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Wind energy lease 

Author:  | Contracts, Indiana

Development Rent. In each year of the Development Period, an annual payment equal to the greater of: (i) $10.00 per acre of the Property; or (ii) $500.00.

Operating Rent. For the first year of the Operations Period, an annual payment equal to the greater of: (i) $50.00 per acre of the Property; or (ii) $1,000.00. For each subsequent year of the Operations Period, this payment amount shall be adjusted upward for inflation in accordance with Section 5.14.

Annual Turbine Host Payment. If one or more Wind Turbines are installed oh the Property, an annual payment equal to the greater of: (i) $4,000.00 per megawatt of rated nameplate capacity of the Wind Turbines installed on the Property, or (ii) $15,000.00 per Wind Turbine installed on the Property, more fully described in Section 5.7.

Meteorological Equipment Fee. During the Term, an annual payment of $4,000.00 for each meteorological tower (“Met Tower”) installed on the Property and a semi-annual payment of $500.00 for each SODAR and/or LIDAR unit (each a “Ranging Unit”) installed on the Property, more fully described in Section 5.4 and such fee for Ranging Units shall be adjusted upward for inflation in accordance with Section 5.14.

Installation Payments. Regardless of whether or not as of the Commercial Operations Date, any Wind Turbines are installed on the Property, (i) a one-time payment of $2.00 per linear foot for each permanent road installed on the Property, and (ii a one-time payment of $1.00 per linear foot for buried cable installed on the Property, provided that Tenant may install multiple transmission cables or wires in the same entrenchment without any additional consideration; in addition, if as of the Commercial Operations Date, one or more Wind Turbines are installed on the Property, a one-time payment of $2,000.00 per Wind Turbine installed on the Property; in each case as more fully described in Section 5.5.

Transmission Payment. If, as of the Commercial Operations Date, any Wind Turbines and above-ground transmission lines are installed on the Property, then a one-time payment of $3,500.00 per acre of the Transmission Line Area (as defined in Section 5.1.3) installed by Tenant. If, as of the Commercial Operations Date, no Wind Turbines are installed on the Property, but above-ground transmission lines are installed on the Property, then a one-time payment of $7,000.00 per acre of the Transmission Line Area installed by Tenant. The Transmission Payment shall not apply if no above-ground transmission lines are installed on the Property.

Inflation Adjustment Factor. An increase in the component value by two percent (2.0%), as more fully described in Section 5.14.

Extension Rights. If the term of this Lease has been extended for the Operations Period, and provided that Tenant is not then in default of this Lease, Tenant shall have the right to extend the Operations Period for an additional period of twenty (20) years (the “Extended Period”) by providing written notice thereof to Landlord no later than thirty (30) days before the then-existing expiration date of the Operations Period.

Tenant’s Use. Throughout the Term, Tenant shall have the sole and exclusive rights to use the Property for Wind Energy Purposes and to convert all of the wind resources of the Property including, without limitation, all rents, royalties, credits and profits derived from wind energy and the wind resources upon, over and across the Property. “Wind Energy Purposes” means: wind resource evaluation (including use of SODAR or LIDAR technology) and determination of the feasibility of wind energy conversion on the Property or on adjacent lands, including studies of wind speed, wind direction and other meteorological data; wind energy development; conversion of wind energy into electrical energy; collection and transmission of electrical energy converted from wind energy; and any and all other activities related to the foregoing. Tenant’s rights hereunder specifically include, but are not limited to, the right to:

• Extract soil samples, perform geotechnical tests, and conduct such other tests, studies, inspections and analysis on the Property as Tenant deems necessary, useful or appropriate in its sole discretion.

