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5. Option AgreementOPTION AGREEMENT This Option Agreement ("Agreement") is entered into this day of , 2014, by and between [ ] ("Subscriber") and MN Community Solar, LLC, a Minnesota limited liability company ("MNC Solar"). RECITALS 1. MNC Solar is developing a solar photovoltaic facility approximately kW in size to be located on the (the "Project"). The Project will be owned by MNC Solar or an affiliate and managed by MNC Solar. The Project is expected to be qualified as a community solar garden pursuant to Minn. Stat. Section 216B.1641 (2013) and sell all the power it produces to Northern States Power Company ("NSP"). 2. Subscriber is a retail customer of NSP and intends to remain a retail customer of NSP for at least two years. Pursuant to regulations and tariffs to be promulgated by NSP and approved by the Minnesota Public Utilities Commission ("PUC"), eligible NSP customers will be allowed to receive credit against their retail electric bills for an amount of electricity produced by the Project equal to up to 120 percent of their average annual electric consumption. Subscriber is likely to be eligible to participate under the expected regulations and tariffs with respect to electricity to be produced by the Project. 3. MNC Solar estimates that the Project will produce an average of kWh annually, using approximately 41OW modules. The capacity represented by one-half a module (205W) is referred to as a "Leaf'. 4. Subscriber wishes to reserve the opportunity to participate as one of the NSP customers entitled to share in the electricity production from the Project once the Project is completed pursuant and subject to the terms of this Agreement, and the Participation Agreement to be executed and delivered as described below. NOW, THEREFORE, in consideration of the above recitals and the mutual promises set forth below, the adequacy and receipt of which are acknowledged, the parties agree as follows. AGREEMENT 1. Option Payment. (a) Subscriber agrees to deposit with MNC Solar the amount of $ ("Option Payment") to reserve [one Leaf or Leaves] and the associated production participation opportunity in the Project. If the Project is completed, and, after adoption of all necessary regulations and tariffs, Subscriber remains eligible to utilize a portion of the production from the Project against its NSP retail bills, Subscriber shall be entitled to a production participation opportunity up to an amount equal to the lesser of (i) the production of its reserved Leaf or Leaves, or (ii) the number of Leaves which is expected to produce an amount of electricity closest to, but not in excess of, Subscriber's maximum eligible production amount as defined by the final applicable rules and tariffs. (b) The Option Payment represents a portion of the full amount which Subscriber will be required to pay for its production participation opportunity, an amount which will reflect the final Project cost, an evaluation of Subscriber's most recent NSP electric bills and usage, the final size and expected production of the Project, and the assumption that Subscriber will be fully eligible to participate under the final rules and tariffs as adopted ("Subscription Amount"). After adoption of the applicable rules and tariffs, the Project size and cost and Subscriber's NSP usage data will be updated and any necessary adjustment to the amount of the Subscription Amount determined to reflect lower or higher expected benefits to Subscriber. The Subscription Amount may also be subject to reduction if MNC Solar is successful in obtaining certain third -party financing for the Project. 2. MNC Solar Obligations. (a) MNC Solar will design and develop the Project, including (i) leasing the site, (ii) obtaining interconnection approvals from and agreements with NSP, (iii) structural and other design assessments, and (iv) equipment selection, in order that the Project will be prepared for procurement and installation as soon as practicable after adoption of all final applicable rules and tariffs. Upon adoption of all such rules and tariffs and any necessary adjustments to the Subscription Amount, and subscription payments of other subscribers, MNC Solar shall procure and install the Project in accordance with its final design. (b) MNC Solar will participate in negotiations with NSP and proceedings before the PUC and other applicable agencies to support the adoption of rules and tariffs which permit the participation by Subscriber in the Project as described in this Agreement, on the best terms possible for subscribers. Subscriber agrees to cooperate with MNC Solar in such efforts. 