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D-8. US Solar Subscription Agreement: Approve Amendment Assigning the Agreement from US Solar to Minnesota SolarOF CHANI ASSE N Chanhassen is a Community for Life -Providing for Today and Planning for Tomorrow ORANDUM TO: Mayor and City Council FROM: Greg Sticha, Finance Director DATE: August 28, 2017 SUBJ: Approval of Assignment of Solar Subscription Agreement PROPOSED MOTION: "The City Council approves the attached amendment to the subscription agreement with United States Solar assigning the Agreement with the City of Chanhassen to Minnesota Solar." Approval requires a simple majority vote of the City Council. BACKGROUND In 2016, the City of Chanhassen and United States Solar entered into a Solar Subscription agreement for 825,000 KWH at a price of $0.1179/kwh for General Service Meters. This summer United States Solar entered into an agreement with Minnesota Solar to purchase their interest in this and other solar gardens in the state of Minnesota. The assignment and the attached amendment does not substantially change the agreement entered into with the city. All significant provisions, including the pricing, is not being amended. Staff had the City Attorney review the amendment and he had no concerns with the amendment. RECOMMENDATION It is recommended that the City Council approve the attached amendment assigning the Solar Subscription agreement with United States Solar to Minnesota Solar. ATTACHMENT 1. Amendment to Solar Subscription Agreement. fAgregs\solar gardens\8-28 memo assigning us solar agreement to mn solar.docx PH 952.227.1100 • www.cl.chanhassen.mn.us • FX 952.227.1110 7700 MARKET BOULEVARD • PO BOX 147 • CHANHASSEN • MINNESOTA 55317 FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT THIS FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT (this "Amendment") is entered into as of August _, 2017 (the "Effective Date"), by and between Minnesota Solar CSG 4, LLC, a Delaware limited liability company (together with its successors and assigns "Operator"), and City of Chanhassen (together with its successors and assigns "Subscriber"); Subscriber and Operator, collectively, are hereinafter referred to as the "Parties". RECITALS A. Subscriber and United States Solar Corporation ("Original Operator'), entered into that certain Fixed Rate Subscription Agreement dated May 15, 2017, as assigned by Original Operator to Minnesota Solar, LLC ("Minnesota Solar"), pursuant to that certain Assignment and Assumption Agreement dated July 7, 2017, and as subsequently assigned in part by Minnesota Solar to Operator, its wholly-owned subsidiary, pursuant to that certain Assignment and Assumption Agreement dated August 10, 2017 (as assigned, the "Subscription Agreement"), pursuant to which Subscriber has subscribed to a portion of the community solar gardens as more particularly described in the Subscription Agreement; and B. In connection with the construction and operation of the community solar gardens described in the Subscription Agreement, Operator and its affiliates are negotiating the terms and conditions of a financing transaction, and are providing Subscriber with notice of the financing transaction, as well as the addresses for any notice to be sent to the Financing Parties under the Subscription Agreement. C. Subscriber and Operator desire to amend the Subscription Agreement as more particularly set forth below. All of the capitalized terms used in this Amendment, unless otherwise defined herein, shall have the same meaning as assigned to such terms in the Subscription Agreement. AMENDMENT NOW, THEREFORE, for and in consideration of the mutual covenants of the Parties hereto, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. Amendment to Subscription Agreement. The parties agree that the Subscription Agreement is amended, as follows: 1.1 All references to "US Solar" in the Subscription Agreement shall be replaced by "Operator". 1.2 The definition of "Financing Party" on Exhibit A of the Subscription Agreement is hereby amended to read as follows: "Financing Party. A person or persons providing construction or permanent financing or tax equity financing in connection with construction, ownerships, operation 1 and maintenance of the Project, or if applicable, any person to whom the ownership interest in the Project has been transferred, subject to a leaseback of the Project from such person." 1.3 Exhibit A of the Subscription Agreement is amended to add a new definition, Force Majeure, which shall read as follows: "Force Majeure. Any act of God, act of public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any curtailment, order regulation or restriction imposed by governmental, military or lawfully established civilian authorities, or any other cause beyond a Party's control. An event of Force Majeure does not include an act of negligence or intentional wrongdoing." 1.4 Article 6 is amended so that in each case where Subscriber is required to provide notice to Operator, each such provision shall read that Subscriber shall also provide notice concurrently to each of the Financing Parties. 1.5 Clause i. in Section 6.3(a) is amended to read as follows: "i. You provide us with at least ninety (90) days' notice of such transfer, our Financing Parties approve of your transfer request, which approval will not be unreasonably withheld; and" 1.6 Section 10.1(b) is amended to add a new clause (v) thereto, which shall read as follows: "(v) an Event of Default has occurred with respect to Subscriber." 