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HomeMy WebLinkAbout6.j. Approval of an Estoppel Agreement for Solar SubscriptionEXECUTIVE SUMMARY City Council Meeting: September 17, 2019 AGENDA ITEM: Approval of an Estoppel Agreement for Solar Subscription AGENDA SECTION: Consent PREPARED BY: Anthony Nemcek, Planner AGENDA NO. 6.j. ATTACHMENTS: Estoppel Agreement APPROVED BY: LJM RECOMMENDED ACTION: Motion to Approve the Estoppel Agreement with Seminole Funding Resources, LLC, and Warsaw Solar LLC and Authorize the Mayor and Clerk to Enter into Agreement. SUMMARY In an effort to support solar energy production and reduce long-term energy costs, the City has entered into subscriptions with multiple solar gardens. The cost savings to the City are derived from the bill credits Xcel Energy pays the City, which amount to more than the cost of the subscriptions. The City entered into the most recent subscription contract at its meeting on April 2, 2019. That contract is with ReneSola, operating as Warsaw Solar LLC. The financing partner of the solar developer, Seminole Funding Resources, LLC, requires the execution of an estoppel agreement that will bring them into the contract with Warsaw Solar LLC. and the City. This is necessary in the event that Seminole needs to take over the obligations and responsibilities of the garden from Warsaw Solar LLC. Technically, the City entered into the agreement with ReneSola (Warsaw Solar LLC), but not Seminole Funding Resources. For this reason, staff recommends that the City Council authorize the execution of this estoppel agreement, so that the provisions in the ReneSola agreement will then be extended to Seminole. The estoppel has been reviewed by the City Attorney and all recommended changes have been incorporated into the final version included in the attachments. A red-lined version of the agreement is attached for reference. RECOMMENDATION Staff recommends approval of the estoppel agreement to extend the terms of the subscription to Seminole Funding Resources. 105511.000178 4833-8351-2475.1 PAGE 1 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC CONSENT AND AGREEMENT This CONSENT AND AGREEMENT, dated as of __________, 2019 (this “Consent”), is entered into by and among the CITY OF ROSEMOUNT, a Minnesota municipal corporation (“Contracting Party”), SEMINOLE FUNDING RESOURCES, LLC, a Delaware limited liability company (“Lender”), and WARSAW SOLAR LLC, a Minnesota limited liability company (“Borrower”). RECITALS A. Concurrently with the execution hereof, Lender and Borrower have entered into a construction loan agreement (together with all supplements, exhibits and amendments thereto, referred to as the “Loan Agreement”), pursuant to which Lender has agreed to extend to Borrower a loan (the “Loan”) for the purpose of financing certain costs of constructing and developing a solar energy project located in Rice County, Minnesota (the “Project”). B. Contracting Party and Borrower have entered into that certain (i) Subscription Agreement – SRC 040823, dated April 4, 2019, and (ii) Subscription Agreement – SRC 040824, dated April 4, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, collectively, the “Assigned Agreement”). C. Pursuant to an Assignment of Agreements executed by Borrower to and for the benefit of Lender (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Assignment”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Loan Agreement and related documents, all of its right, title and interest in, to and under the Assigned Agreement to Lender. D. It is a requirement under the Loan Agreement that Contracting Party and Borrower execute and deliver this Consent. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree, notwithstanding anything in the Assigned Agreement to the contrary, as follows: 1. Assignment and Agreement (a) Consent to Assignment Contracting Party (a) is hereby notified that Lender has made the extensions of credit contemplated by the Loan Agreement, (b) consents to the collateral assignment under the Assignment of all of Borrower’s right, title and interest in, to and under the Assigned 105511.000178 4833-8351-2475.1 PAGE 2 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC Agreement, the rights, powers, and obligations associated therewith and the profits, distributions, and all other rights to payment, whether in cash, in kind, or in any other form, during their continuance and upon their termination, and the proceeds thereof, including without limitation, all rights of Borrower to receive moneys due and to become due under or pursuant to the Assigned Agreement, all rights of Borrower to receive proceeds of any insurance, indemnity, warranty, or guaranty with respect to or for breach of or default under the Assigned Agreement, claims of the Borrower for damages arising out of or for breach of or default under the Assigned Agreement, and the right of the Borrower to terminate the Assigned Agreement, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder (collectively, the “Assigned Interests”) and (c) acknowledges the right of Lender, in the exercise of Lender’s rights and remedies pursuant to the Assignment, upon written notice to Contracting Party, to make all demands, give all notices, take all actions and exercise all rights of Borrower under the Assigned Agreement. (b) Subsequent Owner Contracting Party agrees that, if Lender notifies Contracting Party in writing that, pursuant to and in accordance with the Assignment, it has assigned, foreclosed or sold the