation serving the premises of the Subscriber, Subscriber specific Bill Credit(s)) and Subscriber’s Energy Use Data (the past, present and future electricity usage attributable to the Subscriber for the service address and account number identified for participation in the Community Solar Garden). The following outlines the type of information that will be shared, and how that information will be used. a. Subscriber’s Account Information and Subscriber Energy Usage Data. The Subscriber authorizes Northern States Power Company to provide the Community Solar Garden Operator (and the Community Solar Garden Operator’s designated subcontractors and agents) with the Subscriber’s Account Information and Subscriber’s Energy Usage Data as described in Section 4 above. This information is needed to allow the Community Solar Garden Operator determine the extent to which the Subscriber is entitled to participate in the Community Solar Garden, and to validate the amount of the Bill Credits to be provided by 26 Northern States Power Company to the Subscriber. The current data privacy policies of Northern States Power Company applicable to its Solar*Rewards Community Program provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above are attached as Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form. These privacy policies include definitions of “Subscriber’s Account Information” and “Subscriber’s Energy Usage Data.” b. Subscriber’s Subscription Information: The Subscriber authorizes the Community Solar Garden Operator to provide information to Northern States Power Company identifying the Subscriber (with the Subscriber’s name, service address, and account number) and detailing the Subscriber’s proportional share in kilowatts of the Community Solar Garden and to provide additional updates of this information to Northern States Power Company as circumstances change. This information is needed to allow Northern States Power Company to properly apply Bill Credits for the photovoltaic energy generated by the Community Solar Garden. Also, this information is needed to allow Northern States Power Company to send to the Subscriber notices or other mailings pertaining to their involvement in the Solar*Rewards Community Program. The Community Solar Garden Operator shall not disclose Subscriber information in annual reports or other public documents absent explicit, informed consent from the Subscriber. The Community Solar Garden Operator will not release any Subscriber data to third parties except to fulfill the regulated purposes of the Solar*Rewards Community Program, to comply with a legal or regulatory requirement, or upon explicit, informed consent from the Subscriber. c. Aggregated Information. Aggregated information concerning production at the Community Solar Garden may be publicly disclosed to support regulatory oversight of the Solar*Rewards Community Program. This includes annual reports available to the public related to specific Community Solar Gardens, including but not limited to production from the Community Solar Gardens; size, location and the type of Community Solar Garden subscriber groups; reporting on known complaints and the resolution of these complaints; lessons learned and any potential changes to the Solar*Rewards Community Program; reporting on Bill Credits earned and paid; and reporting on the application process. Aggregated information will not identify individual Subscribers or provide Subscriber-Specific Account Information, Subscriber-Specific Energy Usage Data or Subscriber-specific Bill Credits unless a Subscriber provides explicit informed consent. Depending on the nature of the aggregated information, however, it may still be possible to infer the amount of production attributed