3. Use of Funds. (a) The Option Payment and option payments received from any other subscribers with respect to the Project (in the aggregate, the "Project Deposits") shall be held by MNC Solar in a segregated account for the benefit of Subscriber and other prospective subscribers in the Project. MNC Solar shall be entitled to use amounts from such funds only for the development of the Project, including: (i) lease payments, (ii) interconnection study costs, (iii) electrical and structural engineering costs, and (iv) third -party legal and professional expenses associated with development of the project. MNC Solar shall take no compensation from the Project Deposits prior to completion of the Project. All costs incurred by MNC Solar with respect to Project development shall be allocated across the Project Deposits proportionately. (b) The Option Payment shall be refundable in full to Subscriber if (i) the Project cannot be completed for legal or technical reasons, and Subscriber elects not to subscribe to participation in another MNC Solar project; (ii) Subscriber is not eligible to participate in the Project as contemplated due to restrictions in the final rules and tariffs or a change in circumstances (Subscriber is no longer an NSP customer, for example); (iii) other reasons which render Subscriber's ability to participate in the production of the Project impossible; or (iv) Subscriber 2 Option Agreement elects to withdraw prior to the Notice Date pursuant to Section 3(c). Subscriber's rights to its production participation opportunity in the Project, as adjusted, shall become fully vested, and the Option Payment, as adjusted, shall become nonrefundable (except as set forth in Section 3(c)) upon the determination that Subscriber remains eligible for such participation and MNC Solar's notice to all Project subscribers of its intent to proceed with construction of the Project within sixty (60) days (the "Notice Date"). (c) Prior to the Notice Date, Subscriber shall have the right to voluntarily withdraw from participation in the Project for any reason upon notice to MNC Solar, in which case Subscriber shall be entitled to a full refund of the Option Payment. After the Notice Date and prior to the execution of a Participation Agreement, Subscriber shall have the right to voluntarily withdraw from participation as a Subscriber in the Project, and shall receive a refund of the Option Payment less the proportion of Project development costs described in Section 3(a) previously incurred by MNC Solar and allocated to Subscriber. Subscriber acknowledges that the Option Payment is subject to use by MNC Solar as described and waives any right to a refund of amounts used in accordance with this Agreement if Subscriber voluntarily chooses to withdraw after the Notice Date pursuant to this Section 3(c). (d) After the Notice Date, Subscriber's rights with respect to the Project and Subscriber's production participation shall be governed by a participation agreement conforming to final applicable rules and tariffs to be executed and delivered by Subscriber, MNC Solar, and any separate entity which owns the Project, ("Participation Agreement"). Upon execution of the Participation Agreement, Subscriber will be required to pay the balance of its Subscription Amount, and the Option Payment will be fully credited against the Subscription Amount. The Subscription Amount shall be released in full to MNC Solar for use in procurement and installation of the Project. 4. Status of Project and Production Participation. MNC Solar agrees to provide updates to Subscriber as to progress with respect to the development of the Project, the use of any third - party financing, and adoption of the final rules and tariffs applicable to Subscriber's production participation opportunity. 5. Disclosures. Subscriber acknowledges and agrees that the Subscription Amount, the Project, and the amount and value of any production participation opportunity, may be affected by a number of risks and factors beyond the control of MNC Solar, including, but not limited to the following: (a) MNC Solar makes no representation or warranty as to the likelihood that the Project or any one or more Leaves will generate any specific amount of electricity or sufficient electricity so as to create any expected value to Subscriber in the form of reduced NSP electricity bills during any period of time or over the term of the Participation Agreement as a whole. Subscriber acknowledges that the operation of the Project and its electricity production is subject to adverse weather, lack of sunlight, equipment failures, changes in law and regulation, and other events beyond the control of MNC Solar that may interrupt or prevent production and delivery of energy. Any representation by MNC Solar to Subscriber as to the amount or value of electrical 3 Option Agreement energy expected to be produced and delivered by the Project or the value to Subscriber of such electrical energy is purely an estimate based on the information available to MNC Solar at the time and is not a guarantee that any such production will occur or that any particular value will be received by Subscriber at any time. (b) MNC Solar makes no representation or warranty as to Subscriber's future electrical usage, or the costs to Subscriber of purchasing electricity from NSP at Subscriber's residence or business. Subscriber's usage is subject to Subscriber's existing and future electrical appliances and equipment, lifestyle choices, weather, the characteristics of Subscriber's residence or commercial building, and a number of other