• Construct, install, lay down, erect, improve, place, replace, remove, relocate and operate any and all improvements, machinery or equipment that Tenant deems necessary or desirable in connection with the uses described above, including, without limitation, the following (collectively, the “Wind Facilities”): (a) one or more wind turbine energy generators, associated towers, related fixtures, equipment and improvements, including the appurtenant footings, support structures and towers (“Wind Turbines”); (b) aboveground and underground electrical and communications lines, collection and transmission equipment; (c) power conditioning equipment, substations, switchyards, interconnection facilities, switching facilities, operations and maintenance buildings, transformers, SCADA and telecommunications equipment; (d) roads, gates, signs, fences, Met Towers, wind energy measurement equipment, maintenance yards and other related facilities, machinery, equipment and improvements; and (e) temporary improvements of any kind, including but not limited to temporary security, office, and guest facilities, staging areas, power generation facilities used for wind turbine installations, laydown areas, temporary roads and crane paths, crane pads, and related facilities (collectively, “Temporary Improvements”). An improvement shall be deemed “temporary” if it will be located on the Property for less than one year and “permanent” if it will be located on the Property for one year or longer.

• Capture, use and convert the unobstructed wind resources over and across the Property.

• Generate audio, visual and electrical effects, as well as shadow flicker, radio interference, and/or other effects, on the Property attributable to the operation of Wind Facilities or any other activities of Tenant; and allow the rotors of Wind Turbines located on adjacent properties in the Project to overhang onto the Property.

• Undertake any other activities whether undertaken by Tenant or third parties authorized by Tenant that Tenant determines are necessary, useful or appropriate to accomplish the development and operation of the Wind Facilities, provided that such activities are conducted in a manner consistent with customary industry practices.

Ownership of Wind Facilities. Tenant shall at all times retain title to the Wind Facilities and shall have the right to remove them from the Property at any time. Landlord shall have no ownership, lien, security or other interest in any Wind Facilities installed on the Property and Landlord expressly waives, relinquishes and quitclaims any lien or security interest in and to the Wind Facilities or any other real or personal property of Tenant, whether arising at law or in equity. Landlord shall not have any ownership or other interest in any and all credits, tax credits, benefits, emissions reductions, offsets and allowances of any kind, howsoever entitled, attributable to the Wind Facilities, nor to the electric energy, capacity or other products produced therefrom. The manner of operation of the Wind Facilities is within the sole discretion ofTenant.

Right of Access. Tenant shall have the right of access over and across all portions of the Property, and any adjacent property owned by Landlord, as reasonably necessary to use the Property as permitted by this Lease and to develop and operate the Project, including installing Wind Facilities to and through the Property in order to connect to other properties with Wind Facilities.

No Warranty of Energy Production. Tenant has not made and does not make any representations or warranties regarding energy production from Wind Facilities on the Property, the likelihood that Tenant will install Wind Facilities on the Property or that any Wind Facilities installed on the Property will generate electricity sufficient to obligate payments to Landlord in any specific amount. Landlord acknowledges that the operation of any Wind Facilities actually installed on the Property is subject to adverse weather, lack of wind, equipment failures and other events beyond the control of Tenant which may interrupt or prevent electricity generation.

Quiet Enjoyment. As long as Tenant observes the terms and conditions o~this Lease, it shall peaceably hold and enjoy the rights of Tenant hereunder and any and all other rights granted by this Lease for its entire term without hindrance or interruption by Landlord or any other person or persons. …

Roads. Tenant shall post any roads it constructs on the Property as private roads only for use by authorized personnel in connection with the Wind Facilities. Landlord may use or cross (or permit the use or crossing of) such roads only to the extent such use or crossing does not interfere with Tenant’s operations pursuant to this Lease or enjoyment of Tenant’s rights hereby granted. Landlord shall reimburse Tenant for the cost to repair any damage to Tenant’s roads caused by Landlord or those using the roads with Landlord’s permission.

Crop/Livestock Damage. Tenant shall reimburse Landlord (or, if requested by Landlord, Landlord’s agricultural tenants) one time per occurrence for all damage to cropland, crops and livestock caused by Tenant’s construction, operation and maintenance ofWind Facilities on the Property as follows: …

No Interference. Landlord shall not cause nor permit any restriction or interference with: (a) the siting, permitting, construction, installation, maintenance, operation, replacement, or removal of Wind Facilities; (b) the flow of wind, wind speed or wind direction over the Property; (c) access over the Property to Wind Facilities; or (d) any other activities of Tenant permitted under this Lease.