to individual Subscribers to the Community Solar Garden. The Subscriber agrees to the inclusion of its production information in the creation of the aggregated information. The Community Solar Garden Operator will not use aggregated information for purposes unrelated to the Solar*Rewards Community Program without first providing notice and obtaining further consent, unless the aggregated information is otherwise available as public information. The policies of Northern States Power Company related to sharing aggregated information are part of the data privacy policies contained in the attached Exhibit 1 of this Solar*Rewards Community Subscriber Agency Agreement and Consent Form and should be provided to the Subscriber by the Community Solar Garden Operator pursuant Section 3 above. 27 d. Information Requests from the MPUC or the Department of Commerce. The Subscriber agrees that the Community Solar Garden Operator and Northern States Power Company are authorized to provide any information they possess related to the Subscriber or the Subscriber’s participation in the Community Solar Garden to the Minnesota Public Utilities Commission (MPUC), the Minnesota Department of Commerce, or the Minnesota Office of Attorney General. This information is needed to allow proper regulatory oversight of Northern States Power Company and of the Solar*Rewards Community Program. e. Liability Release. Northern States Power Company shall not be responsible for monitoring or taking any steps to ensure that the Community Solar Garden Operator maintains the confidentiality of the Subscriber’s Account Information, the Subscriber’s Energy Usage or the Bill Credits received pertaining to the Subscriber’s participation in the Community Solar Garden. However, Northern States Power Company shall remain liable for its own inappropriate release of Subscriber’s Account Information and Subscriber’s Energy Use Data. f. Duration of Consent. The Subscriber’s consent to this information sharing shall be ongoing for the Term of the Contract between the Community Solar Garden Operator and Northern States Power Company, or until the Subscriber no longer has a Subscription to the Community Solar Garden and the Community Solar Garden Operator notifies Northern States Power Company of this fact through the CSG Application System. Provided, however, the Subscriber’s consent shall also apply thereafter to all such information of the Subscriber pertaining to that period of time during which the Subscriber had a Subscription to the Community Solar Garden. g. Modification. The above provisions addressing data privacy and in Exhibit 1 shall remain in place until and unless other requirements are adopted by the MPUC in its generic privacy proceeding, Docket No. E,G999/CI- 12 1344, or other MPUC Order. Northern States Power Company shall file necessary revisions to its tariffs and contracts within thirty (30) days of such Order. Subscriber’s Name: City of Lakeville, MN Subscriber’s Signature: Date: 28 Exhibit B – Solar Panel Warranty [Insert Copy of Warranty for Solar Panels] To be inserted once solar panels have been purchased and warranty issued. 29 Exhibit C Description of Premises and System Solar System County: Premises Ownership and Control: Dakota County Operator leases the Premises from Subscriber. Solar System Size: Up to 1,000 kW (AC) (representing an initial estimate, which may vary depending on the final design of the System) Subscriber’s Allocated Percentage: Allocated Percentage: 5% Scope: Design and supply grid-interconnected, ground mounted solar electric (PV) system. Module(s): To be inserted once panels purchased (must be on CEC list) Inverter: To be inserted once inverters purchased (must be IEEE 1547 qualified) Anticipated Commercial