Assigned Interest, then (A) Lender or its successor, assignee and/or designee, or any purchaser of the Assigned Interests (a “Subsequent Owner”) shall be substituted for Borrower under the Assigned Agreement and (B) Contracting Party shall (1) recognize Lender or the Subsequent Owner, as the case may be, as its counterparty under the Assigned Agreement and (2) continue to perform its obligations under the Assigned Agreement in favor of Lender or the Subsequent Owner, as the case may be; provided that Lender or such Subsequent Owner, as the case may be, has assumed in writing all of Borrower’s rights and obligations (including, without limitation, the obligation to cure any then existing payment and performance defaults, but excluding any obligation to cure any then existing performance defaults which by their nature are incapable of being cured) under the Assigned Agreement. Without limiting anything herein, the warranties provided by Contracting Party under the Assigned Agreement shall continue in full force and effect (until the expiration of the applicable warranty periods set forth in the Assigned Agreement) in the event that Lender or a Subsequent Owner succeeds to Borrower’s right, title and interest in the Assigned Agreement. (c) Right to Cure If Borrower defaults in the performance of any of its obligations under the Assigned Agreement, or upon the occurrence or non-occurrence of any event or condition under the Assigned Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable Contracting Party to terminate or suspend its performance under the Assigned Agreement (each hereinafter a “default”), Contracting Party shall not terminate or suspend its performance under the Assigned Agreement until it first gives written notice of such default to Lender and affords Lender a period of at least 30 days 105511.000178 4833-8351-2475.1 PAGE 3 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC (or if such default is a nonmonetary default, such longer period as may be required so long as Lender has commenced and is diligently pursuing appropriate action to cure such default within such longer period but, subject to clauses (a) and (b) below, in no event more than one hundred eighty (180) days from receipt of such notice to cure such default) from receipt of such notice to cure such default; provided, however, that (a) if possession of the Project is necessary to cure such nonmonetary default and Lender has commenced foreclosure proceedings, whether judicial or non-judicial through exercise of a power of sale or otherwise, Lender shall be allowed a reasonable time to complete such proceedings within such longer period, and (b) if Lender is prohibited from curing any such nonmonetary default by any process, stay or injunction issued by any governmental authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Borrower, then the time periods specified herein for curing a nonmonetary default shall be extended for the period of such prohibition. In the event the Lender does not cure any such default within such applicable extended cure period, Contracting Party shall continue to have all rights and remedies afforded to it under the Assigned Agreement. (d) No Amendments (i) Contracting Party agrees that it shall not, without the prior written consent of Lender, cancel or terminate the Assigned Agreement, consent to or accept any cancellation or termination thereof, or enter into any novation, material amendment or other material modification of the Assigned Agreement. (ii) Contracting Party agrees that it shall not, without the prior written consent of Lender, (A) sell, assign or otherwise transfer any of its rights under the Assigned Agreement (other than (1) its right to receive payments under the Assigned Agreement and (2) its right to subcontract under the Assigned Agreement), (B) terminate, cancel or suspend its performance under the Assigned Agreement (unless it has given Lender any notice and opportunity to cure that are required by Section 1(c)), (C) consent to any assignment or other transfer by Borrower of its rights under the Assigned Agreement or (D) consent to any voluntary termination, cancellation or suspension of performance by Borrower under the Assigned Agreement. (e) Replacement Agreements In the event the Assigned Agreement is rejected or terminated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Borrower, Contracting Party shall, at the option of Lender exercised within 45 days after such rejection or termination, enter into a new agreement with Lender having identical terms, conditions, agreements, provisions and limitations as the Assigned Agreement (subject to any conforming changes necessitated by the substitution of parties and other changes as the parties may mutually agree), provided that (i) the term under such new agreement shall be no longer than the remaining balance of the term specified in the Assigned Agreement, and (ii) upon execution of such new agreement, Lender cures any outstanding payment and 105511.000178 4833-8351-2475.1 PAGE 4 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC performance defaults under the Assigned Agreement, excluding any performance defaults which by their nature are incapable of being cured. (f) Limitations on Liability Contracting Party acknowledges and agrees that Lender shall not have any liability or obligation under the Assigned Agreement as a result of this Consent, the Assignment or otherwise, nor shall Lender be obligated or required to (a) perform any of Borrower’s obligations