WAIVER, CONSENT AND AMENDMENT TO CREDIT AGREEMENT
This WAIVER, CONSENT AND AMENDMENT TO CREDIT AGREEMENT (this “Agreement”), dated as of April 15, 2026, is by and among GSRP WAREHOUSE I LLC, a Delaware limited liability company (the “Borrower”), MN8 Energy LLC, a Delaware limited liability company (the “Guarantor”), each lender party to the Credit Agreement (collectively, the “Lenders” and individually, a “Lender”), and MUFG BANK, LTD., as administrative agent (in such capacity, together with its successors and assigns, the “Administrative Agent”).
PRELIMINARY STATEMENTS:
A.Reference is made to that certain Credit Agreement, dated as of February 23, 2021, by and among the Borrower, the Lenders, the Issuing Banks, the Administrative Agent, the Collateral Agent and the Depositary Bank, as amended by (a) the Amendment and Waiver to Credit Agreement, dated as of May 12, 2021, (b) the Second Amendment to Credit Agreement and Amendment to Depositary Agreement, dated as of May 27, 2021, (c) the Third Amendment to Credit Agreement, dated as of August 4, 2022, (d) the Fourth Amendment and Waiver Number 3 to Credit Agreement, dated as of September 16, 2022, (e) the Fifth Amendment to Credit Agreement, dated as of December 22, 2022, (f) the Sixth Amendment to Credit Agreement, dated as of June 25, 2024, (g) the Seventh Amendment to Credit Agreement, dated as of November 22, 2024, (h) the Omnibus Amendment to Credit Agreement and Security Agreement, dated as of February 13, 2026, and (i) the Ninth Amendment and Waiver to Credit Agreement, dated as of March 13, 2026 (as may be further amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”).
B.The Borrower is the sole owner of one hundred percent (100%) of Long Point Solar HoldCo LLC, a Delaware limited liability company, which is the sole owner of one hundred percent (100%) of Long Point Solar Class B LLC, a Delaware limited liability company (“Class B Member”).
C.Class B Member is the sole owner of one hundred percent (100%) of the Class B Units in Long Point Solar TE LLC, a Delaware limited liability company (“Company”), and LongPoint Prairie Class A, LLC, a Delaware limited liability company, is the sole owner of one hundred percent (100%) of the Class A Units in Company.
D.Company is the sole owner of one hundred percent (100%) of Long Point Solar, LLC, Delaware limited liability company (the “Project Company”), which owns, is constructing and will operate an approximately 168 MW(dc) solar generating facility located in Brazoria County, Texas (the “Project”).
E.Pursuant to Section 6.26 of the Credit Agreement, the Borrower is required to cause its wholly-owned Subsidiaries to execute a Tax Credit Transfer Agreement that is in form and substance reasonably acceptable to the Lenders no later than the date of Completion with respect to the Project.
F.Pursuant to the definition of “Permitted Tax Credit Transfer Agreement” solely to the extent a Cash Diversion Event is contemplated in the applicable Tax Credit Transfer Agreement, the Sponsor (or a Person with equivalent or better creditworthiness) is required to deliver to the Administrative Agent a guaranty in form and substance satisfactory to the Required Lenders in respect of such Cash Diversion Event (with liability capped by reference to reasonably anticipated liability pursuant to such Cash Diversion Event) (such requirement, the “Cash Diversion Guaranty Requirement”).
G.The Borrower desires to cause Class B Member and Company to enter into that certain Tax Credit Transfer Agreement, to be dated on or about the date hereof, in the form attached hereto as Exhibit A (the “Long Point Tax Credit Transfer Agreement”), with Automatic Data Processing, Inc., a Delaware corporation (“Buyer”).
H.Pursuant to Section 7.02 of the Credit Agreement, the Borrower shall not, nor shall it permit any Subsidiary of the Borrower to, directly or indirectly, create, incur, assume or suffer to exist any Indebtedness, except for Indebtedness permitted under Section 7.02 of the Credit Agreement, including Indebtedness incurred by the Borrower or any Subsidiary arising from surety bonds or performance bonds securing the performance by the Borrower or any such Subsidiary, in an amount not to exceed $5,000,000 in the aggregate (the “Permitted Surety Bond Cap”).
I.The Borrower has requested that (i) the Administrative Agent and the Lenders consent to the execution of the Long Point Tax Credit Transfer Agreement and any related agreements necessary to effectuate the purposes of the Long Point Tax Credit Transfer Agreement and the sale of the Tax Credits associated with the Project (collectively, the “Long Point Tax Credit Transfer Arrangement”), (ii) the Administrative Agent and the Lenders waive the Cash Diversion Guaranty Requirement with respect to the Long Point Tax Credit Transfer Agreement until June 1, 2026, upon which date, so long as the Company remains an indirect Subsidiary of the Borrower, the Borrower shall cause the cash diversion guaranty attached hereto as Exhibit B (the “Long Point Cash Diversion Guaranty”) to be executed by MN8 Energy LLC, (iii) the Administrative Agent and the Lenders waive the Permitted Surety Bond Cap to allow for Long Point Solar TE LLC to incur Indebtedness in the amount of $5,800,000 pursuant to the terms of the Long Point Tax Credit Transfer Agreement and (iv) the Credit Agreement be amended in the manner set forth herein.
J.The Lenders, constituting all the Lenders under the Credit Agreement and the Administrative Agent are willing to agree to this Agreement on the terms and subject to the conditions set forth herein.
Accordingly, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to them in the Credit Agreement.
Section 2. Amendment to Credit Agreement.
Subject to Section 5 hereof, as of the Effective Date, the definition of “Permitted Tax Credit Transfer Agreement” in Section 1.01 of the Credit Agreement is hereby replaced in its entirety with the following:
“Permitted Tax Credit Transfer Arrangement” means, with respect to any Project, one or more Tax Credit Transfer Agreements (a) (i) that are in form and substance reasonably acceptable to all Lenders and (ii) with respect to which, solely to the extent a Cash Diversion Event (which for purposes of this definition shall deem uses of Tax Equity Investor therein to be Tax Credit Buyer and uses of Permitted Tax Equity Documents therein to be Permitted Tax Credit Transfer Agreement) is contemplated (as determined by the Required Lenders and reasonably agreed by the Borrower) in the applicable Tax Credit Transfer Agreement, the Sponsor (or a Person with equivalent or better creditworthiness) has delivered to the Administrative Agent a guaranty in form and substance satisfactory to the Required Lenders in respect of such Cash Diversion Event (with liability capped by reference to reasonably anticipated liability pursuant to such Cash Diversion Event) and (b) are with Tax Credit Buyer(s) who either (i) have an Investment Grade Rating (determined at the time of execution of such Tax Credit Transfer Agreement) or (ii) are a Deemed Investment Grade Person.
Section 3. Consent. The Administrative Agent and each Lender hereby consents to the Long Point Tax Credit Transfer Arrangement.
Section 4. Waiver. The Administrative Agent and each Lender hereby waive the Permitted Surety Bond Cap solely to allow for the surety bond contemplated pursuant to the Long Point Tax Credit Transfer Agreement in the amount of $5,800,000.
Section 5. Effective Date. This Agreement shall become effective upon the satisfaction or waiver of the following conditions (the date of such satisfaction or waiver of the following conditions being referred to herein as the “Effective Date”):
(a) each of the representations and warranties contained in Section 6 shall be true and correct as of the Effective Date, unless such representation or warranty expressly relates solely to an earlier date, in which case it was true and correct in all material respects as of such earlier date;
(b) no Default or Event of Default shall have occurred and be continuing or shall result from Borrower's entering into this Agreement or the consummation of the transactions contemplated herein; and
(c) Administrative Agent has received duly executed counterparts of this Agreement from each of the parties hereto, which shall correspond with the date first written above.
Section 6. Representations and Warranties. To induce the other parties hereto to enter into this Agreement, the Borrower hereby represents and warrants to the Secured Parties that:
(a) Each representation and warranty of the Borrower under the Financing Documents is true and correct in all material respects as if made on the date hereof, unless such representation or warranty expressly relates solely to an earlier date, in which case it was true and correct in all material respects as of such earlier date;
(b) the Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement, this Agreement has been duly executed and delivered by the Borrower, and this Agreement is the legal, valid and binding obligation of the Borrower, enforceable against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or similar laws affecting the enforcement of creditors’ rights generally and by principles of equity;
(c) no Default or Event of Default has occurred and is continuing;
(d) the execution, delivery and performance by the Borrower of this Agreement (i) have been duly authorized by all necessary organizational action on the part of the Borrower; and (ii) do not and will not (A) contravene the terms of any of the Borrower’s Organization Documents; (B) conflict with or result in any breach or contravention of (1) any Contractual Obligation to which the Borrower is a party or to which the properties of the Borrower or any of its Subsidiaries are subject, or (2) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which the Borrower or its property is subject, except, with respect to clause (ii)(B), to the extent such conflict, breach or contravention could not reasonably be expected to have a Material Adverse Effect; (C) result in, or require, the creation of any Lien upon any of the material properties or assets of the Borrower (other than any Liens created under any of the Collateral Documents and other Permitted Liens); or (D) violate, in any material respect, any Law applicable to the Borrower or any of its Subsidiaries; and
(e) no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Borrower of this Agreement, except for (i) those that have already been obtained or made, and (ii) those which, if not obtained or made, would not reasonably be expected to have a Material Adverse Effect.
Section 7. Covenant. The Sponsor hereby covenants and agrees to deliver an executed counterpart signature page to the Long Point Cash Diversion Guaranty by no later than June 1, 2026, if the Company remains an indirect Subsidiary of the Borrower as of such date. The Borrower hereby acknowledges and agrees that any failure by the Sponsor to deliver the executed counterpart signature page in accordance with the above will result in an immediate Event of Default.
Section 8. Costs and Expenses. Without limiting the obligations of the Borrower under the Credit Agreement, each party hereto agrees that all reasonable out-of-pocket expenses incurred by the Secured Parties (including the reasonable fees, charges and disbursements of counsel and consultants) in connection with the preparation, execution, delivery and administration,
modification and amendment of this Agreement and the other instruments and documents to be delivered hereunder or in connection herewith (including the reasonable fees, charges and disbursements of one counsel for the Administrative Agent), are expenses that the Borrower is required to pay or reimburse pursuant to Section 10.05(a) of the Credit Agreement.
Section 9. Reference to and Effect on the Relevant Financing Documents.
(a) The Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall continue to be in full force and effect and is hereby in all respects ratified and confirmed. This Agreement shall be a “Financing Document” for purposes of the definition thereof in the Credit Agreement.
(b) Except as specifically provided herein, the execution, delivery and effectiveness of this Agreement on the Effective Date shall not operate as a waiver of any right, power or remedy of any Lender under any of the Financing Documents, nor constitute a waiver of any provision of any of the Financing Documents.
Section 10. Severability. If any provision of this Agreement or the other Financing Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Financing Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect only to the extent not so limited.
Section 11. Headings. Section headings herein are included for convenience of reference only and shall not affect the interpretation of this Agreement.
