Exhibit 10.36
AMENDED AND RESTATED
OBSERVER RIGHTS AGREEMENT
THIS AMENDED AND RESTATED OBSERVER RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of [_____] (the “Effective Date”), by and among MN8 Energy LLC, a Delaware limited liability company (“MN8 Energy”), MN8 Energy Holdings LLC, a Delaware limited liability company (“MN8 Holdings”), MN8 Energy, Inc., a Delaware corporation (“MN8 Energy, Inc.”), and WSI Fund II Holdings, LP (f/k/a MN8 Fund II Holdings, L.P.), a Delaware limited partnership (“Ridgewood Investor Member”). MN8 Energy, MN8 Holdings, MN8 Energy, Inc. and their respective subsidiaries are herein referred to as “MN8,” and MN8 Energy, MN8 Holdings, MN8 Energy, Inc. and Ridgewood Investor Member are herein referred to as the “Parties.” Capitalized terms used herein but not defined herein shall have the meaning assigned to such term in the Second Amended and Restated Limited Liability Company Agreement of MN8 Holdings, dated as of the Effective Date (the “MN8 Holdings LLC Agreement”).
Recitals
WHEREAS, on December 22, 2023, MN8 Energy entered into a Preferred Unit Purchase Agreement (the “Preferred Purchase Agreement”) with Ridgewood Investor Member and certain other purchasers signatory thereto (collectively, the “Series A Preferred Members”), pursuant to which MN8 Energy issued certain Series A Preferred Units in MN8 Energy (the “Preferred MN8 Units”) to the Series A Preferred Members;
WHEREAS, in connection with the consummation of the transactions contemplated by the Preferred Purchase Agreement, on March 28, 2024, each of MN8 Energy, MN8 Holdings, MN8 Energy, Inc. and Ridgewood Investor Member entered into the Observer Rights Agreement, dated as of March 28, 2024, by and among such parties (the “Original Observer Rights Agreement”);
WHEREAS, on [_____], MN8 Holdings Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of the MN8 Holdings (“Holdings Merger Sub”), merged with and into MN8 Holdings, with MN8 Holdings surviving such merger (the “Holdings Merger”) and concurrently with the Holdings Merger, MN8 Energy Merger Sub, LLC, a Delaware limited liability company and wholly owned subsidiary of Holdings Merger Sub, merged with and into MN8 Energy, with MN8 Energy surviving such merger (the “Energy Merger”);
WHEREAS, in connection with the Energy Merger, Ridgewood Investor Member’s Preferred MN8 Units were exchanged for Series A-1 Preferred Units and Mercuria Investor Member was issued Series A-2 Preferred Units (the “Preferred Units” and together with Preferred Stock, the “Preferred Securities”);


WHEREAS, as of the Effective Date the Preferred Units held by the Ridgewood Investor Member constitute less than 10% of the equity interests of MN8 Holdings on an as-converted basis; and
WHEREAS, in connection with the consummation of the Holdings Merger and the Energy Merger, the Parties desire to amend, restate and supersede the Original Observer Rights Agreement in its entirety as set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each of the Parties hereto, the Parties hereby agree as follows:
Section 1.    Board Observer. For so long as (i) the Ridgewood Investor Member and its Affiliates collectively hold at least 25% of the Series A-1 Preferred Units Ridgewood Investor Member holds as of the Effective Date and (ii) the Board Observer (as defined in the MN8 Holdings LLC Agreement) appointed pursuant to Section 6.1.5 of the MN8 Holdings LLC Agreement is not an employee of the Ridgewood Investor Member or its Affiliates, the Ridgewood Investor Member shall have the right to appoint one (1) Board Observer to the Board of Directors that, for the avoidance of doubt, will not count towards any limitations on the size of the Board of Directors. The Ridgewood Investor Member shall notify MN8 Holdings in writing of the name of any Board Observer prior to designating such Board Observer. Each Board Observer shall enter into a board observer agreement with confidentiality obligations in a form reasonably acceptable to MN8 Holdings. The Ridgewood Investor Member shall have the right to remove and/or replace a Board Observer at any time by providing written notice of such removal and/or replacement to MN8 Holdings. The Board Observer shall not constitute a Director and shall not be entitled to vote on, or consent to, any matters presented to the Board of Directors. MN8 Holdings shall give the Board Observer notice of the applicable meeting or action taken by written consent at the same time and in the same manner as notice is given to the Directors, provide the Board Observer with access to all materials and other information given to the Directors in connection with such meetings or actions taken by written consent at the same time and in the same manner as such materials and information are furnished to the Directors, and provide the Board Observer with all rights to attend such meetings as are provided to Directors. Notwithstanding the foregoing, Board of Directors may exclude the Board Observer from the relevant portion of any meeting of the Board of Directors or any committee (and from receiving information provided to other Directors) to the extent such information or meeting involves a matter that creates, or otherwise relates to, any conflicts of interest between the Ridgewood Investor Member, its Affiliates or the Board Observer, on the one hand, and the MN8 Entities, on the other hand, or that would otherwise violate applicable law. MN8 Holdings reserves the right to exclude the Board Observer from access to any information or meeting or portion thereof if the Board of Directors determines, in its reasonable good faith discretion, that such access would cause the loss of the attorney-client privilege protection otherwise afforded to any such information or prevent the Directors from engaging in attorney-client privileged communication. The Ridgewood Investor Member (i) shall not exercise any control over MN8 Energy or its public utility Affiliates through the Board Observer and (ii) shall not seek to set or influence the price at which power is sold from any of MN8 Energy’s public utility Affiliates. On
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the earlier to occur of (i) the date the Ridgewood Investor Member and its Affiliates collectively hold less than 25% of the Series A-1 Preferred Units held by Ridgewood Investor Member as of the Effective Date and (ii) the date that the Ridgewood Investor Member delivers a written waiver of its rights under this Section 1 to MN8 Holdings the Ridgewood Investor Member will have no further rights under this Section 1.