under the Assigned Agreement, except during any period in which Lender has assumed Borrower’s rights and obligations under the Assigned Agreement pursuant to Section 1(b) above, or (b) take any action to collect or enforce any claim for payment assigned under the Assignment. If Lender has assumed Borrower’s rights and obligations under the Assigned Agreement pursuant to Section 1(b) above or has entered into a new agreement pursuant to Section 1(e) above, Lender’s liability to Contracting Party under the Assigned Agreement or such new agreement, and the sole recourse of Contracting Party in seeking enforcement of the obligations under such agreements, shall be limited to the interest of Lender in the Project. (g) Delivery of Notices Contracting Party shall deliver to Lender, concurrently with the delivery thereof to Borrower, a copy of each notice, request or demand given by Contracting Party to Borrower pursuant to the Assigned Agreement relating to (i) a default by Borrower under the Assigned Agreement and (ii) any matter that would require the consent of Lender pursuant to Section 1(d) of this Consent. Failure of Contracting Party to provide a copy of any such notice, request or demand or any other notice specified in Section 1(c) hereof to Lender shall not constitute a breach of this Consent and Lender agrees that Contracting Party shall have no liability to Lender for such failure; provided, however, that no cancellation, suspension or termination of the Assigned Agreement by Contracting Party, or any other actions taken by Contracting Party under the Assigned Agreement, shall be binding upon Lender or Borrower without such notice, request or demand (as applicable), if applicable under Section 1(c), the opportunity to cure during the applicable extended cure period specified in Section 1(c) and, if applicable under Section 1(d), consent of Lender. (h) Transfer (i) In the event that Lender or a Subsequent Owner is substituted for Borrower under the Assigned Agreement pursuant to Section 1(b) or a new agreement entered into pursuant to Section 1(e), then, subsequent to such substitution, Lender shall have the right to assign all of its interest in this Consent and in the Assigned Agreement or such new agreement to any entity; provided, that such assignee assumes in writing the obligations of Lender under this Consent or the Assigned Agreement or such new agreement, as applicable. Upon such assignment, transfer or sale of the Project, Lender shall be released from any further liability under the Assigned Agreement or such new agreement. 105511.000178 4833-8351-2475.1 PAGE 5 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC (ii) Contracting Party further acknowledges and agrees that Lender shall have the right, during the term of this Consent, to assign, transfer, and/or participate the Loan, the Loan Agreement, and all related Loan Documents, including this Consent, to an affiliate of Lender or to unrelated financing parties; provided, that such assignee assumes in writing the obligations of Lender under this Consent. Upon such assignment, Lender shall be released from any further liability under such Assigned Agreement or such new agreement. 2. Payments under the Assigned Agreement (a) Payments Contracting Party shall pay all amounts (if any) payable by it under the Assigned Agreement in the manner and as and when required by the Assigned Agreement directly into the account or to such other person, entity or account as shall be specified from time to time by Lender to Contracting Party in writing. Notwithstanding the foregoing, if any entity or person has become a Subsequent Owner pursuant to the terms hereof, then Contracting Party shall pay all such amounts directly to such Subsequent Owner or an account designated by Subsequent Owner. Contracting Party, Borrower and Lender each acknowledge and agree that each payment made by Contracting Party in accordance with this section shall, to the extent of the amount paid, constitute payment of the relevant amount owing by Contracting Party to Borrower under the Assigned Agreement and that such payment shall discharge the obligation of Contracting Party under the Assigned Agreement to make such payment to Borrower. (b) No Offset, Etc. All payments required to be made by Contracting Party under the Assigned Agreement shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than those allowed by the terms of the Assigned Agreement. 3. Representations and Warranties of Contracting Party Contracting Party hereby represents and warrants, in favor of Lender, as of the date hereof, that: (a) Contracting Party (i) is a municipal corporation duly formed and validly existing under the laws of the State of Minnesota, (ii) is duly qualified, authorized to do business and in good standing in the State of Minnesota, and (iii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Assigned Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance by Contracting Party of this Consent and the Assigned Agreement have been duly authorized by all necessary corporate or other 105511.000178 4833-8351-2475.1 PAGE 6 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC action on the part of Contracting Party and do not require any approvals, filings with, or consents of any entity or person which have not previously been obtained or made; (c) each of this Consent and the Assigned Agreement is in full force and effect, has been duly executed and delivered on behalf of Contracting Party by the appropriate officers of Contracting