Section 12. Governing Law; Jurisdiction; Etc. THIS AGREEMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
Section 13. Submission to Jurisdiction. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST ANY AGENT, ANY LENDER, ANY ISSUING BANK, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY AGENT, ANY LENDER OR ANY ISSUING BANK MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
Section 14. Waiver of Venue. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN SECTION 13. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
Section 15. Service of Process. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.03 OF THE CREDIT AGREEMENT. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
Section 16. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 17. Counterparts. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic imaging means (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement. The words “execution,” “execute”, “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
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| GSRP WAREHOUSE I LLC, a Delaware limited liability company, as the Borrower |
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| By: MN8 Energy Operating Company LLC, its sole member |
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| By: MN8 Energy LLC, its managing member |
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| By: | /s/ Jon Yoder | |
| Name: Jon Yoder | |
| Title: Authorized Person | |
[Signature Page to Consent to Credit Agreement (Long Point TCTA)]
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| MUFG BANK, LTD., as Administrative Agent |
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| By: | /s/ Lawrence Blat | |
| Name: Lawrence Blat | |
| Title: Authorized Signatory | |
[Signature Page to Waiver, Consent and Amendment to Credit Agreement]
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| MUFG BANK, LTD., as a Lender |
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| By: | /s/ Saad Iqbal | |
| Name: Saad Iqbal | |
| Title: Managing Director | |
[Signature Page to Waiver, Consent and Amendment to Credit Agreement]
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| HSBC BANK USA, N.A., as a Lender |
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| By: | /s/ Karun Chopra | |
| Name: Karun Chopra, 23341 | |
| Title: Director, HSBC Infrastructure Finance |
[Signature Page to Waiver, Consent and Amendment to Credit Agreement]
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| NATIXIS, NEW YORK BRANCH, as a Lender |
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| By: | /s/ David B Martens | |
| Name: David B Martens | |
| Title: Managing Director |
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| By: | /s/ Elizabeth West | |
| Name: Elizabeth West | |
| Title: Vice President |
[Signature Page to Waiver, Consent and Amendment to Credit Agreement]
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| SOCIÉTÉ GÉNÉRALE, as a Lender |
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| By: | /s/ Stephania Vasilieva | |
| Name: Stephania Vasilieva | |
| Title: Vice-President |
[Signature Page to Waiver, Consent and Amendment to Credit Agreement]
EXHIBIT A
[See Attached]
TAX CREDIT TRANSFER AGREEMENT
Dated as of April [●], 2026
TABLE OF CONTENTS
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| ARTICLE I CONTRACTUAL AGREEMENT | 1 |
| 1.1 | No Partnership Intended | 1 |
| 1.2 | Securities Law | 1 |
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| ARTICLE II DEFINED TERMS AND RULES OF INTERPRETATION | 2 |
| 2.1 | Definitions | 2 |
| 2.2 | Rules of Interpretation | 11 |
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| ARTICLE III PURCHASE OF TRANSFERRED TAX CREDITS | 12 |
| 3.1 | Transferred Tax Credits | 12 |
| 3.2 | Purchase Price | 13 |
| 3.3 | Payment of the Purchase Price. | 13 |
| 3.4 | Cost Reimbursement | 13 |
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| ARTICLE IV CONDITIONS PRECEDENT | 14 |
| 4.1 | Effective Date Conditions Precedent | 14 |
| 4.2 | Conditions Precedent to Funding Dates | 16 |
| 4.3 | Conditions Precedent Status and Funding Election | 18 |
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| ARTICLE V REPRESENTATIONS AND WARRANTIES | 19 |
| 5.1 | Representations and Warranties of Seller Relating to Seller, the Project Company, and the Project | 19 |
| 5.2 | Representations and Warranties of Buyer | 23 |
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| ARTICLE VI COVENANTS | 25 |
| 6.1 | Seller Covenants | 25 |
| 6.2 | Buyer Covenants | 28 |
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| ARTICLE VII TAX PROCEEDINGS | 28 |
| 7.1 | Tax Proceedings Generally | 28 |
| 7.2 | Control of Proceedings | 28 |
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| ARTICLE VIII INDEMNIFICATION | 30 |
| 8.1 | Indemnification of Seller | 30 |
| 8.2 | Indemnification of Buyer | 30 |
| 8.3 | Limitation on Liability | 32 |
| 8.4 | Survival | 33 |
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| ARTICLE IX TERMINATION | 33 |
| 9.1 | Termination | 33 |
| 9.2 | Effect of Termination | 34 |
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| ARTICLE X GENERAL PROVISIONS | 35 |
| 10.1 | Burden and Benefit | 35 |
| 10.2 | Governing Law | 35 |
| 10.3 | Counterparts | 35 |
| 10.4 | Separability of Provisions; Reformation and Rescission | 35 |
| 10.5 | Entire Agreement | 35 |
| 10.6 | Notices | 35 |
| 10.7 | Amendment and Waiver | 37 |
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| 10.8 | Rights and Remedies | 37 |
| 10.9 | Assignment | 38 |
| 10.10 | Forward Contract | 39 |
| 10.11 | Confidentiality & Publicity | 39 |
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| Exhibits and Schedules | |
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| Exhibit A | - | Form of Funding Certificate |
| Exhibit B | - | Form of Beginning of Construction Certificate |
| Exhibit C | - | Form of EC Bonus Certificate |
| Exhibit D | - | Placed in Service Certificate |
| Exhibit E | - | Form of Transfer Election Statement |
Exhibit F-1 Through F-[●] - | TCL Policy |
| Exhibit G | - | Form of Surety Bond |
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| Schedule 1 | - | EPC Agreements |
| Schedule 2 | - | Site Agreements |
TAX CREDIT TRANSFER AGREEMENT
PREAMBLE
This TAX CREDIT TRANSFER AGREEMENT (this “Agreement”) is made and entered into as of April [●], 2026 (the “Effective Date”), by and among Automatic Data Processing, Inc., a Delaware corporation (“Buyer”), Long Point Solar TE LLC, a Delaware limited liability company (“Seller”), and Long Point Solar Class B LLC, a Delaware limited liability company (“Sponsor” and, together with Buyer and Seller, the “Parties” and each, a “Party”).
RECITALS
WHEREAS, as of the Effective Date, Seller owns one hundred percent (100%) of the issued and outstanding membership interests in Long Point Solar, LLC, a Delaware limited liability company (the “Project Company”);
WHEREAS, the Project Company, beneficially and of record, owns a solar electric generation project with an aggregate capacity of approximately 168 MWDC located in Brazoria County, Texas (the “Project”);
WHEREAS, Sponsor owns all of the Class B equity interests in Seller and will benefit from this Agreement;
WHEREAS, the Project is comprised of four (4) separate Inverter Blocks (as defined in the Purchase Agreement) (the “Blocks” and each, a “Block”); and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, on the terms and subject to the conditions set forth in this Agreement, the Transferred Tax Credits (defined below).
NOW, THEREFORE, in consideration of the foregoing, of mutual promises of the Parties and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
CONTRACTUAL AGREEMENT
1.1 No Partnership Intended. The Parties do not intend for this Agreement to create a partnership, limited partnership, joint venture, or limited liability company agreement, and this Agreement shall not be construed to suggest otherwise. The Parties intend that this Agreement is purely an arm’s-length contract for the purchase and sale of the Transferred Tax Credits and the associated duties and obligations of the Parties.
1.2 Securities Law. The Parties do not intend for the Transferred Tax Credits to be treated as a security, derivative, commodity for future delivery, or other security or financial instrument within the meaning of 12 U.S.C. § 1851 or similar state law.
ARTICLE II
DEFINED TERMS AND RULES OF INTERPRETATION
2.1 Definitions. The following defined terms used in this Agreement shall have the meanings specified below.
“Affiliate” means, with respect to any specified Person, any Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.
“After-Tax Basis” means, with respect to any applicable payment to be actually or constructively received by any Person, the amount of such payment (the base payment) supplemented by a further payment (the additional payment) to that Person so that the sum of the base payment and the additional payment, after deduction of the amount of all federal and state income taxes required to be paid by such Person in respect of the receipt or accrual of the base payment and the additional payment (assuming for this purpose that the recipient of such payment is subject to income taxation at the Highest Marginal Rate), equals the amount of the base payment.
“Agreement” has the meaning set forth in the Preamble.
“ALTA Survey” means that certain signed and sealed ALTA survey with respect to the Project dated as of November 11, 2025, that has been made available to Buyer prior to the Effective Date.
“Anti-Corruption Laws” has the meaning set forth in Section 5.1(r).
“Anti-Terrorism and Money Laundering Laws and Regulations” means (a) Section 1 of Executive Order 13224 of September 23, 2001, Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (b) the Terrorism Sanctions Regulations (Title 31 Part 595 of the U.S. Code of Federal Regulations), (c) the Terrorism List Governments Sanctions Regulations (Title 31 Part 596 of the U.S. Code of Federal Regulations), (d) the Foreign Terrorist Organizations Sanctions Regulations (Title 31 Part 597 of the U.S. Code of Federal Regulations), (e) the USA Patriot Act of 2001 (Pub. L. No. 107-56), (f) the U.S. Money Laundering Control Act of 1986, (g) the Bank Secrecy Act, 31 U.S.C. §§ 5311 et seq., (h) Laundering of monetary instruments, 18 U.S.C. § 1956, and (i) Engaging in monetary transactions in property derived from specified unlawful activity, 18 U.S.C. § 1957.
“Applicable Laws” means any treaty, constitution, law, statute, ordinance, rule, order, decree, regulation, or other directive which is legally binding and has been enacted, issued, or promulgated by any Governmental Authority.
“Bankruptcy” as to any Person means: (a) the filing of a petition for relief as to any such Person as debtor or bankrupt under the Bankruptcy Code or like provision of law (except if such petition is contested by such Person and has been dismissed within sixty (60) days); (b) insolvency of such Person as finally determined by a court proceeding; (c) filing by such Person of a petition or application to accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part of its assets; or (d) commencement of any proceedings relating to such
Person under any other reorganization, arrangement, insolvency, adjustment of debt, or liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another, provided that if such proceeding is commenced by a third party, but only if such Person indicates its approval of such proceeding, consents thereto, or acquiesces therein, or such proceeding is contested by such Person and has not been finally dismissed within sixty (60) days.
“Bankruptcy Code” means any and all sections and chapters of Title 11 of the United States Code, as in effect from time to time.
“Beginning of Construction Certificate” means a certificate in the form attached hereto as Exhibit B including factual representations demonstrating that the construction of the Project began before January 1, 2025 for purposes of Section 48 of the Code.
“Block” has the meaning set forth in the Recitals.
“Business Day” means any day other than (a) a Saturday or Sunday or (b) a day on which commercial banks in the city of New York, State of New York are authorized or required to be closed.
“Buyer” has the meaning set forth in the Preamble.
“Buyer Closing Election” has the meaning set forth in Section 4.3(b).
“Buyer’s Officer Certificate” means a certificate dated as of the Effective Date and signed by an authorized officer of Buyer (a) certifying that the representations and warranties made by Buyer in this Agreement are true and correct as of the Effective Date and (b) certifying to the completeness and accuracy of, and attaching with respect to Buyer, (i) copies of its Organizational Documents, each as in effect as of the Effective Date, (ii) copies of “standing” resolutions, (iii) an incumbency certificate as in effect as of the Effective Date, and (iv) a good standing certificate for Buyer dated not earlier than five (5) days prior to the Effective Date, issued by the Secretary of State of the State of Delaware.
“CEA” has the meaning set forth in Section 10.10(a).
“Change in Tax Law” means (a) any change in or amendment to the Code or other U.S. federal income tax law, (b) any issuance, promulgation and/or change in, or of, any temporary or final Treasury Regulations, or of proposed Treasury Regulations to the extent any taxpayer is permitted to rely on such proposed Treasury Regulations before finalization, (c) any change in the interpretation of the Code or Treasury Regulations by a controlling decision of the United States Tax Court, the United States Court of Federal Claims, a United States District Court, a United States Court of Appeals, or United States Supreme Court that applies, advances or articulates a new or different interpretation or analysis of the U.S. federal income tax law, or (d) any published binding guidance, advice, statement, notice, announcement, proclamation, revenue ruling, or revenue procedure issued by the Treasury or the IRS in the Internal Revenue Bulletin or Cumulative Bulletin that applies to taxpayers generally rather than to a specific taxpayer and that applies, advances or articulates a new or different interpretation or analysis of the U.S. federal
income tax law, in each case to the extent relating to the eligibility of the Project for Tax Credits or Sections 48 or 6418 of the Code.
“Code” means the Internal Revenue Code of 1986, as amended.
“Communications Systems Executive Order” means that certain Executive Order No. 13873 on Securing the Information and Communications Technology and Services Supply Chain, effective May 15, 2019, as elaborated by that certain Executive Order No. 14034 on Protecting Americans’ Sensitive Data From Foreign Adversaries, effective June 9, 2021.
“Compliance Period” means the period commencing upon the date on which the first Block comprising the Project was Placed in Service and ending on the fifth (5th) anniversary of the date on which the last Block comprising the Project was Placed in Service.
“Confidential Information” has the meaning set forth in Section 10.11(a).
“Contest Costs” means reasonable and documented fees, costs, disbursements, charges, expenses, and other amounts incurred in the audit, proceeding, defense, settlement, or appeal related to the Transferred Tax Credits.
“Control” (including the terms “Controlling,” “Controlled by,” and “under common Control with”) means the possession, directly or indirectly, of any of the following: (a) in the case of a corporation, more than fifty percent (50%) of the outstanding voting securities thereof; (b) in the case of a limited liability company, partnership, limited partnership, or joint venture, the right to more than fifty percent (50%) of the distributions (including liquidating distributions) therefrom; (c) in the case of a trust or estate, including a business trust, more than fifty percent (50%) of the beneficial interest therein; (d) in the case of any other entity, more than fifty percent (50%) of the economic or beneficial interest therein; or (e) in the case of any entity, the power or authority, through ownership of voting securities, by contract, or otherwise, to exercise a controlling influence over the management of the entity.
“Cost Segregation Report” means, an independent appraisal and cost segregation report prepared by Marshall and Stevens Incorporated that assesses the fair market value and costs of the Project and allocates the fair market value and costs of the Project (and each Block thereof) between ITC Eligible Property and other property at a customary level of detail.
“CP Status Notice” has the meaning set forth in Section 4.3(a).
“Damages” means all claims, actions, causes of action, demands, assessments, losses, damages, liabilities, judgments, settlements, taxes (or additions to taxes or reduction of tax credits, including any Disallowance or Recapture), interest, penalties, costs, and expenses (including Contest Costs and any other reasonable and documented attorneys’ fees and expenses, including such fees and expenses at trial and on any appeal).
“DC Bonus” means the “domestic content” bonus provided for in Section 48(a)(12) of the Code.
“DC Bonus Memo” means a memorandum prepared by Empact Technologies, Inc. (or such other third-party accountant reasonably acceptable to Buyer) confirming the Project’s qualification for the DC Bonus.
“DevCo” means MN8 DevCo 1 LLC, a Delaware limited liability company.
“Disallowance” means any reduction, loss, or disallowance of any Transferred Tax Credits.
“Disqualified Entity” means an entity that is a “tax exempt entity” for purposes of Section 168(h) of the Code.
“EC Bonus” means the “energy community” bonus provided for in Section 48(a)(14) of the Code.
“EC Bonus Certificate” means a certificate including factual representations with respect to the Project’s qualification for the EC Bonus in the form attached hereto as Exhibit C.
“Effective Date” has the meaning set forth in the Preamble.
“Energy Management Agreement” means that certain Agreement to Provide QSE and Energy Management Services, dated July 22, 2025, by and between the Project Company and Tenaska Power Services Co.
“ Environmental Consultant” means SWCA Environmental Consultants.
“Environmental Report” means the final Phase I Environmental Site Assessment report prepared by the Environmental Consultant for the Project.
“EPC Agreements” means the contracts listed under the heading “EPC Contracts” on Schedule 1.
