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HomeMy WebLinkAbout2016-27181 THIS AGREEMENT REGARDING AMENDMENT ONE TO SOLAR PPA — 4950 CENTRAL AVENUE NE ("Agreement ") is effective as of this __jg day of -14e, 2016, and was executed by and between Community Pride Bank, a Minnesota corporation ( "Lender "); Apex Efficiency Solutions, SBC, a Minnesota special benefits corporation ( "Apex "); and the City of Columbia Heights, a Minnesota municipal corporation ( "City "). RECITALS WHEREAS, Apex and the City have entered into a Solar Power Purchase Agreement dated November 17, 2015 ("Solar Power Agreement "). The Solar Power Agreement calls for the City to purchase from Apex all of the energy to be generated by a 39.7 kW roof mounted solar system ( "Solar Power System ") to be constructed and owned by Apex on property owned by the City and located at 4950 Central Avenue N.E., Columbia Heights, MN 55421 ( "Project Site "). WHEAREAS, Apex and the City have entered into a System Site Lease Agreement ( "Lease ") dated September 15, 2015, which Lease grants Apex the right to install, operate and maintain the Solar Power.System on the Project Site. WHEREAS, Apex has requested that the Lender provide financing to Apex for the purpose of partially funding the acquisition and installation of the Solar Power System ("Apex Loan"). WHEREAS, the Lender has conditioned its willingness to provide financing to Apex on, among other things, the following: (i) the granting by Apex to the Lender of a security interest in the Solar Power System and any and all payments to be made by the City to Apex pursuant to the Solar Power Agreement, (ii) the execution of a Collateral Assignment of Lease and Solar Power Purchase Agreement ("Collateral Assignment "), and (iii) the execution and delivery of this Agreement by Apex and the City. NOW, THEREFORE, in consideration of the above - recitals, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Acknowledgment of Security Interest. City hereby acknowledges that Lender will be obtaining a security interest in the Solar Power System for the purpose of securing the Apex Loan. City further acknowledges that the Lender will be taking a security interest in Apex's right to receive payments from the City pursuant to the Solar Power Agreement. The security interests will be created by a Security Agreement executed by Apex in favor of the Lender and will be perfected by the filing of the following: -) a UCC —1 with the Office of the Minnesota Secretary of State, and -) a UCC - 1 Fixture Financing Statement with the Anoka County Recorder/Registrar of Titles Office. The City also acknowledges that Lender will be obtaining the Collateral Assignment as additional collateral for the Apex Loan. 2. Priority of Security Interest. The City hereby agrees that the Bank security interest in the Solar Power System shall be, and is hereby declared to be, prior and superior to any interest of the City in the Solar Power System. Without limiting the generality of the foregoing sentence, the City agrees that any option it may have to purchase the Solar Power System is hereby subordinated to any security interest that the Lender may now or hereafter hold in the Solar Power System. 3. Collection Rights. If Apex defaults under the terms the Apex Loan, the Lender shall have the right to exercise any and all rights that it may have under Minnesota law for the purpose of collecting the Apex Loan, including, without limitation, the right to: (i) demand that City pay all amounts due under the Solar Power Agreement directly to the Lender, (ii) repossess and sell the Solar Power System in the manner provided by the Uniform Commercial Code, as enacted in the State of Minnesota, and (iii) exercise its right under the Collateral Assignment. 4. Agreement Regarding. Enforcement of Rights. (a) In the event Apex defaults under the terms of the Apex Loan and such default is not cured within any applicable grace or cure period, Lender will send notice of default to the City along with a demand that all payments to be made under and pursuant to the Solar Power Agreement be sent directly to the Lender. City agrees to honor such demand and send any and all payments due on the Solar Power Agreement directly to the Lender. Lender will apply all such amounts to the Apex Loan (including interest, principal, and costs of collection) in such order of application as the Lender shall reasonably elect. In the event Lender sends a demand for payment to the City, Apex agrees that all amounts paid to the Lender by the City shall (in addition to being applied to the Apex Loan) be applied in satisfaction of the City's obligations to Apex under the Solar Power Agreement. (b) In the event the payments made by the City to Lender pursuant to subsection (a) of this Section 4. are sufficient to prevent additional defaults from arising under the Apex Loan and are sufficient to cure any then existing defaults within a reasonable amount of time, Lender agrees that it will not seek to repossess the Solar Power System. However, if, in the Lender's reasonable judgment, the payments to be made by the City to the Lender pursuant to the Solar Power Agreement will not be sufficient to prevent additional defaults from arising under the Apex Loan or will not be sufficient to cure any existing defaults within a reasonable amount of time, then Lender may exercise its right to repossess the Solar Power System in accordance with the provisions of Minnesota law. (c) In the event Lender exercises its right to repossess the Solar Power System, the City agrees that it will allow the Lender and its agents to (A) enter onto the City's property and (B) take possession of, show and display to potential purchasers, administer, dispose of, sell and otherwise deal with the Solar Power System. When exercising these rights, the Lender may sell 2 the Solar Power System after it is removed from the Project Site, or the Lender may sell the Solar Power System in- place. -} Removal. In the event the Lender elects to remove the Solar Power System, Lender will