Landlord Consent and Agreement (this “Agreement”) dated, 2015 (the “Effective Date”) made between The Corporation of the City of Owen Sound (the “Landlord”) to and in favour of Eclipsall Funding Ltd. (the “Secured Creditor”), as the lender under the Credit Agreement (as such term is defined herein), and to the Tenant (as such term is defined herein).
(a) The Secured Creditor has agreed to make certain loans to Biidaaske Inc. (the “Tenant”), upon the terms and subject to the conditions set forth in a credit agreement (as the same may be supplemented, amended, restated or otherwise modified, the “Credit Agreement”), entered into among the Tenant and the Secured Creditor, as lender, dated on or around the Effective Date.
(b) The Landlord is the owner of those lands legally known as Park Lot 10 Range 9 EGR Pl Owen Sound; Pt Park Lot 9 Range 9 EGR Pl Owen Sound; Pt Park Lot 9 Range 8 EGR Pl Owen Sound Pt 1 & 2, 16R7694, Pt 3, 16R1193 & Pt 8, 16R337 Except Pt 1, 16R1193; Owen Sound (the “Premises”) and leased to the Tenant, pursuant to a lease (the “Lease”) dated November 4, 2013 between the Landlord, as landlord, and the Tenant, a copy of which is attached as Schedule "A".
(c) The Tenant has entered into a Feed-In Tariff Contract dated August 29, 2014 (the “FIT Contract”) with the Ontario Power Authority, which entity amalgamated with the Independent Electricity System Operator effective as of January 1, 2015, pursuant to which the Tenant will develop and operate a solar photovoltaic ground-mount renewable energy generation facility on the Premises (the “Project”).
(d) All capitalized terms used in this Agreement but not defined herein, shall have the corresponding meanings ascribed to such terms in the Lease.
In consideration of the foregoing and the mutual agreements contained herein (the receipt and adequacy of which are acknowledged), the parties agree as follows:
Section 1 Consent.
To the extent required pursuant to the terms of the Lease, the Landlord consents to the mortgaging and charging of, and the granting of a security interest in, the Lease and the fixtures, equipment and personal property of the Tenant now or hereafter located on or used in connection with the Premises (collectively, the “Security”) as security for the obligations of the Tenant to the Secured Creditor under the Credit Agreement.
Section 2 Representations and Warranties.
The Landlord represents and warrants to the Secured Creditor that (i) the Lease is in full force and effect, (ii) there have been no amendments to the Lease, including, without
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limitation, amendments respecting the amount of rent, the term of the Lease or the assignment and sublet provisions of the Lease, (iii) the Lease constitutes the entire agreement between the Landlord and the Tenant, and (iv) the Landlord is not aware of any existing defaults under the Lease.
Section 3 Notice to the Secured Creditor or a Purchaser.
(1) The Landlord agrees that any written notice given by the Landlord to the Tenant pursuant to the Lease shall also be given to the Secured Creditor at the same time.
(2) The Landlord will give any purchaser or any other person acquiring an interest in the Premises from the Landlord prior written notice of the Lease (including the terms of this Agreement) and of any notice received by the Landlord from the Secured Creditor.
Section 4 Secured Creditor Protections.
(1) The Landlord hereby agrees that the Secured Creditor will, without any further action being required, have the benefit of the following provisions until such time as the Secured Creditor advises the Landlord in writing that the Security is no longer in effect:
(a) the Landlord will give the Secured Creditor the right to cure any breach or default by the Tenant under the Lease, within a period of sixty (60) days commencing on the later of (i) the expiry of the cure period afforded to the Tenant under the Lease and (ii) the date on which the Landlord gives the Secured Creditor notice of such breach or default pursuant to Section 23 of the Lease, or such longer period of time as may reasonably be required to cure such breach or default; and no exercise by the Landlord of any of its rights or remedies against the Tenant will be effective against the Tenant or the Secured Creditor unless the Landlord has given the Secured Creditor such notice and opportunity to cure;
(b) if the Secured Creditor is not capable of curing any breach or default of the Tenant under the Lease (such as a breach or default relating to the bankruptcy or insolvency of the Tenant), the Secured Creditor will have the right to cure all defaults that are curable within the time period specified in Section 4(1)(a) above and the Landlord agrees that it will not terminate the Lease (or exercise any other rights or remedies against the Secured Creditor) if all curable defaults are cured by the Secured Creditor within such time period;
(c) the Landlord agrees that if there exists any breach or default of the Tenant under the Lease at any time when any receivership, insolvency, bankruptcy or similar proceedings or events relating to the Tenant are proceeding or when the Secured Creditor is enforcing the Security, (i) the Landlord will not terminate the Lease as a result thereof, and (ii) if the Lease is actually terminated or disclaimed in connection with or as a result of any such proceedings or enforcement, the Secured Creditor or its nominee or appointee will have the right to enter into a new lease for the Premises upon
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the same terms and conditions (including any options to renew or to purchase) as the terminated Lease (the “New Lease”), provided that:
(i) the Secured Creditor has notified the Landlord in writing of its intention to enter into the New Lease within sixty (60) days from the date the Secured Creditor receives written notice from the Landlord that the Lease has been terminated or disclaimed; and
(ii) the Secured Creditor pays to the Landlord such amounts as may then be owing by the Tenant to the Landlord under the terminated Lease and cures or commences diligently to cure any breach or default by the Tenant under the terminated Lease that is capable of being cured by the Secured Creditor;
If the Secured Creditor so notifies the Landlord of its intention to enter into a New Lease, then the Landlord will forthwith execute and deliver to the Secured Creditor a New Lease;
(d) if the Secured Creditor takes enforcement proceedings under the Security and advises the Landlord of its intention in writing to maintain the Lease (the “Secured Creditor Notice”),
(i) the Secured Creditor: (1) will be entitled to all of the rights of the Tenant under the Lease as though it were an original party thereto,
(2) will only be liable for: (A) the payment of any arrears of Base Rent that the Landlord gives the Secured Creditor written notice of within five (5) Business Days of the Secured Creditor Notice being given to the Landlord, and (B) the performance of the Tenant’s covenants and obligations arising under the Lease for the period starting on the date enforcement proceedings were commenced and ending on the date such enforcement proceedings are terminated or the Secured Creditor assigns, transfers, surrenders or terminates the Lease in accordance with its terms, and (3) may enter upon the Premises and take occupancy of the Premises in the course of realizing on its security pursuant to its security documents, provided that during such occupancy the Secured Creditor (or a receiver) observes and performs all of the obligations of the Tenant under the Lease; and
(ii) (1) payment of rent under the Lease shall not accelerate, (2) the Landlord shall not exercise its right to re-enter or to take possession of the Premises, and (3) the term of the Lease shall not expire or become forfeited or determined, all so long as the covenants of the Tenant contained in the Lease are performed when due.