Party, and constitutes the legal, valid and binding obligation of Contracting Party, enforceable against Contracting Party in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); (d) there is no litigation, action, suit, proceeding or investigation pending or (to the best of Contracting Party’s knowledge) threatened against Contracting Party before or by any court, administrative agency, arbitrator or governmental authority, body or agency which, if adversely determined, individually or in the aggregate, could have a material adverse effect on the performance by Contracting Party of its obligations hereunder or under the Assigned Agreement; (e) the execution, delivery and performance by Contracting Party of this Consent and the Assigned Agreement, and the consummation of the transactions contemplated hereby and thereby, do or will not result in any violation of, breach of or default under any term of its formation or governance documents, or of any contract or agreement to which it is a party or by which it or its property is bound, or of any license, permit, franchise, judgment, injunction, order, law, rule or regulation applicable to it, other than any such violation, breach or default which could not reasonably be expected to have a material adverse effect on Contracting Party’s ability to perform its obligations under the Assigned Agreement or this Consent; (f) neither Contracting Party nor, to the best of Contracting Party’s knowledge, any other party to the Assigned Agreement, is in default of any of its obligations thereunder; (g) to the best of Contracting Party’s knowledge, (i) no event of force majeure exists under, and as defined in, the Assigned Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either Contracting Party or Borrower to terminate or suspend its obligations under the Assigned Agreement; and (h) the Assigned Agreement and this Consent are the only agreements between Borrower and Contracting Party with respect to the Project, and all of the conditions precedent to effectiveness under the Assigned Agreement have been satisfied or waived. (i) Each of the representations and warranties set forth in this section shall survive the execution and delivery of this Consent and the Assigned Agreement and the consummation of the transactions contemplated hereby and thereby. 105511.000178 4833-8351-2475.1 PAGE 7 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC 4. Miscellaneous (a) Addresses Any notices, communications and waivers under this Agreement shall be in writing and shall be (i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail, return receipt requested, or (iii) sent by overnight express carrier, addressed in each case as follows: To Lender: Seminole Funding Resources, LLC c/o Seminole Financial Services 455 North Indian Rocks Road Belleair Bluffs, Florida 33770 Attn: Tim Fetter With copy to: Dykema Gossett PLLC 400 Renaissance Center Detroit, Michigan 48243 Attn: Laura A. Weingartner To Borrower: Warsaw Solar LLC c/o Nautilus Solar Energy, LLC 396 Springfield Avenue, Suite 200 Summit, New Jersey 07901 Attn: General Counsel With copies to: Virgo Investment Group LLC 1201 Howard Avenue, 3rd Floor Burlingame, California 94010 Attn: Eli Aheto To Contracting Party: City of Rosemount 2875 145th Street West Rosemount, MN 55068 Attn: Anthony Nemcek or to any other address as to any of the parties hereto, as such party shall designate in a written notice to the other party hereto. All notices sent pursuant to the terms of this section shall be deemed received (i) if personally delivered, then on the date of delivery, (ii) if sent by overnight, express carrier, then on the next business day immediately following the day sent, or (iii) if sent by registered or certified mail, then on the earlier of the third business day following the day sent or when actually received. (b) Governing Law 105511.000178 4833-8351-2475.1 PAGE 8 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota, without reference to the choice of law or conflicts of law principles of the State of Minnesota. (c) Counterparts This Consent may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. (d) Headings Descriptive The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent. (e) Severability In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. (f) Amendment, Waiver Neither this Consent nor any of the terms hereof may be terminated, amended, supplemented, waived or modified except by an instrument in writing signed by Contracting Party, Borrower and Lender. (g) Successors and Assigns This Consent shall bind and benefit Contracting Party, Lender, and their respective successors and permitted assigns. (h) WAIVER OF TRIAL BY JURY TO THE EXTENT PERMITTED BY APPLICABLE LAW, CONTRACTING PARTY, BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS CONSENT OR ANY MATTER ARISING HEREUNDER. (i) Entire Agreement This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and 105511.000178 4833-8351-2475.1 PAGE 9 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC supersede all oral negotiations and prior writings between the parties hereto in respect of the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument (including, without limitation, the Assigned Agreement), the terms, conditions and provisions of this Consent the Subscription Agreement shall prevail. [SIGNATURE PAGE FOLLOWS] SIGNATURE PAGE CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC IN WITNESS WHEREOF, the parties hereto hereby execute this Consent and Agreement as of the day and