“Final Determination” means the earliest to occur of: (a) the resolution of liability for any tax for any taxable period, by or as a result of (i) a final and unappealable decision, judgment, decree or other order by any court of competent jurisdiction or (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under section 7121 or section 7122 of the Code; (b) the expiration of the time for instituting a suit with respect to a claimed deficiency or an appeal of a previously-rendered decision, judgment, decree or other order by any court of competent jurisdiction; (c) the expiration of the time for instituting a claim for refund, or if such a claim was filed, the expiration of the time for instituting suit with respect thereto; (d) the agreement of the Parties to no longer pursue the relevant contest or the decision by the relevant Party to no longer pursue such contest as permitted under the terms of this Agreement, including any such agreement or decision not to institute a suit or appeal of a previously-rendered decision, judgment, decree or other order; or (e) Seller or Buyer filing a federal income tax return (or an amendment to a federal income tax return) that properly reports Disallowance or Recapture (to the extent that the Parties mutually agree in writing that such Disallowance or Recapture has occurred).
“First Funding Date” means the date on which Buyer makes the first payment of the Funding Amount required to be made pursuant to Section 3.3(a)(i).
“Funding” means the payment of the Funding Amount, as set forth in Section 3.3(a).
“Funding Amount” has the meaning set forth in Section 3.3(a).
“Funding Certificate” means a certificate in the form attached hereto as Exhibit A, certifying the amount of Tax Credits generated by the Project, the Funding Amount and the portion of the Funding Amount to be paid on each of the First Funding Date and the Second Funding Date.
“Funding Date” means the First Funding Date, the Second Funding Date or each of them, as the context requires.
“GAAP” means United States of America generally accepted accounting principles, consistently applied.
“Governmental Authority” means: any (a) federal, state, county, municipal, or local government (whether domestic or foreign) or any political subdivision thereof; (b) any court or administrative tribunal; (c) any other governmental, quasi-governmental, judicial, public, or statutory instrumentality, authority, body, agency, or bureau, the IRS, the U.S. Department of Treasury, or any other taxing authority or entity of competent jurisdiction; or (d) any arbitrator with authority to bind a party at law.
“Guarantor” has the meaning set forth in the Guaranty.
“Guaranty” means that certain Guaranty, dated as of the Effective Date, executed by MN8 Energy LLC in favor of Buyer.
“Highest Marginal Rate” means, as of any determination date, the then highest marginal combined income tax rate in effect for the relevant tax period applicable to corporations (excluding subchapter S corporations) generally taking into account the U.S. federal and state income tax rates, as adjusted by any applicable deductions to the U.S. federal income tax base rate for state income tax payments.
“Independent Engineer” means Enertis Solar, Inc.
“Independent Engineer Report” means that certain technical due diligence report, prepared by the Independent Engineer with respect to the Project, dated as of May 9, 2025, as such report is updated from time to time.
“Independent Engineer Substantial Completion Certificate” means a certificate from the Independent Engineer in the form previously delivered to the Preferred Equity Investor, either addressed to the Buyer or accompanied by a reliance letter with respect thereto for the benefit of Buyer.
“Insurance Report” means a report prepared by Moore-McNeil, LLC (including any updates thereto), setting out recommended property, casualty, and business interruption coverage recommendations and verifying that the Project is fully insured in accordance with prudent utility practices.
“Insurance Tax Proceeds” has the meaning set forth in Section 8.2(a).
“Interconnection Agreement” means, collectively, (a) that certain Amended and Restated ERCOT Standard Generation Interconnection Agreement, by and between the Project Company and CenterPoint Energy Houston Electric, LLC, dated as of October 31, 2023, and (b) that certain Irrevocable Standby Letter of Credit No. SB-59047, dated September 13, 2024, from Natixis New York Branch by the Order of GSRP Warehouse 1 LLC o/b/o the Project Company to CenterPoint Energy Houston Electric, LLC, as beneficiary.
“IRS” means the U.S. Internal Revenue Service.
“ITC Eligible Property” means property that is described in Section 48(a)(3) of the Code.
“Lenders” means the lenders under the Loan Documents.
“Loan Documents” means that certain Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time), dated as of February 23, 2021, by and between GSRP Warehouse I LLC, MUFG Bank, Ltd., as administrative agent, MUFG Union Bank, N.A., as collateral agent and depositary bank thereunder, and the lenders and issuing banks party thereto from time to time.
“Material Adverse Effect” means any change, circumstance, or event that, individually or in the aggregate, has had, or could reasonably be expected to have, a material adverse effect on the amount or availability of the Transferred Tax Credits, including increased Disallowance and Recapture risk, or on Seller’s ability to transfer the Transferred Tax Credits.
“O&M Agreement” means that certain Operations and Maintenance Agreement, dated as of March 4, 2026, by and between the Project Company and MN8 Solutions LLC.
“Organizational Documents” means, with respect to a particular Person (other than a natural person), the certificate or articles of incorporation, bylaws, partnership agreement, certificate of formation, limited liability company agreement, operating agreement, stockholders’ agreement, trust agreement, or similar organizational documents or agreements, as applicable, of such Person, including all amendments thereto.
“Outstanding CPs” has the meaning set forth in Section 4.3(a).
“Party” has the meaning set forth in the Preamble.
“Permits” means all licenses, permits, authorizations, consents, waivers, exemptions, variances, franchises, certificates, and approvals from any Governmental Authorities necessary for the construction of the Project and the commencement of commercial operations and the continued
operation of the Project for its anticipated use, including all zoning, subdivision, environmental, utility, land use, and wetlands permits and any approvals necessary for utility interconnection with the Project, improvement upgrades, and power transmission and including, if required by local law, any commissioning tests.
“Person” means any individual, partnership, joint venture, company, corporation, limited liability company, limited duration company, limited life company, association, trust, or other entity or organization, including any Governmental Authority or instrumentality thereof.
“Placed in Service” means “placed in service” for purposes of Section 48 of the Code.
“Placed in Service Certificate” means a factual certificate issued by the Independent Engineer and attached hereto as Exhibit D certifying that the Project was Placed in Service during calendar year 2025 and the date on which the Project was Placed in Service.
“Post-Closing Delivery Period” has the meaning set forth in Section 4.3(b).
“PPA” means that certain Renewable Energy Purchase Agreement, by and between Microsoft Corporation and the Project Company, dated as of March 16, 2024.
“Prairie TCTA” means that certain Tax Credit Transfer Agreement by and among Buyer, Prairie BX LLC, a Delaware limited liability company, and Sponsor, with respect to a solar electric generation project with an aggregate capacity of approximately 183.1 MWDC located in Champaign County, Illinois, to be executed on or about the Effective Date.
“Preferred Equity Investor” means LONGPOINT PRAIRIE CLASS A, LLC, a Delaware limited liability company (or any assignee or successor thereof).
“Project” has the meaning set forth in the Recitals.
“Project Company” has the meaning set forth in the Recitals.
“Project Documents” means (a) the Project Company’s Organizational Documents, (b) the Site Agreements, (c) the Interconnection Agreement, (d) the EPC Agreements (e) the PPA, (f) the O&M Agreement, (g) the Energy Management Agreement, (h) any limited liability company agreement, equity capital contribution agreement, membership interest purchase agreement or other analogous agreement, if applicable, between Seller or any of its subsidiaries (including the Project Company) and the Preferred Equity Investor (which may be redacted for economic and other confidential terms, in Seller’s reasonable judgment), and (i) any asset management agreement to which either the Project Company or Seller is a party.
“Proposed Change in Tax Law” means any proposed change or amendment to the Code or another U.S. federal income tax statute that is included in (a) a bill reported out of the House of Representatives Committee on Ways and Means or the Senate Committee on Finance, or (b) a bill passed by either the House of Representatives or Senate, in each case, which, (i) if it became law, would (A) cause the Project to no longer be eligible to generate Tax Credits or would materially reduce the amount of Tax Credits generated by the Project that are available for transfer to Buyer,
or (B) prohibit Seller from transferring Tax Credits to Buyer under Section 6418 of the Code, and (ii) has a reasonable likelihood of being enacted into law (taking into consideration, for this purpose, any direct, written opposition or support issued, published, announced or otherwise publicly disseminated by the other chamber of Congress or the Executive Branch or any member of Congress).
“Purchase Agreement” means that certain Purchase Agreement, dated as of November 12, 2025, by and between Seller and DevCo.
“Purchase Price Rate” has the meaning set forth in Section 3.2.
“PWA Assurance Report” means each prevailing wage and apprenticeship compliance assurance report for the Project issued periodically by PWA Consultant, addressing the Project’s compliance with the PWA Requirements for the period from the beginning of the construction of the Project through the end of the Compliance Period.
“PWA Consultant” means Warm Commerce, Inc. d/b/a Empact Technologies.
“PWA Requirements” means the requirements of Sections 48(a)(10) and 48(a)(11) of the Code.
“Recapture” means any recapture of any Transferred Tax Credits under Section 50 of the Code.
“Reimbursement Cap” has the meaning set forth in Section 3.4.
“Reliant CPs” means those certain conditions precedent set forth in Sections 4.2(a)(iii)(B), and (v)(B).
“SC Payment” has the meaning set forth in the Purchase Agreement.
“Second Funding Date” has the meaning set forth in Section 3.3(a)(ii).
“Seller” has the meaning set forth in the Preamble.
“Seller’s Officer Certificate” means a certificate dated as of the Effective Date and the First Funding Date, and signed by an authorized officer of Seller (a) certifying that the representations and warranties made by Seller in this Agreement are true and correct as of the Effective Date and the First Funding Date, as applicable (except for such representations and warranties that are made as of a specific date, which shall speak only as of such date), (b) certifying to the completeness and accuracy of, and attaching with respect to Seller, (i) copies of its Organizational Documents, each as in effect as of the Effective Date or, if such Organizational Documents have changed as of the First Funding Date, as of such Funding Date, (ii) an incumbency certificate as in effect as of the Effective Date or, if the relevant signatories have changed as of the First Funding Date, as of such Funding Date, and (iii) a good standing certificate for Seller dated not earlier than five (5) days prior to the Effective Date and the First Funding Date, issued by the Secretary of State of the State of Delaware, and (c) certifying, as of the First Funding Date only,
that each of the certifications, representations and warranties contained in the EC Bonus Certificate and in the ITC Certificate continue to be complete and accurate as of such Funding Date.
“Site” means real property located in Brazoria County, Texas, required for the construction, installation, operation, and maintenance of the Project and in which the Project Company holds rights under appropriate real property interests therein.
“Site Agreements” means the agreements listed on Schedule 2.
“Sponsor” has the meaning set forth in the Preamble.
“Sponsor’s Officer Certificate” means a certificate dated as of the Effective Date and the First Funding Date, and signed by an authorized officer of Sponsor (a) certifying to the completeness and accuracy of, and attaching with respect to Sponsor, (i) copies of its Organizational Documents, each as in effect as of the Effective Date or, if such Organizational Documents have changed as of the First Funding Date, as of such Funding Date, (ii) an incumbency certificate as in effect as of the Effective Date or, if the relevant signatories have changed as of the First Funding Date, as of such Funding Date, and (iii) a good standing certificate for Sponsor dated not earlier than five (5) days prior to the Effective Date and the First Funding Date, issued by the Secretary of State of the State of Delaware, and (b) certifying, as of the First Funding Date only, that each of the certifications, representations and warranties contained in the EC Bonus Certificate and in the ITC Certificate continue to be complete and accurate as of such Funding Date.
“Surety Bond” means a surety bond in the amount of $5,800,000 naming Buyer as obligee, and issued by a surety company reasonably acceptable to Buyer in substantially the form attached hereto as Exhibit G.
“Tax Credits” means “energy credits” within the meaning of Section 48(a) of the Code.
“Tax Insurance Providers” means Berkshire Hathaway Specialty Insurance.
“Tax Opinion” means a “should” level opinion issued by Baker & McKenzie LLP related to the eligibility of the Project for Tax Credits, the amount of such Tax Credits and the ability to transfer such Tax Credits under Section 6418 of the Code.
“Tax Proceeding” means any proposed assessment of any tax or the commencement of any audit, inquiry, examination, contest, litigation, or other administrative or judicial proceeding with or against any Governmental Authority arising from or related to the transfer, purchase, or claim of the Transferred Tax Credits.
“Taxable Year” means Seller’s taxable year ending on December 31, 2025.
“TCL Policy” means, collectively, those certain policies with insurance coverage by the Tax Insurance Providers (Policy Numbers: [●], [●] and [●]), which are attached hereto as Exhibits F-1 through F-[●].
“Third-Party Costs” means the reasonable and documented third-party out-of-pocket fees and expenses incurred by Buyer in connection with the preparation, negotiation, and execution of this Agreement and the transactions contemplated hereunder.
“Title Pro-Forma” means that certain owner’s title insurance policy with respect to the Project dated as of November 12, 2025 that has been made available to Buyer prior to the Effective Date.
“Transaction Documents” means this Agreement, the Funding Certificate, the Beginning of Construction Certificate, the EC Bonus Certificate, the Placed in Service Certificate, the Guaranty and each Transfer Election Statement executed by the Parties.
“Transfer Election Statement” means a statement described in Treasury Regulations Section 1.6418-2(b)(5) and in the form attached hereto as Exhibit E, describing a transfer of Transferred Tax Credits from Seller to Buyer.
“Transferred Tax Credits” means the Tax Credits generated by the Project during the Taxable Year, as certified by Seller in the Funding Certificate.
“Treasury” means the U.S. Department of the Treasury (including the Office of Foreign Assets Control).
“Treasury Regulations” means the regulations promulgated under the Code by the U.S. Department of Treasury, as such regulations may be amended from time to time.
