ADMINISTRATIVE SERVICES AGREEMENT
Exhibit
10.2
This
Administrative Services Agreement (“ASA”) is effective this ___ day of _____,
20__ by and between _____, a _____ (the “Company”) and [Xxxx Wind, Inc., a
Delaware corporation] (“Contractor”).
RECITALS
1. Company
owns and operates a wind energy generation facility located in _____, _____ (the
“Project”).
2. The
Company has been formed pursuant to and is otherwise governed in accordance with
that certain _____ of the Company entered into as of _____ __, ____ (“Operating
Agreement”). Capitalized terms used in this ASA shall have the
meaning given to them in the Operating Agreement unless otherwise expressly
defined herein.
3. Company
wishes to retain Contractor to perform certain services for the Company as more
fully set forth below and the Contractor is willing to provide such services,
pursuant to the terms of this ASA. Under the terms of the Operating
Agreement, the Board of the Company has approved the retention of Contractor and
the terms and conditions of this ASA.
NOW THEREFORE, in
consideration of the above premises, and the mutual promises and consideration
set forth below, the receipt and adequacy of which are acknowledged by both
parties, the parties agree as follows:
AGREEMENT
1. Services. Contractor
agrees to perform the following services on behalf of the Company:
(a) Administer
and oversee the Company’s rights and obligations with respect to each of the
Ancillary Agreements, including, without limitation, (i) monitoring the
performance of _____ (or any successor thereto) under the Supply Agreement and
the Warranty and Service Agreement, as applicable, (ii) assist the Company in
the performance of its obligations under the Ancillary Agreements, (iii) assist
in obtaining or verifying meter readings and such other information as may be
necessary for the preparation of invoices and related documents to timely obtain
payments under the PPA and as otherwise required under any Ancillary Agreement,
(iv) assist in the calculation and reconciliation of payments due under the
Ancillary Agreements, (vi) assist in the preparation and filing of all
documents, invoices, reports, and statements necessary to maintain the status of
the Project as an entity eligible to receive the _____ State Production
Incentives or otherwise comply with the Ancillary Agreements and (v) perform
periodic inspections of the Project to monitor, among other things, the
Company’s compliance with all applicable permits and laws and the Ancillary
Agreements;
(b) Coordinate
operations with Utility, [Independent Transmission System Operator and
_____];
(c) Pay
all Company Expenses out of Cash From Operations, and apply Cash From Operations
and proceeds from insurance claims, for the benefit of the Company, to repair,
replace and/or upgrade turbines and/or related equipment as approved by the
Company;
(d) In
the ordinary course of business, acquire, sell, lease, exchange or convey
certain equipment, parts or other personal property or any interest therein on
the Company’s behalf as approved by the Company;
(e) Make
an initial calculation of the amount of Distributable Funds and distribute such
initial calculation to Board for its approval in accordance with Section _____
of the Operating Agreement;
(f) In
the ordinary course of business, negotiate contracts, leases, assignments and
other instruments to be entered into and executed by the Company, each in form
and substance approved by the Company;
(g) Renew,
extend or otherwise place the Company’s insurance in a manner consistent with
the Ancillary Agreements and submit and negotiate the settlement of insurance
claims, all as approved by the Company;
(h) Prepare
and revise a recommended annual operating budget for the Company’s review and
approval on or before November 30 of each year for the next succeeding
year;
(i) Communicate
with governmental authorities and make such filings, reports, certifications,
notices or similar instruments with such governmental authorities which are made
in the ordinary course of business (other than Tax authorities, which is the
responsibility of the Tax Matters Member), all in accordance with Section _____
of the Operating Agreement; and
(j) Perform
such other services as Company may reasonably request from time to
time.
In
performing the foregoing services, the Contractor shall coordinate its
activities with the Manager of the Company so as to avoid duplication of effort
and expense.
2. Reporting;
Records.
(a) The
Contractor shall, if requested, attend meetings of the Board of the
Company. At such meetings and at other times as may reasonably be
requested, the Contractor shall report on the business, operations and affairs
of the Company and on the performance of the services by the
Contractor. The Contractor shall not have any voting rights at any of
such meetings.