year first above written. BORROWER: WARSAW SOLAR LLC, a Minnesota limited liability company By: _____________________________ Name: _____________________________ Its: _____________________________ CONTRACTING PARTY: CITY OF ROSEMOUNT, a Minnesota municipal corporation By: _____________________________ Name: _____________________________ Its: _____________________________ Accepted and Agreed to: SEMINOLE FUNDING RESOURCES, LLC, a Delaware limited liability company By: __________________________ Name: __________________________ Title: __________________________ 105511.000178 4833-8351-2475.1 PAGE 1 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC CONSENT AND AGREEMENT This CONSENT AND AGREEMENT, dated as of __________, 2019 (this “Consent”), is entered into by and among the CITY OF ROSEMOUNT, a Minnesota municipal corporation (“Contracting Party”), SEMINOLE FUNDING RESOURCES, LLC, a Delaware limited liability company (“Lender”), and WARSAW SOLAR LLC, a Minnesota limited liability company (“Borrower”). RECITALS A. Concurrently with the execution hereof, Lender and Borrower have entered into a construction loan agreement (together with all supplements, exhibits and amendments thereto, referred to as the “Loan Agreement”), pursuant to which Lender has agreed to extend to Borrower a loan (the “Loan”) for the purpose of financing certain costs of constructing and developing a solar energy project located in Rice County, Minnesota (the “Project”). B. Contracting Party and Borrower have entered into that certain (i) Subscription Agreement – SRC 040823, dated April 4, 2019, and (ii) Subscription Agreement – SRC 040824, dated April 4, 2019 (as amended, amended and restated, supplemented or otherwise modified from time to time, collectively, the “Assigned Agreement”). C. Pursuant to an Assignment of Agreements executed by Borrower to and for the benefit of Lender (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Assignment”), Borrower has agreed, among other things, to assign, as collateral security for its obligations under the Loan Agreement and related documents, all of its right, title and interest in, to and under the Assigned Agreement to Lender. D. It is a requirement under the Loan Agreement that Contracting Party and Borrower execute and deliver this Consent. AGREEMENT NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree, notwithstanding anything in the Assigned Agreement to the contrary, as follows: 1. Assignment and Agreement (a) Consent to Assignment Contracting Party (a) is hereby notified that Lender has made the extensions of credit contemplated by the Loan Agreement, (b) consents to the collateral assignment under the Assignment of all of Borrower’s right, title and interest in, to and under the Assigned Agreement, the rights, powers, and obligations associated therewith and the profits, 105511.000178 4833-8351-2475.1 PAGE 2 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC distributions, and all other rights to payment, whether in cash, in kind, or in any other form, during their continuance and upon their termination, and the proceeds thereof, including without limitation, all rights of Borrower to receive moneys due and to become due under or pursuant to the Assigned Agreement, all rights of Borrower to receive proceeds of any insurance, indemnity, warranty, or guaranty with respect to or for breach of or default under the Assigned Agreement, claims of the Borrower for damages arising out of or for breach of or default under the Assigned Agreement, and the right of the Borrower to terminate the Assigned Agreement, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder (collectively, the “Assigned Interests”) and (c) acknowledges the right of Lender, in the exercise of Lender’s rights and remedies pursuant to the Assignment, upon written notice to Contracting Party, to make all demands, give all notices, take all actions and exercise all rights of Borrower under the Assigned Agreement. (b) Subsequent Owner Contracting Party agrees that, if Lender notifies Contracting Party in writing that, pursuant to and in accordance with the Assignment, it has assigned, foreclosed or sold the Assigned Interest, then (A) Lender or its successor, assignee and/or designee, or any purchaser of the Assigned Interests (a “Subsequent Owner”) shall be substituted for Borrower under the Assigned Agreement and (B) Contracting Party shall (1) recognize Lender or the Subsequent Owner, as the case may be, as its counterparty under the Assigned Agreement and (2) continue to perform its obligations under the Assigned Agreement in favor of Lender or the Subsequent Owner, as the case may be; provided that Lender or such Subsequent Owner, as the case may be, has assumed in writing all of Borrower’s rights and obligations (including, without limitation, the obligation to cure any then existing payment and performance defaults, but excluding any obligation to cure any then existing performance defaults which by their nature are incapable of being cured) under the Assigned Agreement. Without limiting anything herein, the warranties provided by Contracting Party under the Assigned Agreement shall continue in full force and effect (until the expiration of the applicable warranty periods set forth in the Assigned Agreement) in the event that Lender or a Subsequent Owner succeeds to Borrower’s right, title and interest in the Assigned Agreement. (c) Right to Cure If Borrower defaults in the performance of any of its obligations under the Assigned Agreement, or