“Xinjiang Restrictions” means Applicable Laws of the United States of America restricting the importation of equipment that contains materials or components that were mined, manufactured, or produced wholly or in part using forced or child labor in violation of the Uyghur Human Rights Policy Act of 2020, as amended by the Uyghur Forced Labor Prevention Act, 22 U.S.C. § 6901, et seq.
2.2 Rules of Interpretation.
(a) All terms defined in this Agreement shall have the meanings defined herein when used in any certificate or other document made available or delivered pursuant hereto unless otherwise defined therein.
(b) Accounting terms not defined in this Agreement, and accounting terms partly defined in this Agreement to the extent not defined, shall have the respective meanings given to them under GAAP. To the extent that the definitions of accounting terms in this Agreement are inconsistent with the meanings of such terms under GAAP, the definitions contained in this Agreement shall control.
(c) The words “hereof,” “herein,” “hereunder,” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
(d) The word “including” when used in this Agreement shall mean “including without limitation.”
(e) The word “or” is disjunctive but not necessarily exclusive.
(f) The word “extent” in the phrase “to the extent” means the degree to which a subject or other things extends and does not mean simply “if.”
(g) The definitions of terms contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.
(h) Any agreement, instrument, or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument, or statute as from time to time amended, restated, supplemented, or otherwise modified and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein.
(i) Any references to a Person in this Agreement are also to such Person’s permitted successors and assigns.
(j) All Article and Section titles or captions contained in this Agreement or in any Exhibit or Schedule referred to herein and the table of contents of this Agreement are for convenience only and shall not be deemed a part of this Agreement or affect the meaning or interpretation of this Agreement. Unless otherwise specified, all references herein to numbered Articles and Sections are to Articles and Sections of this Agreement, and all references herein to Schedules or Exhibits are to Schedules and Exhibits to this Agreement.
(k) Unless otherwise specified, all references to dollars or “$” contained in this Agreement, in any Exhibit or Schedule referred to herein, or in any instrument or document delivered pursuant hereto, shall mean United States of America dollars.
(l) The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event that any ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
ARTICLE III
PURCHASE OF TRANSFERRED TAX CREDITS
3.1 Transferred Tax Credits. Subject to the terms and conditions of this Agreement, Seller hereby agrees to transfer, assign, and deliver to Buyer, and Buyer hereby agrees to purchase and accept from Seller, free and clear of any liens or encumbrances, all of the Tax Credits generated by the Project during the Taxable Year.
3.2 Purchase Price. The purchase price of the Transferred Tax Credits shall be $0.925 per $1.00 of Transferred Tax Credits (the “Purchase Price Rate”).
3.3 Payment of the Purchase Price.
(a) Subject to the satisfaction (or waiver by Buyer) of the conditions set forth in Section 4.2, Buyer shall pay to Seller an amount equal to the product of the Purchase Price Rate and the amount of Transferred Tax Credits (the “Funding Amount”), as follows:
(i) on the date agreed by the Parties in writing, which shall be no later than five (5) Business Days after the satisfaction (or waiver by Buyer) of the conditions set forth in Section 4.2, Buyer shall pay to Seller the portion of the Funding Amount specified in the Funding Certificate as the First Funding Amount; and
(ii) on the date that is fourteen (14) days after the date on which payment is made pursuant to the foregoing clause (i) or, if such date is not a Business Day, the first Business Day immediately following such date (the “Second Funding Date”), Buyer shall pay to Seller the Funding Amount less the payment made pursuant to the foregoing clause 3.3(a)(i);
provided that, for the avoidance of doubt and notwithstanding anything to the contrary contained in this Agreement, the conditions set forth in Section 4.2 shall be required to be satisfied (or waived by Buyer) solely as a condition to the payment to be made pursuant to the foregoing clause (i) and shall not be required to be satisfied (or waived by Buyer) again as a condition to the second payment contemplated pursuant to the foregoing clause (ii).
(b) Payments of any portion of the Funding Amount pursuant to this Section 3.3 shall be made by irrevocable wire transfer of immediately available funds to the bank account specified in writing by Seller in the Funding Certificate.
3.4 Cost Reimbursement.
(a) Buyer shall submit, or cause to be submitted on its behalf, to Sponsor an invoice for Third-Party Costs relating to the transactions contemplated hereby through the Effective Date or the relevant Funding Date, as applicable. On the Effective Date and then on each Funding Date, Sponsor shall, directly or through an Affiliate, reimburse Buyer for such invoiced Third-Party Costs, subject to an aggregate cap (the “Reimbursement Cap”) equal to (i) $400,000 less (ii) the amount of all such Third-Party Costs previously reimbursed by Sponsor and its Affiliates to Buyer pursuant to this Agreement less (c) the amount of any reasonable and documented third-party out-of-pocket fees and expenses incurred by Buyer in connection with the preparation, negotiation, and execution of the Prairie TCTA and the transactions contemplated thereunder previously reimbursed by any Affiliate of Guarantor to Buyer pursuant to the Prairie TCTA.
(b) Notwithstanding anything else herein to the contrary, if this Agreement is terminated by Seller pursuant to Section 9.1(b)(ii) or Section 9.1(d), then the Reimbursement Cap
shall automatically, and permanently, be reduced to an amount equal to (x) $200,000 less (y) the amount of all such Third-Party Costs previously reimbursed by any Affiliate of Guarantor to Buyer pursuant to this Agreement less (z) the amount of any reasonable and documented third-party out-of-pocket fees and expenses incurred by Buyer in connection with the preparation, negotiation, and execution of the Prairie TCTA and the transactions contemplated thereunder previously reimbursed by any Affiliate of Guarantor to Buyer pursuant to the Prairie TCTA, provided, for purposes of clarity, that if the Reimbursement Cap has been so reduced and Buyer has already been reimbursed for an amount greater than $200,000, then Buyer shall refund the difference between the amount reimbursed and $200,000 via wire transfer of immediately available funds to Sponsor, or the relevant Affiliate thereof, pursuant to wire transfer instructions provided by Sponsor.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Effective Date Conditions Precedent. The effectiveness of this Agreement is subject to the satisfaction, or waiver by the applicable Party benefiting therefrom, of each of the conditions set forth in this Section 4.1:
(a) Placement in Service. All Blocks shall have been Placed in Service.
(b) Seller Deliverables. Seller shall have delivered to Buyer:
(i) the Guaranty, duly executed by Guarantor;
(ii) a signed engagement letter with PWA Consultant, to provide the PWA Assurance Reports including a detailed scope of the work to be performed by PWA Consultant;
(iii) a Seller’s Officer Certificate dated as of the Effective Date;
(iv) a copy of an IRS Form W-9 for Seller;
(v) a copy of the Independent Engineer Report in form and substance reasonably acceptable to Buyer (which may be a copy of the report provided to the members of Seller in connection with the substantial completion equity funding of Seller by its members), and a reliance letter with respect thereto for the benefit of Buyer;
(vi) a copy of the Environmental Report in form and substance reasonably acceptable to Buyer (which may be a copy of the report provided to the members of Seller in connection with the substantial completion equity funding of Seller by its members), and a reliance letter with respect thereto for the benefit of Buyer;
(vii) a copy of the Title Pro-Forma;
(viii) a copy of the ALTA Survey;
(ix) the latest draft Cost Segregation Report, and a reliance letter with respect thereto for the benefit of Buyer;
(x) the TCL Policy binder agreement in form and substance reasonably acceptable to Buyer with evidence of Seller’s payment of any underwriting fees and premiums then due to be paid in connection with the binding of the TCL Policy;
(xi) the EC Bonus Certificate;
(xii) the DC Bonus Memo, and a reliance letter with respect thereto for the benefit of Buyer;
(xiii) an executed copy of the Beginning of Construction Certificate;
(xiv) a copy of the Project Documents;
(xv) a copy of the executed operating agreement of Seller effective on or prior to the date when any Block comprising the Project was Placed in Service, which shall be subject to redactions inserted by Seller to protect confidential and sensitive information;
(xvi) copies of all Permits, except for Permits that are non-material or ministerial in nature and any other Permits not yet required to be obtained but which can reasonably be expected to be obtained on commercially reasonable terms when required;
(xvii) copies of UCC search reports for Sponsor, Guarantor, Seller, and the Project Company, dated no more than thirty (30) days prior to the Effective Date for each of the jurisdictions in which Sponsor, Guarantor, Seller, or the Project Company is organized or has a main place of business;
(xviii) copies of litigation and docket search reports for Sponsor, Guarantor, Seller, and the Project Company, dated no more than thirty (30) days prior to the Effective Date for each of the jurisdictions in which Sponsor, Guarantor, Seller, or the Project Company is organized or has a main place of business;
(xix) payment of Buyer’s costs in accordance with Section 3.4;
(xx) a copy of the audited financial statements of Guarantor for its fiscal years ending on December 31, 2023 and December 31, 2024;
(xxi) a copy of the most recent unaudited quarterly financial statements of Guarantor;
(xxii) evidence reasonably satisfactory to Buyer that (A) the membership interests in the Project Company were assigned to Seller prior to the date on which any Block comprising the Project was Placed in Service, including a true, correct, complete and updated copy of the Organizational Documents of the Project Company and (B) the SC Payment has been made or will be made on the First Funding Date;
(xxiii) the Placed in Service Certificate;
(xxiv) all PWA Assurance Reports received from the PWA Consultant for all periods ending in or before October 2025, and to the extent available, any PWA Assurance Report for any period ending thereafter; and
(xxv) a Sponsor’s Officer Certificate dated as of the Effective Date.
(c) Buyer Deliverables. Buyer shall have delivered to Seller a Buyer’s Officer Certificate dated as of the Effective Date.
(d) Change in Tax Law. No Change in Tax Law has occurred that would (i) cause the Project to no longer be eligible to generate Tax Credits, or (ii) prohibit Seller from transferring Tax Credits to Buyer under Section 6418 of the Code. For the avoidance of doubt, a Change in Tax Law that relates solely to Buyer’s tax capacity (including any Change in Tax Law that relates to minimum tax regimes) shall not prevent this condition from being satisfied.
(e) Proposed Change in Tax Law. No Proposed Change in Tax Law is pending unless the Parties have agreed to amend the terms of the transactions contemplated under this Agreement to account for such Proposed Change in Tax Law in a manner reasonably acceptable to each of Buyer and Seller. For the avoidance of doubt, a Proposed Change in Tax Law that relates solely to Buyer’s tax capacity (including any Proposed Change in Tax Law that relates to minimum tax regimes) shall not prevent this condition from being satisfied.
(f) Delivery of Tax Opinion. Buyer shall have received the Tax Opinion.
(g) Delivery of Corporate Opinion. Buyer shall have received a legal opinion from the in-house counsel of Seller and Sponsor with respect to the matters related to the due authorization by Seller and Sponsor of the execution and delivery of this Agreement.
4.2 Conditions Precedent to Funding Dates. The obligation of Buyer to pay any portion of the Funding Amount on any Funding Date is subject to (i) delivery by Seller to Buyer, or waiver by Buyer of the delivery by Seller, of each of the items set forth in clause (a) of this Section 4.2 (or Buyer agreeing to pay the Funding Amount pursuant to Section 4.3 notwithstanding the non-satisfaction of certain items set forth in clause (a) of this Section 4.2), and (ii) satisfaction, or waiver by Buyer, of each of the conditions set forth in clauses (b) through (e) of this Section 4.2:
(a) Seller Deliverables. Seller shall have delivered to Buyer:
(i) on the First Funding Date, a Seller’s Officer Certificate dated as of such Funding Date;
(ii) the Funding Certificate;
(iii) (A) a bring-down of the draft Cost Segregation Report delivered pursuant to Section 4.1(b)(ix), dated on or after the date as of which the last date on which
any Block comprising the Project was Placed in Service, and (B) a reliance letter with respect thereto for the benefit of Buyer;
(iv) all PWA Assurance Reports received from the PWA Consultant after the PWA Assurance Reports delivered pursuant to Section 4.1(b)(xxiv);
(v) (A) the Independent Engineer Substantial Completion Certificate with respect to all Blocks comprising the Project, and (B) a reliance letter with respect thereto for the benefit of Buyer;
(vi) (A) an updated binder for the TCL Policy attaching an unconditional policy with any conditionalities that were in place at binding, if any, having been removed, (B) confirmation that all bringdown deliverables required to be provided to the underwriter in connection therewith have been delivered to the underwriter, and (C) evidence that any remaining underwriting fees and premiums payable in connection with the binding of the TCL Policy have been paid or will be paid by the First Funding Date;
(vii) on the First Funding Date, a Sponsor’s Officer Certificate dated as of such Funding Date;
(viii) the most recent update to the Insurance Report previously delivered to the Preferred Equity Investor or otherwise available to Seller;
(ix) a flow of funds memorandum setting forth Seller’s bank account and wire details;
(x) copies of litigation and docket search reports for Sponsor, Guarantor, Seller, and the Project Company, dated no more than fifteen (15) days prior to the First Funding Date for each of the jurisdictions in which Sponsor, Guarantor, Seller, or the Project Company is organized or has a main place of business;
(xi) copies of UCC search reports for Sponsor, Guarantor, Seller, and the Project Company, dated no more than fifteen (15) days prior to the First Funding Date for each of the jurisdictions in which Sponsor, Guarantor, Seller, or the Project Company is organized or has a main place of business;
(xii) a properly completed Transfer Election Statement with respect to the Transferred Tax Credits executed by Seller; provided that, if the pre-filing registration number(s) with respect to the ITC Eligible Property comprising the Project and generating Tax Credits has not yet been received from the IRS, Seller shall have delivered to Buyer (x) evidence to Buyer’s reasonable satisfaction that Seller has applied for such pre-filing registration number(s) through the IRS electronic registration system, which, for purposes of clarity, may include a screen shot that indicates Seller has applied for such pre-filing registration numbers through the IRS electronic registration system, and (y) a properly completed Transfer Election Statement with respect to the Transferred Tax Credits that are Tax Credits with only such registration number(s) missing;
(xiii) payment of Buyer’s costs in accordance with Section 3.4;
(xiv) a payoff letter from the Lenders evidencing the termination of their direct security interests in the Project and the assets of the Seller and the Project Company, conditioned on receipt of the first portion of the Funding Amount required to be made on the First Funding Date pursuant to Section 3.3(a); and
(xv) on the First Funding Date, the Surety Bond.