(2) The Landlord hereby covenants and agrees to and in favour of the Tenant and the Secured Creditor to maintain its status as a Municipal Site Host (as defined in the FIT Contract) in respect of the Project and the Premises until the fifth (5th)
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anniversary of the Commercial Operation Date (as defined in the FIT Contract) of the Project.
(3) The provisions of this Section 4 will enure to the benefit of the Secured Creditor and its successors and assigns, and any rights conferred on the Secured Creditor by the terms of this Agreement or limiting its liability under the Lease will benefit each receiver or receiver-manager appointed by the Secured Creditor or by a court of competent jurisdiction.
Section 5 Right to Assign.
The performance by the Secured Creditor (or a receiver) of the covenants of the Tenant under the Lease shall not constitute the Secured Creditor or a receiver as being a tenant under the Lease and shall not be deemed to constitute an attornment by the Secured Creditor or a receiver to the Landlord or a novation of the Lease. Provided that the terms and covenants of the Lease are being performed, the Secured Creditor or a receiver shall have the right to assign the Lease to any person who will covenant to observe and perform its terms.
Section 6 Machinery and Equipment.
The Landlord agrees that the Project Equipment and Connecting Equipment (as defined in the Lease) are the property of the Tenant and are the subject matter of the Security and notwithstanding that such Project Equipment and Connecting Equipment may be affixed to the Premises, same shall not constitute a fixture. The Landlord subordinates any claims it may have against the property and assets of the Tenant to the Security and so long as the Secured Creditor has cured any default in the payment of Base Rent under the Lease as provided for in this Agreement, the Landlord waives any right (whether statutory or common law) it may have to distrain or lien the Tenant's personal property on the Premises. The Landlord agrees that the Secured Creditor or a receiver shall be entitled to remove Project Equipment and Connecting Equipment in enforcing or protecting the Secured Creditor’s rights under the Security, provided that the Secured Creditor or a receiver, as the case may be, repairs any damage caused to the Premises by such removal.
Section 7 Acknowledgment of Waiver of the Tenant’s Condition
The Landlord hereby acknowledges and confirms that it has waived receipt of Notice from the Tenant of satisfaction of the Tenant’s Condition as required pursuant to Section 5(c) of the Lease and the Landlord and the Tenant hereby ratify and confirm the provisions of the Lease and acknowledge that the Lease remains in full force and effect.
Section 8 No Merger.
If the Tenant acquires fee ownership of the Premises, or in the event of the Tenant’s voluntary surrender of the leasehold estate, there shall be no merger of the leasehold estate created by the Lease without the prior written consent of the Secured Creditor provided the Secured Creditor shall be deemed to have given such consent in the case of surrender of the leasehold interest, unless the Secured Creditor enforces its security within 30 days of the Landlord providing Notice to the Secured Creditor.
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Section 9 Sale of the Premises.
The Landlord will not sell, mortgage, charge, or otherwise dispose of all or any part of the Premises, or its interest in the Lease, except to a party which has, prior to such sale, mortgage, charge or other disposition, executed and delivered to the Secured Creditor an agreement substantially in the form of this Agreement.
Section 10 Notices, Etc.
Any notice, direction or other communication in connection with this Agreement shall be in writing and given by delivering it or sending it by facsimile or other similar form of recorded communication addressed:
(a) to the Landlord at:
The Corporation of the City of Owen Sound 808 2nd Avenue East
Any such communication shall be deemed to have been validly and effectively given (i) if personally delivered, on the date of such delivery if such date is a business day and such delivery was made prior to 4:00 p.m. (Toronto time), otherwise on the next business day, and (ii) if transmitted by facsimile or similar means of recorded communication, on the business day next following such date of transmission. Any party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice shall be sent to the party at its changed address.
Section 11 Planning Act Declaration and Acknowledgment.
The Tenant hereby declares that the rights in the Premises and other lands acquired pursuant to the Lease have been acquired for the purpose of a renewable energy generation facility or renewable energy project, in accordance with Section 50(3)(d.1) and/or Section 50(5)(c.1) of the Planning Act (Ontario). The Landlord acknowledges this declaration, and the Landlord and the Tenant hereby ratify and confirm the provisions of the Lease, as amended herein, and acknowledge that the Lease remains in full force and effect.
Section 12 Successors and Assigns.
This Agreement shall be binding upon the Landlord and its successors and assigns and shall enure to the benefit of the Secured Creditor and the Tenant and their respective successors and assigns.
Section 13 Governing Law.
This Agreement shall be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.
Section 14 Counterparts.
This Agreement may be executed in any number of counterparts and delivered in the original by electronic means, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.