upon the occurrence or non-occurrence of any event or condition under the Assigned Agreement which would immediately or with the passage of any applicable grace period or the giving of notice, or both, enable Contracting Party to terminate or suspend its performance under the Assigned Agreement (each hereinafter a “default”), Contracting Party shall not terminate or suspend its performance under the Assigned Agreement until it first gives written notice of such default to Lender and affords Lender a period of at least 30 days (or if such default is a nonmonetary default, such longer period as may be required so long as Lender has commenced and is diligently pursuing appropriate action to cure such default 105511.000178 4833-8351-2475.1 PAGE 3 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC within such longer period but, subject to clauses (a) and (b) below, in no event more than one hundred eighty (180) days from receipt of such notice to cure such default) from receipt of such notice to cure such default; provided, however, that (a) if possession of the Project is necessary to cure such nonmonetary default and Lender has commenced foreclosure proceedings, whether judicial or non-judicial through exercise of a power of sale or otherwise, Lender shall be allowed a reasonable time to complete such proceedings within such longer period, and (b) if Lender is prohibited from curing any such nonmonetary default by any process, stay or injunction issued by any governmental authority or pursuant to any bankruptcy or insolvency proceeding or other similar proceeding involving Borrower, then the time periods specified herein for curing a nonmonetary default shall be extended for the period of such prohibition. In the event the Lender does not cure any such default within such applicable extended cure period, Contracting Party shall continue to have all rights and remedies afforded to it under the Assigned Agreement. (d) No Amendments (i) Contracting Party agrees that it shall not, without the prior written consent of Lender, cancel or terminate the Assigned Agreement, consent to or accept any cancellation or termination thereof, or enter into any novation, material amendment or other material modification of the Assigned Agreement. (ii) Contracting Party agrees that it shall not, without the prior written consent of Lender, (A) sell, assign or otherwise transfer any of its rights under the Assigned Agreement (other than (1) its right to receive payments under the Assigned Agreement and (2) its right to subcontract under the Assigned Agreement), (B) terminate, cancel or suspend its performance under the Assigned Agreement (unless it has given Lender any notice and opportunity to cure that are required by Section 1(c)), (C) consent to any assignment or other transfer by Borrower of its rights under the Assigned Agreement or (D) consent to any voluntary termination, cancellation or suspension of performance by Borrower under the Assigned Agreement. (e) Replacement Agreements In the event the Assigned Agreement is rejected or terminated as a result of any bankruptcy, insolvency, reorganization or similar proceeding affecting Borrower, Contracting Party shall, at the option of Lender exercised within 45 days after such rejection or termination, enter into a new agreement with Lender having identical terms, conditions, agreements, provisions and limitations as the Assigned Agreement (subject to any conforming changes necessitated by the substitution of parties and other changes as the parties may mutually agree), provided that (i) the term under such new agreement shall be no longer than the remaining balance of the term specified in the Assigned Agreement, and (ii) upon execution of such new agreement, Lender cures any outstanding payment and performance defaults under the Assigned Agreement, excluding any performance defaults which by their nature are incapable of being cured. 105511.000178 4833-8351-2475.1 PAGE 4 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC (f) Limitations on Liability Contracting Party acknowledges and agrees that Lender shall not have any liability or obligation under the Assigned Agreement as a result of this Consent, the Assignment or otherwise, nor shall Lender be obligated or required to (a) perform any of Borrower’s obligations under the Assigned Agreement, except during any period in which Lender has assumed Borrower’s rights and obligations under the Assigned Agreement pursuant to Section 1(b) above, or (b) take any action to collect or enforce any claim for payment assigned under the Assignment. If Lender has assumed Borrower’s rights and obligations under the Assigned Agreement pursuant to Section 1(b) above or has entered into a new agreement pursuant to Section 1(e) above, Lender’s liability to Contracting Party under the Assigned Agreement or such new agreement, and the sole recourse of Contracting Party in seeking enforcement of the obligations under such agreements, shall be limited to the interest of Lender in the Project. (g) Delivery of Notices Contracting Party shall deliver to Lender, concurrently with the delivery thereof to Borrower, a copy of each notice, request or demand given by Contracting Party to Borrower pursuant to the Assigned Agreement relating to (i) a default by Borrower under the Assigned Agreement and (ii) any matter that would require the consent of Lender pursuant to Section 1(d) of this Consent. Failure of Contracting Party to provide a copy of any such notice, request or demand or any