(b) No Condemnation; Unrepaired Casualty. No unrepaired casualty or condemnation event affecting any portion of the ITC Eligible Property comprising the Project shall have occurred, unless covered by insurance or unless the Independent Engineer has provided a remediation plan that is reasonably satisfactory to Buyer, including estimates of the cost of and timeline for any required repairs, and Buyer has received evidence satisfactory to it that funds are available to complete such repairs.
(c) Change in Law. No Change in Tax Law has occurred that would (i) cause the Project to no longer be eligible to generate Tax Credits, or (ii) prohibit Seller from transferring Tax Credits to Buyer under Section 6418 of the Code. For the avoidance of doubt, (y) a Change in Tax Law that relates solely to Buyer’s tax capacity shall not prevent this condition from being satisfied, including any Change in Tax Law that relates to minimum tax regimes, and (z) any Change in Tax Law that would reduce, but not eliminate, the amount of Tax Credits generated in the Taxable Year that can be transferred to Buyer shall be reflected solely by reducing the amount of such Tax Credits in respect of the Funding Amount.
(d) Proposed Change in Tax Law. No Proposed Change in Tax Law is pending unless the Parties have agreed to amend the terms of the transactions contemplated under this Agreement to account for such Proposed Change in Tax Law in a manner reasonably acceptable to each of Buyer and Seller. For the avoidance of doubt, a Proposed Change in Tax Law that relates solely to Buyer’s tax capacity shall not prevent this condition from being satisfied, including any Proposed Change in Tax Law that relates to minimum tax regimes.
(e) Material Adverse Effect. No event constituting a Material Adverse Effect shall have occurred.
4.3 Conditions Precedent Status and Funding Election.
(a) CP Status Notice. Seller shall have the right, at any time, to deliver to Buyer a written notice (the “CP Status Notice”) that either (A) confirms that all conditions precedent set forth in Section 4.2 have been satisfied, or (B) (x) confirms that all conditions precedent set forth in Section 4.2 other than one or more Reliant CPs have been satisfied, (y) identifies any such Reliant CPs that remain unsatisfied (the “Outstanding CPs”) and (z) certifies that Seller has used its reasonable best efforts to satisfy each such Outstanding CP.
(b) Buyer Closing Election. If the CP Status Notice identifies Outstanding CPs, Buyer shall notify Seller in writing no later than five (5) Business Days after receipt of the CP
Status Notice (the “Buyer Closing Election”) whether Buyer elects to (A) proceed to Funding and require Seller to satisfy any such Outstanding CPs within thirty (30) days following the First Funding Date (the “Post-Closing Delivery Period”), or (B) decline to proceed to Funding. For the avoidance of doubt, (x) only the Outstanding CPs may be subject to satisfaction during the Post-Closing Delivery Period, and all other conditions precedent set forth in Section 4.2 must be satisfied or waived as a condition to Funding, and (y) any Outstanding CP the satisfaction of which Buyer elects to agree to defer until the Post-Closing Delivery Period shall become a covenant of Seller to be satisfied within such period.
(c) Funding Dates. If Buyer delivers a Buyer Closing Election electing to proceed to Funding pursuant to Section 4.3(b)(A), the Parties shall proceed with Funding in accordance with Section 3.3.
(d) Termination Right. If Buyer delivers a Buyer Closing Election declining to proceed to Funding pursuant to Section 4.3(b)(B), either Party may terminate this Agreement by written notice to the other Party delivered within five (5) Business Days following Buyer’s delivery of the Buyer Closing Election. If Buyer fails to timely deliver a Buyer Closing Election pursuant to Section 4.3(b), Buyer shall be deemed to elect to proceed to Funding.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties of Seller Relating to Seller, the Project Company, and the Project. Seller hereby represents and warrants to Buyer, as of the Effective Date and each Funding Date, as follows; provided that any representation and warranty set forth in this Section 5.1 made only as of a specified date shall be made solely as of such date:
(a) Each of Seller and the Project Company is a limited liability company duly organized, validly existing, and in good standing under the laws of its jurisdiction of formation and has all requisite limited liability company power and authority to carry on its business as it is currently conducted, except as has not had, and could not reasonably be expected to have a Material Adverse Effect.
(b) Seller has all requisite limited liability company power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein. The execution, delivery, and performance by Seller of this Agreement and the consummation of the transactions contemplated hereunder have been duly authorized by all necessary limited liability company action on the part of Seller.
(c) This Agreement has been duly executed and delivered by Seller and (assuming due authorization, execution, and delivery by Buyer) constitutes the legal, valid, and binding obligation of Seller, enforceable against Seller in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy or other similar laws affecting the enforcement of creditors’ rights and subject to general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) None of the execution and delivery by Seller of this Agreement or the performance of the obligations of Seller hereunder, nor the consummation by Seller of the transactions contemplated herein will, directly or indirectly (with or without notice, lapse of time or both) conflict with, result in any breach or violation of, constitute a default under, give rise to any right of revocation, withdrawal, suspension, acceleration, cancellation, termination, modification, imposition of additional obligations or loss of rights under, result in any payment becoming due under, result in the imposition of any lien upon or with respect to the Transferred Tax Credits under, or otherwise give rise to any right on the part of any Person to exercise any remedy or obtain any relief under (i) the Organizational Documents of Seller, (ii) any contract or permit to which Seller is a party or by which any of its respective assets are bound, or (iii) any Applicable Laws to which Seller is subject or any Permit, except, in the case of clause (ii), as have not had, and could not reasonably be expected to have, a Material Adverse Effect.
(e) No default (or event that, with the giving of notice or the passage of time or both, would constitute a default) has occurred and is continuing under any of the Transaction Documents or Project Documents that has had, or could reasonably be expected to have, a Material Adverse Effect or a material adverse effect on Buyer, and the Transaction Documents and Project Documents are in full force and effect.
(f) Seller is not a party to, subject to, or bound by any contract with, or any judgment, order, writ, prohibition, injunction, or decree of, any court or other Governmental Authority, which has had, or could reasonably be expected to (i) prevent the consummation by Seller of the transactions contemplated herein or (ii) have a Material Adverse Effect.
(g) No action, suit, investigation, proceeding, or claim by or against, or involving the business or property of, Sponsor, Seller, or the Project Company is pending or threatened in writing, before any court or Governmental Authority, that has had, or could reasonably be expected to (i) prevent the consummation by Seller of the transactions contemplated herein or (ii) have a Material Adverse Effect.
(h) Seller and the Project Company are in compliance in all material respects with all Applicable Laws and orders of any Governmental Authority applicable to them, except for any noncompliance as has not had, and could not reasonably be expected to (i) prevent the consummation by Seller of the transactions contemplated herein or (ii) have a Material Adverse Effect.
(i) As of each Funding Date, the Project has secured all applicable Permits necessary to permit the development, construction, installation, use, and operation of the Project (other than with respect to matters that have not had, and could not reasonably be expected to have, a Material Adverse Effect).
(j) Other than the filing of any applicable Transfer Election Statement(s), no consents, approvals, authorizations, waivers, licenses, registrations, declarations, qualifications, filings, or notices of or to Persons, including Governmental Authorities, are required in connection with the execution and delivery by Seller of this Agreement, the performance of the obligations of Seller hereunder, or the consummation by Seller of the transactions contemplated herein, in each
case, other than those consents, approvals, authorizations, waivers, licenses, registrations, declarations, qualifications, filings, or notices that were obtained prior to, or will be obtained concurrently with, the Effective Date hereunder.
(k) No Material Adverse Effect has occurred, is continuing, or, to the knowledge of Seller, is reasonably expected to occur.
(l) Neither Seller nor Sponsor, nor the Project Company has (i) intentionally or willfully breached this Agreement or any of the other Transaction Documents to which Seller, Sponsor or the Project Company is a party to or (ii) failed to perform any of their respective material obligations under this Agreement or any of the other Transaction Documents. To Seller’s knowledge, no material breach of this Agreement by Seller, and no material breach by Seller, Sponsor, Guarantor or the Project Company under any of the other Transaction Documents to which Seller, Sponsor, Guarantor or the Project Company is a party to, has occurred and is continuing.
(m) Transferred Tax Credits.
(i) Seller is not related to Buyer (or any member of its consolidated group) within the meaning of Section 267(b) or 707(b)(1) of the Code.
(ii) Absent the transactions contemplated by this Agreement, Seller would be eligible to claim the Transferred Tax Credits, and no other Person is eligible to claim the Transferred Tax Credits.
(iii) None of the Transferred Tax Credits were transferred to Seller pursuant to Section 6418 of the Code.
(iv) None of the Transferred Tax Credits have been carried forward or backward from any other taxable year.
(v) The Transferred Tax Credits are “eligible credits” under Section 6418(f)(1)(A)(ix) of the Code.
(vi) During the Taxable Year, Seller was an “eligible taxpayer” within the meaning of Section 6418(f) of the Code and a partnership for U.S. federal income tax purposes.
(vii) Seller became the owner of the Project for U.S. federal income tax purposes prior to any portion of the Project having been Placed in Service and remains the owner of the Project for such purposes.
(viii) For purposes of computing the Transferred Tax Credits, the tax basis of the ITC Eligible Property comprising the Project is not less than that specified in the Cost Segregation Report.
(ix) Construction of the Project began, within the meaning of Section 48(a)(9)(B)(ii) of the Code and IRS Notice 2018-59, before January 1, 2025.
(x) The Project is eligible for the EC Bonus.
(xi) The Project is eligible for the DC Bonus.
(xii) The Project and each Block comprising the Project was Placed in Service as of the date specified in the Placed in Service Certificate.
(xiii) The Project is treated as a single project under Section 48(a)(9)(A)(ii) of the Code and Treasury Regulations Section 1.48-13(d).
(xiv) Other than as contemplated by this Agreement, Seller has not made, or agreed to make, an election under Section 6418(a) of the Code to transfer any portion of the Transferred Tax Credits to any Person other than Buyer.
(xv) No portion of the Project has been financed with any proceeds from the issuance of any obligations the interest on which is exempt from U.S. federal income tax under Section 103 of the Code.
(xvi) None of the Tax Credits for which the Project is eligible is limited by Section 49 of the Code.
(xvii) No item of property comprising the Project is treated as “tax-exempt use” property within the meaning of Section 168(h) of the Code.
(xviii) None of Seller, the Project Company or any of their respective Affiliates has entered into any financing agreement with a lender pledging a security interest in the Project or in the equity interests of the Project Company or any other entity in the chain of ownership between Seller and the Project Company that is disregarded as separate from Seller for federal income tax purposes, except with respect to any financing which has been paid off in full or will be paid off in full on or prior to the First Funding Date.
(n) Seller only has one taxable year ending in calendar year 2025 and such taxable year ends on December 31, 2025.
(o) The Transferred Tax Credits are “determined with respect to” Seller within the meaning of Treasury Regulations Section 1.6418-2(a)(4)(iii).
(p) Less than twenty percent (20%) of the fair market value of the property, parts, components, and equipment incorporated into the Project consists of property, parts, components, and equipment used by a Person other than the Project Company (other than in connection with the construction, start up, testing, and commissioning of the Project).
(q) To Seller’s knowledge, the Project does not include any equipment that would reasonably be expected to be (i) prohibited by the U.S. Department of Commerce under the Communications Systems Executive Order, except to the extent that use of such equipment in the Project would not cause a material adverse effect on the business or financial condition of the Project, or (ii) subject to unpaid custom duties, antidumping and/or countervailing duties, tariffs, import duties or similar obligations (including if any such obligations are imposed on a retroactive basis) that are unpaid or for which appropriate reserves have not been made, and the non-payment of which has had, or could reasonably be expected to have, a Material Adverse Effect. To Seller’s knowledge, Seller has not imported and will not import into the United States material equipment for use in the Project if such import violated the Xinjiang Restrictions.
(r) Sponsor, Guarantor, Seller and the Project Company have been and continue to remain in compliance in all material respects with all Applicable Laws relating to the prevention of corruption or bribery (including the U.S. Foreign Corrupt Practices Act of 1977, as amended, the U.S. Anti-Kickback Act of 1986, as amended, and any other Applicable Laws of similar effect promulgated, enforced, or administered by any Governmental Authority in the jurisdictions where the Project conducts business (collectively “Anti-Corruption Laws”)). To Seller’s knowledge, there is no action threatened or pending against Sponsor, Guarantor, Seller or the Project Company before any court or other Governmental Authority with respect to any Anti-Corruption Laws.
(s) Sponsor, Guarantor, Seller and the Project Company have been and continue to remain in compliance in all material respects with all Anti-Terrorism and Money Laundering Laws and Regulations. To Seller’s knowledge, there is no action threatened or pending against Sponsor, Guarantor, Seller or the Project Company before any court or other Governmental Authority with respect to any Anti-Terrorism and Money Laundering Laws and Regulations.