factors beyond the control of MNC Solar. The rates and charges paid by Subscriber to NSP against which any production credit will be applied are subject to determination by NSP and the Commission, and are beyond the control of MNC Solar. (c) MNC Solar makes no representation or warranty that the Project will utilize any specific equipment or cost any specific amount, and equipment selection and performance and cost is dependent on availability, market circumstances, NSP requirements, specific Project design and location characteristics, and other factors not subject to control or prediction by MNC Solar. (d) Subscriber is not acquiring any title to or other ownership interest in or to the Project or any of its constituent assets, including any specific module or modules constituting a Leaf or Leaves, or any membership interests or other ownership rights in MNC Solar, or any entity created to own the Project, and MNC Solar, or the entity it creates to own the Project, shall own the Project, which shall remain the exclusive property of such owner. Subscriber is merely obtaining the right to have a proportion of the electricity created by the Project credited against Subscriber's retail electrical bill at its residence or business in accordance with applicable laws, rules and regulations, and shall have no right to any other cash, tax, or other noncash benefits from the Project or ownership of the Project. (e) Any renewable energy credits, and the right to claim the use of renewable energy from the Project shall belong in the first instance to either (i) NSP, if the Project uses certain incentives, or applicable rules and tariffs provide for NSP to receive such attributes, or (ii) the owner of the Project. If such attributes are owned by NSP, Subscriber may not claim that it is receiving or using renewable energy from the Project except to the extent allowed by applicable laws, rules and tariffs. If such attributes are not owned by NSP, they may be sold or transferred to Subscriber or third -parties by the Project owner as set forth in the Participation Agreement. (f) MNC Solar is making no representation or warranty about its ability to obtain any cash grants, rebates, tax investment or other financial benefits which would reduce the Subscription Amount, the availability of which is subject to various laws, regulations, market circumstances, and other factors beyond the control of MNC Solar. Subscriber accepts the risks and uncertainties associated the items set forth in Sections 5(a) — (f) and is providing the Option Payment with full knowledge and acceptance of all such risks and uncertainties. 4 Option Agreement 6. Miscellaneous. (a) This Agreement is agreed to be personal to each parry and neither party may assign or transfer this Agreement or any rights or obligations under this Agreement, in whole or in part, without the prior written consent of the other party. Any such purported transfer or assignment shall be void without the required consent. Subscriber acknowledges that the opportunity which it is acquiring pursuant to this Agreement is subject to Subscriber's eligibility as determined in accordance with applicable law, and that Subscriber's opportunity to participate in the electricity production of the Project is not transferable and cannot be sold, assigned, or otherwise conveyed to any other person or entity either voluntarily or by operation of law. (b) Subscriber acknowledges that the opportunity secured by its Option Payment pursuant to this Agreement is not intended to be a security or investment subject to any federal or state securities laws, and Subscriber is acquiring only an opportunity to have a defined amount of electricity produced by the Project applied to and credited against its NSP retail electrical bills. Subscriber agrees that it is entering into this Agreement solely for such purposes, and not for investment, resale, distribution, or any other transfer of its rights, whether for consideration or otherwise. (c) No provision of this Agreement is intended to nor shall it benefit any third party so as to constitute any such person a third -party beneficiary under any provision of the Agreement or give rise to a cause of action in any person not a party to the Agreement. This Agreement constitutes the entire agreement between the parties and supersedes all prior oral or written understandings, representations or statements. This Agreement may only be amended in a writing executed by both parties. The Agreement is made in Minnesota and shall be governed by the laws of Minnesota. This Agreement may be executed in two or more counterparts and by different parties on separate counterparts, all of which shall be considered one and the same agreement, and each of which shall be deemed an original. Electronic signatures shall be accepted as original signatures, but a physical original signed instrument shall be retained by MNC Solar. The action contained herein shall be effective as of the day of , 2014. SIGNATURE PAGE TO FOLLOW 5 Option Agreement a0jal101:A1.01a i MN COMMUNITY SOLAR, LLC, a Minnesota limited liability company, Its Option Agreement