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HomeMy WebLinkAboutItem 06.v Date: Item No. AGREEMENTS RELATING TO RENESOLA SOLAR GARDENS Proposed Action Staff recommends adoption of the following motion: Move to approve Amendment #1 to subscription agreement and Walcott Solar LLC estoppel agreement, and Walcott solar termination agreement Overview Last year the City of Lakeville entered into a solar subscription agreement with ReneSola Power Holdings, LLC. This agreement allows the city to capture the benefits of solar power generation without having the physical solar panels on city facilities. ReneSola is getting closer to the construction phase of the project, and as is normal with these projects, various investors have begun to be brought in to make the project feasible. As such, agreements between the City and the various investors are required. Primary Issues to Consider • Have the terms of the agreement changed? These agreements do not impact the financial agreements or projections originally entered into between the City and ReneSola Power Holdings, LLC. These agreements have been reviewed by the city attorney. Financial Impact: $ Budgeted: Y☐ N☒ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Good Value for Public Services Report Completed by: Justin Miller, City Administrator April 6, 2020 N/A March 20, 2020 The City of Lakeville 20195 Holyoke Avenue Lakeville, MN 55044 Attention: Char Friedges RE: Termination Agreement of Owner Tier Rate Subscription Agreement (Warsaw Solar, LLC) To Whom It May Concern, This letter is being provided to request the termination of the Owner Tiered Rate Subscription Agreement (the “Agreement”) by and between The City of Lakeville and Warsaw Solar, LLC entered into on February 21, 2019. As outlined in the Agreement, the Warsaw Solar garden was expected to provide 4% of the Project Subscriber’s average annual electricity consumption (“AAEC”). Meanwhile the Walcott Solar, LLC garden (which is a sister garden to Warsaw Solar that is owned and managed by the same Parent company) was supposed to provide for 41% of the AAEC under a separate Subscription Agreement. These numbers were calculated based on assumptions of both the Walcott and Warsaw Garden capacities. However, now that the gardens are completed the output capacity is higher than expected for the Walcott Garden. Therefore, the Walcott Garden by itself can provide all of the AAEC previously promised to the City of Lakeville. An amendment has been drafted and provided to that subscription agreement, which if executed will now make the Warsaw Garden’s Agreement no longer necessary. By making this change your life as a subscriber shall be made easier and simpler, because you will only need to pay attention to one garden as opposed to two. This will make the line items on your bills simpler and also make that invoicing process easier. For these reasons we hereby request you sign this letter to confirm you acknowledge and agree to the termination of the Agreement. Regards, Warsaw Solar, LLC President C/O Nautilus Solar Energy, LLC ACKNOWLEDGED AND AGREED TO: The City of Lakeville By: ___________________________ ____________________________________ Douglas P. Anderson, Mayor Charlene Friedges, City Clerk Date: April 6, 2020 AMENDMENT NUMBER 1 TO SUBSCRIPTION AGREEMENT This Amendment to Subscription Agreement (the “Amendment”) is entered into this ____ day of March, 2020, by and between Walcott Solar, LLC, a Minnesota limited liability company (“Owner”) and The City of Lakeville (“Subscriber”). RECITALS 1. Owner and Subscriber are parties to a Subscription Agreement signed by Subscriber dated April 2, 2019, pursuant to which Subscriber acquires an allocation of capacity in a community solar garden owned and operated by Owner and related rights to Bill Credits associated with the Subscriber Energy associated with that capacity (“Subscription Agreement”). 2. Owner and Subscriber wish to amend the Subscription Agreement to properly reflect the Subscriber’s Allocated Percentage based on new information now that the solar garden is approaching its operational date. NOW, THEREFORE, in consideration of the above premises, and the mutual promises in the Subscription Agreement and this Amendment, Owner and Subscriber agree as follows. AGREEMENT 1. Definitions. Capitalized terms used in this Amendment shall have the meanings given to them in the Subscription Agreement unless otherwise expressly defined in this Amendment. 2. Amendment. Subscriber and Owner agree to amend the Subscription Agreement as follows: a. Community Solar Garden Allocation is amended to read: An amount expected to produce up to 2,040,000 kWh. 3. Effective Date. The effective date of this Amendment shall be March ___, 2020. 