(b) The
Contractor shall prepare a monthly operating report on a timely basis which
shall include information with respect to the turbine and Project availability,
output, warranty work and warranty claims, income, cash flow, and balance sheet
statements, a comparison of actual versus budgeted results, and any other
significant information. In addition, the Contractor shall contact
the Company on a regular basis (as may be agreed by the parties), via email or
telephone, to verify the continued reliable and safe operation of the Project,
and shall report any material and extraordinary events within 12 hours, or
sooner, of such occurrence via email and telephone.
(c) The
Contractor shall promptly notify the Company of (i) any event or circumstance
that could potentially result in a Default or Event of Default under an
Ancillary Agreement, (ii) the receipt of any notice of default or event of
default under any agreement or contract relating to the Project or Company or
(iii) the receipt of any notice from any governmental authority relating to the
Project, Company or a Member. As part of any such notification, the
Contractor shall also specify the actions proposed or recommended to be taken by
the Contractor or the Company to avoid and/or cure any such event or
circumstance.
(d) Contractor
shall create and retain all records necessary for the Contractor or the Company
to perform their respective obligations under any Ancillary Agreement or other
applicable law or regulation. Contractor shall provide any and all
data and information requested by the Company or any Member with respect to the
ASA or the Project in the form requested as promptly as, and to the fullest
extent, practicable.
3. Authority.
(a) Contractor
has no authority beyond that expressly granted by this
ASA. Contractor may not subcontract or delegate any material portion
of its responsibilities without the express written approval of the
Company.
(b) Company
has approved this ASA and the subcontracting of Manager’s responsibilities to
Contractor represented by the ASA as required by Section _____ of the Operating
Agreement and as evidenced by the Company’s execution hereof.
(c) Notwithstanding
any other provision of this ASA, Contractor is not authorized to take any action
that would cause the Project to fail or cease to be a QF Facility or would cause
the Company to fail or cease to be eligible for _____ State Production
Incentives or federal production tax credits under Section 45 of the Code or any
of the actions which would bind the Company or otherwise require the unanimous
approval of the Board (including, without limitation, those items set forth in
Sections _____ of the Operating Agreement) unless Contractor has received the
prior written approval of the Board of Governors delegating such authority to
Contractor.
4. Term. The
term of this ASA (as extended, the “Term”) shall commence on the date hereof and
shall terminate upon the Change of Percentage Interest Date unless earlier
terminated in accordance with the terms of this ASA. Following the
initial term, the ASA shall renew annually without any additional action by the
parties. The ASA shall also terminate automatically upon any
termination of the Operating Agreement.
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5. Compensation. As
consideration for the performance of its services, Company shall pay to
Contractor an annual fee in the amount of $_____ for each year of the Term (the
“Contractor Fee”). The Contractor Fee shall be paid quarterly in
installments in advance of $_____. In addition to the Contractor Fee,
the Company shall reimburse Contractor on the last business day of each calendar
quarter in an amount equal to amounts expended directly and reasonably by the
Contractor in the performance of its services under this ASA; provided, however,
that the Contractor provides substantiating invoices and supporting data
therefore and any such expense in excess of $_____ individually or in the
aggregate during a year must be approved by the Company in accordance with the
Operating Agreement (including, without limitation, those limitations set forth
in Section _____ thereof).
6. General Covenants and
Provisions.
6.1 Standard of
Care. Contractor shall perform its services and all its
obligations under this ASA in a careful, professional, prudent and efficient
manner at a level of care consistent with that expected from similarly situated
professional service providers, and in accordance with applicable requirements
of law, permits and contractual obligations, including the Ancillary Agreements
and the Operating Agreement. Contractor shall assure that it
dedicates sufficient time and resources to performance of its services on a
timely basis. The Contractor shall have responsibility for the
safekeeping and use of the funds and assets of the Company and shall not employ
or permit another to employ such funds or assets in any manner except for the
exclusive benefit of the Company. The funds and assets of Company
shall not be commingled with those of another company and the Company shall have
separate books and records. The Contractor will insure that Xxxxxx
Xxxx is at all times employed by the Contractor and available to perform the
services on the Contractor’s behalf.
6.2 Access to
Project. For any work performed by Contractor on the Project,
Contractor shall comply with the Lease(s) and all applicable policies,
procedures, directives and instructions of Company relating to safety and
security. Contractor’s employees and agents required to access the
Project must be screened and authorized in accordance with any reasonable
policies and procedures promulgated by Company.