other notice specified in Section 1(c) hereof to Lender shall not constitute a breach of this Consent and Lender agrees that Contracting Party shall have no liability to Lender for such failure; provided, however, that no cancellation, suspension or termination of the Assigned Agreement by Contracting Party, or any other actions taken by Contracting Party under the Assigned Agreement, shall be binding upon Lender or Borrower without such notice, request or demand (as applicable), if applicable under Section 1(c), the opportunity to cure during the applicable extended cure period specified in Section 1(c) and, if applicable under Section 1(d), consent of Lender. (h) Transfer (i) In the event that Lender or a Subsequent Owner is substituted for Borrower under the Assigned Agreement pursuant to Section 1(b) or a new agreement entered into pursuant to Section 1(e), then, subsequent to such substitution, Lender shall have the right to assign all of its interest in this Consent and in the Assigned Agreement or such new agreement to any entity; provided, that such assignee assumes in writing the obligations of Lender under this Consent or the Assigned Agreement or such new agreement, as applicable. Upon such assignment, transfer or sale of the Project, Lender shall be released from any further liability under the Assigned Agreement or such new agreement. (ii) Contracting Party further acknowledges and agrees that Lender shall have the right, during the term of this Consent, to assign, transfer, and/or participate the Loan, the Loan Agreement, and all related Loan Documents, including this Consent, to an 105511.000178 4833-8351-2475.1 PAGE 5 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC affiliate of Lender or to unrelated financing parties; provided, that such assignee assumes in writing the obligations of Lender under this Consent. Upon such assignment, Lender shall be released from any further liability under such Assigned Agreement or such new agreement. 2. Payments under the Assigned Agreement (a) Payments Contracting Party shall pay all amounts (if any) payable by it under the Assigned Agreement in the manner and as and when required by the Assigned Agreement directly into the account or to such other person, entity or account as shall be specified from time to time by Lender to Contracting Party in writing. Notwithstanding the foregoing, if any entity or person has become a Subsequent Owner pursuant to the terms hereof, then Contracting Party shall pay all such amounts directly to such Subsequent Owner or an account designated by Subsequent Owner. Contracting Party, Borrower and Lender each acknowledge and agree that each payment made by Contracting Party in accordance with this section shall, to the extent of the amount paid, constitute payment of the relevant amount owing by Contracting Party to Borrower under the Assigned Agreement and that such payment shall discharge the obligation of Contracting Party under the Assigned Agreement to make such payment to Borrower. (b) No Offset, Etc. All payments required to be made by Contracting Party under the Assigned Agreement shall be made without any offset, recoupment, abatement, withholding, reduction or defense whatsoever, other than those allowed by the terms of the Assigned Agreement. 3. Representations and Warranties of Contracting Party Contracting Party hereby represents and warrants, in favor of Lender, as of the date hereof, that: (a) Contracting Party (i) is a municipal corporation duly formed and validly existing under the laws of the State of Minnesota, (ii) is duly qualified, authorized to do business and in good standing in the State of Minnesota, and (iii) has all requisite power and authority to enter into and to perform its obligations hereunder and under the Assigned Agreement, and to carry out the terms hereof and thereof and the transactions contemplated hereby and thereby; (b) the execution, delivery and performance by Contracting Party of this Consent and the Assigned Agreement have been duly authorized by all necessary corporate o r other action on the part of Contracting Party and do not require any approvals, filings with, or consents of any entity or person which have not previously been obtained or made; (c) each of this Consent and the Assigned Agreement is in full force and effect, has been duly executed and delivered on behalf of Contracting Party by the appropriate 105511.000178 4833-8351-2475.1 PAGE 6 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC officers of Contracting Party, and constitutes the legal, valid and binding obligation of Contracting Party, enforceable against Contracting Party in accordance with i ts terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general equitable principles (whether considered in a proceeding in equity or at law); (d) there is no litigation, action, suit, proceeding or investigation pending or (to the best of Contracting Party’s knowledge) threatened against Contracting Party before or by any court, administrative agency, arbitrator or governmental authority, body or agency which, if adversely determined, individually or in the aggregate, could have a material adverse effect on the performance by Contracting Party of its obligations hereunder or under the Assigned Agreement; (e) the execution, delivery and performance by Contracting Party of this Consent and the Assigned Agreement, and the consummation of the transactions contemplated hereby and thereby, do or will not result in any violation of, breach of or default