4. Valid and Effective. Except as otherwise expressly amended by this Amendment, the Subscription Agreement remains in full force and effect. Subscriber and Owner each confirm that their respective representations and warranties in the Subscription Agreement are true and correct as of the date of this Amendment. [Signature page on next page] 2 Walcott Solar LLC, a Minnesota limited liability company By:______________________________________ Its: Manager The City of Lakeville By:______________________________________ Douglas P. Anderson, Mayor _________________________________________ Charlene Friedges, City Clerk 1 SUBSCRIPTION AGREEMENT ESTOPPEL CERTIFICATE Walcott Solar LLC This Subscription Agreement Estoppel Certificate (this “Estoppel Certificate”) is delivered as of March ___, 2020 (the “Effective Date”) by the CITY OF LAKEVILLE, a Minnesota municipal corporation (“Subscriber”), in favor of AMALGAMATED BANK, a bank organized under the laws of the state of New York (together with its successors and assigns, “Lender”) AND VIRGO MANGATA HOLDCO, LLC, a Delaware limited liability company (“Owner,” and together with Lender, the “Parties”). WHEREAS, Subscriber entered that certain Owner Tiered Rate Subscription Agreement, dated as of February 21, 2019, with Walcott Solar LLC, a Minnesota limited liability company (“Company”) (together with all amendments and modifications thereto, collectively, the “Subscription Agreement”), a copy of which is attached hereto as Exhibit A; and WHEREAS, Subscriber executed that certain Subscriber Agency Agreement and Consent Form dated March 19, 2019 (together with all amendments and modifications thereto, collectively, the “Agency Agreement,” together with the Subscription Agreement, the “Agreement”), a copy of which is attached hereto as Exhibit B; and WHEREAS, Lender has agreed to make (i) a certain equity investment in Owner, the sole member and managing member of Company (the “Investment”), and (ii) certain loan(s) to Owner with respect to Company (the “Loan,” together with the Investment, the “Transaction”). WHEREAS, In connection with the Transaction, the Parties require that Subscriber confirm and acknowledge certain matters related to the Agreement. Capitalized terms used but not defined herein have their assigned meanings in the Agreement. Based on the foregoing, and recognizing that the Parties will rely hereon, Subscriber hereby confirms and agrees as follows: 1. Exhibits A and B set forth a true and complete copy of all documents constituting the Agreement, including the Agreement and any amendments or modifications of the same. The Agreement is in full force and effect, has not been modified, changed, altered, or amended in any respect except as indicated in Exhibit A and B. 2. As of the Effective Date: a. all payments and deposits required to be paid or posted to Subscriber under the Agreement (if any) by Company have been so paid or posted; b. all obligations and conditions of Company to be performed under the Agreement (if any) have been performed by Company; c. there are no Events of Default existing under the Agreement on the part of Company or Subscriber, and no events have occurred that, with the passage of time or the giving of notice, or both, would constitute an Event of Default by Company or Subscriber under the Agreement; d. there is no existing basis for Subscriber or Company to cancel or terminate 2 the Agreement; and e. there are no defenses, offsets, credits, rent increases, or claims of Subscriber pursuant to any of the terms or conditions of the Agreement. 3. Subscriber’s CSG Allocation 0.87 MWAC, which is approximately 21.65% of the Project’s projected output. 4. All representations made by Subscriber under the Agreement are true and correct. 5. Subscriber ratifies and confirms the Agreement in all respects. 6. To the Subscriber’s actual knowledge, there are no actions, whether voluntary or otherwise, pending against Subscriber under the Bankruptcy Laws of the United States or any state thereof. 7. Subscriber hereby acknowledges Lender is considered a “Financing Party” under the Agreement, and is entitled to the rights set forth therein, including Article 7, and the rights to copies of notices under Section 7.3 of the Agreement. Notice shall be given to Lender in writing at: Amalgamated Bank 255 California Street, Suite 600 San Francisco, CA 94111 Attention: Skyler Webster, First President E-mail: skylerwebster@amalgamatedbank.com With copy to: Norman L. Jones, III Winthrop & Weinstine, P.A. 225 South 6th Street, Suite 3500 Minneapolis, MN 55402 8. Subscriber shall not amend, modify, assign, or terminate the Agreement without prior written notice to the Parties. 9. Subscriber has read this Estoppel Certificate and acknowledges and understands the certifications and representations made herein. The undersigned signatory represents and warrants that he or she is duly authorized to execute this Estoppel Certificate on behalf of Subscriber. [Signature Page Follows Immediately] Walcott Solar LLC (City of Lakeville) Subscriber Agreement Estoppel Certificate - Signature Page IN WITNESS WHEREOF, Subscriber has executed this Estoppel Certificate as of the Effective Date. SUBSCRIBER: CITY OF LAKEVILLE, a Minnesota municipal corporation By: Name: Douglas P. Anderson Its: Mayor _________________________________ Charlene Friedges, City Clerk EXHIBIT A COPY OF SUBSCRIPTION AGREEMENT [SEE ATTACHED] EXHIBIT B COPY OF AGENCY AGREEMENT [SEE ATTACHED]