6.3 Patents and Copyrights;
Infringement. Contractor shall procure any patent, copyright,
license or other right to use any equipment, process or material which
Contractor uses or intends to use in the performance of the obligations of this
ASA. Contractor shall, at its own expense, indemnify, defend and hold
Company, its Members and Manager harmless against any claim, whether rightful or
otherwise, that any equipment, process or material, or any part thereof,
furnished by Contractor constitutes an infringement of any patent, copyright or
trade secret and Contractor shall pay all damages and costs awarded against
Company, its Members and Manager awarded resulting therefrom. In case
said equipment, process or material or any part thereof, is held to constitute
infringement and/or its use is enjoined, Contractor shall, at its own expense,
subject to the following provisions, either i) procure for Company an
irrevocable, royalty-free license to continue using such equipment, process or
material or replace same with substantially equal but non-infringing equipment,
process or material, or ii) modify it so that it becomes non-infringing;
provided that no such replacement or modification shall in any way amend or
relieve Contractor of its obligations set forth in this ASA.
6.4 Insurance. Contractor
shall procure and maintain, at its own expense, any insurance required by any
Ancillary Agreement associated with its performance of this ASA.
6.5 Taxes. Contractor
shall pay, without reimbursement by Manager or Company, all federal, state and
local taxes which it is obligated to pay with respect to wages, salaries and
benefits paid or provided by it to its employees, including, but not limited to:
i) all payroll-related or consumer taxes of its employees, federal, state and
local tax withholdings, Federal Insurance Contribution Act taxes, and federal
and state unemployment taxes, and ii) all federal, state and local corporate
income taxes on income earned by Contractor.
6.6 Liens. Contractor
shall not create, assume or suffer to exist, any lien upon or with respect to
the Project or to assign any right to receive income from this ASA, in each case
to secure the debt of any person or otherwise, except liens or assignments
expressly permitted by the Loan Documents, any other Ancillary Agreement and
otherwise approved in writing by Company. In the event any lien not
permitted pursuant to this Section arises and unless i) execution and
enforcement is effectively stayed, ii) all claims which the lien secures are
being actively contested in good faith and by appropriate proceedings and iii)
Contractor has posted a bond in favor of Company, or escrowed with Company or
the court an amount reasonably sufficient to satisfy any contested lien,
Contractor shall immediately take whatever actions are necessary to satisfy the
lien and Contractor shall, at its own expense, indemnify, defend and hold
Company, its Members and Manager harmless against any loss, damage or claim
related or arising from any such lien.
7. Financing. No
party may grant a security interest in this ASA without the prior consent of the
other party; provided, however, that Contractor acknowledges and agrees that the
Company may assign its interest in this ASA in favor of Lender in accordance
with the Loan Documents to secure financing for the Company. Upon
request, Contractor shall consent to such collateral assignment of this ASA in
favor of Lender, and shall execute any related certificates or documents to
evidence the same.
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8. Regulatory Approvals and
Compliance. Contractor agrees to seek any permits, licenses or
regulatory approvals from any governmental authority that are necessary for
Contractor to perform its obligations under this ASA. Contractor
shall at all times perform its services in a manner which complies in every
material respect with all applicable requirements of law and permits, as amended
from time to time. In the event Contractor violates any requirement
of law, Contractor shall take all necessary action to place Contractor into
material compliance with the applicable requirement of law.
9. Exculpation and
Indemnification.
9.1 Exculpation. The
Contractor (and its officers, directors, and employees and agents) shall not be
liable to the Company, its Members or Manager for damages or otherwise with
respect to any actions taken or not taken in good faith and reasonably believed
by the Contractor to be in or not opposed to the best interests of the Company,
its Members or Manager, as applicable, except to the extent any related loss
results from fraud, gross negligence or willful or wanton misconduct on the part
of the Contractor or breach of any obligation under this ASA.