(t) All certificates executed and delivered to Buyer by Seller or its Affiliates pursuant to this Agreement are true, correct and complete in all respects and all documentation and written information provided to Buyer for purposes of Buyer’s due diligence review is true, correct, and complete in all material respects; provided that Seller makes no representation or warranty with respect to projections or other forward-looking statements provided by or on behalf of Seller or its Affiliates (including the proforma base case mode for the Project and the assumptions set forth therein); provided, further, that, with respect to any information that is expressly identified as being obtained from a publicly-available third-party source and described as not being independently verified, this representation is made only to the knowledge of Seller.
5.2 Representations and Warranties of Buyer. Buyer hereby represents and warrants to Seller, as of the Effective Date and each Funding Date, as follows:
(a) Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware. Buyer has all requisite corporate power and authority to carry on its business as it is currently conducted except as would not reasonably be expected to prevent, materially delay, or materially restrict or impair the ability of Buyer to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.
(b) Buyer has all requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated herein. The execution, delivery, and performance by Buyer of this Agreement and the consummation of the transactions contemplated hereunder have been duly authorized by all necessary corporate action on the part of Buyer.
(c) This Agreement has been duly executed and delivered by Buyer and (assuming due authorization, execution, and delivery by Seller) constitutes the legal, valid, and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, except as such enforceability may be limited by applicable Bankruptcy or other similar laws affecting the enforcement of creditors’ rights and subject to general equitable principles (regardless of whether enforcement is sought in a proceeding at law or in equity).
(d) None of the execution and delivery by Buyer of this Agreement, the performance of the obligations of Buyer hereunder, nor the consummation by Buyer of the transactions contemplated herein will, directly or indirectly (with or without notice, lapse of time or both) conflict with, result in any breach or violation of, constitute a default under, give rise to any right of revocation, withdrawal, suspension, acceleration, cancellation, termination, modification, imposition of additional obligations or loss of rights under, result in any payment becoming due under, or otherwise give rise to any right on the part of any Person to exercise any remedy or obtain any relief under (i) the Organizational Documents of Buyer, (ii) any contract or permit to which Buyer is a party or by which any of its respective assets are bound, or (iii) any Applicable Law to which Buyer is subject, except, in the case of clause (ii), as have not, and would not reasonably be expected to, materially restrict or impair the ability of Buyer to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement.
(e) Buyer is not a party to, subject to, or bound by any contract or other binding commitment, or any judgment, order, writ, prohibition, injunction, or decree of any Governmental Authority, which would prevent the consummation by Buyer of the transactions contemplated herein.
(f) No action, suit, investigation, proceeding, or claim by or against, or involving the business or property of, Buyer is pending or threatened in writing, before any Governmental Authority, that would reasonably be expected to prevent the consummation by Buyer of the transactions contemplated herein.
(g) Buyer is in compliance in all material respects with all Applicable Laws and orders of any Governmental Authority applicable to it, except for any noncompliance as would not reasonably be expected to prevent the consummation by Buyer of the transactions contemplated herein.
(h) Other than the filing of the Transfer Election Statement(s), no consents, approvals, authorizations, waivers, licenses, registrations, declarations, qualifications, filings, or notices of or to Persons, including Governmental Authorities, are required in connection with the execution and delivery by Buyer of this Agreement, the performance of the obligations of Buyer hereunder, or the consummation by Buyer of the transactions contemplated herein.
(i) To Buyer’s knowledge, Buyer is not related to Seller within the meaning of Section 267(b) or 707(b)(1) of the Code.
(j) Buyer is a “taxpayer” within the meaning of Section 6418(a) of the Code.
(k) Buyer is acquiring the Transferred Tax Credits solely for its own account.
ARTICLE VI
COVENANTS
6.1 Seller Covenants. Seller hereby covenants and agrees as follows:
(a) Tax Year. Seller shall report as a calendar year taxpayer for U.S. federal income tax purposes for each of its taxable year ending on December 31, 2025, and on December 31, 2026.
(b) Related Person. Seller shall not take any affirmative action that would cause Seller to become related to Buyer within the meaning of Section 267(b) or 707(b)(1) of the Code.
(c) Transferred Tax Credits. During the Compliance Period, Seller shall not, and shall cause the Project Company not to, take any action that would, or fail to take any action the absence of which would, be reasonably expected to cause any Recapture, Disallowance, or deferral of the Transferred Tax Credits. As soon as practicable, but not later than fifteen (15) days after the occurrence thereof, Seller shall provide to Buyer a reasonably detailed description of any event reasonably expected to result in Disallowance, Recapture, or deferral of the Transferred Tax Credits and shall otherwise comply with the notification requirements under Treasury Regulations Section 1.6418-5(d)(2)(i) to the extent applicable.
(d) Maintenance of Insurance. From the Effective Date through the end of the Compliance Period, Seller will cause the Project Company to maintain customary property and casualty insurance.
(e) Compliance. Subject to Section 6.1(f), Seller will comply with all pre-filing registration requirements under Treasury Regulations Section 1.6418-4 and will duly and timely file all tax elections, tax forms, and other relevant documentation and take any other compliance actions, in each case, as necessary or advisable to effectuate the transfer of the Transferred Tax Credits to Buyer pursuant to Section 6418 of the Code.
(f) IRS Pre-Filing Registration. Seller shall (i) apply for a pre-filing registration number(s) for the portion of the Project generating Tax Credits in each Taxable Year through the IRS electronic registration system within sixty (60) days of the date on which the last portion of the Project generating Tax Credits in the applicable Taxable Year is Placed in Service; provided that, if the IRS electronic registration system is not available as of such date (including any unavailability due to system failures or other technical issues), Seller shall apply for such pre-filing registration number(s) within thirty (30) days of such system becoming available; and (ii) deliver to Buyer a copy of such completed pre-filing registration. Seller shall provide to Buyer any pre-
filing registration number(s) issued by the IRS with respect to the Project promptly following the issuance thereof by the IRS.
(g) Transfer Election.
(i) Execution of Transfer Election Statement. To the extent not already delivered pursuant Section 4.2(a)(xii), Seller shall cooperate with Buyer to finalize and execute the Transfer Election Statement(s) with respect to the Transferred Tax Credits as promptly as possible after receipt of the applicable pre-filing registration number(s) from the IRS and in no case later than sixty (60) days prior to the due date for Seller’s filing thereof.
(ii) Records. Seller will maintain records substantiating all elections to transfer the Transferred Tax Credits to Buyer pursuant to Section 6418 of the Code, as required by Applicable Law.
(h) Financing Agreements. Except with respect to any financing which has been or will be paid off in full on or prior to the First Funding Date, during the Compliance Period, none of Seller, the Project Company, nor any of their respective Affiliates will enter into any financing agreement, contract or other binding commitment with a lender or any other Person pledging a security interest in the property or assets comprising the Project or the direct membership interests of the Project Company or any other entity in the chain of ownership between Seller and the Project Company that is disregarded as separate from Seller for federal income tax purposes.
(i) No Inconsistent Position. Seller shall not claim any of the Transferred Tax Credits on its U.S. federal income tax returns against its own tax liability nor take any position for tax reporting purposes inconsistent with a sale or transfer of the Transferred Tax Credits to Buyer.
(j) No Transfers to Other Persons. Seller shall not make an election under Section 6418(a) of the Code to transfer any of the Transferred Tax Credits to a Person other than Buyer.
(k) PWA Requirements. Seller shall take all commercially reasonable actions to ensure that the Project complies with the PWA Requirements until the end of the Compliance Period, including by curing or causing to be cured by the applicable contractor any instances of non-compliance within the time period required under Sections 45(b)(7)(B) and 45(b)(8)(D) of the Code and Treasury Regulations Sections 1.45-7(c) and 1.45-8(f)(2), as applicable.
(l) PWA Reporting. As soon as reasonably practicable after the receipt thereof, Seller shall deliver to Buyer a copy of any PWA Assurance Report received from the PWA Consultant after the PWA Assurance Reports delivered pursuant to Section 4.1(b)(xxiv) and Section 4.2(a)(iv). To the extent any physical work is performed on any tangible property comprising the Project after the First Funding Date until the end of the Compliance Period, Seller shall reasonably consult with its advisors to determine whether such work constitutes “alteration or repair” within the meaning of Section 48(a)(10)(A)(ii) of the Code. To the extent any such
“alteration or repair” is performed with respect to the Project in any calendar year during the Compliance Period, within one hundred and twenty (120) days after the end of each such calendar year, Seller shall notify Buyer of the occurrence of such “alteration or repair” during the preceding calendar year and shall deliver to Buyer evidence reasonably satisfactory to Buyer of the compliance of such “alteration or repair” work with the PWA Requirements.
(m) TCL Policy. Sponsor (i) shall timely pay any underwriting fees and premiums with respect to the TCL Policy and shall, promptly after payment thereof, deliver to Buyer evidence of such payment; (ii) shall comply in all material respects with the terms of the TCL Policy; (iii) shall not take any action or fail to take any action that would invalidate the TCL Policy or (other than pursuing a valid claim for recovery thereunder) result in a reduction in proceeds otherwise payable thereunder; (iv) without having first received the written consent of Buyer, shall not (A) materially change or amend, or otherwise substitute the TCL Policy, (B) consent to an assignment by any insurer of its obligations under the TCL Policy, or (C) consent to or take any other action in its capacity as “Named Insured” under the TCL Policy that materially affects the rights of Buyer (including amounts recoverable by Buyer) under the TCL Policy; and (v) shall provide Buyer promptly with copies of all material correspondence sent to or received from the insurers or the insurers’ representatives in connection with any claim submitted under the TCL Policy.
(n) Tax-Exempt Ownership. Until the end of the Compliance Period, Seller shall ensure that no Person that holds a direct or indirect interest in Seller (excluding any indirect owner that owns its indirect interest through a taxable C corporation that is not a “tax-exempt controlled entity” within the meaning of Section 168(h)(6)(F)(iii) of the Code) is a Disqualified Entity.
(o) Foreclosure. If any direct or indirect interests in Seller are foreclosed upon, Seller shall (i) ensure that the relevant secured parties are prohibited from transferring such equity interests during the Compliance Period in a manner that would reasonably be expected to result in a Recapture, Disallowance or deferral of the Transferred Tax Credits, and (ii) require such secured parties to take all necessary steps to prevent the actual or deemed dissolution or termination of Seller as a partnership for U.S. federal income tax purposes as a result of such foreclosure.
(p) Material Adverse Effect. As soon as practicable, but not later than fifteen (15) Business Days after the occurrence thereof, Seller shall provide Buyer with notice of any Material Adverse Effect.
(q) Financial Statements. Not later than one hundred and fifty (150) days after the end of each calendar year, beginning with the year ended December 31, 2025, through the calendar year in which the Compliance Period ends, Seller shall provide to Buyer audited financial statements of Guarantor, in each case prepared on a GAAP basis.
6.2 Buyer Covenants. Buyer hereby covenants and agrees as follows:
(a) No Inconsistent Position. Unless otherwise required by Applicable Laws, Buyer shall not take any position on any U.S. federal income tax return inconsistent with a transfer of the Transferred Tax Credits to Buyer.
(b) Further Transfer of Transferred Tax Credits. Buyer shall not make an election under Section 6418(a) of the Code to transfer any of the Transferred Tax Credits to another Person.
(c) Related Party. Buyer shall not take any affirmative action which would cause Buyer to become related to Seller within the meaning of Section 267(b) or 707(b)(1) of the Code.
(d) Reporting and Recordkeeping Requirements. Buyer shall cooperate with Seller to finalize and execute the Transfer Election Statement(s) with respect to the Transferred Tax Credits no later than sixty (60) days prior to the due date for Seller’s filing thereof.
(e) TCL Policy. Buyer shall (i) comply in all material respects with the terms of the TCL Policy and (ii) not take any action or fail to take any action that would invalidate the TCL Policy or (other than pursuing a valid claim for recovery thereunder) result in a reduction in proceeds otherwise payable thereunder.
ARTICLE VII
TAX PROCEEDINGS
7.1 Tax Proceedings Generally. In the event of a Tax Proceeding, the Party that first receives notice or obtains actual knowledge of such Tax Proceeding shall promptly, but not later than ten (10) Business Days after receiving such notice or obtaining such actual knowledge, provide written notice thereof to the other Party. Such notice shall specify in reasonable detail the basis for such Tax Proceeding and shall include a copy of the relevant portion of any correspondence received from the relevant Governmental Authority.