1.7 Article 12 is amended to add a new Section 12.10 that shall read as follows: "12.10. Services Contract. The Parties intend that this Agreement be treated as a "service contract" within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended." 2. Bill Credit Rate. The Parties acknowledge that, as of the date of this Amendment, the Bill Credit Rate in effect are as follows: Customer Class Bill Credit Type Bill Credit Rate per kWh (AC) for Energy Delivered to Company Small General Service Standard $0.12798 Enhanced — Solar Gardens > 250kW AC $0.14798 General Service Standard $0.10296 Enhanced — Solar Gardens > 250kW AC $0.12296 3. Notices to FinancingParties. Subscriber hereby acknowledges notice from Operator that each of RBC Tax Credit VI, LLC and Cooperatieve Rabobank U.A., New York Branch, shall be Financing Parties for purposes of the Subscription Agreement. Subscriber shall provide copies of any notices concerning the Subscription Agreement or delivered to Operator pursuant thereto (including, without limitation, any notices regarding any breach or default), to each Financing Party 2 at the addresses set forth below or such other address as they (or their affiliates, successors and assigns) direct Operator in writing. No notices regarding any breach or default by Operator under the Subscription Agreement shall be effective unless a copy thereof is concurrently delivered to each of the Financing Parties as set forth above. RBC Tax Credit VI, LLC c/o RBC Tax Credit Equity, LLC 600 Superior Avenue, Suite 2300 Cleveland, Ohio 44114 Attn: President & General Counsel Cooperatieve Rabobank U.A., New York Branch, 245 Park Avenue New York, NY 10167 Attention: Hemani Jadhav/Antoine Collomb/Jason Wetzel 4. Ratification. The Subscription Agreement, as amended by this Amendment, is hereby ratified by Subscriber and Operator. Except as expressly amended by this Amendment, all terms and conditions of the Subscription Agreement shall remain unchanged and in full force and effect. In the event of any inconsistency between the terms and conditions of the Subscription Agreement and this Amendment, the terms and conditions of this Amendment shall control. This Amendment and the Subscription Agreement cannot be modified in any manner other than by written modification executed by Subscriber and Operator. The Subscription Agreement, as hereby amended, contains all of the terms agreed upon between Subscriber and Operator with respect to the subject matter hereof. 5. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute one agreement. To facilitate execution of this Amendment, the Parties may execute and exchange by email counterparts of the signature pages, which email counterpart shall be binding as if they were originals. No originals shall be required. 6. Miscellaneous. The Parties have read this Amendment and on the advice of counsel they have freely and voluntarily entered into this Amendment. This Amendment shall be binding on and inure to the benefit of the parties and their successors. [Signature page follows.] 3 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed effective as of the date first written above. OPERATOR: MINNESOTA SOLAR CSG 4, LLC By: Minnesota Solar, LLC Its: Member By: Name: Jeff Jenner Its: Chief Executive Officer SUBSCRIBER: CITY OF CHANHASSEN By: Name: Denny Laufenburger Its: Mayor By: Name: Todd Gerhardt Its: City Manager rd FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT THIS FIRST AMENDMENT TO SUBSCRIPTION AGREEMENT (this "Amendment") is entered into as of August _, 2017 (the "Effective Date"), by and between Minnesota Solar CSG 4, LLC, a Delaware limited liability company (together with its successors and assigns "Operator'), and City of Chanhassen (together with its successors and assigns "Subscriber"); Subscriber and Operator, collectively, are hereinafter referred to as the "Parties". RECITALS A. Subscriber and United States Solar Corporation ("Original al Operator"), entered into that certain Fixed Rate Subscription Agreement dated May 15, 2017, as assigned by Original Operator to Minnesota Solar, LLC ("Minnesota Solar"), pursuant to that certain Assignment and Assumption Agreement dated July 7, 2017, and as subsequently assigned in part by Minnesota Solar to Operator, its wholly-owned subsidiary, pursuant to that certain Assignment and Assumption Agreement dated August 10, 2017 (as assigned, the "Subscription Agreement"), pursuant to which Subscriber has subscribed to a portion of the community solar gardens as more particularly described in the Subscription Agreement; and B. In connection with the construction and operation of the community solar gardens described in the Subscription Agreement, Operator and its affiliates are negotiating the terms and conditions of a financing transaction, and are providing Subscriber with notice of the financing transaction, as well as the addresses for any notice to be sent to the Financing Parties under the Subscription Agreement. C. Subscriber and Operator desire to amend the Subscription Agreement as more particularly set forth below. All of the capitalized terms used in this Amendment, unless otherwise defined herein, shall have the same meaning as assigned to such terms in the Subscription Agreement. AMENDMENT NOW, THEREFORE, for and in consideration of the mutual covenants of the Parties hereto, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 1. Amendment to Subscription Agreement. The parties agree that the Subscription Agreement is amended, as follows: 1.1 All references to "US Solar" in the Subscription Agreement shall be replaced by "Operator". 