9.2 Indemnity. Contractor
agrees to indemnify and hold Company, its Members and their respective officers,
directors, agents and employees harmless against any and all losses, claims,
damages or liability to which Company, its Members or their respective
affiliates, officers, directors, agents and employees, may become subject under
any law in connection with the carrying out of the transactions contemplated by
this ASA, or the conduct of any activity at the Project (other than as a result
of the act of commission or omission, including negligence or willful
misconduct, of any such other party), and to reimburse Company, its Members and
their respective affiliates, officers, directors, agents and employees, for any
out-of-pocket legal and other expenses (including reasonable counsel fees)
incurred by Company, its Members and their respective affiliates, officers,
directors, agents and employees, in connection with investigating any such
losses, claims, damages or liabilities or in connection with defending any
actions relating thereto. Company agrees, at the request and expense
of Contractor, to cooperate in the making of any investigation in defense of any
such claim and promptly to assert any or all of the rights and privileges and
defenses that may be available to Company. Contractor further
releases and agrees to hold harmless Company, its Members and their respective
affiliates, officers, directors, agents and employees, from any liability to the
Contractor arising out of any breach of covenant, representation or undertaking
of the Contractor contained in this ASA. The provisions of this
Section shall survive the termination of this ASA.
10. Default and
Termination.
10.1 Default. A
default shall occur under this ASA if (a) Company fails to make any required
payment to Contractor when due and fails to cure such default within ten days of
delivery of notice of default by Contractor to Company and provided such failure
is not attributable to any act or omission of Contractor or (b) either party
shall breach any other material term of this ASA and shall fail to cure such
breach, if capable of cure, within 30 days after receipt of written notice of
such breach from the other party.
10.2 Termination. (i)
Upon the occurrence and continuation of a default beyond any applicable cure
period, either party may terminate this ASA upon 30 days written notice to the
other party. (ii) In addition to the foregoing, the Company may
terminate this ASA without cause upon at least 90 days’ prior written notice to
Contractor and the payment of the Contractor Fee for such
period. Notwithstanding the foregoing, even in the event of an
uncured default, neither party may terminate this ASA without the approval of
Company, and such other consents as may be required by investors or Members of
Company or under the Loan Documents. If a good faith dispute exists
regarding the existence of a default giving rise to termination under clause (i)
above, each party to this ASA shall continue to perform its respective
obligations pending resolution of any dispute or default as set forth in Section
12.
10.3 Transition. If
this ASA is terminated for any reason, upon request of the Company or any
Member, the Contractor shall assist in making a smooth transition to a new
contractor, and, without limiting the generality of the foregoing, the
Contractor shall promptly turn over to the Company or its designee all books,
records, reports, data, documents, correspondence, designs, specifications,
software, operating and safety manuals, source lists of manufacturers of
component parts, all special tools needed for routine and preventative
maintenance, safety equipment, spare parts and inventory and any other items
that were furnished by the Manager or the Company or by the Contractor at the
Company’s, a Member’s or the Manager’s cost.
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11. Company
Obligations. Company shall provide Contractor with all
documents, data, notices and other information in the possession of Company or
received by Company and necessary for Contractor to perform its obligations
under this ASA. Company hereby grants Contractor a license to access
the Project and Property subject to the terms of the Lease and shall continue to
provide Contractor with all such necessary access for the performance of its
services, to the extent of Company’s authority under the applicable Ancillary
Agreement(s).
12. Arbitration.
12.1 All
disputes arising between the parties to this ASA which relate to the validity,
interpretation or performance of this ASA, shall be submitted to arbitration at
the request of either party to the dispute, in accordance with the Commercial
Arbitration Rules of U.S. Arbitration and Mediation of Minnesota then in effect,
and this ASA.
12.2 The
demand for arbitration shall be filed in writing with the other party to this
ASA and with the Minnesota office of U.S. Arbitration and
Mediation. No arbitration initiated by the parties to this ASA shall
include, by consolidation, joinder or in any other manner, any other Person
unless such Person and both parties to this ASA agree to the inclusion and
unless such Person is substantially involved in a common question of law or fact
or its presence is required if complete relief is to be accorded in the
arbitration. This agreement to arbitrate between the parties to this
ASA, and any fully executed subsequent agreement to arbitrate with a third
party, shall be specifically enforceable under the Minnesota or federal
arbitration act, whichever is applicable.
12.3 The
arbitrators shall have jurisdiction and authority to interpret, apply, or
determine compliance with the provisions of this ASA insofar as shall be
necessary to the determination of issues properly before the arbitrators,
including the right to order specific performance of this ASA against either
party to this ASA. In making the decision, the arbitrators shall
issue appropriate findings and conclusions regarding the issues. The
arbitrators shall not have jurisdiction or authority to alter the provisions of
this ASA or any applicable law or rule of civil procedure. The
arbitrators shall render a decision within sixty (60) days after the completion
of the hearing on the matter.