Section 2.    Miscellaneous.
(a)    Entire Agreement. This Agreement is intended by the Parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings other than those set forth or referred to herein with respect to the rights granted by MN8 Holdings or any of its Affiliates or Ridgewood Investor Member or any of their respective Affiliates set forth herein. This Agreement supersedes all prior agreements and understandings between the Parties with respect to the subject matter hereof (other than the Preferred Purchase Agreement and the MN8 Holdings LLC Agreement), including the Original Observer Rights Agreement.
(b)    Incorporation by Reference. The following sections of the Preferred Purchase Agreement are hereby incorporated by reference into this Agreement, mutatis mutandis: Section 10.4 (Severability), Section 10.05 (Governing Law), Section 10.6 (Descriptive Headings), Section 10.7 (Gender), Section 10.8 (References), Section 10.09 (Consent to Jurisdiction), Section 10.10 (Amendment), Section 10.11 (No Recourse), Section 10.12 (Waiver), Section 10.14 (Counterparts), Section 10.15 (No Strict Construction) and Section 10.16 (Limitation on Damages).
(c)    Notices. All notices and demands provided for in this Agreement shall be in writing and shall be delivered to the following addresses:
If to any MN8 Entity, as set forth below:
MN8 Energy LLC
1155 Avenue of the Americas
27th Floor
New York, NY 10036
Attention: General Counsel
Email: notices@mn8energy.com
with a copy (which shall not constitute notice) to:
Vinson & Elkins L.L.P.
1114 Avenue of the Americas
New York, NY 10036
Attention: Todd R. Triller; Crosby W. Scofield
Email: ttriller@velaw.com; cscofield@velaw.com
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If to Ridgewood Investor Member, as set forth below:
WSI Fund II Holdings, L.P.
c/o Ridgewood Infrastructure, LLC
34 E 51 ST
New York, NY 10036
Attention: Maria Haggerty
Email: mhaggerty@ridgewood.com
with a copy (which shall not constitute notice) to:
King & Spalding LLP
1185 Avenue of the Americas
New York, NY 10036
Attention: Jonathan Melmed
Email: jmelmed@kslaw.com
(d)    Binding Effect; Assignment. This Agreement will be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, but will not be assignable or delegable by any Party hereto without the prior written consent of each of the other Parties; provided, that if Ridgewood Investor Member Transfers, in accordance with the terms of the MN8 Holdings LLC Agreement (if prior to an IPO) or the Certificate of Designations (as defined in the MN8 Holdings LLC Agreement) (if following an IPO), all of its Preferred Securities to an Affiliate or Affiliates of the Ridgewood Investor Member, this Agreement shall automatically be assigned by Ridgewood Investor Member to, and shall be binding upon, such Affiliate(s).
(e)    Termination. This Agreement shall terminate and be of no further force and effect upon the earlier of (i) the date on which Ridgewood Investor Member, and its Affiliates who are assigned this Agreement in accordance with clause (d) above, if any, ceases to hold any Preferred Securities and (ii) such earlier date as the Parties may otherwise agree.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Parties hereto execute this Agreement, effective as of the date first above written.
MN8 ENERGY LLC
By:
Name:Jon Yoder
Title:Chief Executive Officer
MN8 ENERGY HOLDINGS LLC
By:
Name:Jon Yoder
Title:Chief Executive Officer
MN8 ENERGY, INC.
By:
Name:Jon Yoder
Title:Chief Executive Officer
Signature Page to Amended and Restated Ridgewood Observer Rights Agreement

WSI FUND II HOLDINGS, LP
By: WSI Fund II Holdings GP, LLC, as General
Partner
By:
Name:Michael Albrecht
Title:Managing Partner
Signature Page to Amended and Restated Ridgewood Observer Rights Agreement