Trees, Structures and Improvements. After the Effective Date, Landlord may install new trees, structures and improvements on the Property that are less than thirty (30) feet in height and at least five hundred (500) feet from the base of any Wind Turbine without Tenant’s consent; provided, however, that such an installation shall not violate any setback or other permitting or regulatory requirement for the Wind Facilities or the Project set by any governmental authority. If construction o( the Wind Facilities on the Property is not yet complete then Landlord shall first consult with Tenant to ensure that the new tree, structure or improvement is not within five hundred (500) feet of any planned Wind Turbine and does not interfere with any other requirements of the Project. Any new trees, structures and improvements on the Property after the Effective Date that either exceed thirty (30) feet in height or are proposed to be within five hundred (500) feet of the base of an existing or planned Wind Turbine shall require Tenant’s prior written consent, not to be unreasonably withheld. For the purposes of this Section 7.2, the height of planted trees will be deemed to be their expected height at full maturity. …

Tenant’s Right to Transfer. Tenant and any Transferee (as defined below) shall have the right throughout the Tern to transfer, convey, sublease or assign this Lease or any interest in this Lease, the Property or the Wind Facilities to any person or entity (a “Transferee”) without the consent of Landlord. …

No Severance of Wind Energy Rights. Landlord shall not assign or otherwise transfer an interest in the wind energy rights to the Property, or a portion thereof, separate from fee title to such real property, without Tenant’s prior written consent which Tenant may withhold in its sole discretion. …

Restoration of Property. Upon expiration or termination of the Term, Tenant shall surrender and vacate the Property within sixty (60) days; provided, however, that Tenant shall have a license to enter onto the Property for twelve (12) months following termination to: (a) remove or cause to be removed any and all Wind Facilities from the Property, except that any Wind Facilities more than four (4) feet below the surface may be left in place (including portions of any foundation buried below four (4) feet), except Tenant shall leave in place any roads it constructed if requested to do so by Landlord and Tenant is not otherwise prohibited from doing so; (b) otherwise restore the Property to substantially the same condition that existed on the Effective Date, to the extent it is commercially reasonable to do so; (c) reseed any areas that were vegetated prior to disturbance to commercially reasonable standards, in consultation with Landlord; and (d) implement commercially reasonable erosion control devices and procedures. If Tenant does not remove the Wind Facilities and restore the Property as required by this Section 15.3 within twelve (12) months after termination, Landlord may do so and Tenant shall reimburse Landlord the reasonable and actual costs incurred by Landlord, less the salvage value of the Facilities, within thirty (30) days of receipt of an invoice from Landlord.

Security for Restoration. Upon the earlier to occur of: (i) the termination, expiration, surrender of this Lease, (ii) the date upon which any applicable permits or governmental rules or regulations require Tenant to post security for removal of the Wind Facilities, or (iii) the fifteenth (15th) anniversary of the start of the Operations Period, Tenant shall post and deliver to Landlord a bond, letter of credit or other collateral security (the “Removal Security”) in an amount sufficient to cover the costs (net of the unencumbered salvage value) of removing all Wind Facilities from the Property and restoring the surface of the Property as provided in Section 15.3, which amount shall be determined by an estimate provided by a company in the business of removing Wind Facilities. The amount of the Removal Security shall be set every five (5) years thereafter based on new estimates of the cost of removal and salvage value. If any governmental authority requires Tenant to provide security for removal or decommissioning of the Project, Tenant may provide a single Removal Security that benefits both Landlord and the governmental authority in a manner consistent with the requirements of the governmental authority, and the governmental authority shall have access to the Property pursuant to reasonable notice to effect or complete the required removal or decommissioning.

Confidentiality. Landlord shall maintain in the strictest confidence, for the benefit of Tenant: (a) all the terms and conditions of this Lease; (b) all information provided by Tenant pursuant to this Lease; and (c) all information obtained by or about Tenant’s site or product design, methods of operation, and methods of construction, regardless of its source … Landlord shall get Tenant’s written consent before issuing a press release or having any contact with or responding to the news media with any operational, sensitive or confidential information with respect to this Lease or the Project. The provisions of this Section 16.1 shall survive the termination or expiration of this Lease.

Download original document: “Apex wind energy lease

This material is the work of the author(s) indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

The copyright of this material resides with the author(s). As part of its noncommercial educational effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Queries e-mail.

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