Operation Date: [ To be inserted once NSP completes its interconnection study. ] NSP Unique Garden Identifier: SRC042538 30 Exhibit D Estimate Annual Energy. Estimated Annual Delivered Energy commencing on the Commercial Operation Date, and continuing through the Term, with respect to System under the Agreement shall be as follows: Year of System Term Estimated Annual Delivered Energy Subscriber’s Allocated Percentage Estimated Electricity Allocated to Subscriber 1* 8,499,200 5% 424,960 2 8,456,704 5% 422,835 3 8,414,420 5% 420,721 4 8,372,348 5% 418,617 5 8,330,487 5% 416,524 6 8,288,834 5% 414,442 7 8,247,390 5% 412,370 8 8,206,153 5% 410,308 9 8,165,122 5% 408,256 10 8,124,297 5% 406,215 11 8,083,675 5% 404,184 12 8,043,257 5% 402,163 13 8,003,041 5% 400,152 14 7,963,025 5% 398,151 15 7,923,210 5% 396,161 16 7,883,594 5% 394,180 17 7,844,176 5% 392,209 18 7,804,955 5% 390,248 19 7,765,931 5% 388,297 20 7,727,101 5% 386,355 21 7,688,465 5% 384,423 22 7,650,023 5% 382,501 23 7,611,773 5% 380,589 24 7,573,714 5% 378,686 25 7,535,846 5% 376,792 * For the purposes of the table Term year 1 begins on the Commercial Operation Date 31 The values in the table above are estimates of (i) the kWhs of Delivered Energy expected to be generated annually by the System and (ii) the portion of the Delivered Energy generated annually that is to be allocated to Subscriber pursuant to Subscriber’s Allocated Percentage, which amount is derived by multiplying the estimated Delivered Energy by the Subscriber’s Allocated Percentage in each year. The table will be updated upon final design of the System; provided, however, any such updated values are also estimates. Estimated Delivered Energy may be reduced if the system size is reduced due to square footage limitations on the leased land. Operators used the following methodology to develop the above production projections: National Renewable Energy Laboratory’s PVWatts and SAM software tools. THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK. 32 Exhibit E - Reserved 33 Exhibit F Operator’s Long Term Maintenance Plan Operator to Provide 34 Exhibit G PPA between Operator and NSP To be inserted prior to Commercial Operation Date 35 Exhibit H – Commercial Operation Date Notification [To be added when the Commercial Operation Date is Finalized] 36 Exhibit I – Subscriber Meters Subscriber will provide Operator with the Subscriber Meters and the relevant detail below prior to Construction Commencement. Subscriber Meter Name NSP Account Number NSP Premise Number NSP Meter Number Share of Subscriber’s Allocated Percentage Total 100% AC c a p a c i t y 5, 0 0 0 kw Su b s c r i b e r ' s N P V 30 2 , 6 9 4 $ De m a n d M e t e r e d 0. 0 9 9 1 4 $ An n u a l E n e r g y - A l l S u b s c r i b e r s 8, 4 9 9 , 2 0 0 kw h Sm a l l G e n e r a l S e r v i c e 0. 1 2 4 3 1 $ Bi l l c r e d i t e s c a l a t i o n 3% Re s i d e n t i a l S e r v i c e 0. 1 2 7 4 3 $ Di s c o u n t r a t e 4% Co m b i n a t i o n No t A p p l i c a b l e An n u a l D e g r e d a t i o n 0. 5 0 % Su b s c r i p t i o n P e r c e n t a g e 5. 0 0 % RE C * $0 . 0 2 Bi l l C r e d i t T y p e D e m a n d M e t e r e d If C o m b i n a t i o n , % o f D e m a n d M e t e r e d 10 0 % Xc e l F A Q r e g a r d i n g C S G : ht t p : / / w w w . x c e l e n e r g y . c o m / s t a t i c f i l e s / x e - r e s p o n s i v e / A d m i n / M a n a g e d % 2 0 D o c u m e n t s % 2 0 & % 2 0 P D F s / M N - S R C - S u b s c r i b e r - F A Q s . p d f Xc e l B i l l R a t e C o d e s ht t p : / / x c e l e n e r g y . c o m / s t a t i c f i l e s / x e - r e s p o n s i v e / A d m i n / M a n a g e d % 2 0 D o c u m e n t s % 2 0 & % 2 0 P D F s / M N - S R C - E l i g i b l e - B i l l i n g - R a t e s . p d f Ye a r Pr o j e c t e d kW h - E n t i r e Ga r d e n Su b s c r i b e r ' s k W h Pa y m e n t to G a r d e n Op e r a t o r ($ / k W h ) Bi l l C r e d i t Ra t e ( $ / k W h ) Su b s c r i b e r ' s Pa y m e n t t o Ga r d e n Op e r a t o r Su b s c r i b e r Bi l l C r e d i t fr o m X c e l Su b s c r i b e r ' s Sa v i n g s NP V o f Su b s c r i b e r ' s Sa v i n g s 20 1 6 8, 4 9 9 , 2 0 0 42 4 , 9 6 0 $0 . 