7.2 Control of Proceedings. Subject to the requirements of the TCL Policy (including the right of the insurer to participate in a Tax Proceeding):
(a) With respect to any Tax Proceeding brought against Buyer:
(i) Buyer shall use commercially reasonable efforts to request that any portion of any audit, examination, or proceeding initiated by the IRS against Buyer that relates to the Transferred Tax Credits be converted into an audit or examination of Seller;
(ii) If Buyer is not successful in converting the audit or examination from Buyer to Seller, Buyer shall conduct the defense of such Tax Proceeding (including any subsequent contest or proceeding) diligently, in good faith and in a non-discriminatory manner;
(iii) Seller shall have the right to participate in the Tax Proceeding (including participation in any scheduled meetings or conferences related to the Tax Proceeding with the relevant Governmental Authority), in each case, at its own expense and with its own counsel;
(iv) Buyer shall promptly share with Seller all written correspondence Buyer receives from, and provides to, the relevant Governmental Authority with respect to such Tax Proceeding and shall confer in good faith with Seller before making any written or substantive oral communication related to such Tax Proceeding to any Governmental Authority and otherwise keep Seller reasonably informed of any material developments in such Tax Proceeding;
(v) Buyer shall confer in good faith with Seller with respect to the strategy for conducting such Tax Proceeding and before making any written or substantive oral communication related to such Tax Proceeding and allow Seller to comment on drafts of material filings, and Buyer shall implement Seller’s reasonably requested comments over strategy, and incorporate Seller’s reasonably requested comments in communications, drafts and filings, in each case except to the extent that Buyer considers such comments to be inaccurate or misleading or to the extent they would have an adverse impact on any other portion of a larger audit, examination, or other contest of which the relevant Tax Proceeding forms one portion;
(vi) For the avoidance of doubt, nothing shall (I) require Buyer to share internal or privileged communications or materials with Seller, (II) permit Seller to participate in any scheduled meetings or conferences with the IRS relating to any Tax Proceeding of Buyer unless Buyer obtains reasonable assurance from the applicable taxing authority that no topics or issues unrelated to such Tax Proceeding would be discussed in such meetings and conferences (which Buyer shall seek), (III) afford Seller any right to control any Tax Proceeding of Buyer, or (IV) allow Seller to participate in any meetings, conferences or proceedings (whether, in person, virtual, telephonic, or otherwise) with the IRS that occurs prior to the issuance by the IRS of a Form 4564 (Information Document Request); and
(vii) Neither Buyer nor any of its Affiliates shall enter into a settlement with a Governmental Authority concerning the Transferred Tax Credits, or reject a settlement proposed by a Governmental Authority concerning the Transferred Tax Credits, without the prior written consent of Seller (such consent not to be unreasonably withheld, conditioned, or delayed); provided that, once Buyer has exhausted all available administrative remedies (including, in the case of a U.S. federal Tax Proceeding, pursuing an appeal to the IRS Office of Independent Appeals) and has received a final judgment following a judicial proceeding in a court of competent jurisdiction, Buyer shall not be required to institute an appeal of such judgment or to further pursue the related Tax Proceeding if it is not required to do so by the insurers under the TCL Policy unless Seller provides an opinion of a nationally recognized tax counsel reasonably acceptable to Buyer that Buyer “should” prevail on such appeal.
(b) With respect to any Tax Proceeding brought against Seller (or converted from a Tax Proceeding originally brought against Buyer):
(i) Seller shall conduct the defense of such Tax Proceeding (including any subsequent contest or proceeding);
(ii) Buyer shall have the right to participate in the Tax Proceeding (including participation in any scheduled meetings or conferences related to the Tax Proceeding with the relevant Governmental Authority), in each case, at its own expense and with its own counsel;
(iii) Seller shall share with Buyer all written correspondence Seller receives from the relevant Governmental Authority with respect to such Tax Proceeding and shall confer in good faith with Buyer before making any written or substantive oral communication related to such Tax Proceeding to any Governmental Authority and otherwise keep Buyer reasonably informed of any material developments in such Tax Proceeding; and
(iv) Once Seller has exhausted all available administrative remedies (including, in the case of a U.S. federal Tax Proceeding, pursuing an appeal to the IRS Office of Independent Appeals) and has received a final judgment following a judicial proceeding in a court of competent jurisdiction, Seller shall only be permitted to institute an appeal of such judgment previously rendered if (A) it is required to do so by the insurers pursuant to the TCL Policy, or (B) it provides an opinion of a nationally recognized tax counsel reasonably acceptable to Buyer that Seller is “more likely than not” to prevail on such appeal.
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification of Seller. Buyer shall indemnify, defend, reimburse, and hold harmless Seller, from and against any and all Damages asserted against, imposed upon, or incurred by Seller, directly or indirectly, by reason of or resulting from (a) the breach or inaccuracy of any representation or warranty of Buyer contained in this Agreement or in any certificates or other documents executed and delivered by it pursuant to Article IV, (b) the breach or failure to perform by Buyer of any covenant, undertaking, or agreement contained in this Agreement, or (c) the gross negligence, fraud, or willful misconduct of Buyer.
8.2 Indemnification of Buyer.
(a) Subject to the terms and conditions of this Section 8.2, Sponsor shall indemnify, defend, reimburse, and hold harmless Buyer, from and against any and all Damages asserted against, imposed upon, or incurred by Buyer, directly or indirectly by reason of or resulting from (i) the Disallowance or Recapture of any Transferred Tax Credits, (ii) without duplication of any losses indemnified under the preceding clause (i), the breach or inaccuracy of any representation, warranty or covenant of Seller contained in this Agreement or in any
certificates or other documents executed and delivered by it in connection with this Agreement, (iii) reasonable costs incurred by Buyer with respect to any administrative or judicial proceedings related to the Transferred Tax Credits, (iv) third-party claims relating to the Project or the Transferred Tax Credits and (v) reasonable costs incurred by Buyer to enforce its indemnification rights under this Section 8.2(a); provided that the amount of Damages required to be paid by Sponsor pursuant to this Section 8.2(a) or by Guarantor pursuant to the terms of the Guaranty shall (A) be reduced to the extent of any amounts actually recovered by Buyer under the TCL Policy, excluding, for the avoidance of doubt, the portion of any payment made to Buyer under the TCL Policy intended to “gross up” Buyer for Buyer’s taxes with respect to the receipt of such payment (such portion, the “Insurance Tax Proceeds”), and (B) to the extent relating to the Disallowance or Recapture of any Transferred Tax Credits, not be paid until a Final Determination is made that such Disallowance or Recapture has occurred. (b) Sponsor shall have no liability under Section 8.2(a) for any Damages to the extent attributable to (i) the breach or failure to perform, as applicable, by Buyer of any representation, warranty, covenant, undertaking, or agreement contained in this Agreement in any material respect, except to the extent (x) resulting from any act or omission of Seller or Sponsor, or (y) solely attributable to a breach of a representation, warranty, or covenant of Seller or Sponsor hereunder or the gross negligence, fraud, or willful misconduct of Seller or Sponsor, (ii) the fraud, gross negligence, or willful misconduct of Buyer, or (iii) the inability of Buyer to utilize all or any portion of the Transferred Tax Credits in the amount that was validly transferred by Seller to Buyer pursuant to this Agreement, including as a result of a lack of sufficient taxable income or tax capacity or tax liability.
(c) Buyer shall, prior to making a claim for indemnification under Section 8.2(a), use commercially reasonable efforts to mitigate any potential or actual Damages, such mitigation efforts shall include, but not be limited to, using commercially reasonable efforts to make a claim for payment or reimbursement pursuant to the procedures set forth in the TCL Policy for any Damages for which recovery is not expressly excluded by the terms of the TCL Policy and pursue recovery thereunder in good faith, including by exhausting all legal and contractual remedies thereunder (including, for the avoidance of doubt, receiving a final denial of coverage from the insurer) and any amounts recovered by Buyer under the TCL Policy in respect of such Damages, excluding, for the avoidance of doubt, any Insurance Tax Proceeds, shall reduce, on a dollar-for-dollar basis, the amount recoverable from the Sponsor. Without limiting any other reasonable mitigation efforts of Buyer pursuant to this Section 8.2(c), if Buyer does not recover all or any portion of such Damages under the TCL Policy after making commercially reasonable efforts, then Buyer will be permitted to make a claim against Sponsor for such unrecovered amount.
(d) Any amounts owed to Buyer pursuant to this Section 8.2 or by Buyer pursuant to Section 8.1 shall be paid on an After-Tax Basis.
(e) The Surety Bond shall secure Sponsor’s indemnification obligations under Section 8.2(a) that are excluded from coverage under the TCL Policy because of the amount of any retention that applies under the TCL Policy. Buyer shall be entitled to make a claim against
the Surety Bond upon a Final Determination to the extent Sponsor fails to satisfy its indemnification obligations under Section 8.2(a) and Guarantor fails to make payment in full to Buyer pursuant to the terms of the Guaranty in connection with any such failure by Sponsor. Any amounts recovered by Buyer under the Surety Bond shall reduce, on a dollar-for-dollar basis, the amount recoverable from Sponsor under Section 8.2(a). The Surety Bond shall be released and returned to Sponsor upon the earliest to occur of: (i) the acceptance by the IRS of Buyer’s U.S. federal income tax return for Buyer’s taxable year ending June 30, 2026, on which the Transferred Tax Credits are claimed by Buyer, through the IRS’ issuance of a Letter 590 (i.e., a “no change letter”) or similar document; or (ii) a Final Determination that the Transferred Tax Credits were properly claimed.
8.3 Limitation on Liability
(a) Notwithstanding anything to the contrary contained in this Agreement and with the exception of claims arising from the fraud, gross negligence, or willful misconduct of Buyer, the aggregate amount payable by Buyer pursuant to Section 8.1 or otherwise under this Agreement shall not exceed the Funding Amount plus Seller’s reasonable and documented out-of-pocket costs incurred in connection with the enforcement of Seller’s claims for indemnification; provided that the maximum liability of Buyer to Seller shall be reduced by the sum of (i) the aggregate amount of all indemnity payments made to Seller hereunder and (ii) any portion of the Funding Amount paid by Buyer to Seller.
(b) Notwithstanding anything to the contrary contained in this Agreement, the aggregate amount payable by Sponsor pursuant to Section 8.2 or otherwise under this Agreement shall not exceed one hundred and thirty five percent (135%) of the aggregate amount of Transferred Tax Credits; provided that the foregoing limitation on liability shall not apply to any Damages resulting from the fraud, willful misconduct, or gross negligence of Seller, Sponsor or any of their Affiliates.
(c) Without limiting Buyer’s rights and remedies pursuant to the Guaranty, and subject to the provisions of this Article VIII, Sponsor’s indemnity set forth herein shall be Buyer’s sole recourse with respect to claims arising in connection with the transactions under this Agreement, and Buyer hereby waives all claims pursuant to this Agreement and the other Transaction Documents against Seller and each person holding equity interests in Seller (other than Sponsor and Guarantor). (d) In no event shall Seller, Guarantor, or any of their Affiliates have any liability under this Agreement for or in respect of any punitive, consequential, special, incidental, or exemplary damages of any nature, including damages for lost profits or revenues or the loss or use of such profits or revenues, damages to reputation, and damages for lost opportunities, in each case to the extent constituting consequential damages, regardless of whether such claim is based upon contract, warranty, tort (including negligence and strict liability) or other theory of law and regardless as to whether or not such damages may or may not have been reasonably foreseeable; provided that, for the avoidance of doubt, for the purpose of this Section 8.3(d), any and all Damages asserted against, imposed upon, or incurred by Buyer, directly or indirectly by reason of
or resulting from the Disallowance or Recapture of any Transferred Tax Credits shall not be considered exemplary or consequential damages.
8.4 Survival.
(a) The representations and warranties made by Seller and Buyer in this Agreement and in any certificate executed and delivered by Seller or Buyer pursuant to this Agreement shall survive until eighteen (18) months after the Second Funding Date; provided that the representations and warranties made by Seller in this Agreement or in any certificate executed and delivered by Seller pursuant to this Agreement that relate to the eligibility of any portion of the Project for Tax Credits, the date on which any portion of the Project is Placed in Service, and similar tax matters (including, but not limited to, the representations and warranties made by Seller in Section 5.1(m)) shall survive until sixty (60) days after the expiration of the statute of limitations (as may be extended) applicable to Buyer’s claim of the relevant Transferred Tax Credits.
(b) The covenants and agreements of the Parties in this Agreement shall survive in accordance with their respective terms until the earlier of (i) the performance of such covenant or agreement in accordance with its terms and (ii) except as set forth in Section 9.2, the termination of this Agreement in accordance with its terms.
ARTICLE IX
TERMINATION
9.1 Termination. This Agreement may be terminated:
(a) by Buyer upon:
(i) the Bankruptcy of Seller or Sponsor; or
(ii) Seller’s breach of this Agreement or of its covenants made under this Agreement or the failure or inaccuracy of one or more of the representations or warranties of Seller contained in this Agreement if such breach, failure, or inaccuracy (A) is fraudulent, willful, or has a material adverse effect on Buyer and (B) either cannot be cured or is not cured by Seller prior to the twentieth (20th) Business Day after Seller’s receipt of written notice thereof from Buyer.
(b) by Seller upon:
(i) the Bankruptcy of Buyer;
(ii) Buyer’s failure to satisfy any of its payment obligations under this Agreement, if such failure has not been cured by the fifth (5th) Business Day after Buyer’s receipt of written notice thereof from Seller; or
(iii) other than as described in Section 9.1(b)(ii), Buyer’s breach of this Agreement or of its covenants made under this Agreement or the failure or inaccuracy of one or more of the representations or warranties of Buyer contained in this Agreement if
such breach, failure, or inaccuracy (A) is fraudulent, willful, or has a material adverse effect on Seller and (B) either cannot be cured or is not cured by Buyer prior to the twentieth (20th) Business Day after Buyer’s receipt of written notice thereof from Seller;
(c) by either Party if any Governmental Authority has issued a non-appealable final judgment or taken any other non-appealable final action, in each case having the effect of permanently restraining, enjoining, or otherwise prohibiting the transactions contemplated by this Agreement or the other Transaction Documents;
(d) by either Party if, prior to the First Funding Date, there is a Change in Tax Law that results in either (i) a prohibition on transfers of U.S. federal income tax credits currently permitted pursuant to Section 6418 of the Code that would apply to the transfer of Tax Credits contemplated by this Agreement or (ii) the Project no longer being eligible to generate Tax Credits, in which case Buyer’s commitment to purchase any Tax Credits shall terminate, without further liability; provided that if a Change in Tax Law solely reduces, or is reasonably expected solely to reduce, the amount of Tax Credits for which Seller is eligible with respect to the Project that are available to transfer to Buyer, then this Agreement shall not terminate and, instead, this Agreement shall be amended to provide for the transfer to Buyer of the reduced amount of Tax Credits which Seller remains eligible or is expected to remain eligible to claim with respect to the Project at the applicable Purchase Price Rate;
(e) by either Party pursuant to Section 4.3(d); or
(f) by the mutual written consent of the Parties.