1.2 The definition of "Financing Party" on Exhibit A of the Subscription Agreement is hereby amended to read as follows: "Financing Party. A person or persons providing construction or permanent financing or tax equity financing in connection with construction, ownerships, operation 1 and maintenance of the Project, or if applicable, any person to whom the ownership interest in the Project has been transferred, subject to a leaseback of the Project from such person." 1.3 Exhibit A of the Subscription Agreement is amended to add a new definition, Force Majeure, which shall read as follows: "Force Majeure. Any act of God, act of public enemy, war, insurrection, riot, fire, storm or flood, explosion, breakage or accident to machinery or equipment, any curtailment, order regulation or restriction imposed by governmental, military or lawfully established civilian authorities, or any other cause beyond a Party's control. An event of Force Majeure does not include an act of negligence or intentional wrongdoing." 1.4 Article 6 is amended so that in each case where Subscriber is required to provide notice to Operator, each such provision shall read that Subscriber shall also provide notice concurrently to each of the Financing Parties. 1.5 Clause i. in Section 6.3(a) is amended to read as follows: "i. You provide us with at least ninety (90) days' notice of such transfer, our Financing Parties approve of your transfer request, which approval will not be unreasonably withheld; and" 1.6 Section 10.1(b) is amended to add a new clause (v) thereto, which shall read as follows: "(v) an Event of Default has occurred with respect to Subscriber." 1.7 Article 12 is amended to add a new Section 12.10 that shall read as follows: "12.10. Services Contract. The Parties intend that this Agreement be treated as a "service contract" within the meaning of Section 7701(e) of the Internal Revenue Code of 1986, as amended." 2. Bill Credit Rate. The Parties acknowledge that, as of the date of this Amendment, the Bill Credit Rate in effect are as follows: Customer Class Bill Credit Type Bill Credit Rate per kWh (AC) for EnergyDelivered to Company Small General Service Standard $0.12798 Enhanced — Solar Gardens > 250kW AC $0.14798 General Service Standard $0.10296 Enhanced — Solar Gardens > 250kW AC $0.12296 3. Notices to Financing Parties. Subscriber hereby acknowledges notice from Operator that each of RBC Tax Credit VI, LLC and Co6peratieve Rabobank U.A., New York Branch, shall be Financing Parties for purposes of the Subscription Agreement. Subscriber shall provide copies of any notices concerning the Subscription Agreement or delivered to Operator pursuant thereto (including, without limitation, any notices regarding any breach or default), to each Financing Party 2 at the addresses set forth below or such other address as they (or their affiliates, successors and assigns) direct Operator in writing. No notices regarding any breach or default by Operator under the Subscription Agreement shall be effective unless a copy thereof is concurrently delivered to each of the Financing Parties as set forth above. RBC Tax Credit VI, LLC c/o RBC Tax Credit Equity, LLC 600 Superior Avenue, Suite 2300 Cleveland, Ohio 44114 Attn: President & General Counsel Cooperatieve Rabobank U.A., New York Branch, 245 Park Avenue New York, NY 10167 Attention: Hemani Jadhav/Antoine Collomb/Jason Wetzel 4. Ratification. The Subscription Agreement, as amended by this Amendment, is hereby ratified by Subscriber and Operator. Except as expressly amended by this Amendment, all terms and conditions of the Subscription Agreement shall remain unchanged and in full force and effect. In the event of any inconsistency between the terms and conditions of the Subscription Agreement and this Amendment, the terms and conditions of this Amendment shall control. This Amendment and the Subscription Agreement cannot be modified in any manner other than by written modification executed by Subscriber and Operator. The Subscription Agreement, as hereby amended, contains all of the terms agreed upon between Subscriber and Operator with respect to the subject matter hereof. 5. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, and all such counterparts shall constitute one agreement. To facilitate execution of this Amendment, the Parties may execute and exchange by email counterparts of the signature pages, which email counterpart shall be binding as if they were originals. No originals shall be required. 6. Miscellaneous. The Parties have read this Amendment and on the advice of counsel they have freely and voluntarily entered into this Amendment. This Amendment shall be binding on and inure to the benefit of the parties and their successors. [Signature page follows.] 3 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed effective as of the date first written above. OPERATOR: MINNESOTA SOLAR CSG 4, LLC By: Minnesota Solar, LLC Its: Member By: Name: Jeff Jenner Its: Chief Executive Officer SUBSCRIBER: CITY OF CHANHASSEN Bv: Name: Denny Laufenburger Its: Mayor Bv: Name: Todd Gerhardt Its: City Manager C!