be entitled to enter on to the Project Site for the purpose of removing the Solar Power System. Lender shall have no obligation to pay rent to the City and Lender shall have no obligation to repair or restore the Project Site, except that Lender shall be obligated to repair any damages done in the removal of the Solar Power System that are caused by the negligence or willful misconduct of the Lender or its agents. -) Sale In- Place. In the event the Lender elects to sell the Solar Power System in- place, Apex and the City agree that the Lender shall have the right to enter on to the Project Site for the purpose of showing the Solar Power System to potential purchasers. Lender shall also have the right (pursuant to the Collateral Assignment) to transfer all of Apex's rights under the Power Purchase Agreement and Lease to the buyer of the Solar Power System. In the alternative, at the sole election of the Lender, the Power Purchase Agreement and Lease shall be rendered null and void by reason of Apex's default under the Apex Loan and, in such event, the City agrees that it will enter into a new power purchase agreement and lease with the buyer of the Solar Power System. The new power purchase agreement and lease shall have the same terms as the original Solar Power Agreement and Lease, except that such new agreement and lease shall only run for the remaining term of the original Solar Power Agreement and Lease. (d) Lender shall give the City at least twenty (20) days notice of its intent to enter onto the Property for the purpose of repossessing the Solar Power System or selling such system in- place. (e) The City agrees that the Lender shall not become obligated under the Solar Power Agreement or Lease unless the Lender provides the City written notice that it has elected to assume and perform Apex's obligations under those documents. 5. Prohibition on Removal. Apex and the City agree that they will not remove the Solar Power System from the Project Site without the written consent of the Lender, which consent may be granted or withheld in the Lender's reasonable discretion. 6. Reporting, Notice, Cancellation and Release. (a) Apex hereby agrees that the Lender may provide the City with information regarding the Apex Loan. In addition, Apex agrees that Lender may, and Lender agrees that it will, provide City with any written notice of default served by Lender upon Apex in connection with the Apex Loan; provided, however that the failure to do so shall not invalidate any actions taken by the Lender by reason of such default. (b) Apex hereby agrees that City may, and City agrees that it will, provide information regarding the status of the Solar Power Agreement and Lease to the Lender within a reasonable time of request therefor by the Lender. Apex further agrees that City may, and the City agrees that it will, provide Lender with any written notice of default served by City upon Apex in connection with the Solar Power Agreement or Lease. (c) For purpose of allowing Lender and the City to make the disclosures set forth in Sections 6 (a) and (b) above, Apex hereby releases and waives its rights under (i) any federal, state or local privacy law, rule or regulation, and (ii) any privacy policy now or hereafter enacted by the Lender or the City to the full extent necessary to allow the Lender and City to make the disclosures. (d) In the event of any act or omission by Apex that would give City the right, either immediately or after the lapse of time, to terminate the Solar Power Agreement or Lease, City agrees that it will not exercise any such right: (i) until City has given written notice of such act or omission to Lender; and (ii) until Lender has elected by written notice to City not to cure the default, or until Lender has ceased to diligently proceed to cure the default. (e) Assuming no action has been commenced by a trustee in bankruptcy or debtor -in- possession to recover any payments previously received by the Lender, Lender agrees to release its security interest in the Solar Power System (and the payment stream generated thereby) ninety (90) days after the full payment of Apex Loan. 7. Notices. All notices required or allowed by this Agreement shall be deemed to have been given if hand delivered or mailed by certified mail, return receipt requested, to the following addresses: Lender: Community Pride Bank 1441 Bunker Lake Blvd. N.E. Ham Lake, MN 55304 Attn: Joseph Haag 763 -235 -3957 City: City of Columbia Heights 590 — 4e Avenue N.E. Columbia Heights, MN 55421 Attn: City Manager 19 Apex: Apex Efficiency Solutions, SBC 403 Jackson Street, Suite 308 Anoka, MN 55303 Attn: Mark Rasmussen 763 -201 -8952 8. Miscellaneous. (a) This Agreement shall inure to the benefit of and shall be binding upon Lender, City and Apex, and their respective heirs, personal representatives, successors and assigns. (b) In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall, at the option of the Lender, not affect any other provision of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. (c) This Agreement shall be governed by and construed according to the laws of the State of Minnesota. (d) This Agreement supersedes any inconsistent provision of the Solar Power Agreement and Lease. (e) Nothing contained in this Agreement shall be construed to derogate from or in any way impair or affect the lien and charge or provisions of the Lender's security interest. (f) Lender shall have no obligation and shall not incur any liability with respect to any warranties relating to the Solar Power System, including, without limitation, any warranties respecting use, compliance with zoning, or fitness for purpose or possession. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date and year first set forth above. CITY: The City of Columbia He hts, a municipal cordration 1A Gary L. Peterson Its: Ma or Y: Walter R. Pehst Its: City Manager _ 5 Apex Efficiency Solutions, SBC, a Minnesota special benefits corporation gory Ackerson 0�7 Its: Chief Executive Officer LENDER: Community Pride Bank, a Minnesota corporation