9.2 Effect of Termination.
(a) If this Agreement is terminated pursuant to Section 9.1, all further obligations of the Parties under this Agreement (other than the provisions that survive the expiration or termination of this Agreement pursuant to Section 9.2(b)) shall be terminated without further liability or obligation of any Party hereunder, and the exercise of such right of termination will not be an election of remedies; provided, however, that (i) nothing herein shall relieve any Party from liability in accordance with the terms and provisions of this Agreement for its breach of the terms or provisions of this Agreement prior to such termination; (ii) in the event that this Agreement is terminated prior to the First Funding Date pursuant to Section 9.1(a) or Section 9.1(c), Sponsor shall promptly, and no later than five (5) Business Days of such termination, reimburse Buyer for all Third-Party Costs incurred by Buyer through such termination (less the amount of all such Third-Party Costs previously reimbursed by Sponsor or its Affiliates to Buyer pursuant to this Agreement) pursuant to Section 3.4(a); and (iii) in the event that this Agreement is terminated prior to the First Funding Date pursuant to Section 9.1(b) or Section 9.1(d), Sponsor shall promptly, and no later than five (5) Business Days of such termination, reimburse Buyer for all Third-Party Costs incurred by Buyer through such termination (less the amount of all such Third-Party Costs previously reimbursed by Sponsor or its Affiliates to Buyer pursuant to this Agreement) pursuant to Section 3.4(b).
(b) Regardless of the reason for termination, and without limiting any of Section 9.2(a), this Section 9.2, Article VIII (subject to the limitations and survival periods set forth therein) and Article X will survive any termination of this Agreement with respect to any and all Transferred Tax Credits. ARTICLE X
GENERAL PROVISIONS
10.1 Burden and Benefit. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the respective Parties.
10.2 Governing Law. THIS AGREEMENT SHALL BE DEEMED MADE AND PREPARED AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW, WHICH SHALL APPLY TO THIS AGREEMENT).
10.3 Counterparts. Delivery of an executed counterpart of this Agreement may be made by telefacsimile, electronic mail (including portable document format (.pdf)), or other electronic signature pursuant to the Uniform Electronic Transactions Act, and all counterparts so executed shall constitute one agreement binding on all Parties, notwithstanding that all the Parties shall not have signed the same counterpart.
10.4 Separability of Provisions; Reformation and Rescission. Each provision of this Agreement shall be considered separable, and if for any reason any provision which is not essential to the effectuation of the basic purposes of this Agreement is determined to be invalid and contrary to any existing or future law, such provision shall be reformed as necessary to effect the intention of the Parties and make the provision legal, valid, and enforceable. Unless the inability to reform such clause or provision precludes a Party from receiving the principal benefits intended to be incurred by this Agreement, the remainder of the Agreement will not be affected thereby.
10.5 Entire Agreement. This Agreement and the other Transaction Documents together set forth all (and are intended by the Parties to be an integration of all) of the representations, promises, agreements, and understandings among the Parties with respect to their subject matter, and there are no representations, promises, agreements, or understandings, oral or written, express or implied, among them other than as set forth or incorporated herein or therein.
10.6 Notices.
(a) Any notices, consents, demands, requests, or other communications which may be or are required to be given under this Agreement shall be in writing and shall be deemed given when delivered personally, by electronic mail (provided that the sender of such electronic mail does not receive an automated message indicating that the email was not delivered, such as a bounce back, out of office, or similar message), or by a nationally recognized overnight courier or
United States registered or certified mail, postage prepaid, to the recipient at its address set forth below or such other address as a Party may specify by notice to the other Party.
(b) Any notice required by the provisions of this Agreement to be given to Seller shall be addressed as follows:
| | | | | |
| Long Point Solar TE LLC c/o MN8 Energy LLC 1155 Avenue of the Americas, 27th Floor New York, NY 10036 Attention: Legal Email: notices@mn8energy.com |
| |
| With a copy, which shall not constitute notice, to: |
| |
| Holland & Knight LLP
811 Main St., Suite 2500
Houston, TX 77002
Attention: Ronnie Dabbasi
Email: Ronnie.Dabbasi@hklaw.com |
(c) Any notice required by the provisions of this Agreement to be given to Buyer shall be addressed as follows:
| | | | | |
| Automatic Data Processing, Inc. One ADP Boulevard Roseland, New Jersey 07068 Attention: Tanya Guazzo Email: Tanya.Guazzo@adp.com |
| |
| With a copy to: |
| |
| Chief Legal Officer One ADP Boulevard Roseland, New Jersey 07068 Attention: David Kwon Email: David.Kwon@adp.com |
(d) Any notice required by the provisions of this Agreement to be given to Sponsor shall be addressed as follows:
| | | | | |
| Long Point Solar Class B LLC c/o MN8 Energy LLC 1155 Avenue of the Americas, 27th Floor New York, NY 10036 Attention: Legal Email: notices@mn8energy.com |
| |
| With a copy, which shall not constitute notice, to: |
| |
| Holland & Knight LLP 811 Main St., Suite 2500 Houston, TX 77002 Attention: Ronnie Dabbasi Email: Ronnie.Dabbasi@hklaw.com |
10.7 Amendment and Waiver. Neither this Agreement nor any term hereof may be changed, amended, or terminated orally, but only by written act of the Parties (or, in respect of a waiver, the waiving Party). Any consent or waiver, express, implied, or deemed, to or of any breach or default by any Person in the performance by that Person of its obligations with respect to this Agreement or any action inconsistent with this Agreement is not a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person with respect to this Agreement or any other such action. Failure on the part of a Person to insist in any one or more instances upon strict performance of any provisions of this Agreement, to take advantage of any of its rights hereunder, or to declare any Person in default with respect to this Agreement, irrespective of how long that failure continues, does not constitute a waiver by that Person of its rights with respect to that Person or its rights with respect to that default until the applicable statute of limitations period has lapsed. All waivers and consents hereunder shall be in writing duly executed by the Party affected by such waiver or consent and shall be delivered to the other Party in the manner described in Section 10.6.
10.8 Rights and Remedies.
(a) Unless otherwise specifically provided herein, and except for the Parties’ rights under the TCL Policy, the rights and remedies of any of the Parties hereunder shall be the exclusive remedies with respect to breach of this Agreement; provided that the exercise of one or more of the provisions hereof shall not preclude the exercise of any other provisions hereof. Each of the Parties confirms that damages at law may be an inadequate remedy for breach or threat of breach of any provisions hereof. The respective rights and obligations hereunder shall be enforceable by specific performance, injunction, or other equitable remedy, without the necessity of posting any bond and without the necessity of establishing that monetary relief would not
provide an adequate remedy, but, other than the limitations of liability provisions hereof, nothing herein contained is intended to limit or affect any rights at law or by statute or otherwise of any Party aggrieved as against the other Party for a breach or threat of breach of any provision hereof, it being the intention by this paragraph to make clear that under this Agreement the respective rights and obligations of the Parties shall be enforceable in equity as well as at law or otherwise.
(b) To the extent permitted by law, each Party hereby irrevocably:
(i) consents to any suit, action, or proceeding with respect to this Agreement being brought in the federal courts for the Southern District of New York;
(ii) waives any objection that it may have now or hereafter to the venue of any such suit, action, or proceeding in any such court and any claim that any of the foregoing have been brought in any inconvenient forum;
(iii) (A) acknowledges the competence of any such court, (B) submits to the exclusive jurisdiction of any such court in any such suit, action, or proceeding, and (C) agrees that the final judgment in any such suit, action, or proceeding brought in any such court shall be conclusive and binding upon it and may be enforced in any court to the jurisdiction of which it is or may be subject by a suit upon such judgment, a certified copy of which shall be conclusive evidence of its liability;
(iv) agrees that service of process in any suit, action, or proceeding brought in any such court may be made at its address set forth in Section 10.6, or such other address designated by it pursuant to the terms of Section 10.6;
(v) waives all claims of error by reason of any service effected in accordance with the provisions of subparagraph (iv) above and agrees that such service shall in every respect effect service upon it in any suit, action, or proceeding and shall be taken and held to be valid personal service upon or personal delivery to it, to the fullest extent permitted by law; and
(vi) waives trial by jury in any action related to this Agreement.
10.9 Assignment.
No Party nor any Person required to provide documentation under this Agreement may assign any or all of its rights, privileges, and obligations hereunder, except with the prior written consent of the Parties. Notwithstanding the foregoing, (a) Buyer may assign all or a portion of its rights and obligations under this Agreement to any of its Affiliates prior to the First Funding Date without the prior consent of Seller or Sponsor; provided that (i) such Affiliate assumes in writing all of Buyer’s rights and obligations under this Agreement pursuant to an assignment agreement in form and substance reasonably satisfactory to Seller and (ii) Buyer agrees to retain the obligation to pay any portion of all outstanding Funding Amount with respect to any such Transferred Tax Credits and any other payment obligations under this Agreement that are not paid by such Affiliate; and (b) Seller shall not unreasonably withhold its consent for Buyer to assign its right to purchase
the Transferred Tax Credits or any portion thereof for a Taxable Year, to any Person that assumes in writing all of Buyer’s rights and obligations under this Agreement with respect to such Transferred Tax Credits, so long as Buyer retains the obligation to pay any portion of the Funding Amount with respect to any such Transferred Tax Credits and any other payment obligations under this Agreement that are not paid by the assignee.
10.10 Forward Contract.
(a) Assuming that the Transferred Tax Credits constitute a “commodity” as defined in the Commodity Exchange Act (the “CEA”), each of the Parties acknowledges and agrees that it intends that this Agreement and the purchase and sale of the Transferred Tax Credits hereunder shall be considered a “forward contract” within the meaning of the United States Bankruptcy Code and a qualified financial contract within the meaning of the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
(b) Assuming that the Transferred Tax Credits constitute a “commodity” as defined in the CEA, the Parties confirm their determination that the purchase and sale of Transferred Tax Credits hereunder (i) are not futures contracts within the meaning of the CEA on the basis that such purchase and sale transactions are covered by the forward contract exclusion from such term and (ii) are not swaps within the meaning of clause (iii) of the swap definition in CEA section 1a(47)(A) on the basis that such transactions will convey future ownership of the Transferred Tax Credits from Seller to Buyer and are not options or event contracts within clauses (i) or (ii), respectively, of the swap definition in CEA section 1a(47)(A).
10.11 Confidentiality & Publicity.
(a) Each Party agrees to keep confidential and shall not disclose (except (i) as otherwise required by Applicable Laws and (ii) to any Lenders for the Project and to such Party’s directors, officers, employees, investors (including the Preferred Equity Investor), agents, advisors, and other representatives in connection with such Person’s interests in the transactions contemplated hereby, the performance by such Party of its obligations under, the performance or exercise by such Party of any rights or remedies under, or the defense by such Party against claims in connection with, this Agreement, or in connection with the preparation of any tax returns or financial statements) (i) the existence of and the terms and provisions of this Agreement and (ii) upon receipt from the other Party, any documentation or information (A) that is marked as “proprietary” or “confidential,” (B) that is supplied orally with a contemporaneous confidential designation, or (C) that is known or should be reasonably understood (based on the nature of the information or the manner in which it was conveyed) by the receiving Party to be confidential or proprietary information or documentation of the disclosing Party (collectively, “Confidential Information”). Each Party agrees to utilize the same standards and procedures with respect to Confidential Information received from the other Party that such receiving Party applies to its own confidential or proprietary information or documentation, but not less than reasonable care. The foregoing obligations regarding Confidential Information shall not apply to the tax treatment or tax structure of the transactions contemplated hereby, and each Party (and any employee, representative, or agent of such Party) may disclose the tax treatment and tax structure of such transactions. The preceding sentence is intended to cause the transactions contemplated hereby not
to be treated as having been offered under conditions of confidentiality for purposes of Treasury Regulations Sections 1.6011 4(b)(3) and 301.6111 2(a)(2)(ii) and shall be construed in a manner consistent with such purpose.
(b) From the Effective Date, no Party shall (and each Party shall cause its Affiliates and representatives not to) issue any press release or make any public announcement relating to the existence or the subject matter of this Agreement without the prior written approval of the other Party; provided, however, that any Party may make any public disclosure relating to the subject matter of this Agreement that (i) is necessary for a Party to perform or exercise its rights under, or defend itself against claims in connection with, this Agreement or (ii) is reasonably required by, or made pursuant to, Applicable Laws or the applicable rules of any stock exchange having jurisdiction over the disclosing Party or any of its Affiliates; and provided, further, that, in the case of clauses (i) and (ii), each Party shall use its commercially reasonable efforts to consult with the other Party regarding the contents of any such release or announcement prior to making such release or announcement, and, in the case of clause (ii), the disclosing Party shall (A) disclose only that portion of information that it is advised by counsel in writing is legally required to be disclosed and (B) use commercially reasonable efforts to obtain an appropriate protective order or other reasonable assurance that confidential treatment will be afforded such information.
[Signature pages follow]
IN WITNESS WHEREOF, the Parties have set their signatures to this Tax Credit Transfer Agreement as of the Effective Date.
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| SELLER |
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| Long Point Solar TE LLC, a Delaware limited liability company |
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| By: | | |
| Name: | | |
| Title: | | |
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| SPONSOR |
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| Long Point Solar Class B LLC, a Delaware limited liability company |
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| By: | | |
| Name: | | |
| Title: | | |
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| BUYER |
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| Automatic Data Processing, Inc., a Delaware corporation |
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| By: | | |
| Name: | | |
| Title: | | |
[Signature Page to Tax Credit Transfer Agreement]