under any term of its formation or governance documents, or of any contract or agreement to which it is a party or by which it or its property is bound, or of any license, permit, franchise, judgment, injunction, order, law, rule or regulation applicable to it, other than any such violat ion, breach or default which could not reasonably be expected to have a material adverse effect on Contracting Party’s ability to perform its obligations under the Assigned Agreement or this Consent; (f) neither Contracting Party nor, to the best of Contracting Party’s knowledge, any other party to the Assigned Agreement, is in default of any of its obligations thereunder; (g) to the best of Contracting Party’s knowledge, (i) no event of force majeure exists under, and as defined in, the Assigned Agreement and (ii) no event or condition exists which would either immediately or with the passage of any applicable grace period or giving of notice, or both, enable either Contracting Party or Borrower to terminate or suspend its obligations under the Assigned Agreement; and (h) the Assigned Agreement and this Consent are the only agreements between Borrower and Contracting Party with respect to the Project, and all of the conditions precedent to effectiveness under the Assigned Agreement have been satisfied or waived. (i) Each of the representations and warranties set forth in this section shall survive the execution and delivery of this Consent and the Assigned Agreement and the consummation of the transactions contemplated hereby and thereby. 4. Miscellaneous (a) Addresses 105511.000178 4833-8351-2475.1 PAGE 7 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC Any notices, communications and waivers under this Agreement shall be in writing and shall be (i) delivered in person, (ii) mailed, postage prepaid, either by registered or certified mail, return receipt requested, or (iii) sent by overnight express carrier, addressed in each case as follows: To Lender: Seminole Funding Resources, LLC c/o Seminole Financial Services 455 North Indian Rocks Road Belleair Bluffs, Florida 33770 Attn: Tim Fetter With copy to: Dykema Gossett PLLC 400 Renaissance Center Detroit, Michigan 48243 Attn: Laura A. Weingartner To Borrower: Warsaw Solar LLC c/o Nautilus Solar Energy, LLC 396 Springfield Avenue, Suite 200 Summit, New Jersey 07901 Attn: General Counsel With copies to: Virgo Investment Group LLC 1201 Howard Avenue, 3rd Floor Burlingame, California 94010 Attn: Eli Aheto To Contracting Party: City of Rosemount 2875 145th Street West Rosemount, MN 55068 Attn: Anthony Nemcek or to any other address as to any of the parties hereto, as such party shall designate in a written notice to the other party hereto. All notices sent pursuant to the terms of this section shall be deemed received (i) if personally delivered, then on the date of delivery, (ii) if sent by overnight, express carrier, then on the next business day immediately following the day sent, or (iii) if sent by registered or certified mail, then on the earlier of the third business day following the day sent or when actually received. (b) Governing Law This Agreement shall be construed and enforced in accordance with the laws of the State of Minnesota, without reference to the choice of law or conflicts of law principles of the State of Minnesota. 105511.000178 4833-8351-2475.1 PAGE 8 CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC (c) Counterparts This Consent may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. (d) Headings Descriptive The headings of the several sections and subsections of this Consent are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Consent. (e) Severability In case any provision in or obligation under this Consent shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. (f) Amendment, Waiver Neither this Consent nor any of the terms hereof may be terminated, amended, supplemented, waived or modified except by an instrument in writing signed by Contracting Party, Borrower and Lender. (g) Successors and Assigns This Consent shall bind and benefit Contracting Party, Lender, and their respective successors and permitted assigns. (h) Entire Agreement This Consent and any agreement, document or instrument attached hereto or referred to herein integrate all the terms and conditions mentioned herein or incidental hereto and supersede all oral negotiations and prior writings between the parties hereto in respect of the subject matter hereof. In the event of any conflict between the terms, conditions and provisions of this Consent and any such agreement, document or instrument (including, without limitation, the Assigned Agreement), the terms, conditions and provisions of the Subscription Agreement shall prevail. [SIGNATURE PAGE FOLLOWS] SIGNATURE PAGE CONSENT AND AGREEMENT SUBSCRIPTION AGREEMENTS – CITY OF ROSEMOUNT WARSAW SOLAR LLC IN WITNESS WHEREOF, the parties hereto hereby execute this Consent and Agreement as of the day and year first above written. BORROWER: WARSAW SOLAR LLC, a Minnesota limited liability company By: _____________________________ Name: _____________________________ Its: _____________________________ CONTRACTING PARTY: CITY OF ROSEMOUNT, a Minnesota municipal corporation By: _____________________________ Name: _____________________________ Its: _____________________________ Accepted and Agreed to: SEMINOLE FUNDING RESOURCES, LLC, a Delaware limited liability company By: __________________________ Name: __________________________ Title: __________________________