12.4 This
Section 12 shall survive the termination of this ASA as necessary to resolve any
disputes arising out of, in connection with, or relating to this
ASA.
13. Confidentiality. Contractor
hereby agrees to keep any material information delivered or made available to it
pursuant to this ASA or otherwise acquired by the Contractor in the course of
performing its services (“Confidential Information”) confidential from anyone
other than persons employed or retained by the Contactor who are or are expected
to become engaged in performing its services provided that nothing herein shall
prevent the Contractor from disclosing such information as required by any
governmental authority or pursuant to legal process after notice to
Company. The Contractor shall impose a similar obligation of
confidentiality on its employees and any other persons who are authorized to
perform any of its services under this ASA.
14. Notices. All
notices, requests, demands and other communications provided for by this ASA
shall be in writing and shall be deemed to have been duly given at the time when
hand delivered, or five days after being mailed in any general or branch United
States Post Office enclosed in a registered or certified postage-paid envelope,
addressed to the following addresses of the parties hereto:
Company:
_____
_____
_____,
_____ _____
Attn:
_____
With copy
to:
_____
_____
_____,
_____ _____
Attn:
_____
Contractor:
[Xxxx
Wind, Inc.]
000
000xx
Xxxxxx
Xxxxxxxxx,
XX 00000
Attn: Xxx
Xxxx
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15. Miscellaneous.
15.1 Independent
Contractor. The parties agree and understand that Contractor
is and shall act as an independent contractor of Company in the performance of
its duties hereunder. Contractor is not, and in the performance of
its duties under this ASA will not hold itself out as, an employee, agent or
partner of Company or Manager or of any of Company’s governors or
members.
15.2 Assignment. Contractor
may not assign this ASA or any of its rights or obligations hereunder without
the prior written consent of Company. Any purported assignment in
violation of this Section shall be void.
15.3 Successor and
Assigns. Except as otherwise specifically provided, this ASA
shall be binding on the parties and shall inure to the benefit of the parties
and their respective successors and assigns.
15.4 No Third Party
Beneficiaries. Except for the rights of Lender under the Loan
Documents and the Members of the Company, no provision of this ASA is intended
to nor shall it in any way inure to the benefit of any third party so as to
constitute any such person a third party beneficiary under this ASA, or of any
one or more of the terms of this ASA, or otherwise give rise to any cause of
action in any person not a party to this ASA.
15.5 Entire
Agreement. It is mutually understood and agreed that this ASA
and the exhibits hereto (including the Operating Agreement) constitutes the
entire agreement between Contractor and Company and supersedes any and all prior
oral or written understandings, representations or statements, and that no
understandings, representations or statements, verbal or written, have been made
which modify, amend, qualify or affect the terms of this ASA. This
ASA may not be amended except in a writing executed by both parties and with the
consent of Lender, if applicable, and the Board of Governors.
15.6 Severability. Should
any provision of this ASA be or become void, illegal, or unenforceable, the
validity or enforceability of the other provisions of this ASA shall not be
affected and shall continue in force. The parties will, however, use
their best endeavors to agree on the replacement of the void, illegal, or
unenforceable provision with legally acceptable clauses which correspond as
closely as possible to the sense and purpose of the affected provision and this
ASA as a whole.
15.7 Headings. The
section headings in this ASA are for convenience of reference only, and shall
not be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
15.8 Governing
Law. This ASA is made in Minnesota and the provisions of this
ASA shall be governed by and construed and enforced in accordance with the laws
of the State of Minnesota.
15.9 Counterparts. This
Agreement may be signed in counterparts and each such counterpart shall
represent a fully executed original as if signed by all parties to this ASA,
with all such counterparts together constituting but one and the same
instrument.
[Signatures
on Next Page]
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IN WITNESS WHEREOF, this ASA
has been duly executed as of the day and year first written above.
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[Xxxx
Wind, Inc.,]
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a
[Delaware] corporation
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By:
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Name:
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Title:
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COMPANY:
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_____,
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a
______
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By:
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Name:
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Title:
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