0 8 9 0 0. 0 9 9 1 4 $ $3 7 , 8 2 1 $4 2 , 1 3 1 $4 , 3 0 9 $4 , 3 0 9 20 1 7 8, 4 5 6 , 7 0 4 42 2 , 8 3 5 $0 . 0 8 9 0 0. 1 0 2 1 1 $ $3 7 , 6 3 2 $4 3 , 1 7 7 $5 , 5 4 5 $5 , 3 3 2 20 1 8 8, 4 1 4 , 4 2 0 42 0 , 7 2 1 $0 . 0 8 9 0 0. 1 0 5 1 8 $ $3 7 , 4 4 4 $4 4 , 2 5 0 $6 , 8 0 6 $6 , 2 9 3 20 1 9 8, 3 7 2 , 3 4 8 41 8 , 6 1 7 $0 . 0 8 9 0 0. 1 0 8 3 3 $ $3 7 , 2 5 7 $4 5 , 3 5 0 $8 , 0 9 3 $7 , 1 9 5 20 2 0 8, 3 3 0 , 4 8 7 41 6 , 5 2 4 $0 . 0 8 9 0 0. 1 1 1 5 8 $ $3 7 , 0 7 1 $4 6 , 4 7 7 $9 , 4 0 6 $8 , 0 4 1 20 2 1 8, 2 8 8 , 8 3 4 41 4 , 4 4 2 $0 . 0 8 9 0 0. 1 1 4 9 3 $ $3 6 , 8 8 5 $4 7 , 6 3 2 $1 0 , 7 4 7 $8 , 8 3 3 20 2 2 8, 2 4 7 , 3 9 0 41 2 , 3 7 0 $0 . 0 8 9 0 0. 1 1 8 3 8 $ $3 6 , 7 0 1 $4 8 , 8 1 6 $1 2 , 1 1 5 $9 , 5 7 4 20 2 3 8, 2 0 6 , 1 5 3 41 0 , 3 0 8 $0 . 0 8 9 0 0. 1 2 1 9 3 $ $3 6 , 5 1 7 $5 0 , 0 2 9 $1 3 , 5 1 1 $1 0 , 2 6 7 20 2 4 8, 1 6 5 , 1 2 2 40 8 , 2 5 6 $0 . 0 8 9 0 0. 1 2 5 5 9 $ $3 6 , 3 3 5 $5 1 , 2 7 2 $1 4 , 9 3 7 $1 0 , 9 1 4 20 2 5 8, 1 2 4 , 2 9 7 40 6 , 2 1 5 $0 . 0 8 9 0 0. 1 2 9 3 6 $ $3 6 , 1 5 3 $5 2 , 5 4 6 $1 6 , 3 9 3 $1 1 , 5 1 7 20 2 6 8, 0 8 3 , 6 7 5 40 4 , 1 8 4 $0 . 0 8 9 0 0. 1 3 3 2 4 $ $3 5 , 9 7 2 $5 3 , 8 5 2 $1 7 , 8 7 9 $1 2 , 0 7 9 20 2 7 8, 0 4 3 , 2 5 7 40 2 , 1 6 3 $0 . 0 8 9 0 0. 1 3 7 2 3 $ $3 5 , 7 9 2 $5 5 , 1 9 0 $1 9 , 3 9 7 $1 2 , 6 0 0 20 2 8 8, 0 0 3 , 0 4 1 40 0 , 1 5 2 $0 . 0 8 9 0 0. 1 4 1 3 5 $ $3 5 , 6 1 4 $5 6 , 5 6 1 $2 0 , 9 4 8 $1 3 , 0 8 4 20 2 9 7, 9 6 3 , 0 2 5 39 8 , 1 5 1 $0 . 0 8 9 0 0. 1 4 5 5 9 $ $3 5 , 4 3 5 $5 7 , 9 6 7 $2 2 , 5 3 2 $1 3 , 5 3 2 20 3 0 7, 9 2 3 , 2 1 0 39 6 , 1 6 1 $0 . 0 8 9 0 0. 1 4 9 9 6 $ $3 5 , 2 5 8 $5 9 , 4 0 7 $2 4 , 1 4 9 $1 3 , 9 4 6 20 3 1 7, 8 8 3 , 5 9 4 39 4 , 1 8 0 $0 . 0 8 9 0 0. 1 5 4 4 6 $ $3 5 , 0 8 2 $6 0 , 8 8 4 $2 5 , 8 0 2 $1 4 , 3 2 7 20 3 2 7, 8 4 4 , 1 7 6 39 2 , 2 0 9 $0 . 0 8 9 0 0. 1 5 9 0 9 $ $3 4 , 9 0 7 $6 2 , 3 9 7 $2 7 , 4 9 0 $1 4 , 6 7 7 20 3 3 7, 8 0 4 , 9 5 5 39 0 , 2 4 8 $0 . 0 8 9 0 0. 1 6 3 8 6 $ $3 4 , 7 3 2 $6 3 , 9 4 7 $2 9 , 2 1 5 $1 4 , 9 9 8 20 3 4 7, 7 6 5 , 9 3 1 38 8 , 2 9 7 $0 . 0 8 9 0 0. 1 6 8 7 8 $ $3 4 , 5 5 8 $6 5 , 5 3 6 $3 0 , 9 7 8 $1 5 , 2 9 2 20 3 5 7, 7 2 7 , 1 0 1 38 6 , 3 5 5 $0 . 0 8 9 0 0. 1 7 3 8 4 $ $3 4 , 3 8 6 $6 7 , 1 6 5 $3 2 , 7 7 9 $1 5 , 5 5 8 20 3 6 7, 6 8 8 , 4 6 5 38 4 , 4 2 3 $0 . 0 8 9 0 0. 1 7 9 0 6 $ $3 4 , 2 1 4 $6 8 , 8 3 4 $3 4 , 6 2 0 $1 5 , 8 0 0 20 3 7 7, 6 5 0 , 0 2 3 38 2 , 5 0 1 $0 . 0 8 9 0 0. 1 8 4 4 3 $ $3 4 , 0 4 3 $7 0 , 5 4 5 $3 6 , 5 0 2 $1 6 , 0 1 8 20 3 8 7, 6 1 1 , 7 7 3 38 0 , 5 8 9 $0 . 0 8 9 0 0. 1 8 9 9 6 $ $3 3 , 8 7 2 $7 2 , 2 9 8 $3 8 , 4 2 5 $1 6 , 2 1 4 20 3 9 7, 5 7 3 , 7 1 4 37 8 , 6 8 6 $0 . 0 8 9 0 0. 1 9 5 6 6 $ $3 3 , 7 0 3 $7 4 , 0 9 4 $4 0 , 3 9 1 $1 6 , 3 8 8 20 4 0 7, 5 3 5 , 8 4 6 37 6 , 7 9 2 $0 . 0 8 9 0 0. 2 0 1 5 3 $ $3 3 , 5 3 5 $7 5 , 9 3 5 $4 2 , 4 0 1 $1 5 , 9 0 5 To t a l 10 , 0 1 0 , 3 3 7 $8 9 0 , 9 2 0 $1 , 4 3 6 , 2 9 2 $5 4 5 , 3 7 2 $3 0 2 , 6 9 4 Me t C o u n c i l & O a k L e a f C o m m u n i t y S o l a r G a r d e n F i n a n c i a l M o d e l ( E m p i r e S i t e ) In p u t s ( I t e m s i n Y e l l o w a r e i n p u t s ) O u t p u t s B i l l C r e d i t T y p e s & R a t e s *A l l R E C s f o r t h e s e s o l a r g a r d e n s a r e s o l d to X c e l . X c e l d o e s n o t a l l o w p a r t i a l RE C s a l e s .